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Bug Business (Season 5, Episode 6)

Can one entrepreneur worm her way into the snack food aisle?

May 26, 2017
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LISA CHOW: From Gimlet, I’m Lisa Chow. You’re listening to Startup.A couple of weeks ago, producer Luke Malone invited me into the studio. He’d been working on a story about edible insects and he asked me to do something I really didn’t want to do—eat bugs.

LUKE MALONE: Since I’ve been reporting, I think out of anyone on the team, you’ve been the one who has been the most theatrically opposed to the idea of eating insects. Why?

LISA: I don’t know. I just imagine it. You know, an insect with six legs… Like, when I think of bugs I think of just flies gravitating towards like dead animals.There’s nothing about bugs that seems appetizing to me.

LISA: But Luke wasn’t willing to let me off so easy… He opened up a cardboard box and handed me a little plastic packet.

LISA: Okay, it says bug bistro BBQ mealworms… Do people really eat this? For snacks.

LUKE: Yeah. Well, that’s the idea.

LISA: Do I have to? This is disgusting.

LUKE: You don’t even want to touch the packet. It’s in several layers of plastic.

LISA: The packet was small, filled with maybe 40 dried up worms. They were brown, skinny, and about the length of your fingernail.

LISA: Okay, let’s do it. Oh geez. I gotta close my eyes… Yeah. They’re good!… But I don’t think I would ever seek this out.

LISA: But who knows? Some researchers say in a few years, the global insect market will be worth more than half a billion dollars—and a lot of it will be here in the U.S. But looking at those small brown worms I was thinking… how is anyone going to build a business on this, not to mention an industry? Most Americans are probably like me… grossed out by the idea of eating bugs. This week, we find out how people starting companies in this space are trying to overcome the ‘ick’ factor. A quick warning, there’s some swearing in this episode. Luke takes the story from here.

LUKE: The first time Megan Miller ate a bug was at a bar in Mexico. She’d ordered a michelada…

MEGAN MILLER: And they put this really nice spicy salt on the rim and I was like, “What is this? It’s just fantastic. And they were like, “Gusanos.” And I was like “What? I think I misunderstood you, like, gusanos, those are worms.” And they were like, “Yep, that’s what’s in there.”

LUKE: Unlike our host Lisa … Megan was into it. In the years after that trip, she read up on bugs. She realized they’re really healthy, have tons of protein … And she wondered, why don’t people in the US eat insects? In 2012, she started experimenting. But at the time, bugs weren’t easy to come by…

MEGAN: I just ordered some from a pet store and the first thing I got was the mealworms and the mealworms were in potting soil. So there was this container of potting soil with worms writhing in it. And I mean this does not look like food. And my husband sort of took one look and was like, “Nope, I’m out. Like, you’re on your own. This is your experiment.” And I took the worms and put them into I think it was oat bran… and let them eat that for a couple of days and also gave them some apples and carrots and stuff. Basically I treated them like little horses (laughter) it sounds like. And then I roasted them on a pan and ground them up in a Vitamix and used them to make muffins.

LUKE: She passed them around to her friends and they seemed to like them. Megan was already thinking: maybe there’s a business here. At the time, she was working as a trend forecaster at a big media company. So it’s no surprise that her spidey sense was spot on… Bugs… were about to blow up.

KELLY RIPA: The world famous cricket taco is here! Isn’t this incredible.

LUKE: This is Kelly Ripa, getting excited about crickets on her morning show in 2013. But her co-host at the time, Michael Strahan, wasn’t having it.

KELLY: So you and I are gonna try it.

MICHAEL: You are gonna try it.

KELLY: Well, we’re going to try it together.

MICHAEL: I’m not eating it. I told you the other day, I can see the butt of the cricket. I’m not eating a cricket booty, I’m not eating it.

KELLY: I’m doing it. (Audience screams and under)

LUKE: And it wasn’t just Kelly Ripa. There were articles in National Geographic, Forbes, The Atlantic. Bugs were getting attention in a huge way. The reason? This big U.N. report had just come out saying that the world might be in danger of running out of food—and that eating insects could be a solution. Insects have as much protein per pound as cows or chickens, and raising them takes a lot less land and water. The report created a bug boom. Companies started popping up, with names like Chirps Chips and Entomo Farms—an outfit run by three brothers, who used to breed crickets for pet snakes and lizards, but then switched to feeding people. A cricket protein bar company went on Shark Tank, and got $50,000 from Mark Cuban. Self-help guru Tim Ferriss and the rapper Nas also backed edible insect companies. Megan knew it was go time. She quit her job and convinced her friend Leslie to start a company. They called it Bitty Foods, and raised over a million dollars in seed funding from investors like Arielle Zuckerberg, sister of Mark, and celebrity chef Tyler Florence. They had some success out of the gate with cricket-flour cookies, and launched a line of chips called Chiridos. But pretty quickly, they ran into their own version of the Lisa Chow-Michael Strahan problem.

MEGAN: There was an event that we were doing and this couple came up to us and the boyfriend was actually asking us lots of questions. And the girlfriend, I don’t think she was really paying attention, I think she was looking at her phone or something like that. And she grabbed one of the cup of chips and ate it and it just suddenly dawned on her, like she started listening to him and realized that she had just eaten crickets. And she burst into tears, and she walked away and I was like oh no that’s a disaster.

LUKE: Megan’s cricket chips don’t usually make people cry… but she does get her share of negative reactions. And every time… it hurts. It taps into this fear she’s had ever since she gave up her normal job for insects.

MEGAN: How long am I going to have people telling me that the food that I’m making is disgusting… Like, do I have to be the crazy bug lady, and for how long? How long is it going to go on? And how do you get people to buy a food that so many of them think is gross?

LUKE: Bug entrepreneurs like Megan aren’t the first people to deal with this problem. Lobster was called “cockroach of the sea” before it became a delicacy. Yogurt was a fringe food until Dannon started mixing it with fruit in the 1940s. And tofu didn’t catch on until health food stores started selling it in the ’70s. So, what’s Megan’s next move? How can she and other bug businesspeople convince potential customers that insects are the future of food? And can it happen fast enough for companies like Bitty Foods to survive? I talked to a bunch of experts to find out, and I heard lots of theories, but three people stood out. The first one… is this guy.

LUKE: I’ve heard that you have a nickname.

PAUL ROZIN: Well, you’re probably referring to Dr. Disgust. I’m responsible for the emergence of disgust as a serious area of research and psychology since the late 1980s.

LUKE: Dr. Disgust’s real name is Paul Rozin. He’s a professor of psychology at the University of Pennsylvania. And he says, an aversion to bugs isn’t just some hang-up… it has deep evolutionary roots. Early in his career he did an experiment: he asked college kids if they would eat their favorite food, say mashed potatoes, if he touched a cockroach to them. Most people said no. He asked them why, and they’d say, well, because cockroaches carry disease. So he asked a different question: what if he used a sterilized cockroach? Completely clean. Would they eat the mashed potatoes then?

PAUL: And that makes virtually no difference. That is the idea that cockroach is bad and you’ve cockroached the mashed potatoes.

LUKE: Paul says we have a good reason for responding this way. The omnivore’s dilemma. It’s the name of Michael Pollan’s famous book, but Paul was the one who coined the phrase.The dilemma refers to the fact that most animals have strict diets, but people don’t. We can eat whatever we want. But each time we try a new food, we expose ourselves to the risk that it might be poisonous or contaminated. That’s why we have this built-in fear of pathogens… to make sure we don’t kill ourselves. In other words, our fear of eating bugs, it might be biological. Our body’s way of protecting itself. Now of course it’s safe to eat bugs—two billion people around the world already do. And you’ve probably eaten them, too. You really can’t avoid them. If you’re eating something that originally came from a field, like wheat flour, for example, it probably has bits of insects in it. The difference is, you don’t know they’re there. So you’re not thinking about it. And thinking about it? That’s the problem. It creates a fear in our heads that we need to get past. Paul says… that may sound hard, but it’s possible… just think about the way we eat meat.

PAUL: I would say that the basic situation which very few people realize is that we find all animal food disgusting. That’s the base of it. If you think about it for Americans we eat three mammals: lambs, pigs, and cows. Now there are over 4000 species of mammals and we’re eating only three of them and we’re not only eating only three of them we are only eating their muscle. In the United States we don’t eat their gut. We don’t eat their pancreas. We don’t eat their brain. There’s this little tiny segment of animal foods that most of us eat. So, the question isn’t why insects are disgusting it’s why any animal isn’t disgusting. Why is a horse disgusting or a dog and not a cow?

LUKE: And Paul points out that we’ve developed this whole vocabulary that helps us distance ourselves from the meat we do eat.

PAUL: In English, we don’t call steak cow. We call it steak or beef, right? We have a separate word to describe the animal itself and the food that we eat… There is a peculiar fact that we tend to try to disguise, in language, and in serving, in the way we eat it, the identity of the animal we’re eating.

LUKE: So, Dr. Disgust’s advice when it comes to getting us to eat insects? Rebrand them. Give them a new name. Help people forget the fact that the thing they’re eating is a worm, or something that hops around in the dirt.

