Leadership is extremely hard.

“A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others.” Douglas MacArthur once said, “He does not set out to be a leader, but becomes one by the equality of his actions and the integrity of his intent.”

Truly nailed it.

I’ll try to keep this post short. But keeping the importance of true leadership in mind, I’m going to briefly explain the three “must-have” quality traits of great leaders. If you’re someone who builds things, manages a team, or runs a company, I think it’s worth a read.

Let’s roll.

#1: Empathy

What does empathy actually mean?

Empathy is all about caring for and understanding others. When an employee has a bad performance too many times in a row, as a leader, you don’t yell at them or threaten to fire them. Instead you go, “try again,” or you want to say, “Hey, your numbers have been down the last few quarters, is everything fine? I’m worried about you.”

That’s what empathy looks like.

Your employees are not robots. They can’t deliver great results all the time. They’ve got personal lives too. They have personal problems too. Maybe they’re going through a rough time. Maybe they’re going through some relationship issues. You never know. So try to understand them. Be empathetic.

However, the truth is, how many leaders are like that? Almost rare. It even seems like Steve Jobs had terrible empathy towards people. He’d shortened the deadlines, set ridiculously crazy goals, and almost wouldn’t listen to his employees. Jobs was that guy who’d say, “I don’t care about you, I want this at this exact time, that’s it. Discussion over.” Which indeed was bad for employees’ productivity and their well-being.

That being said,

This might not be a perfect example, but let me tell you a story that can drive this point home: when Satya Nadella was interviewing for a job at Microsoft in 1992, the interviewer, Richard Tait, asked a very simple question to Nadella: “Imagine you see a baby lying in the street, and the baby is crying, what do you do?”

“Call 911,” Nadella responded.

“You need some empathy, man.” Tait gently put his arm around Nadella and said. “Just pick up the baby.” This small incident stuck with young Nadella, which later showed in his leadership career at Microsoft, reforming the company’s culture from “Know-it-all” to “Learn-it-all” mindset, focusing on employees’ well-being.

And this is why Microsoft is successful even though it’s the opposite of Apple.

#2: Bravery

I’ll kid you not, I’ve probably watched this video dozens of times (it’s so good!), and before I explain what bravery is, I want you to watch this video first:

This is a clip of the original full video posted on the All-In YouTube channel.

So what was the scene here? If you don’t know, Palmer Luckey is an entrepreneur and engineer best known for founding Oculus, which got acquired by Facebook in 2014, and Anduril, which is now reshaping the US national security in real time. I think Luckey is generally a good guy, and I love him.

That clip was a response to this guy named Jason Calacanis, an investor who kept mocking and attacking Luckey for years. This was going on for years, until in 2022, when All-In invited Luckey to give a speech. This was a golden opportunity for Luckey to call out Jason publicly in front of his audience lol. And he did. People there like David Friedberg appreciated and respected Luckey’s bravery, pointing out that we don’t see enough bravery these days.

I encourage you to watch the whole video.

But all in all, this is what bravery looks like. Standing for yourself. Standing for your company. Defending yourself. Defending your company. Bravery is about not being afraid of things, people, or of anyone—and still doing the thing that you think is right even if it’s hard and uncomfortable.

But bravery doesn’t just show in defending yourself. It shows when you make a certain decision. When you move in a certain direction. When you take risks. When you do things that are hard and challenging.

A simple question can tell if you’re a brave leader or not: Would you have done the same thing Luckey did if you were there? Put yourself in Luckey’s shoes, and if your answer is no, this means you lack courage and bravery, thus you’re probably a weak leader. But if your answer is “Hell yeah,” then probably you’re a brave leader who isn’t afraid of things, which makes you an interesting and powerful person.

#3: Integrity

“Integrity is a cornerstone of effective leadership because it builds trust, credibility, and respect—three things no leader, no true leader, can succeed without.” Steve writes, “When a leader consistently acts with honesty, keeps their word, and aligns their actions with their stated values, people know what to expect. That predictability creates a sense of security and reliability, which is critical for people and teams to function well, especially under pressure.”

I’d be lying if I said most leaders are “honest.” Because the truth is, most aren’t. Most leaders are not being honest about the actions and decisions they make. They are not being honest about the things they do and why they do them.

Integrity is all about being honest.

I mean, you can simply look at the current situation and easily spot how honest leaders are about their work. Companies are raising capital, shipping new products fast, laying off employees, and making certain decisions without transparency and full honesty, which indeed is not good for the public.

But it’s a double-edged sword. If you’re being honest about your work and you have good intentions behind every single decision you make, people trust and believe in you. Do the opposite too many times in a row, and people stop believing and trusting you and your company.

You must, as a leader, be honest about your work.

“I’m increasingly convinced the insight behind what makes a startup better than its competition is not what determines its success” Julian Shapiro writes, “Instead, the most critical insight behind success is the go-to-market (GTM) insight: What is the startup uniquely doing to grow propulsively?”

I 100% agree with him. I think just building a great product is not enough, you must also have ways to sell it. Because if you don’t, the product is pretty much worthless regardless of its superiority.

Here’s how the OG investor, Peter Thiel, describes it:

Think of distribution as essential to the design of your product. If you’ve invented something new but you haven’t invented an effective way to sell it, you have a bad business—no matter how good the product. Superior sales and distribution by itself can create a monopoly, even with no product differentiation. The converse is not true.

A GTM strategy for a new product is not optional, it’s necessary (if you want it to succeed).

So that’s what I’m covering today in this post. I discuss what a GTM strategy is, who needs it, examples of companies with great GTM strategies, and how to build one. Give this post a read if your goal is to launch a successful product or if you’re trying to make an existing product successful.

Let’s dive in!

GTM Strategy 101

What is a go-to-market strategy?

Let’s look at what Stripe says:

Go-to-market strategies serve as an action plan that specifies how a company will reach target customers and introduce its products or services. They guide a business from product conception to market entry and beyond, influencing how it will exist in the marketplace going forwards.

Spot on! A GTM strategy is used to plan how you’ll launch a new product and acquire customers. A GTM strategy, in my opinion, is especially needed for new products, even though it’s just as important as for well-doing existing products.

One thing I’d like to highlight here is that many people confuse GTM strategy with marketing strategy. They think these two are the same thing. But the reality is, they aren’t. These are two different things. What I believe is, a GTM strategy slowly evolves into a marketing strategy for a product as it matures and finds success in the market. Meaning, you need a GTM strategy when launching a product, and you need a marketing strategy to retain its success, users, and sort of build a thriving business.

Here’s, again, how Stripe describes it:

A GTM strategy is an action plan that specifies how a business will target customers and achieve a competitive advantage for its new product or service. It’s a holistic approach that includes marketing and encompasses sales, distribution, pricing and customer service. The GTM strategy is focused on the introduction of the product to the market. It’s about the “where” and “how” of product launch, delivery and selling.

The marketing strategy is a subset of the GTM strategy. It focuses specifically on creating demand for the product through branding and communication. It’s about the “who” and “why” of reaching potential customers. This strategy is often ongoing and evolves over the life of the product.

Nailed it.

To call it a good go-to-market strategy, broadly, it must have the following elements:

• Customer avatar

• Product positioning

• Distribution strategy

These are broad elements that pretty much cover the nitty-gritty parts of a GTM strategy—for example, pricing, value proposition, user demographics, etc. However, one thing to note is that a GTM strategy may always vary depending on the product.

Five Examples

Here are the five examples of successful companies that have had a solid GTM strategy:

#1: Uber

What was the GTM strategy of the company that fundamentally transformed the transportation industry? Here’s what it looked like:

Uber worked because it was convenient, provided a premium experience, and was efficient. Another best thing Uber did with their GTM strategy was that instead of launching the service in multiple cities, they simply chose SF, controlling the supply and demand to drive word of mouth.

#2: iPhone

Remember that iPhone 2007 moment? Here’s the GTM strategy behind it:

The iPhone GTM strategy was subtle but it worked like magic.

#3: Stripe

Stripe was founded by two teenage developers, Collison Brothers, who grew frustrated seeing how difficult it was to accept and manage payments online, especially for indie hackers and small businesses.

So they introduced Stripe with the following GTM strategy:

Stripe also got lucky because there was nothing like Stripe back then in the market.

#4: Canva

Being a non-techie, the cofounder and CEO of Canva, Melanie Perkins, was frustrated with all the complex design tools like Adobe Photoshop and other existing design tools prior to Canva.

So she built Canva with the following GTM strategy:

Canva is now one of the most used design tools in the world, with over 250 million monthly active users, which is indeed quite impressive.

#5: ChatGPT

Who doesn’t know the product that broke the record of TikTok and gained 100 million users in just two months? ChatGPT grew beyond anyone's anticipation. So what was its GTM strategy? Well,

Now, see, all the things I lay out here are not publicly disclosed by any company covered. No company, after finding success, says…”hey here’s our GTM strategy”. No company. If you study such subjects, you actually analyze them, research, and find things on your own by looking at what they did to make their product successful. And that’s what I did for this section.

Also, a GTM strategy is not supposed to be just three bullet points, but I went with this format because I didn’t want to make it complicated by churning out 1000s of words, which would’ve made this post 8,000-word long. The truth is, most GTM strategies tend to be multiple pages long created in written memos or slides.

Strategies on GTM Strategy

Different companies have different priorities, thus their GTM strategy differs. So what I want to do in this part is elaborate on the points I mentioned earlier. What comes under the ideal customer avatar? What comes under product positioning? What comes under the distribution strategy? These aren’t perfect, but if you can nail just these three points really well, I think you can build a solid GTM strategy.

So let’s elaborate on them:

#1: Know Your Ideal Customer

This is the most important part of a GTM strategy. If you don’t know your ICP (Ideal customer profile), your product may already go into the void before the AWS bill arrives.

You must know your target customer.

Who are you building your product for? How old are they? Are they professionals or students? Are they young or seniors? Are they male or female? Do they understand technology? Where are they from, tier 1 countries or third world? Know as many things as possible about your target customer, because it’s the only way to know exactly what you need to build, and what you don’t.

#2: Position Your Product

If you want your product to succeed, you can’t be just another X for Z. There are probably dozens or 100s of products already in the market. So you have to differentiate your product from the market. You must position it differently.

What makes your product unique? Why should people care about your product? What features does your product have that your competitors don’t? Ask such questions. And then once you figure that out, you need to nail the messaging. Write the best possible copy for your homepage, emails, social media, ads, etc. Make your messaging stand out.

Most companies often take messaging for granted. But if you show a little care about it, you can easily outcompete the existing products in your market just by doing this. You must nail the messaging.

#3: Think About the Distribution

I think this is the easiest one, because you simply have to ask yourself: what channel will you use to reach your target customer? This could be social media, influencer marketing, paid ads, brand sponsorships, cold calling, email marketing, etc.

However, there’s another side of distribution you need to be thinking about: engineering-driven distribution. Can you build something inside the product engineering something that could work as a growth loop—a referral system, incentive system, any viral loop? Make sure you have this in your mind when you’re building the product.

The thing about engineering-driven growth (Dropbox is a perfect example here) is that, if you can nail it, the mental bandwidth to think about distribution and marketing almost goes to zero, because you don’t need to worry about getting customers manually in the beginning. Users join and they bring new users for you on autopilot.

A GTM strategy doesn’t need to be perfect, it just needs to work.

There’s been a debate happening a lot lately about whether becoming a “designer” in the age of AI is the right career path. The fear is real because design, in my opinion, is one of the industries massively reshaped by AI. Everyone now has access to the same AI tools, helping them design in two hours what used to take two weeks.

However, I think it’s worth noting that most people don’t actually understand what design really is. And when there’s a misunderstanding, one can take design for granted, indeed many do.

But design is a very broad term. What type of design am I really talking about? I should be very careful here. Being in tech, I’m primarily talking about product design. However, the things I’ll explain here can also apply to different kinds of design, for example interior or fashion design.

So the goal of this post is to help you understand what design actually is, how one can design masterfully, and most importantly we’ll discuss the future of design. If design is a crucial part of your work or business, I encourage you to give this a read.

Let’s dive in!

What is Design, Actually?

You may know that famous line Steve Jobs once said, “Design is not just what it looks and feels like, design is how it works.” And I think it truly is. Design should always be about how something works, not just how it looks and feels. One of the perfect examples of that Jobs’ quote would be this video from Apple. Just pay close attention:

Most people often misunderstand good design with mere aesthetics, decoration, adding a bunch of unnecessary elements, and product fanciness. That’s not a sign of good design. Designers who have skin in the game know good design is about product functionality, its purpose, user intent, ease of use, and often its simplicity.

As Dieter Rams wrote:

What is good design? Product design is the total configuration of a product: its form, colour, material and construction. The product must serve its intended purpose efficiently. A designer who wants to achieve good design must not regard himself as an artist who, according to taste and aesthetics, is merely dressing-up products with a lastminute garment. The designer must be the gestaltingenieur or creative engineer. They synthesise the completed product from the various elements that make up its design. Their work is largely rational, meaning that aesthetic decisions are justified by an understanding of the product’s purpose.

Nailed it! A product should chase its purpose: why it’s built for, who uses it, and how (simply) it works.

But, “you cannot understand good design if you do not understand people,” Rams said, “Design is made for people. It must be ergonomically correct, meaning it must harmonise with a human being’s strengths, dimensions, senses, and understanding.”

Put simply, you must understand human behavior to design something great.

One of the best examples of this would be Steve Jobs 2007 iPhone moment. “Design is how it works.” Keeping that in mind, Jobs walked onto a stage, pulled an iPhone out of his pocket, and revealed a tiny device that changed the world forever. That right there? That was a big design decision—removing the keyboard. Because again, design is not just how it looks and feels like, design is HOW IT WORKS.

And this means, designers should always focus on:

• Functionality over aesthetic

• User intent over decoration

• Purpose over fancy elements

• Simplicity over stylish animation

Another thing that I’d like to talk about is what Jony Ive likes to call “Carefulness Design”:

Once you start designing stuff keeping these things in mind, the output won’t be the same again.

Design Masterfully

There are countless tactical tips on how to design well. One can learn all about pacing, repetition, shape, contrast, etc., anywhere online. But the following isn’t about that. Rather, I discuss the philosophical, more like framework/principles that guide the tactical design strategy—that’s what I’m going after here. These principles or wisdoms are not mine, rather they come from the greatest designers like Dieter Rams, Jony Ive, and entrepreneurs like Paul Graham.

Here are the design principles you should live by:

#1: Good Design is Innovative

“People only really learn when they’re surprised.” Derek Sivers writes, “If they’re not surprised, then what you told them just fits in with what they already know. No minds were changed. No new perspective. Just more information.”

I think this is also true for design. Good designs always tend to be innovative. But innovative doesn’t always mean original. One can reshape an old idea, tweak a bit, and make something completely distinctive that the world has never seen before.

Good designs are not innovative because they surprise, they surprise that’s why they are innovative. This includes products like the Sony Walkman, iPhone, Tesla (2000s), TP 1 Radio, Volkswagen Beetle (1938), iPod, iMac, Coca-Cola Glass Bottle, and countless others.

Good designs are never experienced before—they are surprising, innovative.

#2: Good Design is Simple

Good design is often so simple. Paul Graham nailed it:

Good design is simple.

You hear this from math to painting. In math it means that a shorter proof tends to be a better one. Where axioms are concerned, especially, less is more. It means much the same thing in programming. For architects and designers it means that beauty should depend on a few carefully chosen structural elements rather than a profusion of superficial ornament. (Ornament is not in itself bad, only when it’s camouflage on insipid form.) Similarly, in painting, a still life of a few carefully observed and solidly modelled objects will tend to be more interesting than a stretch of flashy but mindlessly repetitive painting of, say, a lace collar. In writing it means: say what you mean and say it briefly.

It seems strange to have to emphasize simplicity. You’d think simple would be the default. Ornate is more work. But something seems to come over people when they try to be creative. Beginning writers adopt a pompous tone that doesn’t sound anything like the way they speak. Designers trying to be artistic resort to swooshes and curlicues. Painters discover that they’re expressionists. It’s all evasion. Underneath the long words or the “expressive” brush strokes, there is not much going on, and that’s frightening.

When you’re forced to be simple, you’re forced to face the real problem. When you can’t deliver ornament, you have to deliver substance.

Be it tools, websites, products—good design is simple.

#3: Good Design Solves the Right Problem

PG, again, has a perfect example for this:

The typical stove has four burners arranged in a square, and a dial to control each. How do you arrange the dials? The simplest answer is to put them in a row. But this is a simple answer to the wrong question. The dials are for humans to use, and if you put them in a row, the unlucky human will have to stop and think each time about which dial matches which burner. Better to arrange the dials in a square like the burners.

This is also why companies often place the most important CTAs, the button they want you to click on, at the right side of the screen, especially on mobile devices.

• Leave the App: YES on the left, NO on the right side

• Ready to publish: SAVE FOR LATER on the left, PUBLISH NOW on the right side

• Enable 2f Authentication: REMIND ME LATER on the left, PROCEED on the right

You see this all the time. This is intentional—design solving the right problem.

#4: Good Design is Satisfying

Good design is satisfying. What do I mean by that? The design has failed to do its job if it doesn’t satisfy the user. Imagine building the most expensive, well-designed chair, but it’s too uncomfortable to sit on. The chair is useless, and so is the design in this case. Good design should satisfy the user and make the product usable for them.

This applies to both analog and digital design.

#5: Good Design is Not Subjective

“Design is not subjective because its primary purpose is to solve problems, communicate information, and achieve measurable goals” Google says, “rather than just express personal aesthetic. While art is subjective, design relies on objective principles like hierarchy, contrast, and user testing to ensure effectiveness.”

I agree with this.

Design is not personal. Design is not art. It has to be validated—by data, by usability, by conversion rate, by purpose, by ease, and so on. For example, if making a button slightly bigger increases the conversion rate, then the question isn’t whether we should do it. Rather we have to. It’s not subjective. Because making a button bigger can almost always increase the conversion rate on any page. It’s objective.

For example, this one:

Or this one:

Future of Design

With the rise of AI tools, which now allow anyone to effectively design anything faster, better, cheaper, and more efficiently, designers are worried about their jobs, and inspiring designers are doubting whether they are making the right career decision.

AI design tools like Nano Banana, Google Stitch, Dall-E, Figma AI, Midjourney, and others are literally reshaping the way people design. Today, anyone with little to no experience can produce world-class designs. What used to take two weeks can now be designed in two hours, all thanks to these so-called design tools.

So what’s the future of design, are designers safe?

We’re seeing a paradigm shift in real time. Everyone has access to the same tools. So everyone is prototyping, shipping, and making things happen. From beginner designers to senior executives are designing without needing each other's feedback or help, thus a meme is going viral:

Here’s what’s changing:

You can’t just be a designer anymore. You must be able to do different jobs within your expertise. But above anything else, I think there are two things that’ll always matter (beyond design): Taste and Judgement.

Here’s how Dan explains the two:

Taste is the ability to evaluate quality. That might be knowing which design customers will love or which words will resonate most strongly. It is sometimes called discernment, craft, or product sense. When you study people with the very best taste, you hear one theme repeatedly: taste is not about adding things; it is about removing them. It’s an act of curation or editing.

As the volume of creative work explodes, we need people with great taste more than ever. The rise of vibe coding has led many companies to expect their designers to ship code. That’s great if it helps them prototype and edit faster, essentially acting as an accelerant for applying taste. But we should not turn designers into mini engineers. Because increasingly, code is cheap and taste is expensive.

In marketing, the ability to know what will resonate with an audience will resist AI. Generating many variations of creative, analyzing funnels, and running A/B tests will not. The best brand and product marketers will be standing long after the last performance marketers are gone.

Judgment is the ability to make good decisions under uncertainty. It is sometimes called strategic thinking, systems thinking, or prioritization. “The one thing that’s going to be truly future proof is judgment … In an era when you can do everything, the question is which of these things matter.” - Gokul Rajaram

Information is no longer the bottleneck: it’s easier than ever to know everything about how a business is performing, synthesize all of the feedback from customers, and see everything your competitors are doing. Judgment is the ability to parse all of that and decide what to do.

Investing is close to pure judgment because it presents the same information to everyone and requires them to make the right decision. Charlie Munger called it the act of “inversion” - conceptualizing the outcome you want and working back to today. That requires weighing all of the messy game theory, incentives, human irrationalities, and real-world constraints that will lead to the end result.

I think designers are safe as long as they are learning and evolving.

I think we need to talk about company culture.

After scaling Spotify to over $100 billion in market cap, the CEO of the company, Daniel Ek believes that culture is the most important thing. He said something very interesting, which I’ll paraphrase: “When I founded Spotify at age 23, I didn’t know what culture was. At 30, I didn’t know why it mattered. But at 40, I believe culture is the single most important thing for a company to succeed.”

If you’re a hardcore builder, you’d agree with Daniel. I really do. A great, strong culture is by far the most important thing for a company’s success. And for good reason. It creates a competitive advantage, attracts top talent, and helps employees stick with the company.

Research done by Deloitte, written on Forbes, said that 94% of executives and 88% of employees believe that a distinct company culture is important to business success. Which again proves the point that having a great company culture is non-negotiable.

So today in this post, we’re exploring culture. I discuss what is(n’t) a company culture, how one can build a strong company culture, and why it matters in the first place. If you’re someone who has always underappreciated the importance of culture, I think it’s time for you to rethink it.

Let’s dive in!

What is a Company Culture

It’s helpful to understand what is NOT a company culture before understanding what makes a great company culture. So what doesn’t count as a (great) company culture?

In his book, What You Do Is Who You Are: How To Create Your Business Culture, the Venture capitalist and cofounder of a16z, Ben Horowitz wrote:

“Culture is not the values you list on the wall. It’s not what you say in company-wide meetings. It’s not your marketing campaign. It’s not even what you believe. Who you are is what you do”

More on that, culture is also not your quirky rituals, as many companies assume. It’s not your Friday Fun Time. It’s not your Cookie Time. It’s not your Daylight Moonshot. Rituals can be part of your company culture—more like an environment. But it’s not a culture, it’s just an activity.

As Rand wrote:

“When I thought of culture, I thought of big mission statements and values, like our emphasis on innovation” Jocelyn, who previously worked at VMware, said “Or our social traditions—like Friday afternoon beer bash, or tossing the newly affianced into the campus fishpond. I didn’t think of responsiveness to email.”

Her realization was that none of those were culture (read her Medium article).

So what really is company culture? Well,

Culture is not the set of ideas, but the set of actions – Ben Horowitz.

Brian Chesky, the CEO of Airbnb wrote an article in 2014:

Culture is simply a shared way of “doing” something with passion. Culture is a thousand things, a thousand times. It’s living the core values when you hire; when you write an email; when you are working on a project; when you are walking in the hall.

Culture is living the core values, according to Chesky. But to do that, core values have to be actionable. Because if they aren’t, people can’t put them into action or behavior. This is why core values like integrity or communication don’t drive culture unless they are clearly communicated, because they are too vague to take action on.

Ben Horowitz puts it this way:

Culture is how a company makes decisions. It is the set of assumptions employees use to resolve everyday problems: should I stay at the Red Roof Inn, or the Four Seasons? Should we discuss the color of this product for five minutes or thirty hours? If culture is not purposeful, it will be an accident or a mistake.

So what’s the conclusion here?

The culture of your company, in my opinion, is the direct reflection of your employees’ actions and behavior. It’s how you do things, it’s how they do things, it’s how everyone in your company does things. Many say, “Culture is invisible.” But the reality is, no, it’s not. It shows in everything you do—in good times and in bad times.

Culture also can be toxic. For example you may remember Uber’s early 2010s saga.

Uber, the company that transformed the transportation industry, experienced explosive growth right after launching the service in the early 2010s. Its then-CEO, Travis Kalanick, was known for being aggressive, bold, and disruptive. This rapid “innovation” mindset resulted in employee burnout, ethics issues, and the need to work long hours, which created a very toxic work culture at Uber. It was good for the company’s growth, but the employees weren’t happy with the culture at all.

But it’s not that Uber had slapped “Hustle Culture,” “Hardship,” or “Win-at-all-costs” in their core values. Rather, the leadership took a different approach to growth while preaching a different thing in core values, which created that toxic work culture in the first place. This went on for a few years before one of Uber’s engineers, Susan Fowler, shared her experience working at Uber, writing an article in 2017. The article went viral, Uber fired Travis, and rethought the company culture under its new CEO, Dara Khosrowshahi.

Culture is the behavior you reward or punish.

How to Build a Great Culture

When Airbnb guys started the company, Brian Chesky personally recruited the first 400 employees. Because Peter Thiel had told them “Don’t fuck up the culture” and so they were worried that if they didn’t hire the right employees from the start, the ship would sink before it sails.

Different companies have different strategies for building culture. And indeed, what works for someone may not always work for others. That’s fair. But I think there are quite a lot of things, and actually useful techniques anyone can use to build a strong, healthy company culture.

Here’s what they are:

#1: Mission & Core Values

You may know that all the successful companies: Tesla, Stripe, Google, Microsoft, Meta, Airbnb, Uber, NVIDIA, Amazon, and so many others have a mission and core values. That’s how they have created a culture—doesn’t really matter whether it’s healthy or toxic.

What I like to think, actually, is that every single company who ever raised VC funding has had a mission statement and core values. Because that’s what appeals to investors after all. And indeed, it’s a good start—not just for raising capital, but also to build a company culture.

“So how do we build culture?” Brian wrote, “By upholding our core values in everything we do.” I totally agree with Brian. But core values alone don’t do justice. You need a mission, and to achieve that mission, what you really need are core values. However, the mistake companies make is that they pick some vague core values that don’t tend to be actionable or don’t show in employees’ behavior. Netflix did a great job showing the vague values of Enron, the biggest scam company whose founders went to jail.

Enron’s core values were somewhat good. But they didn’t really communicate what they meant.

• What does integrity mean to your company?

• What does communication mean to your company?

• What does respect mean to your company?

• What does excellence mean to your company?

For different companies, these words mean different things. And as a company, it’s your job to communicate the core values with clarity.

I should also be clear that mission and core values go hand in hand. Core values are what help achieve a company’s mission. And both, together, help create a culture around them. For example Google’s mission: “Organize the world’s information and make it universally accessible and useful.” Microsoft’s mission: “Empower every person and every organization on the planet to achieve more.” Airbnb’s mission: “Create a world where anyone can belong anywhere.”

And guess what? To achieve the mission, they each have different core values and a culture around that.

However, I think mission and core values are only half the battle. Just because you have a strong mission and actionable core values doesn’t necessarily mean all of a sudden you’d have a strong culture. You actually have to work on them—by living them.

#2: Lead By Example

If the leaders of your company don’t live by the things they preach (core values), the culture is broken. Leaders are the needle mover, they set the standard, employees look up to them. And so they must live by what they/your company preach.

Google has core values called “10 Things” and one of them is: You can be serious without a suit. Here’s what they say about it:

Our founders built Google around the idea that work should be challenging, and the challenge should be fun. We believe that great, creative things are more likely to happen with the right company culture–and that doesn’t just mean lava lamps and rubber balls. There is an emphasis on team achievements and pride in individual accomplishments that contribute to our overall success. We put great stock in our employees–energetic, passionate people from diverse backgrounds with creative approaches to work, play and life. Our atmosphere may be casual, but as new ideas emerge in a café line, at a team meeting or at the gym, they are traded, tested and put into practice with dizzying speed–and they may be the launch pad for a new project destined for worldwide use.

It’s pretty obvious that if Google’s leaders and people at the top of the company aren’t living by this core value, none of the employees would. But I have a feeling that they do. They have another philosophy called: “Fast is better than slow,” which has resulted in a graveyard full of 300 products. Because Google ships really fast.

Be the change you want to see.

#3: Hiring is The Gateway

“New hires don’t walk into your company already knowing your culture” Jocelyn wrote “They walk in anxious — hoping for success and fearing failure. They look around them to figure out how they are supposed to behave. They see who’s succeeding, and they imitate what they’re doing as best they can. They figure out who’s failing, and they try to avoid being like them.”

Great leaders like Steve Jobs, Ben Horowitz, and Brian Chesky are big believers in hiring smart people who align with the company’s mission and culture. For example in the following clip, Jobs says something that I thought was interesting, which I’ll paraphrase, “Hiring the first group of 10-ish people is really important. Because they then set the standard and decide who they’d let in the group.” Indirectly, he’s talking about the culture.

Ben Horowitz has a slightly different approach to hiring and talent acquisition. What he actually does is, he’d first ask the new hire to sign an agreement, and once hired, he’d sit with them to talk and discuss culture, which I think is really fascinating.

#4: Empower Employees

Steve Sonnenberg wrote on Forbes:

In a work setting, empowering employees means providing them with the resources, power, trust and time to complete tasks and tackle responsibilities. I’ve found that empowerment allows employees to grow in confidence, competence and skill in the workplace. It’s the antithesis of micromanagement.

Empowered employees are proactive and productive, and they’re not afraid of sharing new ideas or making mistakes. In other words, they’re top performers who are always willing to help and striving to be better.

Nailed it.

As you may know, there are dozens of ways to empower people around you. And to build a great culture by empowering your team and employees the best you can do is to give them honest feedback, appreciate their accomplishments, celebrate their wins, praise them publicly, and inspire them. There’s no rocket science here. You just have to talk and behave with them like you do with your kids.

#5: Empathy & Perspective

This is taking the 4th point one step further.

9 years ago in 2016, Simon Sinek uploaded a video on YouTube that is now his most popular video on his channel with over 10M views. The video is all about creating a culture by being a great leader. I encourage you to watch the video, and below are the ideas from it.

Sinek starts by saying, “There are two things that great leaders need to have: empathy and perspective.” He continues, “Leaders are so often so concerned about their status or their position in an organization, they actually forget their real job, and the real job of a leader is not about being in charge, it’s about taking care of those in our charge.”

But that comes with sacrifice. Because as a leader, you have to take full responsibility when things break, and give full credit to your team or your employee when things work out great. Imagine it’s the captain of the team standing far behind in a photoshoot after a win.

Empathy is all about caring and understanding others. When an employee has bad performance too many times in a row, you don’t yell at them or threaten to fire them. Instead, you may say, “Try again” or you go, “Hey, your numbers have been down the last few quarters, is everything fine? I’m worried about you.” That’s what empathy looks like. Your employees are not robots, they can’t return great outcomes all the time. They have personal problems. Maybe they are going through a rough time. Maybe they’re going through some relationship issues. Try to understand them. Be empathetic.

Then comes perspective. The truth is, most companies are playing the finite game. Always trying to outcompete their competitors. Trying to rank #1 on the App Store that week. Working late at night just to hit quarterly goals. They are playing just to win. But great companies aren’t like that. They don’t outcompete their competitors, they frustrate them. They don’t try to be the #1. For them, quarterly goals are not a big thing. They play infinite games. And when you play infinite games, there’s no winning. They understand that sometimes you’re ahead, sometimes your competitors are.

Imagine how powerful such a thing could be if you just get these two things right. And imagine how powerful a culture you can have in your company just by getting these two things right. Yet most leaders completely lack them.

Culture Eats Strategy for Breakfast

The quote, “culture eats strategy for breakfast” is often attributed to Peter Drucker. And the whole premise of this quote is that culture is fundamental to a business, and it matters way more than the strategy itself.

Let me explain it with examples.

Say, you have an amazing culture: move fast, be transparent, communicate clearly, work like a startup, be accountable, etc. Your manager comes up with a great master plan, a strategy to ship a new product in three weeks. You never thought about it before, you’re unsure whether it’d work, and somehow you kinda think it’s too bold.

But since your team (and company!) has a great culture, kind of, “move fast and break things” there’s a high probability that your team will pull off the project in three weeks or less, assuming your manager is not a bozo.

That’s how culture eats strategy for breakfast.

Contrary to that, say your boss tells the team to ship a new product in five weeks. It looks great on paper. Your team kinda likes it. But everyone knows that the culture at your company sucks. Teams don’t move fast. There’s no clear communication. There’s no transparency. There’s no accountability. So it’s nearly impossible to ship something like that in five weeks. And guess what, you’re right. The project is still “ongoing,” people on your team are “trying” because they love their paycheck, and actually, your boss is a bozo.

The culture is still eating strategy for breakfast.

Whether you’re a startup or a big corp, culture is all that matters. If you have a great strategy and a great culture, your team will crush it. If you have a poor strategy and a great culture, the team can still crush it. But if you have a great strategy but a poor culture, you’ll fall flat.

“Do you want to sell sugar water for the rest of your life” Jobs said to John Sculley, “or do you want to come with me and change the world?” A line so powerful that made Sculley leave his president role at PepsiCo and join Apple in 1983.

But the interesting thing is that just one or two years later, Jobs and Sculley’s vision for Apple was failing to align. Jobs faced a power struggle with Sculley and the Apple board, which ended with a decision to fire Jobs from the company in 1985. Jobs left Apple and started his new company called NEXT.

Jobs did fairly well building NEXT. But what Apple had done by firing him was clearly a bad decision, which showed later down the years. The company became unstable as the leadership changed constantly, the product line became chaotic, market share shrank to less than 3%, vision disappeared, and Apple was burning money like wildfire.

But thankfully, Apple made a big (but smart) decision to buy NEXT for $429 million in 1996, bringing Jobs back. Upon arriving, Jobs learned that Apple was a sinking ship, with just 90 days from bankruptcy. But you know the popular story. All thanks to Jobs’ genius and his team, they didn’t just save Apple from bankruptcy but also positioned it as the most innovative company in the world.

This begs the question: How did Steve Jobs do it?

I think one of the key reasons Jobs was able to do it was because of his unique leadership and management style upon returning to Apple. Every year, he would run what he called “top 100” annual retreat, inviting the 100 most important people at Apple that year. He did these gatherings upon returning to Apple until his death, literally for over a decade.

The result? It was remarkable.

And in this post, that’s exactly what I uncover. I explain what the top 100 annual retreat was, how it worked, and its core benefits. I also explain why companies today (even Cook) are not able to do it, and what one needs to do such annual retreats.

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Now let’s dive into the piece!

The Top 100

When Jobs returned to Apple in 1997, the company at the time had ~8,500 employees. But it was a lost ship, distracted, the product line was chaotic, leaders were clueless, and there was no clear vision for the company.

The company needed clarity and focus.

This led Jobs to start what he called the “top 100” annual retreat. A private gathering where Jobs would unveil new products, share his vision for the company, and tell the participants where the company was headed at the moment.

Every year for each private gathering, Jobs would handpick the top 100 most important people that he thought were the needle-movers for the company that year. Interestingly though, he didn’t choose them based on hierarchy or rank. Instead, he would pick based on their contribution to the company and the talent they hold, which means even entry-level contributors like engineers, designers, and marketers were being chosen for the gathering if they grabbed Jobs’ attention.

The retreats were usually held for 3 days. But nothing was disclosed by Jobs: where the venue was, who the participants were, what the topic would be…nothing. He’d also tell participants not add the retreat dates on their calendar, talking about it to colleagues, even internally, was a no-no. Moreover, the participants weren’t allowed to arrive at the destination by driving. Instead they’d ride buses run from Cupertino, Apple HQ.

Jobs would strictly instruct to clean the rooms for bugs beforehand so it doesn’t disturb the attendees during the sessions. He would also forbid food servers from entering the hall/room during the presentations.

Jobs was the first one who’d usually kick things off at the gathering on the first day. Although, there’d be many key presenters for example Apple’s senior VPs. Jobs would sometimes also invite people outside Apple for the gathering, for example he once invited Intel CEO, Paul Otellini and Apple’s key contractors at AT&T.

People chosen for the annual retreat knew they were important for the company that year, taking it as a badge of honor. People who weren’t chosen for the retreat knew they weren’t contributing significantly, which means they’d likely aim to work harder the following years in the hope of getting Jobs’ attention and being chosen for the next year’s gathering.

This Apple ritual was largely unknown to the public throughout the 2000s. Outside Apple, barely anyone knew about it. It only got “some” attention when Jobs talked about it at an interview with Fortune in 2008, where he said:

“My job is to work with sort of the Top 100 people. That doesn’t mean they’re all vice presidents. Some of them are just key individual contributors. So when a good idea comes … part of my job is to move it around [and] … get ideas moving among that group of 100 people.”

Jobs would usually have a running list of product ideas for the gathering and the stuff he’d want to talk about. If you’re curious enough, this was Jobs’ Apple strategy for 2011, which I think somehow got leaked:

He ran these annual retreats for almost over a decade.

Imagine how much time and effort it’d require to do something like this, yet imagine how powerful such a thing could be if done right. Jobs wouldn’t have kept running these gatherings if they didn’t work.

Hit After Hit

Can you guess the results Apple got from Jobs doing those annual retreats? It was remarkable. Apple introduced hit products again and again for literally over a decade, which would’ve been impossible if Jobs hadn’t run those annual retreats.

Because of the “top 100” annual retreats:

• Apple got clarity

• Apple got a vision

• Apple became focused

• And Apple got a great culture

When he returned to Apple, he didn’t just focus on the products, he reimagined the whole company, deciding to position it as a “different” company than its competitors like Microsoft. Which is why he ran one of the biggest marketing campaigns at the time, Think Different, which was super successful.

In 1998, Apple introduced the iMac, the colorful all-in-one computer that saved Apple, selling over 800,000 units in its first five months. In 2001, Apple introduced the iPod, the device that literally transformed the music industry and the way people listen to music, selling over 100 million units in its first five years. In 2007, Apple introduced the iPhone, a revolutionary product combining a touchscreen phone, iPod, and internet communicator, which later as you know, defined Apple’s success.

But that was not the end…iTunes, MacBook, Apple Store, iCloud, Apple TV, AirPods, and so many other revolutionary products were launched, primarily because Apple was focused, had clarity, and a unique culture that Jobs was able to create because of those annual retreats.

Most of the products Apple introduced in the 2000s were already unveiled to the “top 100” by Jobs years before they became public or even normal employees at Apple got their eyes on. So let me ask this: If you know something for years, and you have been thinking about it for years, how in the world could you not make it “Insanely great?”

Act Like a Startup

When you do what Jobs did by running the top 100 annual retreats, no matter how big your company’s team size is, you will feel like a startup within it. And by this definition, one can say that Apple was technically a startup during those years. However, Jobs was able to run those annual retreats because he had a specific set of skills, which I explain in this Note:

Did some research and found out that almost no company does annual “top 100” retreats like Steve Jobs used to during his time at Apple, which indeed, is so surprising to me. But I think there are a couple reasons why Jobs was able to do it, and why companies today (and even Cook) aren’t.

First is talent. You may know that Jobs was a big believer in bringing in top talent and working with them as “closely” as possible. This doesn’t mean Apple suddenly stopped having great people post-Jobs. But I think how people are perceived today at the company has changed.

Second is vision. It would be fair to say that Job had a clear vision for the company. What he wanted to do in 2 years, 5 years, 10 years. He had clarity. And the thing he did was, he made his team believe in his vision, more so in his mission and conviction.

And third is leadership. The way Jobs operated Apple during his time at the company was completely different than how Apple is now operated and managed. He was one of the early founders who followed the path to Founder Mode, rather than following the conventional approach.

This created a strong culture at the company, and people at Apple weren’t primarily driven by money. They cared about the company, built products they thought were cool, and pushed the company forward caring too little about salary or equity.

Once that culture perished, the “Think Different” was gone.

To do something like Apple’s annual retreat, the leader (CEO/founder) of the company must be a visionary, inspire their team, think big, and follow the path to the unknown. The reason why most companies and even Cook today aren’t able to run such annual retreats is that they lack the quality traits Jobs had: The quality of being a visionary, the quality of not being driven by monetary outcome, the quality of being a great leader, and the quality of not being scared to follow the unknown.

Be the change you wish to see in your company.

The credit for me wanting to write this post goes to this Note:

On that Note, one of my readers made an interesting comment:

This is not a good argument.

A company could in many facets make more money and simultaneously worsen. For example, it was in an interview with Steve Jobs where he recounted the reason for why it seems that every company has business people supercede the engineers who create the product, often at the expense of the consumer, because at a certain point increases in the product provide marginal gain compared to business and monetization decisions.

There are techniques like planned obsolescence which make more money at the expense of both the product and consumer.

There are scam products/companies like AG1 which have huge captures of market share while having a useless product, where simultaneously superior products make far less revenue or go out of business.

There’s monopolization.

There are so many more ways in which this argument is incorrect. Revenue is a proxy for improvement but far from a direct indicator.

And that AG1 part really got me thinking. But since AG1 wasn’t the type of company I cover in my work here, I didn’t really have a good understanding of the company. Although seeing how they sponsor big creators like Joe Rogan and Andrew Huberman, I always thought it must be a great company.

But then I came across this Bryan Johnson’s tweet:

It was only then I was intrigued enough to dig deeper and rabbit hole the company to truly understand it and find out the ground reality. Surprisingly, what I found as a result was not only shocking but sort of unbelievable.

I quickly posted my first Note on this:

And then a couple more Notes I posted, for example this, this, and this.

It became clear to me that AG1 isn’t the type of company I initially thought it was.

And now ladies and gentlemen, we’re uncovering AG1, your favorite health supplement. I will explore the backstory of AG1’s founder, what AG1’s green powder actually is & whether it has any health benefits, the company's strategy to become a unicorn, and the market reaction. If you drink AG1’s green powder, I think this is a must-read for you.

Get your popcorn ready, and let’s dive in.

The Founder: Chris Ashenden

You may not be familiar with this name, but this is the guy who founded AG1. But before, way before founding the company, around in his mid-20s, he was an Auckland Police Officer in New Zealand. To understand how he went on to find a unicorn, we first have to look at who he was and what he was doing before AG1.

Like most people, Chris was not happy with his police job. He hated it and wanted to get rich. So he came up with an idea of flipping houses. He incorporated the Home Finance Company in 2003, started buying homes, and later selling them to working-class families for profits. Chris marketed his company/business model as “Why rent when you can buy, rent is dead money,” becoming a slogan so promising to people that he attracted lots of buyers in a pretty short time.

The model approached by Ashenden looked like a once-in-a-lifetime opportunity to people, especially because at the time getting a mortgage from the bank was almost impossible for most working class living in New Zealand, thanks to a strict banking law introduced in the early 2000s called Basel II, which required people to pay a large amount of money as down payment and needed a good credit history to get a mortgage, which you can assume, most household didn’t have.

So when Ashenden came and marketed his “Rent-to-Buy” model, people saw it as a golden opportunity and didn’t want to miss it. But Ashenden was not authentic, he didn’t have any intention to help people buy homes. Instead, he intentionally put them in trouble. Here’s how his model worked, which he wasn’t clear about to his clients: He would ask his home buyers to sign a 30-year installment agreement, telling his buyers that they own the property title. But in reality they didn’t, until the 30-year contract was completed. However, once the deal was made, the home buyers could live in their respective properties, cover maintenance costs, pay all the bills and taxes, and take care of it. But they were unaware that they never owned the property they were paying the money for.

Luckily this worked, and the scheme ran for a few years before it was unfolded.

One of the people who got into this scheme was Dee Chisholm, a life coach who somehow, one day, went to her bank to find out about her mortgage details, which made sense as someone who’d been paying weekly payments for a few years would definitely want to know the details to make sure everything’s going well, right? That’s what she did. But upon arriving at the bank and asking for the mortgage details, what she found was breathtaking to her.

“They came back to me in the bank and said, well you don’t exist.” Dee recalled, “You don’t have a mortgage here.” “I thought I’m going to get to the bottom of this and some bank’s got to have this information, this money’s going somewhere” She said.

Dee was not alone, many buyers went to their bank to ask about their mortgages, and they all found the same answer from their bank: “You don’t have a mortgage here.” This brought the matter to the Commerce Commission to further investigate the case. And it didn’t take too long for them to find out that Ashenden and his companies were running a scheme against the Fair Trading Act, manipulating people for property ownership. The case was then dragged to the Auckland District Court in 2010, where Ashenden was convicted of 43 criminal cases and his company 47, ordering him to pay over $200,000 in fines and over $42,000 in reparation to the victims.

As I said, Ashenden was not authentic. Instead of showing honesty, accepting his mistakes, and paying the money back to the victims, he declared bankruptcy, wound up his companies, and moved to the US. The court also issued an arrest warrant for him, but his clever move literally saved him from it. And actually, he was already living outside New Zealand before everything unfolded.

He had money. He was in a new country, the US. He was free.

And then, the same year in December 2010, Ashenden founded AG1. Before this, living in the US, he was promoting another health product called Brainquicken, which was founded by Tim Ferriss. And it seems like Ashenden and Ferriss were good friends because Tim was one of the first people to promote Athletic Greens in the early days after selling his own company.

Once a scammer, always a scammer.

This is not limited to Ashenden’s property scam, his newborn company AG1 proudly claims that the product is manufactured in New Zealand. But somehow you can’t buy it in the country, weird right? This looked suspicious to many investigators and independent journalists. One of them was Newsroom from Jonathan Milke, who further investigated Ashenden’s property scams and false claims made by AG1. This guy is unreal. The whole investigation is well documented, which you can learn more about here, here, and here. This investigation was the primary reason Ashenden was forced to resign from the CEO role in 2024 after the whole thing was unveiled in public.

The Product

If you’ve been drinking AG1’s green powder for a while, you may already have realized that the product has no positive impact on your health: gut, energy, immune system, etc. Well, you’re not alone. And it’s not your fault because the “green powder” isn’t helping anyone. James did a great job explaining it in the following video:

The company claims that AG1’s powder has 75 ingredients/multivitamins. But not all the ingredients are shown in the packaging, which raises a lot of concern about whether they are actually helpful or rather harmful to people drinking AG1. That said, the amount of doses of each ingredient is so small that they are functionally incapable of making any difference in the body when you drink the AG1’s green powder.

I find this Reddit post useful:

The macros don’t add up. Literally. Total calories listed per serving is 50 calories. On the nutritional information, It details 6g of carbs (24 calories) and 2g of protein (8 calories). So that is 32 calories and 2g left of fat. But it is not listed anywhere on the label. I went looking for this because I wanted to see the omega-3 profile given the first ingredient is spirulina (more on that later). And yet given the too-long nutrition label, it seems to miss the fat content in this supplement.

The science is contradictory. Back to spirulina. It is great that there is no cyanocobalamin (b 12) in AG1. However, spirulina itself contains a psuedo b-12, which actually blocks b-12 absorption for 3-4 hours, so it is good to space spirulina and b-12 intake. While all algaes are generally high in both b-12 and omega 3s, you need to look carefully at which variety you are getting otherwise its worthless. Chlorella is known for high levels of bioabsorbable b-12, and it is in AG1, but it is not in the first 5 ingredients in the “alkaline proprietary blend”, and if you take spirulina and chorella together, it negates the b-12 benefits. Furthermore, in their own research on the improved bioavailability of AG1 over multivitamins, they compared their product with a tablet. They tout better bioavailability of their powder over conventional tablets, and so by their own logic, taking a capsule (NOT tablet) of a multivitamin with similar nutritional data should do the exact same thing. But additionally, it was an in vitro study and not actually done in humans. Lastly, the only study done on actual humans which showed 97% reported more energy (I wasn’t that!!) was a single-arm study, e.g., no placebo, no control group, no crossover, nada. AND I could not even find that paper on their website to have a complete look through.

Talking about the pricing, AG1 is the most expensive product compared to similar products available in the market. I mean literally, you pay $79 a month to get 30 spoons of green powder that has no evidence-based positive health outcome—with the same money you can renew your gym membership twice in most cities in the US.

Bryan Johnson, the man who says “Don’t Die” and spends $2 million per year on his health, thinks AG1 isn’t worth the price, and rather it should be sold for as low as $30 per packet. But I wonder if even the $30 per pouch is worth it (more on this).

The company does its own experiment by bringing its own people to publish research papers of their green powder’s impact on people’s health. However, the sample size in those experiments tends to be so small (15-30 people) that it looks totally biased, because it is. This is not how a product experiment is done, to be honest. The company has its own researchers, scientists, lab, and experiment team that doesn’t hesitate to do biased experiments.

Another flaw with AG1’s powder is that the ingredient quantities are shown in milligrams instead of grams, so it looks “A LOT” to people buying it. This is a psychological game the company is playing with people’s buying behavior. Look at this Doctor Mike video on this:

Company Strategy

If the product, the green powder, is really that bad, then how in the world is AG1 valued at a whopping $1.2 billion and did over $600 million in revenue in 2024? You may ask.

And the truth is, it’s primarily because of their marketing. AG1 is not a product company, it’s a marketing company. They’ve been prioritizing marketing over anything else since the company’s inception. Well, how are they able to do it? High profit margin. The company enjoys a 75% gross profit margin, which it then invests into buying ads, sponsoring big creators.

The company makes massive contracts, deals worth millions of dollars, partnering with big creators and influencers like Joe Rogan, Andrew Huberman, Tim Ferriss, Lewis Hamilton, Gwyneth Paltrow, Lex Fridman, Peter Attia, Chris Williamson, and many others. It’s been said that the company pays Joe Rogan $10 million per year and Andrew Huberman $2 million per year to promote AG1 on their podcast.

Affiliates are another superpower of AG1. Sources say that AG1’s affiliates get to keep as much as 20-50% of the revenue generated on each unit sold that comes from their unique affiliate links, which in itself is a powerful incentive given that AG1 is mostly a subscription-based product.

The company's strategy is simple: Flood the internet with ads everywhere and pay the creators so much money that people can’t stop hearing about their product. It’s a pure game of frequency and distribution. And indeed, the company has been able to do that. And frankly, none of their homepage, design, copy, messaging, reviews, product quality, or any other metrics really matter. Because when your favorite, trusted creators like Rogan or Huberman say they use the product, there’s no way you wouldn’t buy it—no matter how bad the product actually is.

This is the truth.

AG1’s recent commercial “Good Morning, Moon” is narrated by Rick Robin. I can’t seem to comprehend how much money they must have paid to do this partnership. AG1 is like Nike, except they don’t have a useful product, while I think Nike does.

People & Market

AG1 has a huge pile of (fake) reviews on its website. They flood the internet with their marketing ads, they partner with big creators and influencers that people deeply trust, so the market believes that AG1 must be a “great” product.

Here’s AG1’s total product reviews and ratings from people on their website:

The question it begs though: What percentage of those reviews and ratings are genuine and unpaid? I bet only a fraction of it. Because when you look at the real market and see what people are saying about the product, it’s a completely different story.

Just look at these comments made on Reddit for example:

Been on it for 6 months... don’t really notice anything. When they first came out I took it and felt energized af. What happened

– Famous_Progress_8098 (link)

Started AG1 a few weeks ago. It is expensive. Though it aided my intestinal tract function, after using it awhile, I noticed a major lack of energy and motivation. Mood changes happened and all around irritability. Have stopped using it and have found that my energy level has returned and no mood swings. Guess it’s not for everyone. Good luck to those who can use it.

– Proof-Wrongdoer-8841 avatar Proof-Wrongdoer-8841 (link)

Today is my one month renewal, I don’t notice anything in regards to energy. They advertise AG1 like a supplement to coffee lol no chance. I looked into AG1 because I heard a vitamin deficiency could be why I have acne problems, but I don’t even have a good skin care routine either lol. I switched to Cerave just before I got AG1 in the mail, so unfortunately I couldn’t tell you if one is working over the other but my acne is getting better (not cured). I also did blood work before I ordered AG1, everything was good except my vitamin D levels which were a little low, so I honestly feel like AG1 is all hype. I have no intention of continuing after my second month, in fact ill cancel the subscription right after I post this.

– User name deleted (link)

Tried it for 2 months, it didn’t change anything for me. Just like multivitamins: I don’t feel any improvement. Maybe I already eat anough nutrients and my fatigue comes from elsewhere? In any case, I would not recommend AG1.

– Flying_pizza89 (link)

Also read this entire Reddit post

And then there are countless creators who have made “reality” videos on AG1. You can watch all these videos here.