LUKE: Jennie Roper, a marketing executive, has a different solution. Jennie works at Kinetic… an advertising agency that has worked with clients like L’Oreal, Ford, and Netflix. She recently decided she wanted a new challenge. Most advertising is about getting you to buy things you already know you want. You wear make-up? Buy this lipstick. You want a car? Buy this one. She wanted to see if she could get people to buy something they don’t want. She mentioned this to a colleague during a brainstorming session.

JENNIE: I said we should do an experiment together. And I came up with what was quite a boring idea. I said, well let’s see if we can get people to eat fruit rather than get them to eat pastries. And he looked at me and thought quite earnestly and said I think you need to think a bit more obliquely. And I didn’t really know what that meant and I just nodded and went, “Yeah, definitely.” And he said you should get people to eat insects. It sounded like a good challenge to Jennie. She teamed up with Grub, a company that sells cricket energy bars, and designed two posters. The first took a straightforward, insects-are-healthy approach: “Eat Grub bars, made with crickets. Tasty, nutritious and sustainable!” The second approach was more creative: “2 billion people enjoy insects globally. You can be the first in W1.” W1 is a zipcode in London, where Jenny was testing the posters. The ad was saying you can be the first in your neighborhood to try insects. The first poster, the health-angle one, worked pretty well.

JENNIE: That doubled sales. So you know that was good was quite, quite successful.

LUKE; But the second poster, the don’t-miss-out one, it killed.

JENNIE: That was six times more effective.

LUKE: So, potentially the way to get people to eat insects is to make them insecure and think that they’re missing out?

JENNIE: Exactly. This FOMO thing.

LUKE: FOMO. Fear of missing out.

JENNIE: Oh, look, I’m eating this, I’ve got a great diet. Look at my wonderful body, due to eating insects morning, noon and night. You have to be a bit careful with advertising standards over that one.

LUKE: So that’s Jennie’s lesson for insect entrepreneurs: apply FOMO. Make potential customers think they’re missing out by not eating bugs. But to really figure out how to bring insects into the mainstream you’ve got to talk to someone who has done this before… Someone who has taken a weird food and made it a staple. When I ask people in the insect world what examples they look to, everyone says the same thing: sushi. It seems normal now, but in the 70s, the idea of eating raw fish was unthinkable to most people in North America. They thought it was unhygienic and kind of slimey. But then this man came along.

HIDEKAZU TOJO: My name is Hidekazu Tojo.

LUKE: Hidekazu Tojo. He trained as a sushi chef… at a traditional, high-end restaurant in Osaka, before moving to Vancouver in 1971… He landed a job at a restaurant that served mainly Japanese immigrants and visiting businessmen. At the time, there were a few Japanese restaurants in the city—but not many Canadians were actually into raw fish.

HIDEKAZU: Only five people eat raw fish. But only eat tuna.

LUKE: Five. In 1971, in Vancouver, Hidekazu only saw five Canadians eating sushi—and even then it was all tuna all the time. Everyone else, he tells me, ordered teriyaki and tempura. All cooked, nothing raw. He thought he could get himself more business if more customers liked sushi rolls, but in order to get people to eat them, he’d have to get them past two things that freaked them out—raw fish and seaweed. He started with the seaweed.

HIDEKAZU: You know, seaweed people don’t like. Ohh, yuck. They say that. But I hiding.

LUKE: He said people would say “ohh yuck.” So… he came up with a plan: hide it. Hidekazu disguised the fact that people were eating seaweed by putting the rice on the outside of his sushi rolls. Now, instead of seeing seaweed and fish on a plate, you’d see cylinders of white rice… Hidekazu had invented the inside-out roll.Then he took it one step further… and made a sushi roll that didn’t have any raw fish in it at all. It looked like a regular sushi roll, but was made with spinach, shiitake mushroom, egg, and cooked shrimp—an early prototype of what would later come to be known as the California roll. It turned out to be the gateway roll. People loved them. And, little by little, they started to become more adventurous.

HIDEKAZU: They eat starting sushi cooked product first, then tuna… They slowly slowly approach, step by step, just like a baby.

LUKE: As sushi started to get a foothold in North America… Hidekazu noticed something else helping sales along.

HIDEKAZU: Rock musician people.

LUKE: The local musicians did you say?

HIDEKAZU: No, rock! You know, Rolling Stone, Pink Floyd, AC/DC, Aerosmith. That kind of people. They were looking for something new.

LUKE: I checked with him after, and he’s not throwing those names out as examples—he means the actual bands. According to Hidekazu, the first people in North America to get the ball rolling on traditional sushi were guys like Mick Jagger and Steve Tyler. Over the next 15 years, sushi proliferated across North America. And now, it’s so ubiquitous you can buy it at 7-11.

LUKE: Do you think that crickets have a bigger hurdle now than sushi did back in the 70s?
HIDEKAZU: No, no, no—everything is possible. Not difficult.

LUKE: Hidekazu says, insects could become as big as sushi if edible insect entrepreneurs follow his simple lessons: Hide them among things that people recognize as food. And then…get rock stars to eat them in public. So who’s the best celebrity to pitch crickets? That’s after the break.

**********BREAK**********

LUKE: Welcome back to StartUp.

LUKE: A lot’s changed since Megan started Bitty Foods three years ago. Now, you can find the company’s cricket chips in 200 stores around the country. Megan told me revenue has doubled in the past eight months. And they’ve started exporting overseas, where people already eat insects, and it’s an easier sell.When I spoke to Megan again, she told me she’s already doing some of the things the people from the first half of our story suggested. For example: Bitty Foods is already divorcing the protein from the insect itself. They’re not selling whole crickets, they’re selling chips… which is what she tells potential customers when they look nervous.

MEGAN: Yeah, it’s just a chip. Taste it. You’re really only eating a chip. Or they’ll says something like ha ha are there going to be any legs or wings or something and we’re like nope, never going to encounter that with any product that we make. But when it comes to calling them something other than crickets—like how we call cows “beef”—Megan’s less convinced. We have actually talked about potentially using a different name. But honestly when we say cricket flour they can’t imagine in a million years that we’re actually talking about insects. They think it’s like some ancient grain like teff or kemut or something. Like, seriously I can’t tell you how many people have said to me, ‘Now what do you mean when you say cricket?’

LUKE: And as for tapping into people’s FOMO and getting celebrities to eat insects… Megan says, some of that is already happening: Shailene Woodley has said she eats insects, and there’s a video online of Angelina Jolie feeding tarantulas to her kids. But Megan thinks what you really need is a very specific kind of celebrity.

MEGAN: I actually think we need Beyonce and Jay-Z to eat bugs. Because they’re seen as very very cool trendsetters. But they also are more kind of aligned with regular people. They don’t seem out there. Like even Rihanna I think might be too edgy. But Beyonce…

LUKE: Relatable Beyonce.

MEGAN: Yeah, I guess maybe Beyonce’s not relatable, but she’s somebody that people aspire to be like.

MEGAN: Would you like to try some cricket protein chips? I would like to try some cricket protein chips. Great, get in there.

LUKE: But until Beyonce’s on board, Megan’s stuck pushing her chips one potential bug eater at a time. Which means standing behind a little table at the end of a grocery aisle, offering people samples.

CUSTOMER: Oh, protein chips, what is that? They’re made with cricket protein—super sustainable protein of the future. Cricket like the bug?

LUKE: This demo was a couple of weeks ago at a gourmet grocery store in San Francisco. The kind of place where shelves are stocked with fancy olive oil and 30 dollar bottles of vinegar … and customers care where their food comes from. These should be Bitty Foods’ people. But it’s not a slam dunk, even here.

CUSTOMER #2: So, I can just reach in here and grab what I want. And these are little funny chips.

MEGAN: Yeah, it’s made with cricket protein.

CUSTOMER#2: It looks like dog food. I would make it look more like crickets.

LUKE: Megan always gets feedback during these demos, but it’s usually a bit more constructive than that. Like, people will tell her the chips are too spicy. So lately she’s been rethinking her flavors. It’s a really important thing in the snack business. Especially the bug snack business. If you can get people to try your cricket chips, they’d better taste damn good. Right now, her Chiridos come in three flavors: Baja ranchero, salsa verde, and spicy mole. She wanted to tie them to Mexican food, and a country where eating insects is the norm. But Megan says that might’ve been a misstep.

MEGAN: I think that’s just a little too esoteric. Like, if we’re selling to the American consumer they don’t care about Oaxaca and mole. They actually just want a delicious cheesy poof…

LUKE: So now she’s developing a cheese flavor.

LUKE: Megan’s decided to go all-in on chips, instead of bars or whole insects. She thinks if bugs are going to break through, it’s going to happen in snacks. Because, where are you when you try a snack? Maybe you’re at a party … or you’re watching TV at a friend’s place… usually you’re somewhere where you’re more willing to try something new. And you know who else likes snacks? This little guy.

BLAZE: I want to see this. Would you like to try. Sure. What do you think. Um, it tastes kind of good.

LUKE: This is Blaze, he’s seven.

MEGAN: Did you know that they’re made with cricket flour?

BLAZE: Does that have crickets in it? I can’t believe I just ate a cricket.