The point really is, if the product was genuinely great, these people wouldn’t have made such comments and videos. And guess what? This isn’t just limited to Reddit or YouTube, I have personally seen people comment on my AG1’s Note, saying they also didn’t see any positive impact on their health drinking the powder, for example this girl, Mari:

The sole reason AG1 keeps making hundreds of millions of dollars every year is that they have literally been marketing like Nike since the beginning. And the reality is, the people who are buying AG1 aren’t the healthy people, it’s the unhealthy ones—the people who are afraid of their health condition, have health concerns, and want to fix their health issues. And since the company has bombarded the internet with its brand, the category of these people couldn’t help but choose AG1 over other similar products—awareness level, if you will.

I think I made a good argument here:

AG1 = AGI

AG1 is like AGI. One stands for Athletic Greens, the other stands for Artificial General Intelligence. One is here, present in the market (AG1), the other one is expected to arrive in the future (AGI).

But the outcome for both is expected to be the same. However it’s really not.

People and companies, especially big AI firms like OpenAI, Google DeepMind, and Anthropic think that AGI will change the world, that it’ll be a technology so powerful that it would do most human work, and potentially replace the majority of people from their roles.

Some say it’s terrifying, others say it’s a good thing.

Now AG1. Everyone thinks AG1 is a life-changing product until they learn the ground reality. People think that the “green powder” helps you be healthy, energized, increase the immune system, fix gut health issues, etc. But the reality is far from the truth. Maybe a tiny fraction of people may have seen a significant health improvement by drinking AG1, but most people have only wasted their money on the green powder.

And probably, you’re one of them.

Communication is crucial.

Communication is how companies get their message in front of people, it’s how people learn about a product, it’s how deals & partnerships are made, and it’s how business is done overall.

As Morgan Housel wrote:

Wilbur and Orville Wright conquered flight on December 17th, 1903. Few inventions were as transformational over the next century. It took four days to travel from New York to Los Angeles in 1900, by train. By the 1930s it could be done in 17 hours, by air. By 1950, six hours. Unlike, say, mapping the genome, a lay person could instantly grasp the marvel of human flight. A guy sat in a box and turned into a bird. But days, months, even years after the Wright’s first flight, hardly anyone noticed.

Said differently, when you change the world and no one notices.

The Wright Brothers didn’t have a medium to communicate their message and their remarkable accomplishment. People who knew their work—didn’t believe in it, local journalists didn’t want to cover them, a few local reporters they approached to—ghosted, and publication behemoths like The New York Times had zero clue who these “Dayton Boys” were and what they were doing in Kitty Hawk.

But just imagine, just imagine…if the Wright Brothers had a Twitter account. Here’s what they probably would’ve tweeted out: “Hey guys, been workin’ on this project, and I think we finally made it! Watch the video below.”

Boom! 54 million views.

Except, it didn’t happen.

The lack of a medium to communicate their message and accomplishment was one of the key reasons it took them so long to make people believe in their technology, get early deals, and get paid for the work they’d been doing for years.

But a lot has changed since then. Today’s generation of founders and companies doesn’t need to face the difficulties the Wright Brothers or Nikola Tesla faced. We now have one of the most powerful technologies called the internet, which allows anyone to communicate their message and get their product in front of people effectively at zero cost.

And that’s what I’m uncovering in today’s post. We’ll look at how founders and companies communicated in the old days, and how they communicate their message to their customers, partners, and people in today’s era, and most importantly why it matters in the first place.

Let’s roll.

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The Old Way

The old way of communication for conveying a message or getting a product in front of people, mass audiences, happened through newspapers, magazines, and local publications, later followed by radio and television. This was pre-internet, and distribution (thus narrative!) was controlled by the legacy media.

At the time, newspapers were the only reliable source for companies to get market visibility, hire staff, acquire customers, track market trends, and gain stock insights. People or companies didn’t have a way to build their own audiences, so they’d simply go to popular publications and magazines to promote and get their message to the world.

A good example of this would be Ford’s first car, the Model T. When it was launched in 1908, a publication called The Sunday Evening Post placed an ad for it, which looked like this:

Hiring and job recruiting were done the same way, through newspapers:

Or like this:

Or this:

And since the internet email didn’t exist, Nikola Tesla sent JP Morgan letter after letter to get funds for his new venture, but he never got a reply from Morgan. When he died, Tesla would send letters to his son, but also never heard back from him. The point? It was how founders raised capital—either send letters or get your ads in newspapers.

Then later came the television ads around the 1940s. The first ever TV ad was sponsored by a watch company named Bulova that paid $9 for a 10-second spot, which ran before a baseball game in 1941.

Watch the ad below:

While many of these newspaper ads were for business purposes, one of the terrifying things about this was, in general, how much control they had to shape the narratives. I mean just look at these:

There were many problems with this model (which is why they made a ton of money), which I later cover in this post. But just so you know, these publications, newspapers, channels, and magazines were the gateway for people and companies to access mass audiences.

The New Way

Enter the internet era.

The internet, which was invented in the late 1960s, came as a real breakthrough that truly changed the way people, companies, businesses, and governments communicate with each other and the world. Built off of the internet, email became the first ever messaging tool, which was founded by Ray Tomlinson in 1971.

People used this very new technology to communicate internally and for very specific needs, but it was far behind to replace the traditional media or newspapers. For years, the internet was still an infant, it was only in the late 1980s when the World Wide Web was created, and the full potential of the internet was unleashed.

People started creating personal blogs, forums, and early versions of communities where people could chat, reply, and communicate with each other in real time. This was the first time when companies, instead of thinking about going the traditional way, used the internet to find customers, employees, investors, etc.

It was remarkable.

And if you’re wondering, this was the sole reason Google and Amazon became so popular so quickly when they were launched, as people were talking about the technology on blogs and forums, creating an internet word of mouth so powerful that people couldn’t ignore.

However, the traditional media was still a thing—but not for too long. The next wave of the internet came in the form of social media. In the early 2000s, companies like Facebook, Twitter, LinkedIn, Myspace, Friendster, Reddit, and other social media platforms were born that posed a real threat to traditional media and their massive distribution.

For the longest time, newspapers and TVs controlled the distribution, attention, and narrative. But that changed with social media. The time spent scrolling Facebook or Twitter meant time not spent watching TV or reading the newspaper.

And with the help of these new-born social media platforms, companies and businesses could build their own communities, followings, connections, and own an audience, effectively at zero costs. So when a company needed to launch a product or hire staff, they didn’t go to traditional media, they shared it on their social accounts, blogs, and online communities.

And now, almost all founders and companies use the new way of communication—the internet way. Every great company and founder understands the importance of having a social media presence, building a community, and owning an audience.

Let’s look at a few examples:

When a robotic company, 1X Technologies, introduced their new product, NEO, they didn’t choose the traditional way to convey their message, they instead shared it on Twitter. 69K likes and 68 million views later, for free:

And unlike Ford, that unfortunately used traditional publications to get their product in front of people. Now car companies like Tesla use Twitter to launch their new model and effectively get millions of views:

With the help of this powerful tool, email, companies and founders talk internally or to groups without anyone’s permission. For example when Adobe was hiring Apple’s employees, this was the email Steve Jobs sent to Adobe’s CEO, Bruce Chizen:

Or this email from Elon Musk to the OpenAI team:

When the world’s most valuable, biggest private company acquires another multi-billion dollar company, they simply inform people about it via a tweet, not through TV or newspaper:

Do you think when OpenAI launched ChatGPT-3 in 2022, they asked traditional newspapers or media begging for an ad slot? Nope. Sam and OpenAI’s team flooded Twitter with the update that the people literally couldn’t ignore, collecting millions of views AKA users:

And even though platforms like Reddit, Facebook, LinkedIn, and Twitter help create communities, companies also prioritize creating their own communities that they run on their own platform:

And because these companies now have millions of loyal customers lurking online who trust them, these companies channelize the audience for things like events or annual conferences. For example look at this NVIDIA’s GTC where Jensen seems to be the new Tyler Swift of tech lol:

Companies now organize their own events, invite smart folks, and talk for hours, which their customers come to attend. And not only that, the company then uploads the same videos and photos on the internet, which brings, if not millions, hundreds of thousands of views, for example, Stripe:

And the good news is, this isn’t just limited to companies and big tech, but even independent creators are doing it. For example look at this guy, Ryan Trahan, a YouTuber who launched his gummy product on his YouTube channel that got millions of views:

Companies today don’t rely on traditional media, they have their own media team: videographers, writers, editors, filmmakers, storytellers, camera crew—the guys who work in-house, specifically for the company.

In the old days, traditional media would charge you to talk about your product in front of their audience. Today, the same guys sent you an email asking if you want to come to their “Show” because they just saw that you broke the internet with your new product launch.

This is how you communicate in the modern world.

Why it Matters

Okay, so we talked about how communications were/are done pre-internet and in the internet era. But we haven’t discussed why it matters in the first place, right? So why does it even matter, and how big of a deal it really is? You ask.

I think it matters for several important reasons, which I lay out below:

#1: Control the Narrative

When Nikola Tesla invented AC (Alternating Current), Thomas Edison’s company portrayed it as a harmful technology for humanity, showing people how it kills people and animals. Many newspapers shamelessly criticized Tesla for his technology, writing that he wants to kill people. But you know the reality, we all know what the reality was, and Tesla’s vision. However, since Tesla didn’t own an audience or have a direct way to communicate with people, he simply couldn’t clarify things for the bad impressions being made about him and his new technology.

But the internet changes that. Since, now companies and founders have the ability to “Go Direct” own an audience, and talk to people directly—they are able to correct misleading things and control the narrative. It helps get the right message in front of people, fight enemies that spread misinformation, and protect the company’s image and the brand.

#2: No Permission Required

The Wright Brothers were ghosted by many local news reporters. They’d promise to cover their story, but they’d never reach the spot and talk to the Dayton Boys about the technology they were working on. Again, the Wright Brothers couldn’t do anything about it, so they just kept building. But fast forward to today, companies don’t need legacy media to get their message in front of people. Now companies have the most powerful tools: social media, email, communities, and online platforms to get their message and product in front of mass audiences. The best part? You don’t need anyone’s permission to do so.

You don’t waste time, no one can ghost you—because you go direct. This is a real unlock.

#3: Faster Feedback Loops

How did companies get feedback on what to build/improve in the pre-Internet era? Well, you go ask people who used your product, or you simply guess hard by yourself. There was no fast feedback mechanism. But the internet changes that. With the help of social media platforms, emails, and communities, companies now have the ability to get fast feedback on the product they’re working on to build. The method is so fast that you tweet, post an IG Story, upload a YouTube video, send Dms, or email people—in the morning, get feedback by noon, rebuild the product by evening, and give an update the next morning.

#4: Infinite Golden Opportunities

The internet is fundamentally permissionless, which means you can lurk around wherever you want online—social media, communities, servers, newsletters, groups, chat rooms—engage, hang around, and find opportunities you wouldn’t otherwise. And the interesting thing is, you can reach a wide range of people (not just customers in your industry!) on the internet. This means, as you may know, you raise capital fast, find untapped opportunities, and build a thriving career or business along the way doing the “Internet thing” well.

#5: Build Once, Channelize Forever

Elon Musk has over 234 million followers on Twitter. Guess how he channels it? The same 234 million followers buy his electric cars, partner with his aerospace company, become his clients, use his platform, X and xAI, etc. And if tomorrow he’s going to start another company, there are literally already millions of people who will proudly want to invest in his new company, become clients, customers, and work for him.

Communicating via the internet is the real communication in the modern world. Now, of course this doesn’t mean traditional media is dead. And even though Lulu says it’s dead, I don’t think the traditional media is fully dead. But it’s fair to say that it has become irrelevant when it comes to getting your message and product in front of people.

The rise of the “Internet companies” in the late 1990s was so speculative that investors bought into the narrative, creating a bubble large enough to weaken the US economy and trigger a mild recession. Because the majority of the companies were driven by cheap capital, media hype, and “Get Big Fast” mentality.

Companies like Pets dot com, Kozmo, Boo dot com, Webvan, eToys dot com, and many other hot companies were shut down as the Dotcom Bubble burst in 2000. And indeed, Amazon as well was supposed to be dead as its stock price fell from $113 to $6 per share, an unbelievable 94% drop in the company’s market cap.

But it somehow survived.

How? Right before the bubble, Amazon issued $1.25 billion worth of 10-year convertible bonds in 1999. The company had initially planned to issue $672 million, but realized, “More is Better” and doubled the raise, all thanks to its legendary then-CFO, Joy Covey. And call it luck or pure vision, the decision single-handedly ended up saving the company from bankruptcy despite its stock falling by over 94% in 2000.

Most internet companies at the time were illusory, had business model flaws, and didn’t have enough capital to get through the Dotcom Bubble. But Amazon had $1.25 billion in cash, which it spent heavily into international expansion, building distribution centers, offering better value to its customers (lowering prices!), and making the processes and business faster, easier, efficient, and reliable that others couldn’t compete with.

Jeff Bezos later once said, “The stock is not the company and the company is not the stock,” which was proven so right. Even though Amazon’s stock had fallen by over 94%, its internal metrics were doing better than ever: the number of customers was growing fast, profits per unit were improving at rocket speed, and every efficiency metric was heading in the right direction.

Stock was just noise, Amazon was winning, quietly.

And with that, Amazon built some of the most powerful moats. First, the capital, $1.25 billion in itself acted as a moat known as Cornered Resources. And by the time it survived the bubble, it already had fabricated moats like Economies of Scale, Network Effects, Switching Costs—the same moats that later defined the company’s success.

The best part? Amazon is not alone.

All the successful companies I know have moats built around their business, which helps them retain market share, gives pricing power, and brings great profits. And the reality is, building a company without any moat is like riding a bike with no brakes—you can feel unstoppable for a while, but it’s also dangerous and can put you in a dead zone.

So today in this post, we’re studying moats. It’s one of the most interesting business concepts to me, I’ve already shared dozens of Notes around the topic on my Substack account, and now I want to go deep and help you understand what moats are, their types, and why they matter.

Let’s dive in.

What is a Moat?

In ancient times, moats were used to protect castles and valuable properties/areas by building trenches and filling the area around usually with “water” so it prevents enemies and attackers from occupying them and the resources.

A well-articulated picture:

But as that era has gone, now businesses and companies use the very concept to protect them from the competition, charge premium prices (Apple), and retain market share. But instead of simply calling it moats, we now call it economic moats.

The term “economic moats” was popularized by the legend none other than Warren Buffett, when for the first time he talked about it in the Berkshire Hathaway Annual Shareholder Letter in 1986. This very concept was the reason he invested in Apple, Coca-Cola, American Express, Costco, and other valuable companies as they have had real competitive advantage AKA moats.

“A truly great business must have an enduring moat that protects excellent returns on invested capital. The dynamics of capitalism guarantee that competitors will repeatedly assault any business ‘castle’ that is earning high returns. Therefore a formidable barrier such as a company’s being the low-cost producer… or possessing a powerful worldwide brand… is essential for sustained success.” —Warren Buffett

You get the point. An economic moat is a company’s competitive advantage that helps prevent competitors from eating their lunch, charge premium prices, retain market share, attract investors and golden opportunities, and enjoy high profit margins, creating an enduring, lasting business.

Types of Moats

In his book, 7 Powers, Hamilton Helmer offered seven types of moats: Economies of Scale, Network Effects, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power.

But I think there are more, a lot more. With the technological progress being made, new moats have emerged, and they’ll continue to emerge as we continue to make progress and enter one technological era (PC, mobile, cloud, AI, robotics, etc.) after another. For instance, distribution is now one of the most important moats, and so is relentless execution and providing personalized customer experiences.

But broadly speaking, moats can be divided into three main categories:

• Hard Moats

• Soft Moats

• Modern Moats

We’ll discuss each of them and go through as many moats as possible that come under them, while also giving you real-world examples of the companies that have those moats. Let’s start discussing them.

#1: Hard Moats

Hard moats are hard to build, but once built, they act as a tool so powerful that creates strong customer stickiness, durable business profit (ROIC “return on invested capital” above 15% over 5-10 years), and helps retain market share and profit margin.

How to know if you actually have a hard moat? Simply ask: Do I have something that is hard to copy or replicate by the competitors? If yes, you have a hard moat. These moats are tangible, durable, and create strong defensibility for your company.

Here’s what comes under this category:

#1: Switching Costs: Your relationship with the product you use becomes so in(valuable) or deep that it makes it hard for you to switch to a new provider because switching can be hard, expensive, and time-consuming. A perfect example of this would be Salesforce. A customer that’s been using Salesforce as an all-in-one CRM platform for years, switching to a new provider would be painfully hard, time-consuming, and expensive because Salesforce over the years has learned about your company, has deep knowledge of every workflow and integration, providing you personalized experience to lock you in with their platform.

#2: Network Effects: A product becomes more valuable as more people use it, creating a virtuous cycle because of the rapid feedback loop. All the social media platforms (IG, Twitter), marketplaces (Airbnb, Amazon), and payment networks (Stripe, PayPal) have network effects. A study done on this website says that 70% of the value in tech is driven by network effects, which I thought was fascinating. A simple example of Network Effects would be Instagram. As more people join Instagram, more businesses and creators see it as a valuable platform. More eyeballs bring more content, which means more revenue for Meta, creating a virtuous cycle that positions Instagram as a lucrative and valuable platform. It’s the same reason Instagram has over 3 billion monthly active users. What type of products don’t have Network Effects? Plain note-taking apps, single-player games, photo/video editing tools, physical goods like cameras, cars, speakers, etc—anything that doesn’t become valuable as more people use it.

#3: Economies of Scale: Cost per unit goes down as production increases and as the company grows larger. For software companies the marginal cost of distribution is zero, instead they have fixed costs: once a software is built, it can be used by 100 people and also by 100,000. Economies of Scale gives power to companies that have physical inventory. For example in the early days, Amazon heavily invested capital into building distribution centers, warehouses, and gaining negotiation power with suppliers, which later dramatically reduced the cost per unit for shipped products, giving it an Economies of Scale as a moat.

#4: Cornered Resources: This is one of the most powerful hard moats, which includes things such as patents, licensing agreements, trade secrets, trademarks, regulatory relationships, talent, valuable assets like HQs, offices, equipment, and other resources that competitors can’t easily borrow or copy. The examples of Cornered Resources can be Pixar’s unique creatives, Apple's design team, or SpaceX’s proprietary technology that allows for autonomous landing.

#5: Counter-Positioning: A (new) company uniquely positions itself from the incumbents or from what already exists in the market, usually coming up with a different but better business model. It’s hard to copy for Incumbents because it’d hurt their existing business model, thus revenue. Examples of Counter-Positioning can be: Airbnb vs. traditional hotels, Uber vs. taxis, Netflix vs. Blockbuster, and Digital camera vs. Kodak.

#2: Soft Moats

Unlike Hard Moats, which are easily quantifiable, Soft Moats are often rooted in a company’s culture, brand, customer loyalty, trust, community, and unique operational capabilities. Just like Hard Moats, these are also hard to replicate, but require consistent investment and are directly tied to the product’s quality or what they stand for, think of Apple and Nike.

Here’s what comes under this category:

#1: Brand: Naval once tweeted, “If your brand is your moat, you won’t have a moat for much longer” which is fair but you can’t deny the fact that brand as a moat is also the hardest one to build, and it’s one of the favorites of Warren Buffett, who famously bet on household brands like Heinz, See’s Candies, and Coca-Cola because they’ve had an exceptional brand.

#2: Community: Nothing is more powerful than having a community of people who trust your company, love the product, and support each other. It’s the same reason companies that have a community are so powerful and valuable, think of: Airbnb, Canva, Figma, Apple, Salesforce, Tesla, etc. A community doesn’t just give users a sense of connection and belonging but it’s also how a company can foster organic growth, bring new users, and find unique insights and ideas.

#3: Process Power: It’s a special “hard-to-copy” way of doing things that acts as a moat. The way you do things matters, it’s how you separate your company from the competition. SpaceX is a perfect example here. They have figured out how to build reusable rockets in-house, and because of the team, and talent, and resources, and operational efficiency for doing things they have, it’s exceptionally hard for competitors to copy them.

#4: Culture & Management: If Process Power is about the outcome—the result. Culture and management are how you bring those results or what goes on behind the scenes. A company that has a great work culture, prioritizes rituals, and manages things that are suited for employees will always beat companies that don’t. Airbnb is a perfect example here. Its CEO, Brian Chesky cares about culture so much that he has written a post on this, and reading this article makes you realize how far Airbnb actually goes when it comes to building great culture.

#3: Modern Moats

Modern Moats are moats especially needed in the AI era even though they existed long before. And indeed, they are equally important as the above two types, especially for AI companies.

Here’s what comes under this category:

#1: Relentless Execution: A company that moves fast and ships new products at relentless speed has a huge advantage over companies that don’t. This is why new AI startups are directly competing with tech incumbents, which can’t move as fast as a startup with 12 people.

#2: Distribution: While shipping and moving fast is important, what matters most is distribution. Products get copied, features get stolen, teams get poached, but what can’t be copied or stolen is distribution. One perfect example: Microsoft Teams vs. Slack. Teams isn’t inherently the best product, but because it’s powered by Microsoft’s massive distribution, it has 4 times the Slack’s users.

#3: Personalized Experience: Hands down, this is becoming one of the most powerful moats, specifically for AI-first companies. Models are commoditized, code isn’t the real bottleneck, LLMs are cheap and free, what matters is providing a personalized customer experience. And this means having a long memory of customer data, workflow, integration, users' tastes, and their preferences is the only thing that matters for AI-first companies.

Why Moats Matter

Building a company with no moats is like running a marathon with no preparation and training. You can run fast for a few minutes, but eventually get outcompeted by runners who pre-trained themselves months before the marathon.

In the same way, a company with no real competitive advantage is being eaten by the companies that have better business models, better cost structure, superior distribution, or tighter feedback loops. Put simply, having moats is non-negotiable for a company.

Groupon’s failure is a perfect example of this.

Founded in 2008, Groupon came into the market as a Messiah for people who wanted to save money shopping online, promising to offer group discounts on services like spas, restaurants, fitness classes, groceries, and other special retail products. The timing was perfect as it was founded in the middle of the financial crisis, the 2008 Housing Bubble.

What could be a better way than to help people save money during a recession, right?

People loved the idea (and platform), as a result Groupon grew to 150 million email subscribers operating in 35 countries within 3 years since the launch. The juggernaut, Google was quietly paying attention to Groupon, and ended up offering it $6 billion for an acquisition in 2010, to which unfortunately, Groupon rejected saying, “Nah, we’re doing an IPO next year in 2011 at $13 billion.”

Now you may whisper, “Wow! Groupon really made it.”

Well, sort of, but its success only lasted for a short time. After going public, things started to go south, revealing that the company’s business model was fundamentally broken, which only became clear as time passed.

A few things happened:

#1: Groupon worked as a mediator for connecting people (customers) to businesses (Groupon’s partners). And the way its model worked was, say if the original price of a product was $100, the company allowed like a 50% discount. Once the deal was redeemed, the total price was split between Groupon and its partner for 50-50. This was a pure gamble for Groupon’s partner but they did it to get new customers.

#2: By offering daily discounted coupons, Groupon thought it could deliver its partners’ loyal customers, but it turned out that most people who used the platform were deal-seekers who never really cared about the platform, but the deals they got at a given moment.

#3: Since Groupon attracted low-quality buyers, businesses using the platform didn’t see a return on investment (ROI), deciding to quit the platform. And for Groupon, not only did getting daily deals become a challenging task, but retaining the existing customers was also hard.

Customers weren’t loyal, businesses didn’t see a return on their investment, and it faced fierce competition from Amazon and Google, which offered better platforms, introducing Google Offers and Amazon Local, respectively.

Groupon hasn’t been dead, but it’s commonly seen as a failed company, because it is. However, if Groupon had any sort of durable moat say network effects, switching costs, distribution, or an ecosystem, I bet it could’ve survived.

If I distinctly remember, I used LinkedIn only once for two short months in 2022. And since then, it’s a platform I couldn’t care less about. Needless to say, I keep a dummy account in case I need to spy on someone or check LinkedIn profiles of internet weirdos.

I once came across a controversial yet powerful career advice someone gave, which worked as a confirmation bias and boosted my confidence to stay away from LinkedIn. And ever since, I get this feeling that I’ve been criticizing the platform more and more lol.

I’d feel stupid doing this for no clear reason. But if you Google, “The cringiest platform,” it turns out that LinkedIn is the cringiest platform on the internet. I don’t always agree with Google, but I do agree with this one.

And you’d be surprised to know there’s a famous Subreddit called “LinkedIn Lunatics” where people share the cringiest, dumbest LinkedIn posts. And I know a whole bunch of people who absolutely hate LinkedIn. Twitter by far, in my experience, has the most users who can’t stand LinkedIn.

Why is that? LinkedIn’s got problems.

LinkedIn’s got some serious problems. The problems are so worse they’ve created a bad brand identity and put LinkedIn in a position that’s helpful practically to no one. But interestingly, on the flip side, LinkedIn has become a monster business to Microsoft, generating tens of billions of dollars every year, and it indeed has had the potential to become the next big thing.

Hold on! Can we explore these? I think we should.

I don’t want to keep criticizing LinkedIn throughout the post, explaining all the problems it has. I’m not a pessimist. So, I will aim to help you understand LinkedIn as a whole, walking you through the platform’s problems, the platform's evolution, its monster business, and LinkedIn’s opportunity to become the next powerful professional networking platform.

Let’s roll.

The Identity Problem

LinkedIn has a bad brand identity problem.

I’m not talking about LinkedIn’s identity/ID verification, what I’m talking about is LinkedIn’s brand identity. A brand identity AKA image is how people perceive and see a company, and it’s the reason people use or stay away from a platform. My bet is that every single popular platform has a brand identity attached to the company’s product.

WhatsApp? Personal chat app. Instagram? A platform for flex. Twitter? Toxic & hateful. TikTok? Ruined society. Substack? The modern library. LinkedIn? Cringe as hell, everything’s fake. Did I get all of them right or just the last one? The point is, LinkedIn’s brand identity is its cringeness and fakeness. And professionals are forced to use the platform, not because they want to, but because they have to.

You don’t have to believe me, listen to Forbes:

LinkedIn’s real-identity network should be its greatest strength. Instead, it became its crutch. With no meaningful competition and near-total dominance over the professional graph, LinkedIn never faced the pressure to innovate. Professionals stayed because they had to, not because they wanted to.

So why is it the way it is? A few key reasons:

#1: Personality

I don’t know when this became the norm but most people on LinkedIn try to be smart, clever, and impress others. But as you may know, from a human psychological standpoint, the smarter you try to be, the dumber you look; and the more you try to impress others, the less impressive you become. Sadly, I think LinkedIn’s professionals don’t know this phenomenon.

I’ll take a simple example of their LinkedIn bios:

#2: Fake professionalism

It’d be unfair to say that everything, everything is fake on LinkedIn. But it’s also true that since a large number of people “fake” things on the platform, it indeed overshadows the genuine ones and the real work of people who don’t.

#3: Doomed Features

Can we say that LinkedIn has some of the worst, nonsense, pointless features? I mean who needs to add a tagline “#OPENTOWORK” to find a job? And who needs Skill Endorsements that no one cares about? The only people who need these are the incompetent ones. But guess what? Incompetent people don’t get hired either way.

My man Greg has a hot take on this:

The Culture problem

Here, things get worse.

But again, I’m not talking about LinkedIn’s internal company culture, what I’m instead talking about is the platform’s culture where the end user lives, breathes, or dies. Some people thrive on LinkedIn’s platform culture, but most simply can’t breathe and die.

I’d be lying if I said the platform’s culture has nothing to do with LinkedIn’s brand identity. Frankly, one of the reasons LinkedIn has a bad brand identity is because of its platform culture. This bad platform culture could be due to its algorithm, content, notifications, and other nonsense acts by LinkedIn.

Here’s why LinkedIn has a culture problem:

#1: The Content

What type of content comes to your mind when you think about LinkedIn? Probably these: Hustle porn, humble brags, lessons from everything, fake announcements, clickbait hooks, performative vulnerability, repetitive self-promoted courses and services.

Walk down the street of any major city in the US, and ask them about LinkedIn’s content. If they aren’t doomed and have scrolled through the platform enough times, they’d tell you how bad it actually is.

You don’t have to believe me, just see what people on Hacker News are saying:

Recently I came to the conclusion that I needed to change jobs, but I held off because I didn’t want to deal with the psychotic ramblings of LinkedIn posters. I’m sure in real life they are all perfectly normal individuals but something about LinkedIn insists that every poorly worded fable is gateway to wisdom, that metaphorical socratic dialog is to mechanism to describe human behaviour, and starting every second post with ‘I’m sure this is a contraversional opinion but hear me out...’ In the end I got fired, so I’m actually forced back into the LinkedIn maelstrom of mediocrity but against my will, and without even the grace of my own grim resignation to spur me into action.

LordN00b

LinkedIn is full of worthless posts full of users wanking each other off. Its the only place full of “get out of bed early, quite drinking soy lattes, inherit wealth” type of posts where it doesn’t get challenged (maybe X is another one). I genuinely might prefer reading AI-generated crap, because then I feel better about humanity.

Aleksjess

Deleted my account years ago, and I’m not surprised LI has become even more of a cesspit. I’ll continue to find meaningful things to spend my time doing by talking with actual humans by email, phone, and in person.

meristohm

They are all right, LinkedIn couldn’t be worse. There’s no room for genuine, insightful content. And even if you do find insightful, genuine content, do you know how it gets structured? They are structured and read like this, which makes a good idea bad:

Click to read more

I know you’ve seen them.

The LinkedIn posts that go like this.

One single line after another.

It starts with a surprising personal story.

An unexpected workplace anecdote.

Struggle and triumph immortalized.

In bizarre business-oriented free verse.

It’s meant to impart an inspirational lesson.

In the end, it delivers some tired cliché.

People are calling it “broetry.” You’ve just read a broem.

The Broetry usually reads like this:

I’m confident to say people on LinkedIn think writing like this is a sure-fire way to get people’s attention. But if you’re anything like me, you know these types of posts are full of crap that do nothing but waste your time.

#2: The Algorithm

Content wouldn’t be a problem if LinkedIn’s algorithm weren’t promoting them. But the reality is far from the truth. The platform is in love with crap, one-liners, cringe content. The more you try to avoid them, the more you tend to come across them.

I’ve also heard that there is a new type of problem LinkedIn “Professionals” are encountering: AI-generated content. LinkedIn’s new algorithm update, 360Brew, was supposed to protect its users from the dystopia. But it looks like the algorithm isn’t helping, and rather feeding its people not just the cringiest posts but pure AI-generated content that takes zero effort to create.

Just read this and this Reddit post:

#3: Messages & Notifications

I know you don’t want to congratulate people on their job anniversaries, and I know you don’t want to get sponsored messages from LinkedIn’s weirdos, and I know you don’t want to get that useless notification that says “You appeared 17 times on search last week, find out more.” All nonsense.

Most people on LinkedIn don’t want to engage in such activities. But since they only have so much control over their account, LinkedIn makes the user experience worse by constantly sending them such messages and notifications that they couldn’t care less about.

Nothing is good and important about these messages & notifications.

Was LinkedIn Always Like This?

Knowing all this, you now may wonder and question, “Was LinkedIn always like this?” And the answer I’d tell you is: Well, absolutely not. LinkedIn wasn’t always like this. Actually, LinkedIn’s evolution is pretty interesting.

LinkedIn wasn’t started as a social networking platform as it is today. Instead it was more like a job board and a professional resume platform where recruiters and prospects could find their ideal hires and jobs while making connections. There was no social feed, algorithm, or creator tools.

Here’s how LinkedIn actually evolved over the years:

#1: Founding Era

LinkedIn was founded by Reid Hoffman and Eric Ly in 2002 and was officially launched in 2003, with the initial goal to help people and businesses connect with each other, manage resumes, and find opportunities through the platform.

This turned out to be a great idea, resulting in LinkedIn gaining over 1 million users within a year by August 2004. By 2007, that number had grown past 10 million users, LinkedIn going public in 2011, and becoming a success story in Silicon Valley. But it still wasn’t a social media platform it later would become.

This was one of the early versions of LinkedIn:

#2: Social Era

LinkedIn slowly started turning into a social media platform as the 2010s began. They had observed Facebook’s success. So with their initial effort, LinkedIn had already introduced a few social-like features, for example:

• LinkedIn Groups

• LinkedIn Subscription

• Who Checked Your Profile

LinkedIn made the biggest social bet in 2012 when it introduced its Influencer Program, allowing prominent figures and thought leaders like Richard Branson, Arianna Huffington, Jack Welch, and others share their ideas and wisdom on the platform through long-form articles. And with its success, LinkedIn mainstreamed it in 2014 to allow all users publish articles on LinkedIn, making today’s home feed the default tab.

The company later introduced dozens of new creator tools for example video feature, live stream, newsletter, direct messages, and more to help its users succeed on the platform.

#3: Cringe Era

In 2016, Microsoft paid $26.2 billion to acquire LinkedIn.

And it was only when LinkedIn’s AI algorithm and its Content Feed was heavily supercharged, making it the central feature of the platform. However, Microsoft didn’t just make LinkedIn a social networking site, they also integrated it into Microsoft’s deep ecosystem so tightly that its customers benefited like never before for finding opportunities, recruiting, job trends, data, etc.

LinkedIn became an internal tool for Microsoft’s customers.

However, this was also when people using the platform started to see a strange pattern: More cringeness, fakeness, ridiculous thought-leadership content. Worse, the pandemic hit. Thread boys from Twitter headed to LinkedIn, LinkedIn existing users doubled down on their content creation strategy, and a dystopia of humble brags, hustle porn, fake vulnerability, and useless B2B lessons type of content flooded the platform.

By 2021-22, people could sense the platform’s cultural shift and how LinkedIn was turned into a useless platform. The more people started posting, the cringier the platform became, ruining its professional-sense because of the cringeworthy posts. The Snowball Effect. And people started addressing the problem via articles like this, this, and this, and this:

People who liked the cringeness thrived on the platform; people who didn’t, simply quit the platform. But one thing was clear: the cringier the posts, the cringier the platform’s culture became, attracting the fake “professionals” around the world.

Of course the evolution was necessary, and it indeed makes sense to provide users with the creator tools they needed to succeed. But clearly, the incentives for good work were misaligned. As Charlie Munger once famously said, “Show me the incentive and I’ll show you the outcome.” If the algorithm hadn’t favored one-liner nonsense crap, people would’ve stopped creating them.

But Wait…LinkedIn Has Potential

Truth be told: No matter how cringe the platform, LinkedIn is a monster business.

LinkedIn has over 1 billion users globally, impressively 60% of its users are young adults at the age of 24 to 34. Revenue-wise, the company did over $16.4 billion in 2024, and $17.8 billion in 2025 in total revenue, representing a year-over-year growth of around 10%. Now compare this to Twitter, which did around $2.99 billion, and Snapchat, which did around $5.7 billion in total revenue in 2025, LinkedIn looks far ahead.

But that’s not just the end, LinkedIn’s numbers are so impressive, and show signs of potential. Here are a few of LinkedIn’s stats and numbers that I think position it as a potential powerful professional networking platform:

• 65 million LinkedIn users are decision-makers

• 54% of US LinkedIn users make over $100,000 annually

• 80% of B2B leads generated on social media come from LinkedIn

• 89% of users in B2B sales think LinkedIn is essential for closing deals

• 40% B2B marketers reported that LinkedIn is effective in driving high-quality leads

• 68% of B2B marketers have increased their use of LinkedIn in the past year

• Over 9,000 members apply for jobs on LinkedIn every minute

• 7 people are hired every minute on LinkedIn (3 million new hires annually)

• 84% of B2B marketers believe LinkedIn delivers the best value compared to other platforms

• 82% of B2B buyers review LinkedIn profiles before accepting a meeting or making a connection

Damn! Crazy stats, right? When you look at the platform and the type of content it promotes, you tend to think that the platform is over. But looking at these numbers, it seems like LinkedIn is actually delivering real value to businesses, professionals, and anyone who plays the right game on the platform.

And this is why I think LinkedIn has still got a chance to become the next big, powerful social, professional networking platform, and potentially kill platforms like Twitter and Threads. And for good reason. Billions of people already use it. Almost all businesses have a LinkedIn presence. Data tells us that LinkedIn has huge potential. All it needs to do is make the platform worth using for everyone involved.

A Chance for LinkedIn

It’s clear to me that there’s no other platform like LinkedIn. Of course, the platform is broken right now. But guess what? It has got the user base, it has demand, and it has an ecosystem and tools that businesses and professionals depend on.

So, can LinkedIn become the next big thing?

Yes, but not easy. However, with meaningful right strategies LinkedIn could be the next big professional platform where not just the greatest conversations happen, but a platform that actually helps businesses find the best employees—and people, their next dream role, while making meaningful connections and relationships.

LinkedIn’s mission is audacious: “Connect the world’s professionals to make them more productive and successful.” But to actually achieve it, LinkedIn, in my opinion, needs to fix the following things that currently annoy most people who use the platform.

#1: Fix the Algorithm

No one likes LinkedIn’s algorithm as I’m writing this. It sucks. It doesn’t help with finding good content, it doesn’t help when you search for something on the platform, and it doesn’t help with finding relevant people and connections.

This must be changed.

When you search for something on the platform, the results should be relevant: right people, right communities, right posts, and right companies. When you follow someone or like a new post, it should show you relevant posts and accounts, not random things out of nowhere. The algorithm should be so smart that it learns from every tiny action and makes the user experience beyond imagination.

It will be incredible if LinkedIn could tie together a person’s profile to the type of content they create. If a mismatch is found, the creator should be penalized. This would be especially helpful if the person is giving business or financial advice. Rules, of course, must be applied but I think this will single-handedly increase the valuation creation.

#2: Remove the Cringeness

LinkedIn has always prioritized cringeworthy one-liners over quality, thoughtful content. But truth be told: no one likes to read the “show more” useless crap. They are usually cheap, low-effort content created to waste readers’ time. More often than not, one-liners turn out to be clickbait, engagement bait content.

This kind of content should absolutely be punished. And instead, LinkedIn should incentivize content that is thoughtful, genuine, and insightful that actually helps people learn and entertain. Any kind of behavior like “Comment YES if you agree” in the posts must be shadow-banned. And comments as well should be ranked based on their thoughtfulness, readers’ engagement, and replies, not just by the number of likes.

LinkedIn also needs to stop idealizing too much on humblebrags, hustle porn, lessons from everything, fake announcements, and fake vulnerable posts. One way LinkedIn can know about this is through scanning the comments of the post. Even though such content has become the norm on LinkedIn, if incentives are rightly aligned, people may slowly stop posting such content.

Temporary shadowban creators and users who consistently try to hack the algorithm by creating one-liner low effort content, or practices and publish AI-generated content. When LinkedIn’s users scroll the feed, they should be left feeling, “This was great, learned something new!” not “Damn, this platform sucks.”

#3: Get the Messages & Notifications Right

I’ve noticed that in recent years, LinkedIn’s messages and notifications have gotten out of hand. Countless promotional messages, irrelevant direct messages, useless notifications and alerts that users don’t want to see and engage with.

This is absolutely terrifying and makes the user experience worse. LinkedIn should give people more control over their accounts and what they want to read, see, and receive and what they don’t. This will single-handedly boost people’s productivity and give a far better user experience while using the platform.

#4: Redefine Networking

Networking on LinkedIn right now is about requesting “Connect”. But it doesn’t have to be that way. LinkedIn should learn from Twitter and Reddit, and try to implement similar things. Just like there are different small communities on Twitter (crypto, personal finance, trading etc.), and on Reddit, small local communities, topics, and open chats; LinkedIn can have similar small and large communities.

LinkedIn should give options to create communities and incentivize its users to join and run them. The reason crypto bros can’t leave Crypto Twitter is that all the other crypto bros are there, and the reason Reddit nerds don’t leave memes pages is that all the great memes are created and found earlier in those Subreddits.

What if LinkedIn’s communities are hard to ignore for professionals?

Now you may say: Doesn’t LinkedIn already have Groups? Well, you’re right. But what I’ve found is that they are not very useful. The people who create Groups do so intentionally: to share and sell their stuff. And more often than not, these groups are far away from personal conversations, genuinely helping each other, and having a good time chatting, like I see people on Subreddits do. This is the kind of community I’m talking about: value-driven, genuine, helpful, and a sense of connection.

#5: Stay True to the Core

It’s absolutely amazing that LinkedIn provides its creators and users with Creator Tools (posts, video, newsletter, carousel, etc.) that they need to succeed in their creator and business journey. And I know it’s important to publish their ideas in the creator economy. But don’t forget that this is not what LinkedIn was meant to be.

Content is a medium to connect people and businesses with each other, that’s it. LinkedIn’s primary goal is to help businesses find good employees, and people find their next dream job while making meaningful connections.

This is LinkedIn’s core value, and it should stick to it.

But LinkedIn, in recent years, has clearly made it painful for people to find jobs and for recruiters and businesses to hire the right employees. LinkedIn must be aware of it and make meaningful improvements so people don’t have a hard time finding jobs, and companies don’t have a hard time hiring the right employees.

By fixing them all, I think LinkedIn is set to become the next big professional, social networking and job board platform on the internet. The question however is: Does LinkedIn actually take time to think about these and implement them, or it’s busy changing the homepage and remains unchanged.

The cofounder of Slack once said, “Email is the cockroach of the internet.”

There’s a sweet story behind why Stewart Butterfield said that. When Slack was launched in 2013, people thought of it as an email killer. But you may know that Slack was never built to kill email, both have had different use cases from the beginning.

But look at this 2013 article from Fast Company:

Things became clear when in one of the web summits in 2015, Butterfield was asked if Slack is an email killer, to which he responded saying, “Email is like the cockroach of the internet…it’s got another 30-40 decades” clarifying that they are not after email or trying to replace it. However, Slack did manage to make business communications easier, faster, and more efficient.

But it didn’t kill email. And not just Slack, countless chat apps and communication tools were built but email remained irreplaceable. And it’s really fascinating how email has now become a big part of our lives, not just in work but in day-to-day activities too.

And isn’t it crazy that I get to send you this post just because of email, for free? I can’t take this simple yet powerful technology for granted! But guess what? Email is not just limited to sending or reading newsletters, think of that brand sponsorship email, that hiring email, that email from Stripe, that email from your favorite artist, that email from your dream client, that email from your boss, and that email from your old friend.

Nothing beats emails.

So in today’s post I want to shed some light on email. Honestly, I couldn’t be more grateful for this wonderful invention—email. So the agenda of this post is to walk you through the history of email, why it’s powerful, how it changed the world, and its future.

Let’s dive in!

Email All the Way Down

The history of communication is fascinating. Before the internet was invented and email was a thing, people used different sorts of communication methods to send and receive messages.

If you go back to history all the way down, you’d find that in ancient times, people used Smoke Signals as a distance communication method, then came the messengers. And then in the industrial era, things like telephones and radios were discovered.

But it was only in the 1960s, when the internet was invented and online messaging became a thing. However, what’s worth noting is that the internet wasn’t mainstreamed yet, rather scarcely used by universities, governments, and militaries in the US.

Computers had been around for a decade or two, but unlike today’s computers, they used to be the size of a room, barely movable, required dozens of different components that connected all together, and were incredibly expensive ($200k or more per unit).

They looked like this:

Now here’s how the computer messaging was born.

Noel Morris and Tom Van Vleck, the two MIT employees (graduates!), who for the first time in the 1960s, worked on an internal messaging program called CTSS that allowed people to leave messages between users sharing the same computers. For example, leaving a message for the colleague that their files had been backed up. However, this messaging model was limited to the same computers and couldn’t be seen on other computers.

A few years later in 1971, another MIT computer scientist, Ray Tomlinson, who at the time was working at a government-funded project called ARPANET, built an email system combining the local messaging program SNDMSG (to write messages) with an experimental file transfer program, CPYNET, allowing messages to be sent across different computers connected to ARPANET.

A couple of things Tomlinson did here. First, he used an @ sign to distinguish the username from the machine (host), a technique which has been used in email addresses ever since. And secondly, the first message Tomlinson sent was a test message between two computers placed side by side, typing a random word, “QWERTYUIOP.”

Here’s how Ray Tomlinson describes it:

Computers were very expensive — I think one we had here, for example, was something on the order of two or three hundred thousand dollars. That’s 1970 dollars. They were a scarce resource. To get the best use out of them, they were shared by multiple users at the same time — that’s the concept of time-sharing, because the computer very quickly switches attention from one user’s job to the next user’s job. Since most of the time working on a computer you’re thinking rather than doing something, it works pretty well.

So this idea had been around for several years, of sending messages to other people on the same computer. I saw an opportunity to extend that to users on other computers, because now we had a network connection that we could use to transfer the mailbox information from one machine to the other. I put that together in late 1971. I combined the SNDMSG program we had, which was used within a single computer, and a little experimental file-transfer program I had made.

This was a real messaging breakthrough as now people could not just send messages to other people using the same computer, but also to all the people using computers connected to ARPANET. And with that, Ray Tomlinson became the inventor of email.

The interesting thing is though, Tomlinson pursued the idea independently, stating, “It seemed like a neat idea,” but upon demonstrating the system to colleagues he’d said, “Don’t tell anyone! This isn’t what we’re supposed to be working on.” However, he deep down knew that if he just got this thing right, it would change the way people communicate forever.

And indeed, he did. Watch Tomlinson talking about it:

Once invented, lots of improvements happened on the email technology, for example in 1983, the Simple Mail Transfer Protocol (SMTP) was implemented, a guiding framework for sending and receiving emails between servers. The technology was so powerful and efficient that during the 1980s and 1990s, it became the most used communication method for businesses, universities, governments, and in defense.

And since the technology was powerful, it enabled an opportunity for other companies to build products around it. For example Microsoft launched MSMail in 1988, which became the first commercial email client for Apple Macintosh. Then came Hotmail in 1996, offering a web email service, and it was later purchased by Microsoft in 1997.

Microsoft later rebranded the name to Outlook. At this point email was web and computer only. But in 2002, email went on mobile devices when Blackberry introduced its email feature on the BlackBerry 5810, which was revolutionary on its own. A few years later Google introduced its email provider Gmail, which dominated the email industry forever, leaving Microsoft behind.

And now fast forward today, the email technology is over 54 years old, and has transformed the world for the better. And can we say that email is one of the greatest tech inventions of all time?

The Digital Passport

If a physical passport is required to enter a foreign country, a digital passport is required to enter the world of the internet, and that digital passport is none other than email. I can’t name a signal tool, software, or website that allows you to sign up for an account without an email address.

• Want to create a Slack account? Need an email

• Want to create a Zoom account? Need an email

• Want to create a Netflix account? Need an email

• Want to create a Twitter account? Need an email

• Want to create a YouTube account? Need an email

• Want to create an Instagram account? Need an email

And we’re not done yet…Airbnb, Uber, Stripe, Figma, Canva, ChatGPT, Curosr…you name it, they all need you an email to create an account and login, though many of them do have other sign-up options, but that doesn’t change the fact that most people simply go with email signups or logins, don’t you?

Then there’s 2 factor authentications. When you have forgotten your password or need to add an extra layer of security, companies don’t ask you to enter your grandma's name, they ask you to add another email that they can easily verify with.

It’s actually insane the amount of difficulties and problems you can experience or run into if you simply don’t have an email address. Just for an example, you can’t even use a web browser like Chrome to its fullest potential if you don’t have an email.

Then comes the God Mode. When the CEO of a $91.5 billion company asks its customers to contact him via email, know that email is inevitable, and it’s truly the cockroach of the internet.

Decentralized Technology

Decentralization is about ownership and full control over your assets (whatever you have). Let’s understand it with a simple example.

The biggest difference between owning a newsletter and having a Twitter following is that the latter is not owned by you. Elon Musk (the owner of Twitter) can delete, ban, suspend, or de-platform you from it anytime he wants. Even though you may think you own your Twitter followers, you technically don’t. And this is the same thing with other social media platforms.

Newsletter or any sort of email practice, on the other hand, is powerful because you own the emails–the list. For example, if something unexpected happens with Substack, I can take my email list that has thousands of email addresses, export and import it somewhere on another platform, and literally nothing changes or affects my work.

And the reason for this is that unlike social media, which runs on algorithms controlled by a single entity, email is fundamentally a decentralized technology, guided by SMTP (Simple Mail Transfer Protocol), which no single entity owns or runs. And btw, don’t get confused with Google’s Gmail or Microsoft’s Outlook, they are providers, not the rulemakers.

This is what separates email from social media—at scale.

The Tool so Powerful

I wanted to know about email, so all I did was ask Google: “Can you tell me a few stats about email?” and it gave me the following AI Overview, which I think pretty much drives the point how powerful email actually is:

Some more stats: Gmail alone has over 3 billion users, of which around 2 billion are active users. But realize that Gmail is just one service provider, there’s Outlook, iCloud Mail, Proton Mail, and many more.

Google says that there are around 4.5 billion email users globally, expected to reach 4.8 billion by 2027, making it one of the most reliable sources for businesses and companies to reach their targeted customers. Because here’s the reality: Not everyone likes to be on social media, especially these days (becoming toxic?). But guess what? They do own an email that can be reached via paid marketing.

Ever wondered why you often receive emails, and not mobile SMS or push notifications from your favorite companies letting you know that you need to confirm XYZ, find more about their new updates, or get help when you run into a problem? The reason is simple: Email is the most reliable, convenient, secure, and efficient way to reach people.

Now here’s some crazy stats: according to research done on this website, it’s been found that 55% email senders increased their email volume, and 49% of email senders said that they were emailing customers more often during the initial months of the pandemic and lockdowns.

Email is truly powerful.

Another best thing about email is that, if you compare email and social media, the engagement ratio is vastly different. On Social media, you’d be lucky if 7-10% of your audience read, watch, or listen to the content you create. Sometimes you go viral but that doesn’t equal to cash. An email list, on the other hand, can have an open rate of 30% to 70%, driving significantly better engagement, thus increasing the sales conversions.

The Future of Email

If you Google “The future of email” you’ll come across a bunch of sites that claim to change and replace email. But none of them, in reality, has been able to do so even after decades of bold promises. What’s going on? Well, email is irreplaceable anytime soon.

However, I do agree that email is constantly changing and evolving. For example, recently Google announced some big changes to Gmail, integrating its AI, Gemini, into it. Since Gmail is a dominant player in the email industry, it’s worth paying attention to it.

So here are three big changes Google is making:

#1: AI Overviews: Generally, when you open your emails or Gmail, you usually open each email one by one manually, right? Well, Google, for the first time, is giving you an option of an AI Overview, which will help you find not just what’s new in your inbox, but also your years-old emails with a few right keystrokes.

#2: Write Emails with AI: Tired of typing every single word while sending/replying to emails on Gmail? Well, with the help of Gemini, now you can auto-select emails and replies suggested by it instead of writing every single word manually. It’s about productivity, as they say.

#3: Dedicated AI Inbox: Google went one step further and just made email easier for you. Instead of checking your inboxes, now you have an option called AI Inbox wherein the most important emails sit. For example emails about renewals, your friends’ birthdays, joining letters, important confirmations, etc.

I agree that email isn’t what it used to be, but you also can’t deny the fact that it’s irreplaceable, and useful, and important, and inevitable. And as Slack’s cofounder, Stewart Butterfield already said, “email is the cockroach of the internet, and it’s got another 30-40 decades,” I do think email is here to stay for another few hundred years, at least.

In recent months, a debate has been unfolding online about Uber being the next Blockbuster. The idea that AV (autonomous vehicles) companies like Tesla and Waymo will bankrupt Uber in the near future. Just search “Uber Blockbuster” on Twitter, and you will find countless tweets like this one:

Fair enough!