LUKE: This is another thing Megan’s learned over the past few years: go for the kids! They’re a huge potential market. Parents are always looking for healthier snacks for their children, and kids like Blaze haven’t developed strong negative emotions about insects. Everything seems new and weird to them, so they adjust quicker. They might even be the ones to convince adults to eat them… like Blaze did with his mom.

BLAZE: I ate a cricket.

MOM: You ate a cricket?
BLAZE: Made of cricket flour.

MOM: Get out. Get out, that says it right on the bag.

BLAZE: Try one.

MOM: I don’t know, I don’t know. I’ve never eaten a bug… That’s a good bug.

LUKE: A lot of people say … that for insects to truly take off in the U.S., a food industry behemoth has to come into the market, and buy up a company like Bitty Foods, or bring out its own line of cricket Doritos. One thing that might slow that down? Crickets are actually pretty expensive to farm … and insect growers are still trying to figure out how to mass produce them and bring costs down. When that happens… there could be a market waiting. Last year, the CEO of PepsiCo … the biggest food and beverage company in North America … said she’s paying close attention to the bug snack market, looking for the moment when customers are ready.But until then, Megan has to keep pulling long days at her demo table.

MEGAN: I really think that this is a thing where we’re going to have to hang on and like claw our way through the next few years of sales. I mean to be quite honest the phase that we’re in right now is drudgery. Like I did not quit my exciting media job so that I could sell groceries. But that is the next couple of years. We just have to sell the shit out of Chiridos and get everybody really excited about it. So yeah we’ve got a hard road ahead of us. I know that. It’s hard to tell how long it all might take… and if companies like Bitty will be able stay afloat while customers get used to eating insects.

LUKE: But Megan thinks she’ll make it. That story she told about the woman who cried after eating cricket chips … it didn’t end there. The woman came back to Megan’s table a little while later. The tears were gone. And now… she wanted to try the salsa verde flavor.

—————
CREDITS
—————

LISA CHOW: Luke Malone is a producer of StartUp.

StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry, and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe.

Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. Additional music by Legs, Jupyter, Radiation City, Golden Gram, and the band Hot Moms Dot Gov. For full music credits, visit our website.

David Herman and Ian Scott mixed the episode.

Special thanks to Natalie Jones and Bec Couche.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you in two weeks.

Bootstrapping a Better Vaccine (Season 5, Episode 5)

A founder tries to bootstrap a scientific breakthrough in a very unlikely place.

May 19, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is Startup

LISA: Biotech— it’s an industry that requires a big investment of capital, a long waiting period to see if a scientist can prove out his or her theory, and then a tiny chance of a massive return. And that’s why innovation in the biotech space has so often happened inside major research universities and pharmaceutical companies. But increasingly, young scientists are moving outside those institutions and starting their own companies. Some people call it the ‘biohacking’ movement. On this episode, we have a story of one of those ‘bio-hackers’ — a guy who came up with an idea, and decided a breakthrough in vaccine research was more likely to happen in a small town in Central America than inside Pfizer or Stanford. StartUp producer Bruce Wallace went to Guatemala; that’s where our story begins.

BRUCE WALLACE: Last month, I found myself on an overgrown hillside, standing in front of a low cinder-block building.

JAKE GLANVILLE: Alright so this is the facility, We’re going to put on gloves

BRUCE: Jake Glanville, the biohacker I was here to see, was about to introduce me to his research subjects. But first… we had to take some precautions.

JAKE: We’re going to chlorinate our feet to make sure we don’t track anything in. So just go ahead and step in here.

BRUCE: We sloshed our rubber boots through a chlorine bath, then made our way into a large, fenced-in yard.Jake is trying to revolutionize the way we vaccinate people for the flu. It could give us ways to manage other viruses, too … and save hundreds of thousands of lives … He’s doing this … using pigs … an animal that until a couple years ago Jake knew absolutely nothing about.

JAKE: So I was looking at like people who have pigs as pets. They have these lists of things to do with the pigs that they’re real smart and they’ll get bored if you don’t give them toys. They get sunburned easily. Things like that.

BRUCE: Jake is 36. He’s tall, with glasses and curly black hair that corkscrews erratically around his head. When he’s deep into a scientific problem he listens to Nicki Minaj songs on repeat; when he likes something he says it’s “deluxe.” His big idea about how to revolutionize the flu vaccine hit him back in 2011. He’d studied genetics as an undergrad at Berkeley, and had worked his way up to being a principal scientist at the pharmaceutical giant Pfizer, working on developing new medicines…One day, he was heading home from work.

JAKE: I think I was on my motorcycle, I had music in my helmet which I’m sure I shouldn’t be doing but I did.

BRUCE: The idea Jake had was a way to create a universal flu vaccine.One single vaccine that could protect against all the thousands of strains of flu…Here’s the thing you need to know how the flu works: the virus is constantly mutating and changing … we face new ones every year … so every year scientists have to race around and create a new set of vaccines to fight it.But around the time Jake had his realization, scientists were focusing on this one spot on the flu that doesn’t mutate.

JAKE: A spot that can’t mutate and that gives you a way to force the immune system to target it. You know in like Star Wars when they say there’s a weakness in the Death Star? It’s like that, you’re basically spotting a weakness in the Death Star.

BRUCE: Which means if you could make a vaccine that targeted that spot … it could protect against all flus.

JAKE: Yeah, all flus forever. It’s the last flu shot you’ll ever need.

BRUCE: A universal vaccine. This would be a big deal. Because those seasonal flu vaccines … they’re not perfect. At best they’re 60% effective. That’s part of the reason up to half a million people die from the flu every year.And the vaccine industry doesn’t have a big incentive to fix this — the market for the annual flu vaccine is worth about four billion dollars. Despite that … several years back a bunch of scientists started trying to develop universal vaccines, including ones to hit that death star spot … that spot that doesn’t mutate. But it turns out — that’s really hard.

JAKE: The problem is just how to get these damn antibodies to hit the right spot on the virus.

BRUCE: It sounds, for someone who understands one percent of it, it sounds so frustrating to know exactly where the spot is and all this science has been pointed at it and you just can’t, it just can’t hit the spot.

JAKE: It’s amazing, no, the immune system has ADHD. There’s this site that doesn’t change, every once in awhile somebody gets lucky and gets the right antibodies against it, but most of us miss.

BRUCE: And this is what hit Jake as he was riding his motorcycle home from work that day …a new way to train the immune system to hit that death star spot. Jake wasn’t actually working on vaccines at the time, but he was reading a lot about them. The problem tripping up scientists was that when the immune system recognizes a flu virus, it attacks the virus from all sides, with all kinds of antibodies. Instead of making only antibodies that target that death star spot. Think of shotgun spray when what you want is a sniper’s bullet. Jake’s epiphany was a way of basically teaching the immune system to recognize its target. He would show the immune system that vulnerable death star spot over and over again. So the antibodies would focus in on that one spot, instead of getting distracted and attacking some other part of the virus…Jake remembers rushing home to his computer to see if his idea could work.

JAKE: And it was beautiful. I could feel the heartbeat in my head. When you see something that’s that cool, I think I remember thinking ‘This is too beautiful not to be real.’

BRUCE: If Jake could prove this idea worked, he could create a vaccine that would save the lives of not only the hundreds of thousands of people who die from the seasonal flu each year … but potentially millions more than than that.

JAKE: Every 10, 15 years, we have a major pandemic that hits, and they can kill a million people easily, and back in 1918 there was a flu pandemic that killed 51 million people.

BRUCE: In other words if his idea for the universal vaccine worked … it would mean the end of the flu as a public health threat to humans.

BRUCE: So, when Jake had this idea, he got really excited. But he also started feeling anxious … anxious he might be wrong. But also anxious that he might be right … because he knew proving his idea could take over the next decade of his life.

JAKE: You’re trying to kill the idea as quickly as possible, because you’re either going to like kill the dragon or ride it. if it’s real, it could end up swallowing up my life but If this thing works it alters the human relationship to health. And so I was just like no goddamnit I’m going to try this.

BRUCE: One problem with that was — Jake knew Pfizer wouldn’t go for it. He’d been there for four years, and seen them pass on lots of innovative, outside-the-box ideas.

JAKE: There’s actually a formula, and I’m sure Pfizer is not unique in this there’s this formula. This is how valuable the project is. And one of the features in the formula is how many other people are working on it. If you’re the only one working on it you think that will be valuable. No, that counts against you because it is a greater risk.

BRUCE: So Jake quit. Five years ago, he and two former Pfizer colleagues launched a startup called Distributed Bio. They had a couple of ideas for products they could get to market quickly. And they figured they could use the money from those products to fund the vaccine research. It was a gutsy plan to finance his big idea. At first it seemed like it was all working out … Distributed Bio licensed their products to a bunch of pharmaceutical companies. Jake started a PhD program at Stanford, to get more biology and computer modeling under his belt. But after a year, they hadn’t made enough money to get the vaccine experiments going. And at the same time huge pharmaceutical companies like Sanofi Pasteur, and academic powerhouses like Scripps and Harvard — were making progress on their universal vaccines. Jake was feeling the pressure.