However, I’d argue that comparing Uber to Blockbuster without understanding what actually led to Blockbuster's bankruptcy is a cynical assumption that doesn’t make sense. So first, what I want to do here is tell you the quick story of Blockbuster and learn why it failed so we can further debate on the topic.

Founded in 1985, Blockbuster dominated the entire entertainment industry in the 1990s. With thousands of retail stores, millions of customers, and a vast amount of media assets—they were the gateway for people to rent VHS tapes (later DVDs) of almost all movies and video games.

Making money through “Late fees” was the backbone of Blockbuster. If the customer failed to return the rented media asset on time, they had to pay a late fee, usually $1 for each late day. The company thrived on this business model.

Now enter Netflix.

Launched in 1998, Netflix promised to revolutionize the entertainment industry by offering a mail delivery system to rent DVDs. Their concept was simple: Allow people to rent DVDs for as long as they want with a monthly subscription fee, and instead of visiting a physical store, one simply needs to go to Netflix’s website, enter their address, and the company would ship them the preferred DVD via mail.

Netflix quickly found success as people loved the idea, reaching over $30 million in annual revenue by 2000. Blockbuster on the other hand, thought of Netflix as a niche business, failing to see the paradigm shift.

Now here’s the most interesting part: The same year in 2000, Netflix went on to offer itself to Blockbuster for $50 million with a promise that Netflix would promote Blockbuster on their platform, and they wanted Blockbuster to promote Netflix via their thousands of physical stores so they could together create a monopoly so powerful not just offline but online too.

Guess what happened? Blockbuster laughed at Netflix, rejecting the offer.

But from then on, as you may know Netflix only crushed Blockbuster, bankrupting it in 2010 as the demand for online services grew bigger and bigger. Netflix was right and lucky that it bet on the right technology—the internet.

Now compare this to Uber. Uber of course will be the next Blockbuster if it doesn’t adapt to the new technology—autonomous vehicles. If Uber remains unchanged, keeps prioritizing human drivers, I’m confident that AV companies like Tesla and Waymo will bankrupt Uber in the next 10 years.

So it begs the question: Is Uber adapting or trying to remain unchanged? The good news is, in this post I don’t just show you what Uber is doing in response to AV, but also aim to give you a 360-degree view of the whole ride-hailing industry, the current situation of AVs, and what the future may look like in the next 5 or 10 years.

I couldn’t be more excited, let’s dive in!

The Market

Right now the dominant players in the ride-hailing industry in the US are Uber and Lyft with 70% and 30% market share, respectively. It’s impressive how just these two companies have been dominating the industry for years and years.

But the debate now is that as more and more AV companies enter the market, Uber and Lyft will lose their market share. Currently, Uber has 70% and Lyft 30% rideshare trips in the US, but as AVs will disrupt the industry, Uber, as per Morgan Stanley research, is expected to fall from 70% to 22%, and Lyft from 30% to 7% in AV trips by 2032.

Pretty bold prediction, right?

Make no mistakes, that stat doesn’t include human drivers. But to give you some context, Uber is currently available in more than 15,000 cities across 70 countries, has over 8 million drivers, and ~185 million riders on the platform, making it one of the most used ride-hailing platforms in the world.

Now compare this to Tesla and Waymo, which have just gotten their foot in the industry, it will take a while for them to scale-like-Uber given the nature of AVs (job loss, safety, etc). Scaling to new cities will be the biggest challenge for companies like Waymo and Tesla. This shows, currently Waymo is available only in five cities in the US, whereas Tesla Robotaxi is only in Austin, Texas.

But it’s not just that Waymo and Tesla will face the scaling challenges, if Uber wants to have AVs on its platform, it too is going to face the same scaling challenge. If you don’t know, when Uber was started, the company used a lot of blackhat tactics and broke local laws to enter new cities.

So who’s going to have the largest market share in AV trips? No one knows, companies are figuring things out. But I think it seems like there’ll be multiple winners as each company has its own unique advantage. On the contrary, I also think that whoever scales their AV services to new cities around the world “fast” has an opportunity to become a monopoly.

The User Experience

No matter the technology, they are here to make people’s lives easier, better, and efficient. And by this definition, in the ride-hailing industry, whoever provides the best customer experience will ultimately win.

When it comes to user experience, here are the key aspects riders will look for:

#1: Cost per Mile: Uber’s cost per mile tends to hover around $1 to $2, although it can vary depending on the time and place. Waymo’s cost per mile is a bit higher than Uber's, averaging around $1.5 to $3. Whereas Tesla Robotaxi’s cost per mile is by far the lowest, hovering around $.20. This puts Tesla as a winner when it comes to pricing and cost per ride.

#2: Safety: Riding on Uber can be paradoxical: Sometimes you find great drivers who are kind and respectful, and then there are times when you encounter idiots who ruin your whole day. The internet is filled with stories like these. Also, there’s always a skepticism towards human drivers even though you know a few things about them via the app. AVs on the other hand, tend to promise more safety. There’s no driver in the car so there’s no agenda, and you have little to no impact on your mood since you don’t talk to any driver while riding. The only safety concern about AVs is: Are the vehicles smart enough to drive safely and take you from one point to another. Although we’re still too early and AVs aren’t perfect now, so they will make mistakes. But as we make progress, they’ll just get better and better, becoming safer over time.

#3: Convenience: Right now Uber is the behemoth—they control the demand so Uber drivers have the best utilization of their cars. By the time a driver drops one rider off, there’s already another one on the line. This is also useful and convenient for riders on the platform because they have less wait time and a faster pickup time. It’ll take AVs to do so. Also, convenience in the sense, some people prefer not feeling obligated to talk to the drivers while riding. And I think this is going to be a big unlock for people to choose AVs over human drivers who want quiet rides.

So I think the winner here will be AVs, not human drivers.

The Future

So is Uber the next Blockbuster?

Honestly, I don’t think so. The reason Blockbuster failed as we talked earlier is that it failed to adapt and change to a new technology. But I think this clearly isn’t the case with Uber. The company is preparing, adapting, and innovating as the new technology is disrupting. Uber is not sitting around the corner waiting for things to collapse, or failing to see the paradigm shift—like Blockbuster did.

Uber is taking actions in response to AVs.

Here’s what and how:

#1: Uber Moves

Here’s what Uber is doing in response to AVs:

#1: Partnerships: One might think Uber is just sitting around doing nothing in response to AVs, prioritizing human drivers. But that couldn’t be further from the truth. Did you know that Uber partnered with Waymo to launch AVs in Atlanta and Austin on the Uber Platform? Did you know that Uber partnered with WeWide to introduce self-driving cars in Abu Dhabi? And did you know that Uber partnered with Momenta to introduce self-driving cars in Munich, Germany? And did you know that Uber partnered with Wayve to introduce self-driving cars in London? The list goes on and on. Don’t sleep on Uber.

#2: Owning AVs: It’s no surprise to me that Uber will own its own AV fleet in the near future. They’ll have their own cars utilized via the Uber platform. This is why they have partnered with NVIDIA to provide its vast amount of customer driving data and raw footage to NVIDIA to help it design custom-built GPUs and driving stacks that are ready for Uber-rides. The core idea is that companies like Stellantis and Lucid will build autonomous cars for Uber based off of NVIDIA’s custom-built GPUs and driving stacks.

#2: Diversification: Although the key revenue source for Uber comes from its riding services, taking ~28% on each ride, it’s worth knowing that the company’s business isn’t limited to riding services. They have now got a ton of stuff and are doing dozens of different things, aiming to de-risk the company by diversifying. For example they’ve got Uber Eats, Uber Freight, Uber Grocery, Uber Business, Uber Advertising, and new projects like drone deliveries. This diversification will act as a guardrail for Uber’s business.

#2: Uber Benefits

It’s clear to me that the longer it takes for AV companies like Waymo and Tesla to expand their services in new cities around the world, the more time Uber gets to think and strategize about how it can combat its competitors.

AV companies are already facing regulatory challenges and approval delays because of the nature of the technology and business, which I think is a big win for Uber. The only thing I’d say is though, Uber needs to move fast if they want to retain their market share.

But even if AV companies successfully scale their services in developed countries like the US, UK, Canada, Europe, and Japan, they’ll still face scaling issues in developing countries like India, Africa, etc.

Take India for example. This country has a population of 1.5 billion people with a growing market. But to accurately work a technology like autonomous vehicles there, the country needs good infrastructure: better roads, traffic signals, optical bars, no dogs or cows on the road, which India clearly lacks. And it’s not just that the infrastructure isn’t quite there yet, it’s also that the government is too strict and slow. And for this reason alone, I don’t think AVs are disrupting India anytime soon, which means a huge win for Uber in countries-like-India.

#3: Uber Positioning

I want to make a few important points in this section.

In my opinion, the ride-hailing industry isn’t going to be divided into “Just this or just that”. And no matter how badly the AVs disrupt the industry, there will always be demand for human drivers.

And even though AV companies like Waymo and Tesla are trying hard to scale their services in new cities as quickly as possible, aiming for international expansion—they may still need Uber as a partner to generate demand that they can’t get anywhere else.

Uber is making it easier for AV companies to join their platform because they know that an 80/20 split is not a bad deal for both parties. AV is actually a good thing for Uber as a lot of expenses for the company come as a form of Uber drivers’ insurance and Peak Hour incentive. But with AVs, Uber won’t have to think about it, saving billions of dollars every year.

That being said, no AV company will want a poor utilization of their vehicles. But sadly, this is going to be a problem for new AV companies. As Uber already controls the demand, it’s going to be much harder for others to generate enough demand and have the best vehicle utilization on their platform alone. It’ll be especially brutal if Uber goes hard on AVs. This is the exact reason why Waymo partnered with Uber even though it’s scaling fast in the US.

Said differently, Uber could be an aggregator.

Let me explain it via the McDonald’s example. The company has its own app, millions of people use it, and McDonald’s generates billions through their app and physical stores. But guess what? They also partner with companies like Uber Eats, DoorDash, and Grubhub to get customers. And the reason is simple: they want as much demand and customers as possible.

This is the same story with restaurants, delivery apps, and booking sites.

And the thing is, the ride-hailing industry is growing fast and has become a space so big that it can have multiple winners even after the arrival of AV companies. Of course, the industry has been dominated by Uber for years, but now I think as more and more AV companies are entering the market, there will be multiple winners. Just like we know that there are multiple winners in the streaming industry, to name a few: Netflix, Prime Video, HBO, and YouTube.

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Microsoft is a weird company.

When you think of one of Microsoft’s long-time competitors, Apple, you’re forced to think about their genius marketing, beautiful designs, and wonderful products. Compare this to Microsoft, and it makes you realize that the company is the complete opposite of Apple.

Microsoft, indeed, is not very good at design, storytelling, marketing, or building great products. But what’s surprising to me is that when you look at the numbers, both companies pretty much overlap with each other: Apple is the second-largest company in the world, whereas Microsoft is the fourth by market cap.

How is this even possible?

Well, if you ever took the time to study Microsoft, you may know the reason. But if you don’t, let me share with you a Note I posted a few months ago that I think sums everything up well. Here you go:

Both juggernauts, Apple and Microsoft, are super successful. However, one more thing is clear though, Microsoft isn’t a beloved brand like Apple. If you walk down the street of any city in the world, you’ll at least find a few who’d say, “I just love Apple.” But this clearly isn’t the case for Microsoft.

Again, if you’re thinking, “Why is this such a thing?” I’d ask you not to be so hard. By the time you finish reading this post, you’ll have an answer.

But then, you may say, “Who cares if you’re a beloved brand or not?” Well, you’re right…as long as you’re printing money, you’re fine because the fact that you make money shows you have useful, valuable products.

Which absolutely is the case for Microsoft.

So in this post, what I want to do is explain why Microsoft wins despite not being very good at marketing, design, storytelling, or building great products. And the truth is, one shouldn’t take Microsoft for granted, as I find it interesting that the lesson Microsoft shares, other successful tech companies barely do.

So let’s understand Microsoft and why it wins!

What is Microsoft

The fascinating thing about Microsoft is that no singular power law product defines the company like Google’s Search, Apple’s iPhone, Amazon’s E-commerce, and Facebook’s Family of Apps. And while it doesn’t have a single power law product, Microsoft is one of the rare companies that rode almost all the technology waves.

Microsoft was a computer/software company from the 1970s to the early 1990s. Became a browser company from the mid-1990s to the early 2000s. Then rode the consumer tech wave from the 2000s to the late 2000s. Then became a cloud company from the mid-2010s to early 2020s. And now? It’s riding the AI wave from 2022 onwards.

Not everything I wrote in the above paragraph may be accurate, but it at least gives a general idea of what the company actually was in that timeline. And so, it’s worth saying that Microsoft has never been as stable a brand as Apple in building lane-of-products.

Microsoft started with personal computers, which people initially thought were toys. But as years passed, the company built different domains of products from a web browser to smartphones to gaming consoles to developer platforms to cloud infrastructures.

Some products were mega hits, like Excel. Some of them failed, like Windows Phone.

When Microsoft was started in 1975, its mission was: “A computer on every desk and in every home.” And indeed, the company was so successful in accomplishing that mission. But now, 50 years into building, that mission has changed with a new one:

“To empower every person and every organization on the planet to achieve more.”

You can clearly see the direction Microsoft is moving into.

Microsoft is now the fourth-largest company in the world with a total market cap of $3.6 trillion, with the revenue reaching over $293 billion in 2025. And the company has more successful products than I can barely remember, including Excel, Microsoft Teams, VS Code, Windows, Microsoft 365, Azure, GitHub, LinkedIn, and Xbox.

So what is Microsoft?

Is it a software company? A gaming company? Cloud company? Computer company? Or an AI company? What the heck is Microsoft actually? Truth be told, as I said, Microsoft doesn’t have a single power law product like Apple and Google, making it hard to define the company with one of its successful products. However, in simple words, saying: Microsoft is a technology company that builds tech products in different domains wouldn’t be wrong, if that makes sense.

The Roller-coaster Ride

You may think that Microsoft has had a smooth ride, but the reality is, the company’s journey from the early 2000s to the late 2000s was not very good. However, Microsoft did fairly well prior to 2000—dominated the PC market, crushed Netscape, went public, etc.

It was only in 2000 when things went south, see the graph:

What happened as 2000 started? Well, a lot happened in that timeline. First, Microsoft’s founder Bill Gates stepped down as CEO, with Steve Ballmer taking over the position. Another important thing that happened was the Dotcom Bubble, later followed by the Great Recession—the two events that didn’t just crash Microsoft, but the majority of the tech companies.

Let’s touch on Steve Ballmer.

Under Steve Ballmer’s leadership, the company tried a bunch of new projects that it had never done before. For example, E-Reader, HailStorm (a web service), NTFS (data storage), Digital Music, and many others. But sadly, most of the projects didn’t really take off.

Not only that, under Ballmer’s leadership, the company focused too much on its competitors, responding with similar new products and features. And due to that, even though it was never an innovative company, it paralyzed Microsoft from making anything different or original.

Then began the Great Recession that collapsed the entire US economy, dragging tech companies like Microsoft to a near-death crisis, with its stock falling more than 44% in 2008. And because the company tried many different things in a bad economy with poor execution, it didn’t just fail on those projects, but also lost control over the products it was finding success in, for example Windows Phone.

The good news though? Microsoft remained a dominant player in the PC market even though the demand for personal computers was declining in the 2000s. However, if there’s one thing to say around this timeline about Microsoft, it’s this: From the early to late 2000s, the company became a big loser in the consumer market despite dominating the PC market.

The 2000s were a hell of a rollercoaster ride for Microsoft.

The Return of Microsoft

Microsoft started to take off again when Satya Nadella became the new CEO of the company in 2014. Nadella, before taking the CEO role, was the Head of the Cloud and Enterprise Group at Microsoft, joining the company in 1992. As he already had a good grasp of cloud computing, he doubled down on this very technology, which quickly paid off.

Microsoft Azure, which started as an experimental project in 2006, was founded in 2008, and officially released in 2010. The product was initially called Windows Azure as the technology was primarily focused on Windows PCs. But under Nadella’s leadership, the product was renamed to Microsoft Azure, focusing on broader use cases and global expansion.

However, what’s interesting is that before Azure found some success initially, the only dominant cloud provider was AWS, which was founded by Amazon in 2006. While Azure had only found product-market fit yet and started to grow, AWS was already doing over $10 billion in revenue per year.

Azure had to catch up, Microsoft knew. And frankly, it did—in 2019, within just five years under Nadella’s leadership, Azure surpassed $10 billion in annual revenue for the first time ever, and soon became one of the key revenue sources for the company.

Although AWS remains the dominant player in the cloud market, Azure is not far behind. AWS right now has 29% market share in the cloud space, whereas Azure has 22%, which is impressive.

Microsoft reignited its growth because of Azure under Nadella’s leadership.

Microsoft shared that Azure has surpassed $75 billion in revenue this year. Just to put this in context, Microsoft will do around $300 billion in total revenue this year, which means a quarter of the revenue is directly coming from Azure alone, which is commendable.

But Nadella didn’t just stop with Azure.

Under his leadership, in 2016, Microsoft acquired the networking platform, LinkedIn for $26.2 billion. And two years later in 2018, it acquired the developer platform, GitHub for $7.4 billion. The company also went hard in the gaming industry, acquiring ZeniMax Media for $7.5 billion and Activision Blizzard for $68.7 billion—the last one being the company’s largest acquisition yet. And what’s impressive to me is how all of these acquisitions turned out to be the right decisions for Microsoft.

And now, enter the AI wave.

Microsoft, unlike Apple, isn’t sleeping on AI. The company has made massive deals and partnerships with top AI companies. For example, Microsoft is committed to invest $13 billion in OpenAI, owning a 27% ownership stake, while it also promised to invest $5 billion in Anthropic in partnership with NVIDIA last month.

I have no doubt that the company is right back on track again. Although giving too much credit to the above acquisitions and Azure’s success alone wouldn’t be fair. But guess what? It’s clearly not the case. Under his leadership, Satya Nadella also drastically changed Microsoft’s culture, from Know-it-all to Learn-it-all growth mindset, which gives a huge room for learning, experimenting, and being willing to fail to Microsoft’s employees and teams.

The Winning Formula

So what’s Microsoft’s winning formula?

Let’s be real: For a new company, it takes years to find product-market fit, moat, defensibility, and the right business model. And this is why it’s incredibly hard to really understand a newborn company. But as time passes, things become clear, which I’d say is also quite true for Microsoft.

The older it got, the more we understood the company. And it seems to me that Microsoft now has a clear picture of what market it wants to serve, who its ideal customers are, and its core strengths and weaknesses.

So now it’s somewhat clear, here’s why Microsoft wins:

#1: Sell Utilities, Not Lifestyle

If you’d asked people in the 1980-90s what Microsoft is? They’d tell you that “Well, it’s a consumer company that builds computer-related tech products for everyday people.” Which indeed was true at the time—but certainly not today.

This doesn’t mean Microsoft doesn’t focus on the consumer market. But the reality is, the company is now more focused on serving “Businesses & Enterprises” instead of everyday people. Take GitHub, LinkedIn, Excel, VS Code, and Azure for example, which are primarily built for businesses and enterprises. Of course, I’m not ignoring their consumer products: Xbox, Microsoft Edge, Bing, and Windows.

But their main focus now is business, not individuals.

So when the focus drifts away from the consumer market to business and enterprises, the company doesn’t need to heavy-lift storytelling, marketing, or design. Because the truth is, “Businesses don’t buy from emotion, they buy from logic.” This is the exact reason you don’t often see Microsoft putting too much effort into storytelling, marketing, and design.

A simple comparison that explains it well:

#2: The Ecosystem

To understand Microsoft’s ecosystem well, I’ll simply pick one of its products, LinkedIn.

The company acquired LinkedIn for $26.2 billion in 2016. And now, roughly a decade later, the platform is deeply integrated across Microsoft’s products.

Sounds cliché, but LinkedIn is known for its professionalism, with the most updated data of working professionals available on the platform.

• Joining a new company? Update LinkedIn

• Resigning from a company? Update LinkedIn

• Starting a new company or firm? Update LinkedIn

People on LinkedIn literally do this. And this gives a huge data advantage to Microsoft, deeply integrating it with its Microsoft 365, Outlook, Teams, and Copilot. And then there’s the LinkedIn feed that provides a real-time labor market: skill demand, hiring trends, and job mobility, and which can be advanced-searched, filtered, and accessed via Microsoft products.

This is Microsoft’s ecosystem 101.

But it’s not just LinkedIn. Almost every product Microsoft has ever built or owns tends to be tightly integrated across all its products. For example, when you create a document on Word or Excel, it gets automatically saved to OneDrive, which allows real-time collaboration with teams and colleagues.

Overall, this gives Microsoft three big advantages:

• Makes the switching costs high

• Gives customers a smooth working experience

• Creates strong network effects so products become valuable over time

And this right there is powerful.

#3: Massive Distribution

As Reid Hoffman puts this in his book Blitzscaling:

“Many people in Silicon Valley like to focus on building products that are, in the famous words of the late Steve Jobs, “insanely great.” Great products are certainly positive, but the cold and unromantic fact is that a good product with great distribution will almost always beat a great product with poor distribution.”

Why is it that Microsoft Teams has over 320 million monthly active users, whereas Slack, around 80 million monthly active users? The answer is simple: It’s nothing but the power of great distribution. The sole reason Microsoft Teams has 4 times the Slack users is that Microsoft has a massive distribution reach, bundling and deeply integrating Teams into its 365 Office Suite and across the platform—in Microsoft’s deep ecosystem.

Microsoft’s huge distribution power doesn’t just allow its existing products to succeed, but it also gets a lot easier for the company to make a new product successful, for example their new AI assistance, Copilot. No one would be paying attention to Copilot if it were a standalone product with no distribution added. But because of Microsoft’s powerful distribution, it is tightly integrated across its products, so its customers can use it without the company doing heavy marketing.

The 100,000 Foot View

The conventional wisdom for building a successful company goes like this: build great products, do excellent marketing, nail storytelling, focus on branding, and be exceptionally great at design. But as you see, this post proved that that’s not always the case—certainly not for Microsoft.

Microsoft builds useful products, not great or life-changing products, aiming to be just “Good enough.” And since the company has shifted its focus to serving businesses and enterprises, it doesn’t obsess over storytelling, marketing, and design—never has.

Another thing worth pointing out about Microsoft is that the company has barely invented any product it sells—original thinking isn’t something Microsoft is good at. But guess what? It’s not really a problem for the company, and it shouldn’t be for you either. It’s absolutely fine to steal what already works. And as long as Microsoft provides value, solves real-painful-boring problems, and prints money doing that, the company is fine.

However, there’s one important thing to note here.

To accomplish what Microsoft has accomplished, companies must know their strengths and weaknesses. Microsoft leaned into what it was good at, doubling down on that. And it worked quite well for them. But if you blindly apply what worked for Microsoft, it may be a disaster for your company. You must first understand the rules so you can break them later.

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In the first week of this month, I published, You’re Wrong About Marketing, an essay I wrote to explain how companies should think about marketing. Going forward, in today’s piece, I want to talk about distribution and how companies should approach it.

I believe great distribution is crucial for a product to succeed.

As Morgan Housel puts it: “There’s often a big gap between changing the world and convincing people that you change the world.” And I think this also applies to building companies, “There is often a big gap between building a great product and finding people to use it.”

This reminds me of the Wright Brothers’ achievement.

Wilbur and Orville Wright had been working on building a controllable aircraft for several years. Each Glider they’d built had some flaws and issues, leading them to disappointment after disappointment. But they kept trying, kept building new gliders with different variations until they finally figured it out. On December 17, 1903, for the first time ever, they built a fully controllable aircraft and flew it for 12 seconds at 120 feet.

What they had been working on for years had finally paid off.

But the crazy part? No one saw their success, no one knew what they had built, no one knew what they had built would change the world forever. The media didn’t follow them, a few people who did see, didn’t believe it, they weren’t on the front page of The New York Times.

Why? The Wright Brothers lacked distribution.

It was only three years later that The New York Times, for the first time, talked about them in 1906. But just imagine if the Wright Brothers had media coverage, every generalist wanted to write about them, or they were in the popular magazines right after their achievement? Their work would’ve spread like wildfire, and indeed, they could’ve gotten the Government support, partnerships, or deals faster than they actually did.

Although pioneering aviation was more important than distribution at the time, this will not work if you are building a SaaS product, a robotic company, or a gigantic AI infrastructure. In a fast-changing world, you need to show people what you’re building—you need distribution.

So let’s explore distribution!

Understanding Distribution

To hear your opinion on distribution, I Noted a few days ago:

One person said, “Distribution is when owners take money from their own company that isn’t on payroll. It’s taxed different,” Another said, “Distribution is about ‘Money in the pocket ;)” whereas the Last Honest Broker said, “Logistics mostly.” And it seems to me that most people don’t quite understand what distribution really is, nonetheless these comments are somewhat closer to the answer I was looking for.

To understand Distribution, let me introduce you to the Marketing Mix.

Marketing Mix is a term coined by Neil Borden in the 1950s, and later it was refined by E. Jerome McCarthy and Philip Kotler, who proposed the idea in the book, Basic Marketing: A Managerial Approach in the 1960s. Marketing Mix is a concept to explain how a company should go about marketing its product to the target customers.

Marketing Mix has four key elements called 4Ps:

• Product

• Price

• Place

• Promotion

Let me explain them:

For a company to market its product to people, it must understand what the product is, who it’s built for (Product), and how much it’s being sold for (Price). The rest two are where I’ll focus and provide you more context. Place is Distribution: what channel you’re going to use to get your product in front of people, or where people can get it. Promotion is Marketing: what would be your message, positioning, awareness, and persuasion technique to make people nod their head and use or buy your product.

Said differently, if marketing is about the message, positioning, awareness, and what you want to say; Distribution is about WHERE you want to say them or what channel you will use to do that.

Make no mistake, distribution can have two different meanings in the AI era. For a company that makes and ships physical goods, its main distribution would be warehouses, trucks, agents, and anything that delivers the product to the end customers. For a founder that has a SaaS product, their main distribution can be a Twitter account or SEO that helps reach new users.

The line between distribution and marketing in the AI era has been blurred.

It’s the same reason why in tech, especially in Silicon Valley, you’d hear people often saying, “Focus on distribution” when they literally mean “Focus on marketing.” And it makes sense because in the old days, marketing meant advertising-driven growth. But in the modern world, saying “Focus on distribution” doesn’t just mean advertising-driven growth, but it also includes engineering-driven growth.

For example, look at this Peter Thiel’s quote:

If you’re a little confused to understand what Thiel is talking about, let me explain: Distribution doesn’t necessarily mean you need to find a channel, it can be product-inbuilt. For example, you can build a referral system, an affiliate system, or some viral loop built directly into your product that brings new users on autopilot, and that’s your distribution.

Distribution is not limited to selling physical goods or having an inventory, distribution can also be a tweet with your product link attached to it that people click on, land on your website, and make a purchase right away.

Is distribution part of marketing? Absolutely. And this is why I said “The line between distribution and marketing in the AI era has been blurred,” where these two oftentimes overlap with each other. Because if the goal of distribution is to get your product in front of people, then a 13-word tweet with your product link attached to it can also do it, right?

Types of Distribution

When I say “Types of Distribution,” I don’t mean channels to distribute a physical product (warehouses, trucks, inventory, etc). Instead, I want to talk about the distribution channels you can use to get your tools, software, SaaS, or digital products in front of people. However, many of the following channels can also work for the physical products.

I think it’s important for companies to know the available options to reach their customers. And although there are countless distribution channels out there, I’m only going to cover a handful of channels that I believe are popular and most effective.

There are two types of distribution channels—for lack of better words, I’m calling them Owned Channels and Rented Channels. Let me explain to you what these channels are and how they work in brief.

1. Owned Channels

Owned Distribution Channels are channels that you have, partially or fully, control over. These channels can be powerful and effective if done right. Here are strategies that come under this Distribution Channel:

#1: Referral: This is a mechanism to get new users for free, wherein the existing users share your product with their friends, family, or coworkers. And in exchange, you incentivize them cash or a sign-up bonus. When Dropbox was founded, this was one of the distribution techniques they used to grow the user base.

#2: Affiliate: Take the referral system one step deeper, and you’ve got affiliates. Referral works for existing users who use your product, but affiliates can promote your product without being a customer. Why would they? Because every sign-up or sale being generated via their unique affiliate link, they make a commission from you. Almost all companies do this to get new users, for example, Canva and Shopify.

#3: Natively In-Built: This distribution strategy only works if you already have a successful working product, else you need to find a partner…but then that becomes a “Rented” distribution. In this distribution strategy, you integrate the new product somewhere into your existing product such that people can see and click on it. For example, you may already have seen Google Gemini integration across the company’s products.

#4: SEO: Even though AI chatbots are rapidly eating Google Search, SEO can’t be ignored when it comes to distribution. You may already know what SEO (Search Engine Optimization) is. But if you don’t know, it’s a method where you create SEO-optimized articles that have a chance of getting ranked on Google Search. A few companies I know that do it well: Hubspot, Grammarly, Salesforce, and Instacart.

#5: Sales Team: This distribution technique works best for B2B products. You hire experienced sales reps—they make phone calls, send emails, or do whatever it takes to close deals and partnerships for your company. This is especially lucrative if you’re selling to large enterprises, deals worth millions of dollars.

#6: Signature: When you send an email to someone from an Apple device, the person sees a signature saying, “Sent from my iPhone or iPad” at the end of the email. That signature right there? That’s what I’m talking about. Or have you sometimes seen those “Powered by X” taglines at the very bottom of the page? For example, if you go to the Stratechery website, you find this tagline at the bottom right corner.

#7: Product-Led Growth (PLG): This distribution strategy is purely engineering-driven. You built a product so good, so simple: easy onboarding, easy to navigate, and user-friendly that people keep coming back to your product and recommend it to others.

#8: Online Groups & Communities: Having an online community or group can supercharge your product’s user growth. Think of a Facebook Group, Subreddit, Discord Server, or your own Developed Group where you provide free value to your existing users—newcomers come, see what’s happening, and give your product a shot. Another way to think about online groups and communities is, you go and talk about your product in these same social media communities and groups. But I would doubt if that counts as an “Owned” Distribution Channel.

#9: Email Lists: The best thing about an email list is that, unlike followers, you can export and import it on another platform whenever you want. Meaning, you can jump from one platform to another with the same email list, which you can’t do with the following. This makes an email list one of the most powerful distribution strategies to reach new users in the AI world.

2. Rented Channels

Unlike Owned Channels, you don’t usually have “Full control” over Rented Channels. However, this type of channel can also equally be powerful if used correctly. And what’s important to note is that there are situations when you don’t actually have any other choice but to go with the Rented Channels, for instance when you build a mobile app.

Let’s explore each of them briefly!

#1: App Store & Play Store: Hands down…these are two of the biggest platforms when it comes to getting your app in front of billions of people. If you’re building a mobile app, you just can’t ignore these two platforms. Who owns the App Store? Apple. Who owns the Play Store? Google. Guess how many popular mobile OS (operating systems) there are…just two—iOS and Android. Who owns them? These two companies. So you have no choice but to go with them.

#2: Meta Platforms & Twitter: When I say Meta Platforms, I mean Instagram, Facebook, WhatsApp, Threads, and Messenger. And of course, there’s Twitter/X. You go on to these platforms and build a distribution engine to reach new users. You create content that is your marketing, and over time you have this silly thing called “Followers.” The downside though? Unpredictable when they can ban or suspend your account.

#3: Amazon & YouTube: If you’re an author, guess where you want to publish your next book? Probably Amazon, right? And the reason isn’t that it’s hassle-free (they do all the work for you), but because you also get to reach their 300 million active users globally who happen to use the platform. Same with YouTube, which has 3 billion users globally. But again just like above, these two are also Rented Distribution Channels.

#4: Partnership & Advertising: You spend a fortunate amount of money on advertising and partnership to get your product in front of someone else’s audience. This could be partnering with celebs, sponsoring newsletters and YouTube Channels, or making creators a brand ambassador (like Notion did). Then there’s advertising where you directly spend capital on social media ads, native ads, YouTube ads, etc.

#5: Third-Party Integration: And last but not least, this is a type of distribution strategy where you ask to integrate your product to a third-party software company, or to someone that already has users, either as a collaboration or mutual benefit. However there are cases when you don’t need to ask, but that requires your product to be popular. For example, Zapier or a collaboration platform, or OpenAI, integrating your product to their platform.

Alright, these were a handful effective distribution strategies.

The Real World Examples (Stories)

Is great distribution as equally important as great products? Well, the reality is, the companies that actually come up with great distribution strategies and have a useful product to fulfill users’ needs are the ones that actually find success.

So in this section, I want to tell the story of companies that cracked “Distribution” in their early days, which didn’t just allow them to outcompete their competitors, but also singlehandedly helped them dominate their category. The following are the companies that didn’t just focus on product strategy, but distribution strategy too.

1. Dropbox

Dropbox was founded in 2007, and even though it came out as a great product, its founder quoting, “Forget your USB Drive;” One of the important distribution strategies Dropbox used in the early days was “Referral.”

Dropbox had already gotten attention on Hacker News and Reddit. These platforms did help gain tens of thousands of users in the shortest time possible, but after several months the growth became steadier. Drew knew he needed to change something, so he came up with this very distribution strategy, Referral.

Here’s how it worked: Dropbox built a two-sided referral system. When an existing user referred to someone, each of them received 250MB free storage (later increased to 500MB). The best part? Dropbox already had tens of thousands of users. However, they were not actively referring the product to others. But as soon as Dropbox launched the referral program, users started to share it with their friends, family, and co-workers.

And why not? Getting 500MB for free was a huge deal at the time.

The distribution strategy worked extremely well because they built the system directly into the onboarding process: When a new user would sign up, they’d see an option, “refer to a friend and get 500MB for free.” Although existing users could also see the option once logged in. This skyrocketed Dropbox’s user growth, jumping from 100,000 users in late 2008 to 4 million users by late 2009.

Watch Drew Houston talking about it:

2. Facebook

Three years into founding the company, Facebook had reached 25 million users by 2007. But it wasn’t a dominant player in the social media category that it later would become, its competitors were ahead and had more users than Facebook did.

• Myspace: 107 million users (4x to FB)

• Hi5: 70 million users

• Friendster: 50 million users

• Bebo: 40 million users

You see…so what changed all of a sudden?

Here’s the distribution strategy Facebook used: In May 2007, the company introduced its Developer Platform, allowing developers (AKA companies) to build their social apps directly on the Facebook platform, tightly integrating with Facebook Social Graph. Facebook had a reach, so this seemed no-brainer to developers to build their apps on the platform to make bank.

Here’s what Facebook said about this launch and the developer platform:

“Until now, social networks have been closed platforms. Today, we’re going to end that,” Zuckerberg told an audience of more than 750 developers and partners. “With this evolution of Facebook Platform, any developer worldwide can build full social applications on top of the social graph, inside of Facebook.”

Guess what happened? Tens of thousands of apps were created within a year and hundreds of millions of people joined the platform solely because of those apps, soaring Facebook’s total users from 25 million to 250 million in just two years, leaving its competitors like Myspace and others in the dust.

3. ChatGPT

ChatGPT is one of the fastest-growing consumer products of our time. But it didn’t just come out in the market with its superiority and novelty, there was a strong distribution strategy gamified to make ChatGPT successful. What was ChatGPT’s distribution strategy? Social media.

OpenAI’s CEO, Sam Altman was already a prominent figure in tech before ChatGPT-3, and there were a ton of smart, influential people who worked at OpenAI who have had influence, for example, Mira Murati, Greg Brockman, Illya Sutskever, etc. So when ChatGPT was launched, they all shared it on their social media accounts, primarily on Twitter.

For example this tweet:

Then there was a whole group of people, and “Thread Bois” who bombarded social media with their “10 ChatGPT prompts that’ll change your life” posts. This created a huge virality among people, sharing with friends, family, and co-workers.

And this is why literally in no time, ChatGPT became the first ever product to reach 100 million users in just two months, slashing TikTok and Instagram that took 9 and 30 months respectively to achieve the same numbers.

Of course the product, ChatGPT, was great, useful, and revolutionary. But imagine if OpenAI didn’t have a distribution engine, and like, its CEO Sam Altman had 370 followers on Twitter lol. Indeed, things might have gone in another direction.

4. Airbnb

What Airbnb did to grow its user base in the early days, especially via Craigslist, is certainly not considered “Whitehat.” Nonetheless, what I’m about to tell you will give you a whole different perspective on what you can do to gain users.

Here’s what Airbnb did:

Around 2009, Airbnb was still fairly small, founders were struggling to grow the product, had limited capital, and needed to move fast. At the time, they had a few hundred customers to a couple thousand users on the platform. Founders knew they had to do something, else they’d run out of business soon.

At the time, Craigslist was popular for everything, including for rooms and apartments hunting. This sparked an idea in the cofounders’ mind: “Craigslist has a massive reach, millions of people search rooms and apartments there, why don’t we just build a tool that bypasses their users to our platform?” They had found their Blackhat Distribution Strategy.

Here’s what they did: They built a bot that’d allow Airbnb’s hosts to cross-post their Airbnb listings directly on Craigslist with a single click. The goal was: When people would search a room or apartment on Craigslist, the bot would show them the relevant Airbnb listing with a link attached that the users could click on and get redirected to Airbnb.

Luckily, this worked like magic. Why? Airbnb’s co-founders had already done some “Do Things That Don’t Scale” work, helping its hosts take professional photographs of their rented places and put them on the Airbnb website. This made Airbnb’s listings stand out on Craigslist, making it more trustworthy and exclusive for people visiting Craigslist.

And guess what? Airbnb numbers soared.

5. Gemini

Are you paying attention to how Google is quietly, in a very smart way, integrating its AI product, Google Gemini across its products? You may already have seen a Gemini option on Google Docs, Gmail, YouTube, Google Drive, Google Calendar, Google Meet, etc. And that right there? That’s a distribution channel disguised as a simple integration.

It’s the smartest thing Google did to distribute Gemini. And see, now Gemini is everywhere. Although it’s not the only distribution strategy Google uses to make Gemini the most used AI tool, they have got other distribution channels too. For example, massive social media reach, YouTube channels, and hundreds of thousands of people who worked at Google.

I mean, look at this Google ad about Gemini:

6. Hotmail

Founded in 1996, Hotmail used a clever distribution strategy to get new users in the early days. What did they do? Every email you sent from Hotmail, had a signature at the bottom of the email that the receiver could see. The link was clickable, written in “PS. I Love You. Get your free email at HoTMaiL.”

Within hours of this new feature launch, Hotmail’s growth took off, soon averaging around 3,000 users per day. The next year, after gaining a massive 12 million users in just one year, Hotmail’s founders sold the company to Microsoft for a whopping $400 million in 1997.

Why Distribution Matters

I hate to say this, but I think most companies take distribution for granted. They’d spend most of their time building a product, while too little time thinking about their distribution strategy or how they’ll get the product in front of people. But realize that distribution strategy matters as much as product strategy.

As Reid Hoffman puts this in his book Blitzscaling:

“Many people in Silicon Valley like to focus on building products that are, in the famous words of the late Steve Jobs, “insanely great.” Great products are certainly positive, but the cold and unromantic fact is that a good product with great distribution will almost always beat a great product with poor distribution.”

To drive this home, let’s take an example of Microsoft Teams vs Slack.

If you compare these two products, neither of them is vastly different from the other—both are able to get your job done. Although many believe, to a degree, that MS Teams is more of a B2B product, primarily used by large enterprises; on the other hand, Slack is for small teams, more user-friendly, primarily used by startups.

But I think that’s not true. Slack is owned by Salesforce, one of the biggest CRM companies in the world, valued at over $240 billion. On the other side, there’s Microsoft, the juggernaut behind Azure, LinkedIn, GitHub, and Copilot. I don’t take these companies for granted, and would never assume they’d restrict their user growth serving one type of customer.

And so, if that’s the case, then why Microsoft Teams has over 320 million monthly active users, whereas Slack, around 80 million monthly active users? The answer is simple: It’s nothing but the power of great distribution. The sole reason Microsoft Teams has 4 times the Slack users is that Microsoft has a massive distribution reach, bundling and deeply integrating Teams into its 365 Office Suite and across the platform—in Microsoft’s deep ecosystem.

This chart is a bit old but tells the same story (Great distribution >> Good product):

This chart also explains it well:

And it’s not that this is only the case with Microsoft and Slack. Actually, if you study great companies you’ll find that all the companies that outpaced their competitors, applied some form of great distribution strategy. Although not to mention, the product has to be great to win. But guess what? Not even a great distribution can save a BAD product. Period. And this leads me to the next point.

Wait…But There’s More!

Can great distribution save a bad product? Absolutely not.

We’re living in one of the most transformative periods in human history. The world is moving faster than ever, things are changing in the blink of an eye, and there’s AI that is commoditizing what was once precious. And this is why I like to believe that great distribution can’t save a bad product in any circumstances, anymore!

The chances of winning are almost zero if you go with “Great distribution + bad product,” especially in a crowded market and in an AI era, where anyone can code their way to clone your product idea not in days, but hours. And not just that, great distribution also can’t save a “Bad but novel product.” Because as soon as you introduce a new, novel product in the market, there will be dozens of copies with better UI, better pricing, better integration by the weekend. The days have gone when you actually come up with a new idea, take your time, iterate on the product slowly, and dominate the category you’re in.

This reminds me of the story of Quibi.

Quibi was a streaming platform founded by two billionaires in 2018 and launched right at the beginning of the pandemic in 2020. The company had raised $1.75 billion from investors, spending over $60 million in marketing the product.

Despite spending tens of millions of dollars on distributing the product, Quibi failed. The company was shut down within 8 months of launch in December 2020. And it’s not that the pandemic was the reason it failed. Quibi failed because it was indeed a bad product—there was clearly a mix and match between what users wanted and what Quibi offered. On top of that, the platform was buggy, poorly designed, with no market research.

You don’t get a second chance when you launch a bad product in a crowded market—YouTube was already there, TikTok was taking off, Meta Platforms had already conquered people’s attention, leaving no room for Quibi to charge $8 per month for providing the content that was already available on YouTube for free.

Great distribution can’t save a bad product.

How to Think About Distribution

So all that being said, how should you actually think about distribution?

As David Sacks (PayPal Mafia, founder of Yammer) puts it: “Distribution has to be baked into the product from the beginning, it’s not something you tack on later.” This was a core conviction at PayPal and Yammer for their success.

If you’re building any kind of product, digital or physical, don’t just think about product strategy, think also about distribution strategy from day 1. The advantage of doing so is that you will be engineering-driven from the beginning, forcing you to build the product for viral growth.

• Can you add a referral system?

• Can you add an affiliate program?

• Can you build an invite system?

• How would you onboard new users?

• What would the whole UI look like?

• Can you build any sort of network effect?

Distribution-first mindset from day 1 helps you get clarity on these questions.

And while I said that great distribution can’t save a BAD product, I do think if you have a decent, useful product with great distribution, you can outcompete your competitors without much effort. But to do so, your product has to be genuinely helpful.

And since AI is here, things are becoming easier and easier to build and copy. There’s literally no moat left on the coding side unless you create a strong network effect, make the switching costs high, or build something only you can build, which means shifting the real moat to the distribution side for most companies. Whoever has the best distribution with a decent, useful product will win over a great product with poor distribution.

And above all this, which I haven’t talked about yet, you know what’s the most powerful form of distribution? Word of mouth. It’s at this stage, you actually dominate the category you’re in as your users share and recommend your product to their friends, family, and coworkers for free.

But the tricky part? Getting there is hard. How do you make Word of mouth start working for you? Well, you first build the foundation: Have a useful product, and spend the early days doing the distribution until enough people start using your product, satisfied with it so exceptionally well that they share it with others for free.

Lulu has a tweet around this, she says: “The most efficient distribution is getting users to promote the product as a way of promoting themselves, especially their achievement, intellect, taste, access, and tribe.” If your product helps the user accomplish any of the above, you’ve already got the word-of-mouth distribution.

Build a useful product with a distribution-first mindset.

Nothing is more powerful than people sharing your product for free as goodwill. Of course, getting here is hard, but once you do get there, growth becomes easier and easier from there. Multiple paths to get there, but realize that a distribution that is not anchored in product behavior collapses the moment you stop paying for it. Thus, if you’re thinking about distribution, think about the right distribution.

Hope this helps, thanks for reading!

Drew Houston, a precocious kid, was born in Acton, Massachusetts in 1983. When Drew was just one and a half, he could read, and at two and a half, he started playing games on an IBM PCjr, which his parents had bought a few years ago. Growing up in a well-doing middle-class family, his father was a Harvard-trained electrical engineer and his mother, a high school librarian.

By the time Drew was 8, he was using bulletin board systems, and later he learned how to make games and started going under the hood to reverse-engineer things. His mother knew what was going on, insistently saying, “Drew is becoming a code geek.”

By the time he turned 13, his passion for technology had grown much bigger, often saying to his parents that he wanted to be the next Bill Gates. This showed, when he was in sixth grade, he wanted to learn how to incorporate a company, so his parents took him to the town hall to talk to a clerk. Although he didn’t get to incorporate a company at the time, it revealed how interested he was in starting something like Microsoft.

When he was around 14, he signed up to beta test an online game, and as he was testing it, he found out that the game had security flaws. The smart kid emailed about it to the company, and they hired him as their networking programmer in exchange for equity.

The same year in 1996, at his school assembly, one speaker asked the group, “Raise your hand if you know what you want to become when you grow up.” Surprisingly, Drew was the only kid out of 250 who raised his hand up. While other kids at his age had no idea what they wanted to do growing up, Drew was distinctly clear that he wanted to start his own company.

Being a Harvard-trained electrical engineer, Drew’s father knew an MIT professor who was running an industrial robotics startup. One day, the professor ran into a coding problem, which he didn’t know how to solve. He luckily shared it with Drew's fathers, who said, “Don’t worry, my son can fix this.” Later, Drew converted their code to Linux, saving the MIT professor thousands of dollars.

Impressed by Drew Houston’s talent, he hired him to work for his startup.

Lo and behold, a few years later, he got enrolled into the same university, MIT, starting his freshman year in computer science. He continued working for the professor’s startup, but his interest in starting his own company only grew bigger and bigger. And this is why he’d often go to MIT’s Fraternity, and read all the business books from sales to marketing to management, etc.

A few years later, when he was around 21, he learned that the SAT prep was changing, from 1600 to 2400 points, which would make all the existing course material obsolete overnight. Drew saw this as an opportunity and started his first company, Accolate with one of his former high school teachers when he was in his final years.

In Drew’s words:

I was maybe 21, and the SAT was changing. I started an online SAT prep company because the opportunity was the SAT was changing in 2004, 2005 from 1600 to 2400 points. So, suddenly, all of the course material overnight was gonna be obsolete. I saw an opportunity to maybe develop not just a course for the new SAT but an online course, and I teamed up with a former teacher from my high school who had his own little cottage SAT prep company.

In 2005, he finally graduated from college, but his SAT prep company wasn’t doing very well. Things weren’t going as he expected initially, realizing that making it the company he wanted would be impossible. The harder he tried, the harder it got, so he decided to keep it as a side project and started focusing on other things.

Now here’s the interesting thing that happened.

While working on his startup and for other companies, one thing he realized was that he would often forget his USB drive at home, which was super frustrating for him. Forgetting his USB Drive means he wouldn’t be able to access his files and couldn’t get anything done. He knew that this was such a big pain and wished there was a solution. But guess what? It was around the mid-2000s, cloud wasn’t mainstream yet, and there was no Google Drive or iCloud.

Now this is where things get interesting.

After graduation, many of Drew’s friends moved to New York, while he stayed in the same place, Boston. But Drew was closely connected to his friends who had moved to New York, and luckily, they invited him to visit New York for a weekend. However, the guy realized he needed to get some work done for his SAT prep company, but he also didn’t want to disappoint his friends.

So he said yes, and backpacked his way to visit New York from Boston, which was a four-hour bus ride. The guy didn’t want to waste his bus ride, also the weekend he was going to spend with his friends, so he thought of carrying his USB drive and other necessary devices with him, planning to get some work done throughout the trip. Genius!

November night 2006, he landed on the Chinatown bus, and as he got on the bus, he realized that he had again forgotten his USB drive at home. He couldn’t be sadder and kept saying, “I’m stupid, I’m dumb, I hate me.” But the reality was, he couldn’t go back home and pick up his damn drive.

Here’s how Drew describes it:

A lot of my friends had lived in New York, and they’re like you got to come out. It’s a lot of fun here. Just come out for the weekend, and I have a dilemma because I’m like, well, I need to get some stuff done for my company. But I also want to go to New York, and I’m like maybe if I take the Chinatown bus or if I ride the bus I can have four and a half hours each way. So, then I’ll have ten hours. Ten hours should be enough time to do what I need to do, you know, all the elaborate rationalizations we come up with. So, I’m like, okay, if I take the bus, I’m greenlit to go to New York. Then I get on the bus, and I’ve forgotten my thumb drive.

“Screw this, Drew said, I never wanna have this problem again.”

He did some brainstorming, opened up the editor, and started writing some code in Python that would eventually become Dropbox, which he planted the seed of in that very bus, Chinatown. And what’s interesting is that as soon as he started working on Dropbox, he stopped all the side projects he was working on, including his SAT prep company, Accolate.

His Dropbox’s promise was simple: Forget your USB Drive. Dropbox lets you store all your data and files in one place that syncs across your devices smoothly for free up to 2GB. It doesn’t really matter whether you want to access your files and data from your phone, PC, or tablet; Dropbox’s got your back.

The idea sounded promising, the first version of Dropbox—an MVP was ready, and all Drew needed was users for his new product. Luckily, he already knew about Y Combinator and some marketing strategies like Gorilla Marketing, which he learned at MIT.

He had applied for Y Combinator with his previous company, but unfortunately, he got rejected. And this time again, he planned to join the startup school, Y Combinator. What’s interesting is though, YC had recently launched a website called Hacker News, a kind of Reddit specifically for programmers. Now this was a big deal for Drew as he wanted the attention of Paul Graham, the man behind Y Combinator.

So Drew asked, “What does Paul do all day?” And his hypothesis was like this: “Well, just like us programmers, he refreshes Hacker News all day long.” Why this question? Drew’s plan was to share about his product, Dropbox on Hacker News and try to get Paul’s attention.

So he made a quick tutorial video of Dropbox, posted it on Hacker News, and luckily it went viral, trending on the front page of Hacker News for two straight days. And surprisingly, it got the attention of Paul Graham. Later, Paul sent an email to Drew saying, “Your idea looks good, but you need to find a co-founder to join Y Combinator.”

So he started hunting for a co-founder and eventually found Arash, another MIT student. And they not only got enrolled into Y Combinator but also got their first outside funding of $15,000 from Paul Graham. And because of this, they got the attention of many Silicon Valley investors, for example, Sequoia Capital, which provided $1.2 million in a seed round in 2007.

Growth was easy for Dropbox as it was actually a great product. The users grew from 5,000 to 85,000 within a span of a few months, reaching its first one million users in April 2009, 2 million in September, and 3 million in November the same year. Then Dropbox crossed big milestones like 50 million registered users in October 2011, 100 million users in November 2012, and over 700 million users in 2021

Today, Dropbox is being used by more than 700 million people around the world. It’s the same company that forced tech giants like Google and Apple to start their own data storage products, Google Drive and iCloud, respectively. Dropbox’s market cap hovers around $7.15 billion, with the company doing over $2 billion in revenue for many consecutive years.

Every problem is a potential opportunity for entrepreneurs.

When you’re a billionaire, raising venture capital for your new startup is not hard at all. People already trust you (the fact that you’re a billionaire!), and all you have to do is make investors believe that what you’re building will change the world, and it’s a once-in-a-lifetime investment opportunity for them.