JAKE: I just felt constantly anxious that I had this cool idea and I was squandering it by not working on it. And you know I have all these e-mail alerts and news articles or papers come out and I get like a little mini heart attack every morning I wake up and it’s the first thing I do I check and some titles will come out that freak you out or I’m like oh god someone did it. And then you check you know like OK no that’s not what they did.

BRUCE: How many of these news alerts did you have set up?

JAKE: I think I have like 12 of them like everyday I get some. BW: And each time you see one you’re like oh god is this it. JG: Yeah it’s like one of … It’s like one of them it’s weird little ritual

BRUCE: So the plan for funding his vaccine experiments had failed…Jake’s next idea: VC funding. Venture capitalists were starting to pour a lot of money into biotech — four and a half billion dollars in 2012. Jake thought the first phase of his experiments would cost about a million dollars. But when he started approaching VCs … he ran into a new problem. You can drop out of Harvard and still get VC money to grow Facebook … but in biotech, VCs look for credentials.

JAKE: In biotech people who lead things have Ph.D.s. And I didn’t. And they want to know who thought of this. How does how do you know how do you know enough breath to make sure your idea is right and who the hell are you. I think that was another question I would get from the VCs a lot.

BRUCE: Scientific research is expensive, and it takes a long time. So investors look for evidence that an idea could prove out. “Come back when you have more data,” they kept telling him. This is actually a real problem for people trying to move new scientific ideas forward. It’s hard to turn a concept into data without money. This gap between concept and proven-concept is wide enough that people actually have a name for it — the biotech valley of death. So, VC money wasn’t going to fund Jake’s experiments. But he had one more idea: Maybe there was a way the experiments themselves could generate some cash…Jake knew that he’d have to prove his vaccine on animals before he could test it on people.

JAKE: My thinking was, ‘Why don’t I work on an animal market where we can make money in veterinary science on the way towards humans.

BRUCE: Jake had been planning to hire a contract lab which would run his experiments on mice. But no one would buy a flu vaccine for mice.

JAKE: So I called my buddy at Zoetis, and I said, ‘Hey Is there an animal that there’s a vaccine or an interest in it in a vaccine for that has a virus that rapidly mutates. And what’s the biggest market?’ And so he said well of course it’s flu and pigs. He’s like 165 million dollars a year. That’s a big market. There are vaccines right now and they have to change them every year and they have all the problems that human vaccines have. And so like as soon as I hung up the phone with him I called my father afterwards and was like, ‘How much does a pig cost in Guatemala?’

BRUCE: How much does a pig cost in Guatemala? And how do you do biotech in a place where there’s no biotech.That’s after the break.

BREAK

BRUCE: Welcome back to StartUp….The leap Jake made to doing his vaccine work in Guatemala isn’t as random as it sounds. He grew up there, in the town of Santiago, a bumpy three-hour drive from Guatemala City. Jake’s dad still lives there, and runs a hotel in town. When Jake had the idea to test his vaccine on pigs, he had two thoughts: first, pigs are raised commercially back in Guatemala. And second, stuff is cheap there. Jake’s dad told him, a pig … costs 50 bucks. And suddenly Jake saw a way to get his experiments done: he only needed about 30 pigs to get started … and he had the money for that. Plus he knew there was some unused land behind his dad’s hotel. And his brother, who works in construction, could build a space for the pigs. So here’s the scheme he pitched to his co-founders, Giles and Chris: he’d ship his vaccines from his lab in San Francisco down to Guatemala, and inject it into the pigs there. Then he’d draw blood samples from the pigs, and ship them back to the states, to find out whether the pigs were having the response he was hoping for. He needed to do that testing in the US because it had to happen in a lab with a higher bio-safety level.

BRUCE: To like an uninitiated person coming to them and saying I’ve got a solution I’m gonna build a facility in Guatemala I’m going to ship vaccine down there to ship blood back. It sounds like kind of a crazy work around. Was anybody like what you’re crazy.

JAKE: Yeah. You know it is complicated. I think people who Chris and Giles and stuff they knew I grew up down here for them it was the numbers. I just was like Look here I think I can make this work. It’s got to be instead of $900,000 for this initial round of experiments. I’m going to be spending like about 80 grand is what I estimated at the time.

BRUCE: 80 thousand dollars … versus nine hundred thousand dollars…Today behind the hotel, there’s a cinderblock building and fenced in yard where the pigs live. There’s a beatup soccer ball and some chew toys to keep the pigs from getting bored. A specially built overhang lets them get out of the hard Guatemalan sun.

BRUCE: Wait why aren’t they going after you?

BRUCE: When we first arrive, a half-dozen pigs swarm around me, inspecting the cheap rubber boots I bought the day before coming down here. They gnaw and pluck at them, and do this weird sucking thing around the top.

BRUCE: Ok ok ok. I can’t imagine they’re that tasty. They taste like Target. Cheap Chinese Target shoes.

SARAH IVES: Hi piggies. Hi. You look so good

BRUCE: This is Sarah Ives. She took the lead on running the lab down here. She’s fond of the pigs, even decided they should have names: Elloin Degeneres, Kim Kardashioink, Spamela Anderson, Squeeyoncee, and Pink…Cute, but these pigs are not to be trifled with.

SARAH: Pigs are very powerful and have very strong jaws, they can basically crush you.

BRUCE: Now you tell me.

SARAH: Oh yeah they can rip your hand off if they wanted. But they give you little love bites to say hello.

BRUCE: The pigs were injected with vaccine a week ago. They’re getting blood drawn today to test if the vaccine is prompting the right antibodies. So we start herding them into the cinderblock building…Inside, the pigs are brought to the vet one by one. An assistant has a long pole with a metal ring around the end. He slides it over the pig’s lower jaw to restrain it. They take some vitals to make sure the pigs are healthy, and then begin the blood draws. Before they start, the scientists put in earplugs.

JAKE: Alright let’s kick off. SI: Oh earplugs BW: Oh, it’s that loud?

SARAH: The first pig is always the calmest, because it doesn’t know what’s coming. So as the day goes on and we go through more pigs, they scream more loudly, because they get agitated from the previous pigs.

BRUCE: So this is calm?

SARAH: This is about as calm as it gets.

BRUCE: Wow.

BRUCE: Jake and I watch a couple. Then head out.

BW: That is definitely the most horrifying noise I’ve ever committed to tape I think.

JAKE: Yup, I warned you.

BRUCE: The blood draw only lasts a couple minutes, and the pigs seem to recover quickly.

A few minutes later, the first two of them, including that calm one you heard screaming, are back outside playing in the sun.
BRUCE: Jake and his company are saving a lot of money by working down here. But they’ve run into some pretty big problems they wouldn’t have if they were in the States. There have been bureaucratic snafus: one compound they needed to make their vaccine got stuck in customs–passed back and forth between the ministry of health and the ministry of mineralogy because neither knew which was supposed to sign off on it. The additive spoiled before they figured it out. And there’ve been other hurdles a lot of founders don’t have to deal with. Early on, Jake may have cut some corners.

JAKE: More than you might think, there’s probably planes where people are– for good reasons– immunologists are moving weird stuff around in their socks or if their luggage without listing it appropriately. People do what it takes sometimes to get the work done.

BRUCE: What have you done?

JAKE: I have all my approvals in place. [Laughs]

BRUCE: Jake didn’t want to go into detail on tape. They haven’t only had to navigate bureaucracy. There’ve also been some wilder problems. Like this one time, eight months into their work in Guatemala. They had the first full round of samples ready to send back to the states; the samples that would show whether all of their work was on the right track. To get the samples out of Guatemala, Jake had to deliver them to a shipping company in Guatemala City. But then, that morning…

JAKE: I wake up and my scientist who was with me at the time sends a text that says, ‘So I’m hearing that there was a murder in town and now we can’t leave. I’m not sure I’m understanding. The murdered person was Mayan, part of an indigenous group called Tz’utujil.

JAKE: Tz’utujil people are super-polite but they’ve put up with a lot. They were occupied during a 30-year civil war. A lot of Tz’utuji died during that war, killed by Guatemalan paramilitaries. At the time Jake was trying to get his samples out, cops in town had been squeezing the Tz’utujil for a few months. Asking for bribes, and for free stuff from stores…And so these these jackasses were going around and demanding stuff free stuff from people and I guess they were really drunk one night it was the night before we were about to leave and they went and tried to demand free booze from a cantina which is like a little Mayan bar and the guy running the cantina is like, ‘No you need to get out of here.’ And one of the cops drew his gun and he killed the guy.

BRUCE: A crowd chased the cops to the police station, and demanded they give up the cop who’d shot the guy. Protesters lit a police car on fire. Others went out to the edges of town and blocked all the roads so that reinforcements couldn’t get in. Jake’s driver called from outside of town.

JAKE: He’s like look man I can’t get to Santiago they blocked the roads. I can’t get into Santiago and I’m like mean you can go meet you and he goes no that’s not a good idea. And I’m like What do you mean he’s like now. People are really angry is better you stay away. And at that point I had this dry ice cooler with all of our samples in it. But the dry ice evaporates. And so I thought I might have two more days left but maybe not. And then I’d be losing all these samples.