That’s the story of Quibi, a short-form streaming platform founded by two billionaires, Jeffrey Katzenberg and Meg Whitman in 2018, promising to revolutionize the streaming industry, going head-to-head with Netflix, YouTube, TikTok, and Meta Platforms.

Quibi’s premise? People are busy, they don’t have time to watch hours-long videos on Netflix. They need short, quick, premium video content, usually under 5-15 minutes that they can consume easily on their phone. This sounded like a great idea, so investors poured $1.75 billion into the company.

But the crazy part? I don’t know if you know this, but just like Mira Murati’s AI company, Thinking Machines didn’t have any working product when it raised billions of dollars (oh wait…they still don’t?), the same way Quibi didn’t have a working product when it started raising capital—the Billionaire Effect, as they say lol!

Several months later however, in 2019, Quibi announced that after building the platform for a few years, they were finally going to launch it in 2020. Poor investors who had gambled their money to make a profit from a company founded by billionaires!

And I’d argue that when you’re already a billionaire, when it comes to building and growing a startup, you may overlook a lot of things. You may overlook or underappreciate solid market research, asking for initial customer feedback, or in general building the product the right way because you’re overconfident.

And that’s the exact mistake Quibi’s founders made.

The company had raised more money than they needed, so it created an abundance mindset. What did they do with $1.75 billion? Well, Quibi spent an enormous amount of money, $63 million in just a few months on marketing, planning to deploy around $400 million in the first year alone.

Quibi burned capital on celebrity promos, billboards in every major city, Super Bowl ads, social media ads, influencer marketing—they did everything they could to let people know about the product. Now of course, this was not bad at all; anyone with over a billion dollars in budget would like to spend a decent amount on marketing.

So what went wrong?

When you spend tens of millions of dollars advertising a product in a pretty short period of time, it does seem like you’re gaining exposure and the platform is growing. That’s exactly how Quibi felt. But their marketing was ineffective. Of course, they did manage to get eyeballs and hijack people’s attention, but it was unclear to people who the platform was built for. Many showed hesitation to try the product because a) the platform wasn’t free, $5 with ads, $8 without per month, so why not just use YouTube or TikTok? And b) People who did sign up would churn out quickly because there was a mix and match between what the platform offered and what people needed—a lack of a high-quality content library made it hard for the users to keep paying for the product.

The company was shut down within 8 months of launch in December 2020.

Many people believe that the 2020 pandemic was the reason Quibi failed. I disagree, because that was clearly not the case. Quibi was an online streaming platform, not like Airbnb, Uber, or DoorDash that actually faced the death crisis in the pandemic. And if you study what really happened in the pandemic, you’d know that the video streaming platforms like YouTube, Netflix, TikTok, and Meta Platforms actually saw a massive growth in user base and revenue, not a decline—no way Quibi wouldn’t.

The reality is, great marketing can’t save a bad product.

Quibi’s failure is one of those stories that teaches you that spending millions marketing a product isn’t enough, and it’s actually dangerous if you’re marketing the wrong way. And this is why it’s so important to understand what marketing really is. Because ultimately you whisper, “How a company like Tesla became a trillion-dollar juggernaut without spending a dime on advertising, while a company like Quibi failed despite spending tens of millions of dollars on marketing.”

Here’s how to actually think about Marketing:

Understanding Marketing

Before we understand what marketing really is, one must know what marketing is NOT really about. Precisely, marketing is not about asking people to buy the product you’re selling, it’s not really about persuading people to take an action, and it’s not really about attracting an audience. If you’re thinking these are marketing, I think you aren’t thinking big enough about it.

And even though you’d argue that these are some forms of marketing, I think it’s worth pointing out that marketing, in a real way, goes beyond that. These may sound like the right definition for someone who doesn’t fully grasp marketing.

For example, Caroline from HubSpot, who says:

Marketing refers to any actions a company takes to attract an audience to the company’s product or services through high-quality messaging. Marketing aims to deliver standalone value for prospects and consumers through content, with the long-term goal of demonstrating product value, strengthening brand loyalty, and ultimately increasing sales.

Do you buy it? I don’t know about you, but I don’t.

When you see an Apple billboard, you don’t immediately take action or buy their product. Many don’t even use Apple products, but they’d be like, “Apple is great, I really admire the company.” Why? Because it’s the perception of the brand. To make marketing work and get its job done, it does not need to make people buy, use a product, or become a loyal customer. However, great marketing always does that.

I believe there are only two kinds of marketing that really matter: Brand Marketing and Product Marketing. Brand marketing is when you market your company and tell people who you are as a company, what you stand for, and what you do matters. Product marketing is when you market your (new) product. But you can’t crack the latter without cracking the former, unless you have a really, really great product.

And this is where the Brand Perception comes in.

Everyone, including you and me, has a Brand Perception of the companies we know. And based on that brand perception, we buy what we buy from them because we feel connected to that brand, or we want to be part of the movement. Steve Jobs did a great job talking about this in the following video, I encourage you to watch it:

He nailed it. Marketing was never about talking about your product. If it were, Nike wouldn’t have become what it is today. And to be clear, Nike sells commodities—shoes. And you know that, we all know that there are far better shoes than Nike. So why do people prefer Nike over other brands? Because it’s brand perception—Nike honors great athletes, they inspire people to become the best version of themselves, and that’s why most people who want to achieve greatness wear Nike shoes, not because the shoes themselves are great, although they are.

It’s the same reason you don’t click on random ads you come across online. Why? Because you don’t know who the company or person is behind the ad, and you barely trust the ad, so you don’t bother. We buy from companies we have a great brand perception of, which helps create trust and a deep sense of connection.

I mean, look at the following ads. Apple spent millions marketing these ads that weren’t even about their products. If this doesn’t convince you what marketing is all about, I don’t know what will. I know the world has become messier and messier, and there’s more noise than signal, but you gotta find your way to think about marketing, right now.

But then you may ask: What should a startup do? It makes sense, it’s the same reason why it’s painful to grow a startup—you don’t have a brand perception, no one knows you, and people don’t trust you yet. So how do you grow a startup and sell its products? The only way to tackle this is to build a great product. Period. I’ll talk about this in-depth later in this article.

So ask yourself: What Brand Perception do you want to create? Go market that.

Marketing Geniuses

Quibi’s failure is a perfect example of why Brand Perception matters. The reason it failed despite spending tens of millions of dollars on marketing is that the company didn’t have a brand perception among users. No one knew what the company was about, what it stood for, and who they truly were. Worse? Quibi built a product people didn’t like, so it backfired.

The reason once you become an Apple customer, you keep buying most of their new products is that you have a great brand perception about the company. And it’s the same reason you upgrade to new Tesla models every few years.

You already know that these companies make great products, and they stand for something that you feel connected to. So it doesn’t take a lot of effort to think whether you’re going to buy their next (new) product or not. It’s an instant yes, and of course, sometimes no. But a strong, great brand perception helps create trust and loyalty, which Quibi clearly didn’t have.

Let’s understand this in-depth with three stories:

#1: Tesla

For years, Tesla spent zero dollars marketing its products; it’s only in recent years, they’ve started running ads on Twitter/X. But the company still doesn’t quite focus on marketing its products, except through its social media accounts.

This begs the question: How is Tesla able to sell so many units & become a trillion-dollar company despite not marketing its products enough, while its competitors struggle to get attention? The answer is simple: Tesla doesn’t just sell cars (like most car companies), they sell the future, they sell autonomy, they sell sustainable energy, and they sell what they stand for.

And this has created a strong brand perception about the company without them doing heavy marketing. And it’s why people who buy Tesla, take a picture of it, share it with their audience, and do the free marketing for the company.

I mean, look at these celebs promoting Tesla for free:

Of course, nothing would’ve worked out if Tesla had bad products, but guess what? Tesla makes great cars that are fully electric, beautifully designed, fully autonomous, safe, luxurious, and look great. Elon Musk once famously said: The path to the CEO’s office should not be through the CFO’s office, and it should not be through the marketing department. It needs to be through engineering and design.

Marketing gets a lot easier if you already have a great product.

#2: Nike

Then there’s Nike, which does the complete opposite of Tesla when it comes to marketing. But first, I should be clear that Nike’s products aren’t massively great or different from its competitors; actually, there are far better products than Nike's.

So it begs the question: Why do most people choose Nike over its competitors? Nike has been able to achieve the success it did primarily because of its great marketing, which created a great brand perception about the company among people.

If Nike’s marketing were all about their shoes, how good they are, and why they are better than Adidas, Puma, or Reebok, most people wouldn’t buy them. And of course, Nike would’ve gone nowhere.

But Nike’s great marketing did the work. How? They tapped into feelings. They honored great athletes, they inspired people, and Nike showed that you can be the best version of yourself if you want. Never in the entire history of Nike did they ever talk about their shoes in their ads. Not once!

#3: OpenAI

Remember the year 2022, when OpenAI launched ChatGPT-3 three years ago?

There’s a great marketing lesson here. First of all, OpenAI was largely unknown before ChatGPT-3: people barely knew what the company was about, and surely, it wasn’t the hot AI company it is today. Why? Because it didn’t have any mega-successful, breakthrough product, nor did it have brand perception.

So how did ChatGPT-3 attract 1 million users in the first five days?

Exceptionally great product. When ChatGPT-3 came out in the market, it took the internet by storm as the world had never seen an AI chatbot like ChatGPT-3 before. This created a strong viral word of mouth among people, sharing and talking about it with their friends, family, and co-workers. As a result, ChatGPT-3 became the first ever product to hit 100 million users in just two months.

The only thing OpenAI did? Introducing the product on Twitter. Actually, Sam Altman’s tweet was a big booster. But what’s interesting is that if you study the success behind great products built by largely unknown companies, you’d find that it’s the same story again and again.

How to Actually Think About Marketing

As you see from these stories, two things are distinctly clear: To make marketing work, you either should have a great Brand Perception or a great product. And this means, nothing in the world can help people buy the product you’re selling if you don’t have any of them.

Can marketing alone work?

Not really. Marketing can’t save a bad or mediocre product, and great marketing alone can’t do the magic. You should think of marketing as an amplifier, a gasoline on a fire that supercharges the progress you make if you actually have a great product in the first place.

Sadly, these are the 3 marketing mistakes companies make, quite often:

#1: Missing the Bigger Picture: Stop running “Products” ads if you don’t already have a brand perception of your company in people’s minds. It’s just not gonna work. First, identify who you are as a company, what you stand for, and what your core values are. Once you figure that out, let the world know it. That’s how you start a marketing movement. But the mistake most companies make is that they never try to figure out who they truly are and what they stand for.

#2: Too Much About the Product: People don’t care about the product you have, all they care about is if they can do the thing they want to do with your product. Your product is a medium for them to achieve the thing they want. Stop telling them about your product’s features, and let them know what they can do with it. But the mistake companies make is that they focus too much on their products: why they are better than their competitors, or the features they have.

#3: Inconsistent Branding: A lot of companies market their products, but they don’t often have brand consistency in their ads. Meaning, they don’t include their company logo, name, or slogan in the ads/content they make, leaving the ideal customers thinking who the hell is behind it. So the best thing you can do is to always add your brand logo or name to every single content or ad you create.

This all now begs the very question: How to create a great Brand Perception?

A million-dollar question right there! Once you figure out how to build a great brand perception, let alone marketing, attracting the most talented people, building a company culture, and setting a high standard for design, sales, or product development becomes a lot easier.

So how do you do that? This is where Simon Sinek’s The Golden Circle comes in.

The Golden Circle has three rings:

• What: Most companies/people know this

• How: Few companies/people know this

• Why: Only a handful of companies/people know this

Here’s what the Golden Circle explains: Every single company and organization on the planet knows WHAT they do. Big, small, VC-backed, non-VC-backed, profitable, unprofitable—all know what they build, what they sell, and what their products or services are.

A few companies and organizations know HOW they do what they do. This is how they explain how their product is better than their competitors, how their product works, and its features. But this doesn’t give a reason why people should care and buy their products or services.

Only a handful of companies and organizations know WHY they build what they build. In this category, companies like Apple, Tesla, or Nike come in. Customers know WHY the company does what it does. And this is what makes a difference and separates companies that have the best talents, best products, great customer loyalty, and best marketing from those that don’t.

Let me explain this with a few examples:

Assume a car company comes to you and says, “Hey, we make great cars, they have great mileage, you wanna buy one?” And you’d be like, “Meh, not really.” Nothing is appealing here. You don’t trust the brand, you don’t know who they are, so you don’t bother.

Another example: A computer company comes and says, “Hey, we make great computers, they have good batteries, big creators use them, do you wanna buy one?” And you’d be like, “Meh, I don’t need it.” Again, not appealing.

What’s going on here? These fail to give you a reason WHY you should buy their product. Just saying your product is better than others and has XYZ features doesn’t really make people buy it because there’s always something better, cheaper, and more efficient. And if it were the case, Apple wouldn’t sell more PCs or iPhones than its competitors because let’s be honest, Apple’s products aren’t vastly better or different from its competitors. But they’re able to do that primarily because they have a great Brand Perception, and people know WHY Apple does what it does.

Now here’s how great companies communicate:

This is how Apple communicates: Apple comes and says to you, “Hey, everything we do, we believe in challenging the status quo and thinking differently. The way we challenge the status quo is by building our products beautifully designed, easy to use, and user-friendly. We just happen to make great computers, wanna buy one?” And you’d be like “Of course!”

This is how Tesla communicates: Tesla comes and says to you, “Hey, everything we do is to protect our planet and move the world to sustainable energy for a better future. The way we do that is by building our products fully electric, fully-autonomous, software-first, instantly fast, and safe that doesn’t screw up the world. We just happen to make great electric cars, wanna buy one?” And you’d be like, “I’m sold, let’s do this!”

Of course, I’m exaggerating a bit, but you get the point.

Think Different.

The point really is: You need to show people WHY you do what you do: Show them what you stand for, who you are as a company, and what your core values are. Only then can you make people believe in WHY you do what you do matters and it’s worth becoming a part of the movement. This is so obvious, yet most companies don’t think about it at all. And again, this is not just for creating great marketing ads, but it’s also for hiring, attracting talent, building products, sales, design, creating culture, and everything you can imagine in your company.

People don’t buy WHAT you do, they buy WHY you do it.

If you’re still asking, “Are we living in an AI bubble?” You’re basically asking the wrong question. Because there’s no denying that we are living in an AI bubble, and the questions worth asking are: when will the AI bubble burst? What companies will it affect? How much damage will it do? These are questions worth exploring.

To give you some context on how big the AI bubble is, some analysts including Julian Garren, have predicted that the AI Bubble is 17 times larger than the 2002 Dotcom Bubble and 4 times bigger than the 2008 Housing Bubble. This directly means the AI bubble will wipe out tens of trillions of dollars from the market and leave millions of people unemployed, which is just bonkers even to think about.

However, it’s hard to judge the AI bubble from one source—doing so will be biased and can lead to a wrong conclusion. So to understand the AI bubble as a whole, one must look at it from AI CapEx to profit margin to demand to model improvement from different sources. And that’s what I’ve done for this piece.

Doing so was not easy, and indeed, one of the most frustrating things I noticed researching this piece is that many “So-called” analysts and generalists try to hide the truth behind the curtain with technical jargon, leaving the reader with no clear conclusion. I mean, why can’t you just tell the truth about the AI Bubble in simple words?

So this post is an attempt to help you understand the AI Bubble. It doesn’t really matter whether you’re a founder, leader, investor, 9-5er, or a curious kid trying to understand this very topic; this post will give you a 360-degree view of the AI Bubble in the simplest explanation.

Let’s dive in!

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1. The CapEx

One of the crucial factors why everyone believes that we’re living in an AI bubble is that they can see with the naked eye how ridiculous the CapEx (Capital Expenditures) of the AI companies are, supported by their partners like NVIDIA, Oracle, AMD, and Softbank.

Morgan Stanley expects that a whopping $3 trillion will be spent on AI buildout by 2029, while this year alone, AI companies will spend around $400 billion, and an astonishing $500 billion in 2026 and 2027, respectively. On the other hand, McKinsey projects that to meet AI-driven demand, it’ll require around 156 GW of new electrical capacity by 2030, the size of Spain and Portugal’s grid combined, needing $5-7 trillion in capital spending.

To me, these numbers are bonkers.

Before ChatGPT, hyperscalers like Google, Microsoft, Meta, and Amazon would invest 44% of their operating cash flow in CapEx. But by 2024, that number has gone up to 68%, expecting to reach 72% in 2025. This gives a strong signal that companies are deploying an absurd amount of capital into CapEx, primarily in building AI infrastructure.

Just to put this in perspective, the Apollo Program allocated around $300 billion to get America to the Moon between the early 1960s to 1970s. Comparing that to this year’s total AI spending, the AI Buildout will require companies to fund a new Apollo program every 10 months, not every 10 years!

Why is this concerning? This leads us to the next point.

2. The Profits

The good news is that five years ago, GenAI was making no money, but this year, the total revenue AI will generate is around $60 billion, which does seem impressive—until it’s not.

Even though 80% of the stock gains this year came from AI companies, it’s hard to justify the CapEx with the revenue AI companies are currently generating. For instance, OpenAI has already made deals worth trillions of dollars, but this year, it’ll only do around $20 billion in total revenue, which is far from becoming profitable or giving returns on investments anytime soon.

To drive this home, it’s worth noticing that at the height of the US railroad expansion in 1872, CapEx was two times the revenue. In the 1990s, Telecom CapEx was four times the revenue. But today, AI CapEx is six times (Six!) the revenue ($60 billion of $400bn), and the only thing is that we’re not yet in the peak AI bubble.

Another surprising thing is that in the S&P 500, the best performing stocks are the table top 10 (AI) companies that have outperformed the entire S&P 490 companies. And it’s much more useful to think that these 10 companies, including NVIDIA, Microsoft, Google, Amazon, and six others are primarily moving the market forward.

The concerning thing about all this is that while the stock prices of public companies are going up so long as the CapEx is skyrocketing, the profit and the revenue they generate are no way near covering the cost anytime soon.

However, OpenAI and Anthropic predict that they will be profitable by the end of this decade, OpenAI explicitly predicting that they’ll have 10x the annual revenue by 2028, reaching $200 billion. But a nerd would ask: Will everything go as planned? I’m not sure if OpenAI will reach its revenue by 2028.

What if they can’t meet investors’ expectations? Even if we’re in the early AI bubble, investors are providing capital because they are in FOMO, and these AI companies somehow manage to convince them that this technology is going to change the world and it’s a once-in-a-lifetime opportunity. But it’s worth pointing out that if investors (and partners) can’t see a return on their investment for a long time, they’ll eventually step back. So it’s the testament of investors on how long they stick around before they lose their minds and stop funding AI companies, realizing that it’s all smoke and mirrors.

3. Valuation and Debt

This is where things get very, very serious. AI companies have raised tens of millions and some even billions of dollars with no actual product, product-market fit, or a clear path to monetization, while the valuation reaches sky-high. On the other hand, a data center builder like Oracle is taking a massive debt to build AI infrastructure for its partner, OpenAI.

An AI research lab, Thinking Machines, founded by former OpenAI executive Mira Murati, has raised $2 billion at a $32 billion valuation, and is seeking to raise another round that’d value the company at $50 billion with no actual product released yet. Worse, they refuse to tell investors what they are working on.

This company is not alone. Most AI companies have no actual product, zero revenue, no moat, no path to profitability, no clear monetization, while their valuation reaching sky-high. You might have already seen this graph from Bloomberg:

That’s how the AI bubble was created.

OpenAI has partnered with NVIDIA, making a deal worth $100 billion to provide GPUs, but NVIDIA is also an investor in OpenAI, which means money is circling back and forth. OpenAI has partnered with Oracle and made a deal worth $300 billion to build data centers for it, but Oracle doesn’t have $300 billion, so it’s taking a debt. Earlier this year, OpenAI raised $40 billion in funding, with its leading investor Softbank providing $30 billion. But since Softbank didn’t have capital, it dumped the entire NVIDIA stake to provide the capital.

Two things are clear here: First, companies don’t have money so they are taking debt. Second, if they do have money, it’s moving from one place to another to fulfill the demand, promise, and partnership, which has created the above AI Bubble.

4. The Demand

It’s easy to look at the market and say AI has a growing demand. But I think that’s partially true. Researchers have found that the AI adaptation rate at big companies has started to decline in recent months.

Another interesting thing McKinsey discovered was that nearly 80% of companies using AI had no significant impact on their bottom line. Meaning using AI tools didn’t increase those companies’ revenue, profit, or any financial metrics.

On top of that, studies have also proven that 50% of Americans are more concerned than excited about the increased use of AI in daily life—that number was 37% in 2021. This shows somehow that people are intentionally downplaying AI.

However, this doesn’t mean AI is useless. But these charts and studies are proving the point that if AI continues being the same as it is today (lots of privacy concerns, safety concerns, inefficiency, and inaccuracy), people will intentionally try to avoid using the technology, which leads us to the next point.

5. The Improvement

In his research, Julian Garren who’s partner at MicroStrategy, showed that AI tools’ completion rate is anywhere between 1.5% to 34%, far from what you expect these AI tools to complete. And what’s even more interesting is that a 34% completion rate doesn’t always occur every time you ask an LLM to complete a task.

Watch the video below:

And I think it’s the same reason big companies are relying less and less on AI tools because they clearly understand that these AI tools (ChatGPT, Sonnet, Grok, Gemini, etc) aren’t very efficient in task completions, and part of the reason also why big companies didn’t see any significant increase in their bottom line.

But that’s not the end. In that same research, Julian shared that he asked ChatGPT to create an image of a chessboard one move before white wins. Guess what happened? The model failed to do that and provided a totally different image that wasn’t even close to what he had asked for. This shows that these LLMs are either not very good at doing specific tasks or they have simply hit the scaling law.

Now talking about the scaling laws, if you compare the AI boom story to the US railroad and Telecom boom, you’ll realize that these three events have had pretty similar cases in terms of capital spending to build the infrastructure.

In the 1870s, private companies poured billions of dollars into building the railroad infrastructure only to realize that there wasn’t enough demand—the market crashed and people lost billions of dollars. The same thing happened again in the Telecom boom when in the 1990s, companies spent trillions of dollars building internet services, installing internet cables globally, only to realize that there wasn’t enough demand for the internet and people barely used the service, the market crashed and people lost trillions of dollars again. And now in the 2020s, investors and companies are doing the same thing—spending trillions of dollars to build AI infrastructure that has yet to return profits, while the demand also seems to decline in the corporate world.

However, the important thing to notice is that in the Railway and Telecom boom, money spent on building the infrastructure was largely undepreciated. Meaning once the stations, rail lines, and systems were built, they could be used in the future because of low asset depreciation. Same thing for the Telecom boom—fiber optic cables, once built and installed, can be used for over a decade without any replacement.

But with AI infrastructure? Things are different. AI data centers are rapidly depreciating assets. Chips become obsolete in 1-3 years and need consistent replacement, cooling, and other networking systems last no more than five years, and the building itself becomes obsolete in 10 years due to changes in the layout caused by frequent hardware innovations. And this means even new data centers become obsolete in an average of 5-7 years.

So what does this mean? AI companies constantly need to reinvest capital to keep the data centers running, which makes AI infrastructure buildout more expensive than any technology humans have ever built. Said differently, companies like OpenAI and others need hundreds of billions of dollars every few years just to keep their data centers and servers running.

That being said,

Another thing you should know is that each generation of AI model has been vastly more expensive than the previous ones. It’s the same reason why ChatGPT-3 cost around $50 million to build, ChatGPT-4 cost $500 million, and ChatGPT-5 cost around $5 billion, even though the models weren’t noticeably better.

In Ben Thompson’s words, Aggregation Theory doesn’t apply to AI companies. Facebook is a social media platform, and once the platform was established, the marginal cost to acquire new users and serve them was zero. AI models are different. The more new users use a model, the more tokens it burns, and the more expensive it gets, making the marginal cost go up.

And that sounds concerning!

6. The Optimism

To me, every single data point says that we are living in an AI bubble, and it’s very clear that the bubble will burst. But to look at the positive side of AI, how can one be optimistic about it? How can you think about it from an angle that forces you to believe that what’s being built is worth it?

Let’s be honest, it doesn’t take a lot of effort to think that to fulfill the growing demand of AI (even though it’s declining in the corporate world), companies must build AI infrastructure regardless of what profit it generates in the future. Because not doing so would be like not starting that damn business because you’re so afraid that it’ll fail.

So yeah, I think buildouts are important the same way railroad and telecom buildouts were important. Another thing you should consider paying attention to is that the Generative-AI industry was functionally making no money five years ago, and now it’s generating tens of billions of dollars annually. So maybe, just maybe, if things got right, it’ll benefit humanity?

And the most important thing I’d say is that the technology—AI—is here to stay. It doesn’t really matter whether there’s a bubble or not, or how big the AI bubble really is; we’re not going back to the pre-AI era. Humans have always figured out things by trial and error, and I certainly hope this time we’ll be able to do the same.

7. The Bubble

Above anything else, the AI Bubble burst is inevitable.

But I think the AI boom and bubble are two sides of the same coin. If AI companies keep making good progress and delivering return on investment, that would mean producing a technology so capable and revolutionary that it will wipe out millions of jobs, which means entering into a new revolutionary industrial era. If AI fails, it’s also certain that it’ll wipe out trillions of dollars from the economy and make millions of people unemployed.

Seems like a losing battle.

And here’s what’s terrifying about this: The AI boom is currently at an all-time high, though it’s unclear how far it will go in the coming years. But to put this in context of the 2008 Housing Bubble, it took nearly 15 years to recover the market and reach the same level as it was in 2008. 15 years! So the question worth asking is: How long will it take the economy to recover and to reach this same level again once it crashes?

Many smart founders and investors already know that we’re an AI bubble. For example, Airbnb’s CEO, Brian Chesky, at the Web Summit Conference this year in Lisbon said, “There’s a lot of Vibe Revenue in AI. Companies are taking about billions in pipeline that may never materialize.” In the same event, one of the most famous and respected investors, Vinod Khosla also said, “95% of AI startups will fail. The question is which 5% that becomes Google.”