BRUCE: Driving out of Santiago was out of the question. The town is on a lake and normally it’s easy to get in and out by boat. But Santiago’s mayor had just tried to escape that way, so the protesters shut down the docks. They told all the boat drivers that if they tried to pick anyone up… they’d set their boats on fire.

JAKE: And so all the boats left and everyone’s like, ‘Yeah no we’re not picking up in Santiago.’ So I started calling guys I knew in San Pedro. And finally one of them was like All right. That is a special day is it going be a special price. And I was like whatever takes man just come straight to Santiago boat docks and then let’s leave immediately. And so that’s what he did. He showed up we like had our stuff ready just dumped it right in the boat and then we bailed and we were leaving went across the lake and as we got on the other side of the lake we could see helicopters flying over toward Santiago And they sent in like a massive number of like. I mean there were cops who looked like shock troops right to go like reassert control. But we made it out. We had the samples and we’re able to bring them up to the states.

BRUCE: Once Jake got those samples out of Guatemala, they were ready to analyze their first round of results. It was a moment of truth.

JAKE: Your theory could be wrong. You could have that the vaccines went bad in transit, maybe you processed the samples incorrectly, maybe the pigs had been treated weirdly maybe they secretly all got sick you didn’t know about it and it screwed up their vaccine response.

BRUCE: The whole team was back in San Francisco for this moment…In their lab, Sarah put the samples into a grid of small tubes. Each tube contained a sample from one pig. To test the samples, Sarah added an enzyme to each one. If the pigs were responding to the vaccine the way they hoped … making antibodies against different strains of the flu … the tubes would turn light blue. The control samples on the other hand would remain clear. So what they wanted to see was a mix of blue and clear tubes.

BRUCE: When she started to see results, Sarah called Jake who was on his way in.

JAKE: And she’s calling me and I’m driving down and I’m like, ‘How’s it look?’ Because I knew if nothing was responding the plate would not turn blue at all. If they all turned blue at all there was some problem. What I was expecting was polka dots. What I’m expecting is polka dots. And she goes Jake it’s polka dots. So I got into the lab. //That’s when the first time when we saw like that technique was absolutely working we’re getting the super broad reactivity against a whole bunch of viruses that go back to like 1918 which is the pandemic H1N1 that killed 51 million people.

BRUCE: For four years, ever since that motorcycle ride, Jake had been following a theory. Now he had real evidence that he was onto something.

JAKE: So there’s a photo of it. It’s like us sitting there like 8 p.m. on a Friday night and everyone still laugh because they want to see the results. And like I teared up I had like take my glasses like the stupid photo be taking my glasses off. It was emotionally overwhelming to have all that like fear and like all of the hope and fear all twisted up inside you and then you looked at the data and it was beautiful it wasn’t just like half of a signal it looked gorgeous and it was kind of inspiring and overwhelming. And it was you know it’s something you’re like scared to let yourself be too excited about. But then you see that moment you realize how much you’ve been hiding that from yourself. And the truth is of course you wanted that you wanted that the whole time.It was a major victory, but they’d need a lot more of those.

BRUCE: Before they could say that their technique was showing promise, they’d need to do multiple rounds of testing on three separate groups of pigs…It’s been more than a year now since those first results. Jake and his team are planning to finish the pig tests next month. If those results look good, they could start making money from a pig vaccine. But if Jake wants to make a vaccine that doesn’t only work for pigs but also for people, he’s going to need a lot more money.

BRUCE: Does it still feel like you’re in a race?

JAKE: Yeah, yeah absolutely it does. Because I still feel like I’m in a David and Goliath situation.

BRUCE: Say more about that.

JAKE: Well you know we’re still a tiny operation, I’m still running experiments in Guatemala to get this done. There’s other ways to get this done faster if you have huge resources behind you. And I haven’t had that.

BRUCE: A couple of months ago — the quest for funding brought Jake to Washington, D.C. He was in town to pitch BARDA. It’s a research arm of the federal Department of Health and Human Services that focuses on pandemic-sized threats. Like Zika outbreaks and anthrax letters…Jake and I caught a cab to the meeting.

BRUCE: Of all the times you’ve pitched this, how important is this one?

JAKE: This one’s much more important because BARDA, BARDA would pay for human trials, they’d pay all the way to the FDA. So that’s $30 million for the phase 1s…

BRUCE: To make a human vaccine, Jake will need to do another round of animal trials, followed by trials in people. And BARDA is one of only a few organizations that could move that work forward…We pull up in front of a modern, stone and green-glass office building, one block off the Mall…The cab driver had been listening to us talk.

DRIVER: Hey good luck on your presentation, Okay? It sounds very interesting. Thank you.

BRUCE: Jake hustles in with his computer…A few hours later, I meet him outside.

BRUCE: Overall did it go as well as you’d expected?

JAKE: So it was um medium-good. It went super long and they were excited about all the tech. But Perfect would have been ‘Yeah we’re going to do human right now. They didn’t like write a check at the meeting. That would have been the perfect outcome. They didn’t just kick us out and be like, ‘Yeah this was stupid.’ Now I’m just exhausted That was like three hours wasn’t it? Uggh.

BRUCE: The BARDA scientists pointed out some drawbacks to Jake’s plan. One flagged that FDA approval could take a really long time, because of all the viruses in his vaccine. Another wondered if it would work as well in humans as it had in pigs…Not surprisingly, Jake has an alternative plan. The Gates Foundation. They funded some of his PhD work, and Jake has been in touch with them about his vaccine research. When he found out the head of their infectious disease program was gonna be at Stanford, he decided to stop by.

JAKE: And so I showed up and they were a bunch of other people still there and there was this other professor who was sitting down just wouldn’t get up and leave.

BRUCE: Jake told me the story on the phone the next day.

JAKE: And so I was sitting there thinking like oh my god are you kidding me. I’m not even going to be able to have this conversation. I was like I’m just going to get an uber and driver to the airport so I can have a one-on-one. But then the conversation shifted and she’s the one who brought it up she said hey so we’ve been looking at your universal vaccine work we’re really interested in some ways we can apply it. And then we started having this conversation and just rolled from there. And basically went over the experiments that we’d conduct next.

BRUCE: And what what kind of possibilities does that open up for you?

JAKE: It’s huge. It’s huge. Right. So so far I basically came up with this idea and had I thought it was too beautiful to be wrong. So I had to test it. And I had to come up with money // and build a company that support the infrastructure to be able to test the hypothesis. Them coming in means I don’t have to test one thing at a time I can parallelize and we could test more than just influenza. We can start testing the HIV applications. And I’d like to partner with someone like Gates so we can give it away in the developing world.

BRUCE: The HIV applications … This is the hope of a lot of scientists who are working on the universal vaccine. That the technique could be applied to other viruses that mutate quickly. Like HIV…But that’s still really far off. His conversation with the woman from the Gates Foundation was promising… but it was also preliminary.

JAKE: You know there’s not a solid commitment yet. Like here’s the experiments. Here’s what we’re going to run. Here’s where they’re going to run. You know here is how much money is involved. So I don’t want to get myself too excited till I see that stuff lineup.

BRUCE: Partnering with Gates or BARDA would put Jake near the end of the biotech valley of death — that funding gap that plagues startups like his. If Gates comes through, he thinks he could be doing the first human trials of the flu vaccine within months…To get to where he is now, Jake started his own company. He spent five years improvising and dreaming up ways to do science outside of major research organizations. In other industries, that’s enough time to build a successful business, maybe even sell it off. But since Jake is in science, he’s just getting started.

LISA: Bruce Wallace is a producer of Startup…Next week on StartUp: What it’s like to start a company when people don’t necessarily want to buy what you’re selling.

MEGAN: How long am I going to have people telling me that the food that I’m making is disgusting… Like, do I have to be the crazy bug lady, and for how long?

LISA: Crickets, worms and crazy bug ladies. That’s next time on StartUp…StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen, Emanuele Berry and Amy Standen. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe.

Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music. Additional music by The Centennial, Donny Carma, Drexler, Get Better, Jupyter, Tyler Strickland, and the true gentleman Bobby Lord.

David Herman and Mark Wilkening mixed the episode.

Special thanks to Ben Kuebrich, Natalie Jones, Ian Setliff, Doris Bucher, Jean-Marie Silverman, and Ryan Bethencourt.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you next week.

Running a Family and a Business (Season 5, Episode 4)

A founder struggles with a difficult balancing act.

May 12, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. This is Startup, the show about what it’s really like to start a business. On this episode, we’re going to hear a conversation between a founder and an executive coach.

JERRY COLONNA: What what would feel comfortable talking about and useful.

DIANA LOVETT :Yeah.

JERRY: Because that’s the key.

DIANA: I mean, I think the biggest thing is for me personally, um you know— I’m like getting teary even talking about it. I find it very challenging to navigate being a mom and being an entrepreneur and you know really feeling so um… really guilty about,missing out on so much stuff at home. And then when I do you know leave work, about all the things I’ve left undone. So that although it’s very personal and very vulnerable, you know, feels like something it would be super helpful to address.

LISA: This is DIANA Lovett. She started a company called Cisse Cocoa, which makes baking mixes, hot chocolate, and other cocoa products. She’s talking to JERRY Colonna, who will be familiar to longtime listeners. He was the CEO whisperer from Season 2. He’s also the executive coach to Gimlet’s founders, Alex and Matt. He used to be a venture capitalist and has a lot of experience working with entrepreneurs. A few weeks ago, we did a call-out to our listeners. We were looking for entrepreneurs facing some kind of problem connected to their business … and that’s how we met DIANA. She started her career working for international NGOs — but she got disillusioned after seeing donors’ priorities shift. So she began thinking about other ways to have a positive impact. She wondered: what if I took this thing that I love, chocolate, and built a business on it that supports small growers around the world.

DIANA: Our cocoa is grown in the Dominican Republic. It’s grown by a cooperative called Fundopo and // they’ve put in some clean drinking water wells. They’ve renovated schools they’ve built a community center. And that model really appealed to me, it was locally needs driven.

LISA: Cisse Cocoa is growing. DIANA’s products are on shelves in more than 4,000 stores, including at Whole Foods, Target, and Stop & Shop. She has visions of building out a brand as recognizable as Annie’s Organic. But the thing that she struggles with most, day to day, is balancing being a CEO and being a parent to two young kids. And so when DIANA sat down with JERRY, the executive coach, that’s what they talked about. It’s a conversation that a lot of working parents will probably relate to. I know I did. DIANA’s session with JERRY lasted an hour and a half. We’re going to play you a shortened version of their conversation.

DIANA: I mean it feels kind of relentless, you know what I mean, like from the minute I wake up in the morning I’m baking brownies for a meeting, trying to have a little bit of time to connect with my kids, running off to work — you know like, I get home we make dinner. It’s… there’s… I don’t have a place to be calm and present until like 9:30 p.m. and then I’m exhausted.

DIANA: I feel like I can get hacks from other people I can get like advice but the like, how I face this as a person is so hard.
JERRY: Yeah.

JERRY: We’re going to be calm and present.

DIANA: Ok.
JERRY: So that your brain and your body can experience some of that and we’re going to talk about the challenges associated with that.

DIANA: OK.

JERRY: And we may or may not end up with a life hack or two.

DIANA: Ok.

JERRY: But life hacking doesn’t really get us the answers.

DIANA: Yeah. No I think it’s like emotion hacking or something so that you’re.

JERRY: It’s hacking being human.

DIANA: Yeah.

JERRY: So I have a couple of questions just to help give some context to this.

DIANA: Yeah.

JERRY: How old is the company.

DIANA: It’s five and a half years old.

JERRY: And tell me you’re married.

DIANA: Yeah. I have a husband.

JERRY: And what’s his first name.

DIANA: Matt.

JERRY: Matt. And how long have you been together.

DIANA: We’ve been married for seven years.

JERRY: And how old are your children.

DIANA: Basically five and two. Like they’re about to have birthdays.

JERRY: Gotcha. And what are their names.

DIANA: Noam and Tali. A boy and a girl.

JERRY: And Noam is the older.

DIANA: Yup.

JERRY: So both of them have only known mom as an entrepreneur.

DIANA: Um hm, yeah.

JERRY: And that landed for you just now.

DIANA: Yeah.

JERRY: What’s up?

DIANA: I mean it’s a lot of guilt. You know I didn’t take a maternity leave with either of my kids. And I feel like that sort of I don’t know paradigm or example of like I feel like I’ve prioritized work over my kids. And they never—

JERRY: Slow down. When I tell you to do that it’s not that you’ve done something wrong.

JERRY: It’s because our impulse when we touch really painful stuff is to speed through it but it’s like hitting a speed bump and speeding up and all that’s going to happen is we’re going to wreck the undercarriage of the car. So we actually want to go slow over those tough spots. You feel like you prioritized work over your children.

DIANA: Yeah.

JERRY: That’s a big statement.

DIANA: Yeah.

JERRY: And I’m staring into your eyes and I’m seeing someone who can’t believe she just said that.

DIANA: Umhm.

JERRY: Yeah, yeah.

DIANA: Cognitively I know that they are deriving benefit from seeing me you know chase my dreams and…

JERRY: Bla bla bla.

DIANA: Exactly. Exactly. Exactly. Yeah. So.

JERRY: But emotionally.
DIANA: Yeah.

JERRY: –it feels like crap.

DIANA: Yeah. No I feel t– I mean you know my son… Noam asked me this morning, “Mama can you take me the aquarium today?” And I was like, well that’s a good question. You know I said well I can take you over the weekend. And he was like well… I want to go with you today.

JERRY: Right.

DIANA: So you know it was 7:15 this morning. And you know like he’s really happy he’s well adjusted you know he’s great. So I don’t think he’s living in a world of deprivation. But I am missing that. And I think it elevates my stress level at work because I try and be home for family dinner so I have that internal cut-off like have to be there at 7. So I feel like it’s like sort of negative at home because I’m not there enough.

JERRY: And negative at work–

DIANA: And negative at work because I’m so aggressive on like —no I can’t take that on too, you know I mean like… I feel like it’s putting all sorts of boxes around it that’s making it harder everywhere.

JERRY: Yeah.

DIANA: So that’s what–

JERRY: So you feel like you’re failing on both ends.

DIANA: Yeah I don’t think it– I don’t think it’s helpful. Yeah.

JERRY: Boy howdy you’ve got a lot of guilt. You feel guilty because you’re not a good enough leader.

DIANA: Yeah.

JERRY: And you feel guilty because you’re not a good enough mother.

DIANA: Yeah. You know for me it’s the, it’s the time I just I don’t know how you’re supposed to you know spend every minute with your kids and spend every minute at work.

JERRY: Where did you get the impression that you’re supposed to spend every minute with the kids at work.

DIANA: Yeah. That’s a good question. I’m not… I don’t want to have… you know I wouldn’t want to have no profession. But I think the you know the challenge for me is just you know making more time.

JERRY: Making more time.

DIANA: Or making better–I don’t know. You know I don’t know what the answer is. You know making better time. You know just like getting into that mental space where I feel happy and present at home and I feel happy and present at work. And I’m not.
JERRY: Sorry. Yeah.

DIANA: You know feeling tethered or guilty about the other one when I’m you know what I mean.

JERRY: Yes.

DIANA: Like, I do this when I get home from work. I zip my phone into my backpack and I hang it in our mudroom so.

JERRY: Nicely done.

DIANA: It’s like not present. You know, so that this family dinner and putting the kids to bed is separate from that.

JERRY: Yes.

DIANA: But even during that time, you know if you have a bad day. It’s sort of like dour cloud. You know it affects you. I can’t I can’t zip the way I feel about work into my bag. It’s — I may not be checking my email or you know transacting business at the dinner table but sometimes it’s occupying my attention even when I’m sitting with my family.

JERRY: OK. So let’s stay with this so. I love your I’m going to zip my phone in my bag. But that’s a hack.

DIANA: Right.

JERRY: And what you notice is it actually doesn’t alleviate the anxiety that you’re carrying from work and so then you’re fee– And this is what you’re doing. You’re feeling guilty because you’re feeling anxious and then you’re feeling anxious because you’re feeling guilty. And the only question, the only choices that you seem to be holding onto is make more time or make better use of the time that I have.

DIANA: Yeah.

JERRY: How about not feeling guilty.

DIANA: I know! How?

JERRY: OK. I want to read you something. And um…one of my teachers is a Buddhist teacher named Sharon Salzberg. And this is from a book she’s written called loving kindness

JERRY: “Buddhist psychology makes an interesting distinction between guilt and remorse. The feeling of guilt, or hatred directed towards one’s self, lacerates. When we experience a strong feeling of guilt in the mind, we have little or no energy available for transformation or transcendence. We are defeated by the guilt itself because it depletes us. We also feel very alone. Our thoughts focus on our worthlessness. I’m the worst person in the world. Only I do terrible things. However, such an attitude is actually very quote self promoting. We become obsessed with self in the egotistical sense. Remorse by contrast is a state of recognition. We realize that we have at some point done something or said something unskillful that caused pain and we feel the pain of recognition. But crucially remorse frees us to let go of the past. It leaves us with some energy to move on. Now it’s a long quote but it’s an important quote I think for you to work with because, I get moving back and forth between feeling like I’m doing a crappy job at the office and a crappy job at home. And you’re too sophisticated to fall into the trap of thinking you’re supposed to have it perfectly figured out aren’t you?

DIANA: Right.

JERRY: Thinking about your children for a moment– what what do you believe about the world that you would like them to know. What is value would you like to have?

DIANA: Yeah I mean I think I I want them to be conscious. I.

JERRY: Empathetic perhaps?

DIANA: I want them to be empathetic. I want them to have a sense of empowerment that when
they see an injustice that they’re empowered to be change makers.

JERRY: What if they fail.

DIANA: I would be proud of them for trying.

JERRY: Yeah. What creates the pride in trying even if you fail.

DIANA: I mean it’s better than doing nothing you know or… so I did this you human rights fellowship after I graduated from college. And we used the Holocaust as a framework for understanding contemporary issues of human rights. And in that framework. There was people who were bystanders. There was people who are collaborators. And then there were people who were part of the resistance. And you know, I want them to be part of the resistance.