So this all begs a very important question: When will the AI bubble burst? Well, no one knows how far the market will go and when the bubble will burst. But from my personal understanding, I think we’re still 18-24 months away before we see some significant market change. Again, this is not financial advice—one should do their own due diligence before they make any financial decision.

Thank you for your attention to this matter.

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Here’s this week’s rundown (news & updates):

1. Google Introduces Gemini 3

From Google:

Nearly two years ago we kicked off the Gemini era, one of our biggest scientific and product endeavors ever undertaken as a company. Since then, it’s been incredible to see how much people love it. AI Overviews now have 2 billion users every month. The Gemini app surpasses 650 million users per month, more than 70% of our Cloud customers use our AI, 13 million developers have built with our generative models, and that is just a snippet of the impact we’re seeing.

And now we’re introducing Gemini 3, our most intelligent model, that combines all of Gemini’s capabilities together so you can bring any idea to life.

It’s state-of-the-art in reasoning, built to grasp depth and nuance — whether it’s perceiving the subtle clues in a creative idea, or peeling apart the overlapping layers of a difficult problem. Gemini 3 is also much better at figuring out the context and intent behind your request, so you get what you need with less prompting. It’s amazing to think that in just two years, AI has evolved from simply reading text and images to reading the room.

On Tuesday, Google introduced its most intelligent model (as it says), Gemini 3, which is capable of deep reasoning, grasping in-depth nuances, and understanding context better. This sounds promising, and it’s also impressive that they have achieved it in just two years, since the inception of their first AI model, Bard.

2. Ramp Valuation Reaches $32 Billion

From Eric, Ramp’s Co-founder:

Today, Ramp raised another $300M at a $32B valuation. In the past year our revenue has doubled to over $1B, growing 10x faster than the median public SaaS. We all know money talks — we’re teaching it to think. Getting big no longer means getting slow.

A few things you should know about Ramp:

• Over 50,000+ customers

• $1 billion in annualized revenue

• 20 million hours saved for its clients

What does the company do? Helps you save time and money. As the saying goes, “Boring businesses are the profitable businesses.” Here’s an excellent insight, from the Ramp’s blog, which I think is quite true:

3. OpenAI Introduces Group Chat

From OpenAI:

Early feedback from the pilot has been positive, so we’re expanding group chats to all logged-in users on ChatGPT Free, Go, Plus and Pro plans globally over the coming days. We will continue refining the experience as more people start using it.

Today, we’re beginning to pilot a new experience in a few regions that makes it easy for people to collaborate with each other—and with ChatGPT—in the same conversation. With group chats, you can bring friends, family, or coworkers into a shared space to plan, make decisions, or work through ideas together.

Starting this week, OpenAI has officially launched the Group Chat feature on ChatGPT globally, allowing all users to join, chat, and collaborate on the project they work on. This means you can invite your friends, family, and co-workers to a chat and discuss things just like you do on Slack or Discord.

To make a chat, Group Chat, simply click on the three-dot icon of that chat, and it’ll show you the “Start a Group Chat” option. Click on that, and send the chat link to people you want to invite to your chat.

4. NVIDIA & Microsoft Partners with Anthropic

From Anthropic:

Today Microsoft, NVIDIA, and Anthropic announced new strategic partnerships. Anthropic is scaling its rapidly-growing Claude AI model on Microsoft Azure, powered by NVIDIA, which will broaden access to Claude and provide Azure enterprise customers with expanded model choice and new capabilities. Anthropic has committed to purchase $30 billion of Azure compute capacity and to contract additional compute capacity up to one gigawatt.

For the first time, NVIDIA and Anthropic are establishing a deep technology partnership to support Anthropic’s future growth. Anthropic and NVIDIA will collaborate on design and engineering, with the goal of optimizing Anthropic models for the best possible performance, efficiency, and TCO, and optimizing future NVIDIA architectures for Anthropic workloads. Anthropic’s compute commitment will initially be up to one gigawatt of compute capacity with NVIDIA Grace Blackwell and Vera Rubin systems.

Watch the full update:

5. Suno AI Raises $250 Million

From Suno AI:

Over the last two years, nearly 100 million people have made music on Suno – many for the first time in their lives, discovering a passion they never knew they had. And this isn’t just a story about new creators: top producers and songwriters have integrated Suno into their daily workflows, and new artists emerging on Suno are being recognized by the industry’s most important charts. Suno has become a platform where imagination meets reality, at every level of the creative journey.

Today Suno announces its $250M Series C at a $2.45B post-money valuation, led by Menlo Ventures, with participation from NVentures (NVIDIA’s venture capital arm), Hallwood Media, Lightspeed, and Matrix.

Posted this earlier but got the numbers wrong ;)

Not investment advice, but if you’d love to invest in an AI company, you want to look at companies like Suno AI, which actually helps artists, musicians, and creators make great music and provide actual value. The company has already found product-market fit and is growing fast.

6. Google Nano Banana Pro

From Google:

Just a few months ago we released Nano Banana, our Gemini 2.5 Flash Image model. From restoring old photos to generating mini figurines, Nano Banana was a big step in image editing that empowered casual creators to express their creativity.

Today, we’re introducing Nano Banana Pro (Gemini 3 Pro Image), our new state-of-the art image generation and editing model. Built on Gemini 3 Pro, Nano Banana Pro uses Gemini’s state-of-the-art reasoning and real-world knowledge to visualize information better than ever before.

The name is weird though, but I guess this Nano Banana Pro is so, so good. I tried to create a few visuals with it, and it got almost everything right. And it does seem like it’s a good product, I mean look at, even the CEO of the second-largest publicly traded Canadian company got his hands on it:

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In 2023, Fast Company nominated Builder AI the 3rd most innovative company in AI, right behind OpenAI and Google’s DeepMind, while NVIDIA, the largest company in the world right now with over $4.5 trillion in market cap, was in the sixth position.

But this year in May, Builder AI went bankrupt, and the company is no longer operational. How a company that was the third most innovative company in AI with over $1.5 billion in valuation just two years ago, collapsed all of a sudden?

It turns out, Builder AI was not even an AI company, which it claimed to be. The company’s valuation grew mostly through hypes and fake promises that they weren’t even delivering to their customers in the first place. On top of that, the pandemic became a big factor for the company’s growth, which I’ll go through in the piece.

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I think the collapse of Builder AI is one of those stories that especially alarms investors to make sure that they understand the company properly and know the details before they invest in that company. As the saying goes, “Believe none of what you hear and half of what you see,” which perfectly fits with this story.

Here’s the full story of how Builder AI collapsed:

The Back Story

The so-called London-based “AI startup,” Builder AI was founded in 2016 by Sachin Dev Duggal, promising to revolutionize the software development process for (small) companies. Precisely, the idea was to build software and apps for non-tech companies as easily as ordering a pizza, faster and cheaper.

The company officially launched the platform in 2018, first naming it Engineer.AI, and raised its first venture fund, Series A of $29.5 million from Lakestar and Jungle Ventures. The next year in 2019, the company rebranded its name to Builder AI, with its AI being Natasha.

It sounded promising until it wasn’t. They marketed the product as an “AI-powered” platform that helps develop software, tools, and apps for their clients, with 80% of the development being done by their so-called AI model, Natasha. But it turns out that there was no AI developing the products, instead it was 700 Indian programmers vibe-coding for their clients’ required products.

For example, you wanted Builder AI to help you build an app. All you had to do was select the product you want to build, the features you want to have, the pages, the integrations, etc. Once you submit the “Request,” their AI would make a quick prototype (which they had already pre-built for multiple uses!), and it’d say that the final product will take a few weeks to months, depending on the requirements.

Even though the company was never true to its work, it had raised a whopping $450 million from Microsoft, Softbank’s DeepCore, the Qatar Investment Authority, Jungle Ventures, Lakestar, Insight Partners, and more. And the company had around 1,500 employees working from multiple countries (majority India), and was valued at $1.5 billion in 2025 before it collapsed.

So what went wrong? Let’s unpack!

What Went Wrong

There wasn’t just one thing that was wrong about the company, actually the whole company was “Smoke and mirrors,” hiding truth behind the curtain, faking about their vision, the way they operated, and the financials. It was all lies, head to toe.

I’ll go through as many as I can.

1. The Work

What they called their AI, Natasha, didn’t even exist. Instead the products and tools the company’s clients asked to build were manually coded by 700 Indian programmers. Although the AI part did help with frontier transactions like showing the progress bar or accepting the product requirements, so it makes the clients feel like the work is actually being done by an AI.

Going deeper, what they actually had in their systems was two pieces of tech: First, pre-coded blocks of reusable features such as user logins, payment integration, contact page etc., which they’d often need for every client. And then there was a second piece of tech, which was proprietary AI tools that those 700 programmers would actually build in real time.

But what’s more interesting is that even though they had pre-coded features, in the first prototype sent to clients often tended to lag and didn’t work properly, which was frustrating for the customers. And this leads us to the second problem.

2. The Clients

The Builder AI customers weren’t happy.

The company would give an estimated timeline to complete a project, but they’d often miss the deadlines and postpone it, promising to deliver the next time. Because of this, many clients would cancel the project in the middle, and many would also refuse to pay the unpaid amount (you could pay in installments).

3. The Financials

This is where the reality came out.

The pandemic massively helped the company grow. They had raised multi-million dollars in funding, but since the pandemic had hit, “no one could go to the Builder AI office, pull out the data, and match the actual number of what they were claiming,” said one of its investors.

In a few years, from 2020 to 2023, Builder AI’s growth skyrocketed. From the outside, it looked impressive: $450 million in funding, over $100 million in annualized revenue, tens of thousands of customers. On top of that, they were gaining popularity and media coverage consistently, making it unreasonable to question the finances.

But around late-2024, the board looked suspicious: How could the company have little cash despite its fast growth and revenue? They questioned, eventually finding out that the numbers were drastically overstated. The company’s revenue for the 2023 fiscal year was reported $157 million, while the actual revenue was $42 million. In 2024, the company reported a total of $217 million in revenue, while the actual revenue was $51 million.

Not only that, the company owed $75 million to AWS, vendors were unpaid, and employees’ salaries were delayed multiple times. This was truly shocking. And the funniest part? Despite being a unicorn, the company didn’t even have a CFO until 2023 lol.

The board made a quick decision to fire its CEO, Sachin Dev Duggal (calls himself Chief Wizard), and assigned one of its investors, Manpreet Ratia, as the new CEO, hoping to save the company.

But it was already too late.

A few weeks after the leadership change, the Israeli lending firm Viola Credit, which had given money to the company, analyzed the company’s financials, as they were also skeptical about the stated numbers. And they learned (the board didn’t want Voila Credit to know it!) that it’s all overstated numbers on the spreadsheet. Viola Credit immediately froze Builders’ AI accounts and seized remaining cash, confirming that financial discrepancies were real and severe, leaving the company with no other option than to file for Chapter 7 bankruptcy this year in May 2025.

4. The Marketing

You may ask: The company had raised $450 million, so where did all the money go? In just one word: Marketing. They spent roughly 80% of their revenue and funding on marketing the product, instead of making it better, improving it, or scaling it, etc.

The company poured millions into advertising its AI, Natasha. Just a few examples: They were at the Web Summit Conference in Lisbon, were Gold Partners at TechCrunch Disrupt Conference in SF, and were advertised at Gitex Global Conference in Dubai. They were spending literally tens of millions of dollars advertising the product all over the world.

Then comes their online marketing. One of Builders AI's YouTube videos has over 6.9 million views…what do you think they got it organically? Nope, they poured money into buying these views. I know what you’re saying: “How’s all this even possible?” Then she whispered, “It’s basically magic.”

More Magic

You may think, “Well, it’s just one company, why should we care?” I wish I could say it was true, but the reality is, it’s definitely not. Builder AI's story isn’t the only one, the list is too long. In recent years, we have seen a ton of cases, companies selling misleading products, committing fraud, scamming their clients, or even money laundering.

For example look at these three:

#1: Humane AI Pin: Founded in 2017 by former Apple executives Imran Chaudhari and Bethany Bongiorno, Humane promised to revolutionize the smartphone industry by replacing it with a screen-less, AI-driven device that will completely replace the smartphone. They had secured $240 million from Sam Altman, Microsoft, Marc Benioff, and others. But when the actual product came out in the market around 2024, it was a disaster. MKBHD made a video saying, “The Worst Product I’ve Ever Reviewed.” In February 2025, Humane AI sold all its assets to HP for $116 million and shut down the company.

#2: Nate: A New York-based AI startup, Nate, promised to streamline the shopping experience by skipping the checkout process for the consumer when buying products online on e-commerce sites. Investors poured $40 million. But in 2022, the Information wrote that Nate wasn’t an AI, instead the company had contractors in the Philippines who were manually completing each sale. The company eventually shut down the operation.

#3: GameOn: Another SF-based AI startup, GameOn, founded by Alexander Beckman and her wife, Valerie Lau Beckman, who ran an AI sports chat, was charged with fraud allegations and scamming people in January 2025. They did all the fake things: Fake reviews, fake bank statements, stolen identities, and diversified millions of GameOn dollars to pay for personal expenses, including the couple’s wedding and their house. Investors lost somewhere between $60 to $80 million in GameOn.

So, are we in an AI Bubble?

Straight to be clear: There’s no correlation between the AI bubble and Builder AI. We could argue, “Yeah, it’s all an AI bubble,” only if the company was built off of AI: model training, compute, spent billions of GPUs and chips.

But Builder AI never did any of that.

Now, to think about whether we are an AI bubble or not, I think there’s a useful perspective I have that’d make a ton of sense. What’s that? Remember the 2002 Dotcom Bubble? The reason the Dotcom Bubble occurred was that the internet companies’ valuations were off the charts. The valuations were too high, while they had no business model, moat, product-market-fit, or usefulness.

The market realized that, and crashed. But did it kill all tech companies? No. Amazon, Apple, Microsoft, Google, NVIDIA, and many valuable companies survived and later shaped the world. The Dotcom Bubble only killed bad companies and made a correction in the market, which needed to happen to know the actual worth of those tech companies.

I think it’s the same case with AI. Artificial Intelligence is a technology that allows companies like OpenAI, Anthropic, Cursor, Runway, etc. to build AI products. But it’s obvious that most AI companies don’t even have a working product, product market-fit, moat, business model, or usefulness, while their valuations reaching sky-high.

Trillions of dollars are being spent on AI infrastructure, data centers, model training, etc. Of course, these expenditures are required to get the technology off the ground and to fulfill the demand. But what’s worth pointing out is that the market is too hyped on AI that it’s pouring money everywhere there’s AI, which created new markets we didn’t need, products we didn’t need, and the companies’ valuation is off the chart while they aren’t anywhere near being profitable any time soon.

And that’s the issue.

And this means we may see a correction in the market. A bubble will pop and kill “only” those companies that are bad: have no actual product, no business model, over-valued, zero moat, etc. Those types of companies will collapse. But the companies that have real products, creating demand, and finding success, won’t go anywhere. Of course, when the bubble pops, these companies will also see a correction. But once the bubble is over, they will grow just like Amazon, Apple, Google, and Microsoft did in the late 2000s.

And then maybe, just maybe we’ll have AGI.

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Here’s this week’s rundown (news & update):

1. Softbank Dumps Entire NVIDIA Stake

From Fortune:

SoftBank Group has liquidated its complete stake in Nvidia for $5.8 billion, the company announced during a presentation for investors early Tuesday morning, instead redirecting capital toward OpenAI as part of a strategic pivot that underscores both the company’s bullish conviction on AI and CEO Masayoshi Son’s willingness to place massive, high-stakes bets on emerging tech. Nvidia stock fell 2% shortly after the opening bell.​

SoftBank sold 32.1 million Nvidia shares in October, the company disclosed Tuesday alongside fiscal second-quarter earnings showing net profit more than doubling to 2.5 trillion yen, or approximately $16.6 billion. The windfall represented SoftBank’s best quarterly performance since July-September 2022, driven primarily by valuation gains in its OpenAI holdings, which totaled 2.16 trillion yen for the quarter.

Wow! Though it’s not the first time Softbank has done this, in 2019 they sold their entire stake of $3.6 billion in NVIDIA and re-entered the position in 2020. Are they going to do the same again? We don’t know.

But a simple question a nerd would ask: Why sell NVIDIA’s stake? Why not other companies? Given that they plan to invest the capital into their “Hot” partner, OpenAI, the company that heavily relies on NVIDIA’s GPUs.

Any finance bro can explain what’s going on here?

2. Cursor AI Valuation Reaches $29.3 Billion

From Cursor:

Today, we’re pleased to announce a new round of financing: our Series D of $2.3B at a $29.3B post-money valuation. We’re excited to deepen our work with existing investors, including Accel, Thrive, Andreessen Horowitz, and DST, and welcome new partners Coatue, NVIDIA, and Google.

Earlier this year in March, I wrote about Cursor, diving deep into its organic growth funnel. At that time, the company was valued at $2.5 billion and had just reached $100 million in ARR. Looking back now, in eight months, Cursor has 10x’ed its valuation, reaching $29.3 billion; the headcount, employing 300 individuals; and the ARR, reaching over $1 billion, which is pretty, pretty remarkable.

This company is truly unstoppable.

3. Apple Introduces iPhone Pocket

From Apple:

ISSEY MIYAKE and Apple today unveiled iPhone Pocket. Inspired by the concept of “a piece of cloth,” its singular 3D-knitted construction is designed to fit any iPhone as well as all pocketable items. Beginning Friday, November 14, it will be available at select Apple Store locations and on apple .com in France, Greater China, Italy, Japan, Singapore, South Korea, the UK, and the U.S.

So on Tuesday, Apple introduced what they’re calling iPhone Pocket, “a beautiful way to wear and carry iPhone.” And people be like: “Who asked?” It’s insane how Apple is making products out of nowhere, hoping that people will buy this $230 garbage. Maybe some, but not people who are going insane on this Reddit post, this, and this Twitter post.

Think Different, Apple!

4. Anthropic to Invest $50 Billion in Data Centers

From Anthropic:

Today, we are announcing a $50 billion investment in American computing infrastructure, building data centers with Fluidstack in Texas and New York, with more sites to come. These facilities are custom built for Anthropic with a focus on maximizing efficiency for our workloads, enabling continued research and development at the frontier.

Anthropic is partnering with the UK-based cloud provider, Fluidstack to invest $50 billion in AI infrastructure, building data centers in the US. Compare this to OpenAI, it’s nothing, right? OpenAI has made deals worth over a trillion dollars this year alone. So seeing this, there’s no way Anthropic would just sit around and do nothing, so here they are.

This project will create roughly 800 permanent jobs and 2,400 construction jobs, Anthropic said, with the site coming online throughout 2026, promising to get one step closer to the Trump Administration’s AI Action Plan. Big time.

5. Vacuum Robot Matic Getting Popular

While a humanoid robot, NEO raises privacy concerns, which I covered about a few weeks ago, a home cleaning robot, Matic can help you clean your home and floors without staring at your daughter.

This little device is going viral on Twitter a lot lately, which I came across recently from this post. Though it looks promising, and does seem like the robot actually does the work and cleans stuff. And most importantly it’s not humanoid, so it’s less likely to raise privacy and safety concerns.

Also, the pricing is quite affordable, starting from $1,095. Just to be clear, I’m not affiliated or partnered with the brand. It’s just that it caught my eye and I thought it was worth sharing. Who knows? You are done with your maid and maybe need a Matic.

6. OpenAI Claims to be Profitable by 2030

From Fortune:

OpenAI is plotting a dramatic arc toward profitability through the end of the decade, but that growing won’t come without some pain. The company reportedly expects to rack up massive annual losses each year, including roughly $74 billion in operating losses in 2028 alone, then pivot to meaningful profits by 2030, according to financial documents obtained by The Wall Street Journal.​

Okay, so this is now giving me some hope, really.

OpenAI’s projected to hit $200 billion in annual revenue by 2030, and with that, it’ll turn into a profitable company. Although it has also been said that the company will burn and lose billions of dollars in the next few years, a whopping $115 billion through 2029.

To give you more context, last week Sam Altman said on Twitter that the company is expecting to reach $20 billion in annual revenue in 2025, which means by the end of this decade (only five years!) it’ll 10x its revenue. So it’s worth asking, will OpenAI be the #1 largest company in the world before 2035?

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Here’s this week’s teardown (learnings):

1. Great Ideas & Great Products

Steve Jobs on great ideas and great products:

Steve Jobs couldn’t be more accurate. There’s a huge gap between coming up with a great idea and turning that great idea into a reality, making a great product. Most founders, leaders, and builders think that coming up with a great idea is 90% of the work. But in reality, that couldn’t be further from the truth.

When you go, and execute on a great idea, you realize that a tremendous amount of craftsmanship is required to turn that idea into a great product. You have to fit 100 different things so perfectly well together that look and work great. The catch? Doing so is the real challenge. Coming up with a great idea is only half of the battle; the real challenge is bringing it to life.

And to do that, you need a smart group of people, because you can’t just build a great product alone. The iPhone, Tesla, ChatGPT, Google, YouTube, or Airbnb weren’t built by one person, but by a group of really smart, talented people. That’s why visionaries like Steve Jobs, Elon Musk, and Jeff Bezos focus on recruiting talented, smart people.

Great ideas are worthless without execution.

2. Why No One Loves Microsoft

I can’t believe this Note went viral:

I’m not biased when I say this: Microsoft really makes third-grade products, the products that can’t make people feel and whisper, “I really, really love Windows 11, Microsoft Teams, or Edge.” Crazy!

And I think there are a couple of possible reasons:

#1: Enterprise software: One reason this might be the case is that Microsoft has a ton of enterprise and B2B software. Think of Azure, Microsoft Teams, Microsoft 365 Suite, GitHub (partially), LinkedIn, and many more. But then I realize they also have Excel, Windows, Xbox, Edge, and so many consumer products too.

#2: No Cult-Following: If you carefully notice, you’ll realize that they don’t have a cult-like following as Apple does. I mean seriously, Apple fanboys are real. Even if they just use an iPhone, they won’t resist hearing anyone talking shit about Apple. Microsoft? I have yet to see someone screaming, “DON’T SAY THAT TO MICROSOFT.”

#3: Not Enough Work Done: I like to believe that Microsoft doesn’t put enough effort into thinking about and taking time building their products. Of course, they work fine, but they also often lag, break, and look ugly—for example their web browser, Edge, MS Word, or MS Store. Talking about innovation, they never really invented anything, ever.

So I ask you: What might be the possible reason?

3. Being a Great CEO

Ben Horowitz on being a great CEO:

Being CEO requires lots of unnatural motion. From an anthropological standpoint, it is natural to do things that make people like you. It enhances your chances for survival. Yet to be a good CEO, in order to be liked in the long run, you must do many things that will upset people in the short run. Unnatural things.

The reality is, no one is born a CEO or it’s something that naturally comes to someone who’s a CEO; rather it’s learned, it’s mastered through years and years of practice, through trial and error, through pain and suffering, and of course, through doing the unnatural.

4. Do The Thing

From Gareth Evans

Preparing to do the thing isn’t doing the thing.

Scheduling time to do the thing isn’t doing the thing.

Making a to-do list for the thing isn’t doing the thing.

Telling people you’re going to do the thing isn’t doing the thing.

Messaging friends who may or may not be doing the thing isn’t doing the thing.

Writing a banger tweet about how you’re going to do the thing isn’t doing the thing.

Hating on yourself for not doing the thing isn’t doing the thing. Hating on other people who have done the thing isn’t doing the thing. Hating on the obstacles in the way of doing the thing isn’t doing the thing.

Fantasising about all of the adoration you’ll receive once you do the thing isn’t doing the thing.

Reading about how to do the thing isn’t doing the thing. Reading about how other people did the thing isn’t doing the thing. Reading this essay isn’t doing the thing.

The only thing that is doing the thing is doing the thing.

Go and do the thing.

I love this so much. Couldn’t also be more accurate, right? We waste so much of our time planning the thing, scheduling the thing, ideating the thing, rather than just doing the thing. So the point really is, if you know what you need to do, don’t make a to-do list about it, don’t plan it, don’t prepare it, just go do the thing.

I think Notion is a perfect example of this: by the way, I love Notion despite not using it, though it’s a great product. But the problem with this productivity tool is that you waste so much time planning, optimizing, building trackers, and checking the boxes, instead of just doing the thing, and I think it just feels like time-wasting.

So just go do the thing.

5. Stephen Hawking on AI

Stephen Hawking’s quote, which he said in 2014, seems true:

Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.

We all now know that AI is more powerful than we initially thought. It’s capable of doing all sorts of things that we initially didn’t believe. We don’t even have AGI yet, but still, AI is capable of writing emails for you, researching for your next thesis, coding for a new product you want to build, or even creating music, images, and videos that once people thought were impossible.

On top of that, we now have humanoid robots powered by AI that can do all sorts of things from laundry, cooking, cleaning, tutoring kids, serving you a glass of water or tea, to folding your clothes.

While AI has tremendous benefits and seems promising to make people’s lives easier, better, and productive in the coming years, there’s another side of AI that not many people talk about, and that is: the risk of AI. Building Safe AI is so, so important.

Just take the example of OpenAI. Since ChatGPT launched in 2022, hundreds of people have sued the company regarding its product, ChatGPT, claiming it influenced suicidal activities. Recently, seven families sued OpenAI for the same thing, claiming that their product is responsible for their children's suicides.

To me, that’s terrifying. Even though we can say that ChatGPT isn’t the sole reason those suicides occurred. Of course, that’s not the case, but since the product is widely available and anyone can use it for free, many teenagers and adults use it as a therapist or for their mental health issues. And the problem is that since the product is not perfect, it can make mistakes (and it’ll make mistakes), so it may give advice or suggestions that can cause more harm, like suicide, or self-harm, especially to young men, instead of helping them with the problem they have. And I think this is a real issue that must be solved as soon as possible.

Bonus: 😂

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