JERRY: Oh yeah, yeah. So is it possible that if they hold the understanding that mom was part of the resistance–yeah. And that sometimes we couldn’t go to the aquarium. But she loved us nonetheless.

DIANA: I think so, but I don’t know so. You know and… and I think even well-intentioned parents can do things that you know affect children later in life in different ways. And maybe I inspired them to be part of the resistance but all they wanted was for me to be at the lacrosse game, you know. And that’s like that’s my little agenda. That may not have been their little agenda.

JERRY: Well that’s the self-laceration.

DIANA: Yeah.

LISA: Coming up: How do you stop self-laceration and express remorse to a five-year-old … and what exactly does it mean to be a good parent. That’s after the break.
AD BREAK

Welcome back to Startup. When we left off, Diana was talking to Jerry about the conflict she feels … wanting to do the work that she’s passionate about … but also wanting to be there for her kids. Jerry continued the session by asking her about her expectations for herself.

JERRY: Can you forgive yourself for leaving home in the morning.

DIANA: Yes.

JERRY: Can you forgive yourself for leaving work.

DIANA: Yes.

JERRY: Can you forgive yourself for not taking your son to the aquarium today.

DIANA: No.

JERRY: If the shoe were on the other foot could you forgive. Noam for disappointing you.

DIANA: Yes.

JERRY: So you’re holding yourself to a standard that you don’t hold anybody else that you love to.

DIANA: Yeah but I think it’s different for parents.

JERRY: What are parents supposed to do.

DIANA: I mean, they’re supposed to be the people that are you know unconditional love, they’re supposed to nurture and support you. They’re supposed to, you know, that’s my framework right. Like you’re supposed to bring your own values and share those with your children. But then you’re also supposed to be like “but who are these tiny creatures and how do they express–” you know and then be supportive of that. OK. We know we took them to skating, they hated that let’s do painting, you know mean like, to constantly be taking the feedback of who they are, and incorporating that into how you raise them and constantly kind of reading the tea leaves of their faces. I think they just need a hug right now, you know what I mean, like to intuit their needs on all levels. And I think.

JERRY: What are the… what are the… what is the skill set or the way of being that’s most in service to them. There you are reading the tea leaves of their eyes, trying to gauge do they need a hug? Do they need a trip to the aquarium? Do they need a mom that they can believe in as a leader of the resistance? What do they need?

DIANA: Unconditional love.

JERRY: What would unconditional love give them about themselves.

DIANA: Self-empowerment.

JERRY: Yeah. So when you spend all this energy trying to anticipate and meet their needs, how does that help their self-empowerment? Look I’m going to respond to you, not even as
a coach but as a fellow parent. Only my children are adults now. I lacerated myself in the same ways.

DIANA: Yeah.

JERRY: So I really relate to where you’re coming from and the one salvation for me was the realization that, stumbling our way through, we gave our children the ability to speak to say this is what I need from you. Sometimes modeling for them what it means to be a participant in a larger more conscious world. My therapist once gave me a really powerful piece of parenting advice. You are going to screw it up. Get used to that. The issue is not how do I prevent that but how do I instill in my children the resiliency so that they can grow into their own adulthood.
DIANA: But why? Why do we have to accept that we’re going to screw it up?

JERRY: Because we are imperfect beings. And because learning to actually be with our imperfections as parents perhaps is their most important lesson. Do they love you regardless of your imperfections.

DIANA: Yes.

JERRY: That’s a powerful powerful lesson. Can they be loved despite their imperfections.

DIANA: Yes.

JERRY: Would you love them nonetheless. No matter what.

DIANA: Yes.

JERRY: That’s the lesson.

DIANA: Yeah.

JERRY: Teach them how to speak that they felt disappointed. Teach them how to think about responding to somebody knowing that unconditionally no matter what they say they will be met with love. And to say, mom, I was mad that you didn’t come to the game.

DIANA: Yeah.

JERRY: That hurts. But it’s a powerful lesson.

DIANA: Yeah.

JERRY: From where I sit, I think that’s as important if not more important than actually you being at the game. Learning at an early age, I am OK whether or not mom’s at the game. Sure, I want mom at the game.

DIANA: Yeah.

JERRY: But I am not annihilated and devastated because moms not at the game because I know mom loves me. And when I tell her that I’m mad she’s still going to love me.

DIANA: Yeah. Yeah.

JERRY: That’s a pretty powerful gift.

DIANA: Yeah. I mean maybe it’s hard because they can’t articulate that right now. You know what I mean.

JERRY: That’s right.

DIANA: They’re so little that they’re not really that’s why I was saying it’s like reading the tea leaves. You know your kids are older so and they can tell you they’re upset about it. And like I think my 5 year old kind of can because he’s like I want you to come to the aquarium and that I’m like I can’t because I have to work, but then if I tried to say you know and how does that make you feel, he’s be like, OK.

JERRY: No, but might say you might model.

DIANA: Yeah.

JERRY: And that makes me feel sad Noam. And so I want to spend time with you. And sometimes I can and sometimes I can’t and that makes me feel sad. That makes me feel sad too, Mommy. You see what I’m saying. What you’re reaching for is presence where I think, if I may, where I think you’re still getting tripped up is a kind of hacking that the only way to meet Noam’s need in that moment was actually go to the aquarium.

DIANA: Yeah. Yeah.

JERRY: That’s an impossibility.

DIANA: Right. Right.

JERRY: So here’s the kind of leadership assignment slash growth assignment.

DIANA: Yeah.

JERRY: You made the connection before to your own company.

DIANA: Yeah.

JERRY: Leaning into these spots, learning how to be with these conflictual feelings is really important for the company. It’s really important for your own resiliency. And it’s really important lesson to model for
those kids.

DIANA: Yeah.

JERRY: Because they’re going to face the same kind of conflicts in life.

DIANA: Yeah.

JERRY: They’re going to be torn.

DIANA: Yeah.

JERRY: They’re going to want to be in one place and the other. What you can give them, which very few other people in their world will be able to give them, is modeling a way to be with those conflicts. Not with guilt that lacerates. But, yeah I’m sorry I missed that. And I’m going to let it go. And I’m going to look forward to the thing that we are doing together.

DIANA: That would be amazing to give them.

JERRY: Imagine they enter their 30s and 40s with that kind of a perspective. They enter their parenting with that kind of perspective.

DIANA: That makes a lot of sense. I mean to give them that I think especially my daughter, because I do think it’s more powerful for women but.

JERRY: I think it is intensely powerful. It is a torture for women.

DIANA: Yeah. That concept of you know of no guilt or whatever else. I do think that that’s a pretty powerful thing for myself, for them, and probably for my other colleagues who are parents you know.

JERRY: Tell me how are you feeling.

DIANA: Yeah I mean, I think the part that’s really like connecting for me is you know saying it. So instead of just be like oh I wasn’t here, I didn’t make it to the aquarium, is being able to say, you know I’m sad we didn’t get to go together, we could go together on the weekend, or you know whatever else. I think the the point that I’m… I think is going to be harder for me is to, as you said you know guilt is very lacerating, is actually you know I can verbalize the remorse you know but actually just shutting down that you know stopping that and redirecting it that feels harder.

JERRY: So a word about that.

JERRY: Learn some slow time. As you’re putting the kids to bed tonight, look into their eyes. Don’t just put the phone in the bag. Look into their eyes. Here’s a memory. You know what they smell like after they’ve taken a bath.

DIANA: So good.

JERRY: So good. You know what they feel like when they snuggle you and they have their pajamas on and they’re getting ready for bed and mommy will you read a book to me.

DIANA: Yeah.

JERRY: Those are the precious slow times. Those are the times. Watch the laceration it just came back in.
DIANA: I know I feel like I’ve been rushing through it you know I’m like oh let’s get the kids to bed so we can clean up. So like… because it’s so compressed, you know.

JERRY: Yeah.

DIANA: But I’m with you, I mean that is the good… you know. That’s not one more thing. That is the thing.

JERRY: Yes.

LISA: When the session between Diana and Jerry ended, Diana took the train back home to where she lives, outside of New York City. I caught up with her a couple of weeks later.

DIANA: This is Diana

LISA: Hi Diana; it’s Lisa

DIANA: Hi Lisa, how are you?

LISA: Good, how are you?

DIANA: I’m good

LISA: Talking to Diana, I wanted to know how things had been since her meeting with Jerry. My kids are about the same age as Diana’s, and when she talked about her guilt, I understood where she was coming from.

LISA: You know hearing your conversation you know it was very… I was actually living vicariously through you. But it was very helpful.

DIANA: Yeah.

LISA: Because I mean just hearing your guilt I think a lot of moms experience that level of guilt.

DIANA: Totally

LISA: I certainly do and hearing Jerry talk to you about that guilt was interesting to kind of hear him challenge you a little bit on it.

DIANA: Yeah.

LISA: So I’m curious like… in the last couple of weeks has there been an instance where you caught yourself feeling guilt again.

DIANA: Of course. I mean it’s impossible to you know flick that on and off so, absolutely. You know my son was like Mama I don’t want you to go to work today.

LISA: In that moment … Diana borrowed some of Jerry’s language from the session.

LISA: And what did you — how did you respond to Noam when he asked you that.

DIANA: I would say I want to stay home with you too. I’m so sad I’m going to miss spending all day with you. I’m going to go to work and I’m working on building something that’s about you know doing good and helping other people. And I’m really passionate about it. And say you know what I’m sad I’m not going to be here with you.

LISA: Right right…

LISA: Before how would you talk to Noam about, about leaving.

DIANA: I guess I would say you know oh don’t worry you know I’ll be home for dinner and you know we’ll be together on the weekend or you know kind of maybe more dismissive or distraction

LISA: Right.

DIANA: Than acknowledgement.

LISA: And how did Noam respond.

DIANA: I mean you know he was like OK. He’s five so he was like oh is that a bouncy ball. It was not like a big profound moment.

DIANA says she’s leaning on Jerry’s advice in other ways, too… being gentler on herself … and experiencing the “slow times”…

DIANA: I was like you know what I’m gonna sit at the table// with my coffee you know they’re eating breakfast // you know when you really lock eyes with your little ones and you’re connecting you’re making them laugh or whatever else it’s like what are you rushing through. You know whatever time you are spending with them like there’s nothing that you know like what are you going to put them down here in like clean the dishes and do more work like that kind of stinks. So Why not really enjoy it.

LISA: Right. Right. It didn’t cause any anxiety about not getting those things done on your to-do list.

DIANA: I mean now that you’re mentioning it yeah but at the time no! thanks a lot Lisa!

LISA: Sorry!

LISA: Diana’s still looking for new hacks, like trying to include her kids when there’s downtime at work. A few weeks back, her company got a delivery in, and she invited Noam and Tali to the office to hang out while she unloaded pallets. She’s also planning to take Noam along the next time she demos her company’s products. But learning how to go easy on herself … that’s going to take time.

DIANA: It’s probably like a 16 point turn and not a u-turn. //

Lisa: Right right.

DIANA: It’s hard not to feel guilty about missing out on time with your kids. You know I’ll — What did you do today. Oh I went to swimming and you know I got a badge and I’m a slime eel now and you know you’re just like I want to be there, I wanna see you get your little badge and so you know just that’s always the challenge right.

LISA: Diana Lovett is the founder of Cisse Cocoa, a company that makes chocolate products.
The executive coach she talked to, Jerry Colonna, has his own podcast called “Reboot.” If you’re an entrepreneur who’s facing a challenge in your company, and would like to talk about it on Startup with a coach, email us at startup@gimletmedia.com with the subject line “Coaching”. Tell us about the problem you’re struggling with, and how best to reach you. Next time on StartUp, a founder who’s trying to revolutionize medicine gets some unexpected lessons.

JAKE: I had to like learn a bunch of stuff about pigs because I knew nothing about pigs. So I was looking at like people who have pigs as pets. They have these lists of things to do with the pigs that they’re real smart and they’ll get bored if you don’t give them toys. They get sunburned easily. Things like that.

LISA: The lengths you’ll go to, to follow a dream. That’s next week on Startup.

StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen and Emanuele Berry. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe.

Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.

Additional music by Bobby Lord.

David Herman mixed the episode.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.

Thanks for listening. We’ll see you next week.

BONUS – Introducing Every Little Thing

Gimlet’s newest show examines the hidden lives of office plants.

May 5, 2017

Friendster: Part 2 (Season 5, Episode 3)

Why aren’t we all logging onto Friendster today?

April 28, 2017
View show transcript

LISA CHOW: From Gimlet Media, I’m Lisa Chow. You’re listening to Startup, the show about what it’s really like to start a business. Last week, we told you about the beginnings of Friendster, the company that essentially created online social networking. It had launched in 2003, before Myspace, before Facebook, and grew incredibly fast. Users were making all sorts of new connections on the site…for business, romance and friendship… and investors were dying to get a piece of the company. But the site started crashing because of all the traffic. Pages were taking forever to load, and Friendster’s board decided that the founder, Jonathan Abrams, had to go. So they fired him. But they told the staff not to worry… they would find a great new CEO someone with lots of experience. That’s where we ended last week’s episode, with the board telling Friendster employees the future was bright.

KENT LINDSTROM: It was the board of directors coming in and saying. This is going to be amazing. We’re going to get you a professional CEO. And all of a sudden it was stars and lights. Today on the show, what happened next.… and how Friendster’s mistakes may be the reason another company is worth over $400 billion today.

LISA: A quick warning, there’s some swearing in this episode.

[MUSIC]

LISA: After Jonathan Abrams was removed as CEO, one of Friendster’s board members filled the spot temporarily. And then, 3 months after Jonathan was out — the board announced that they’d found their impressive new CEO. His name was Scott Sassa. Scott was a TV wunderkind. He’d dropped out of college but went on to be the first employee at Fox, writing the TV network’s original business plan. He then worked for Ted Turner, and at 25, became one of the youngest cable network executives in the country. After that, he ran Marvel, a division of NBC, and in 2004 … Friendster.

LISA: why do you think they picked you for the job?

SCOTT SASSA: I’m not sure exactly why they did, but I would hope that part of it was I had a background of starting companies and scaling companies, albeit media companies, but you know, TNT, Cartoon Network, things like that.

LISA: The TV networks that Scott ran made money through advertising. And Friendster’s board saw advertising as the way the site was going to make money. They were focused on revenue because they’d been burned by the recent dot com crash when a lot of companies went public with no business model. When the Wall Street Journal reported on Scott Sassa’s appointment, they wrote that it was a move to turn Friendster from “a quirky internet startup to a profitable online business.” But other people at Friendster had their doubts.Why would you recruit a media guy to run a tech company, especially one that’s facing serious technology challenges. The skepticism was so apparent that even Scott, the new CEO, was aware of it.

SCOTT: My favorite thing is the engineers used to say, how’s our brain dead media executive doing today?

LISA: But it wasn’t Scott’s job to fix the page load problems. Friendster had just hired a bunch of superstar engineers and the new head of engineering, who came from Netscape, had a radical plan to fix the site.
He invested millions in a new server system, and rewrote the site from Java to an open source language, called PHP. People I’ve interviewed debated whether these were the right decisions at that time. But one thing became clear pretty quickly. These moves did not solve the site’s issues. Chip Benson, an early employee working in customer support, says this period was really frustrating.

CHIP BENSON: I can remember you know the board coming in to one of the all hands meetings. And … I stood up in the all hands meeting and just basically went off — on … I didn’t understand why things hadn’t been fixed. I didn’t understand what was taking so long. You know the board should have the power to make this stuff happen. And you know I just remember them going, “Thank you very much, Chip, for your feedback and insight. We’re going to take this into consideration and then we’re going to work on it.” You know, and I sat down and I thought, “Ah, crap this isn’t going to go anywhere.” I just had that feeling.

LISA: We reached out to Friendster’s board members from this time. None of them agreed to talk for this story. The technology problems at Friendster were difficult to solve, but there was something deeper happening at the company that was making it nearly impossible to make progress—power struggles and conflicts between teams. Chris Lunt, an early engineer at Friendster, says a highly political culture had emerged as its leadership changed.

CHRIS LUNT: People started to get into camps and form loyalties within the company. And there was a lot of politicking in order to see who was right about the vision for the company, who could best carry the company forward. And so there was a tremendous amount of gossip, rumor, innuendo that drove what people were doing day to day.

LISA: A big tension was between product and engineering. People on the product side wanted to release new products. Like blogging, chat, music sharing. But people on the engineering side thought: we have to fix what we already have before we can even think about new features. Scott Sassa, the CEO, said the tensions showed up in all sorts of ways.

SCOTT: My favorite line was a product person from Yahoo told a 5 year MIT PhD, “You’re a plumber and you’ll do as I say!” So that was a problem.

LISA: Friendster was already dealing with managerial, technical and cultural problems when Chip, the employee in customer support, started to see a completely different kind of problem on the horizon…a serious competitor: Myspace.

CHIP: You know — MySpace started to come into being. And we noticed some of the people were saying, “We don’t want to join Myspace. We want to stay on Friendster, but you know you got to fix the performance.” And around that time, we started seeing all these profiles being created and there was a picture of a really charming man and woman, you know, a really clean cut having fun skiing or something. And all there was on the profile with the names, what I like to do, about me, and stuff all in caps. Excuse my language, but all in caps it said, “Fuck Friendster join MySpace.” And there was thousands and thousands of those profiles being pushed out by, you know, MySpace obviously.

LISA: Chris Dewolfe who founded MySpace with Tom Anderson, told me the company wasn’t behind those fake profiles. But he did say the whole idea to start MySpace came from watching Friendster. He and Tom were living in LA, working for an internet marketing company when they kept hearing about this new website.

LISA: Do you remember getting an invitation to join friendster?

CHRIS DEWOLFE: Yes, it definitely piqued my interest

LISA: This is Chris Dewolfe.

CHRIS: it was like the first time I think ever that I’d gotten 5 or 6 invitations for any kind of service ever, from people that I actually knew. So I thought that was interesting and there must be something to it.

LISA: But when Chris started using Friendster, he noticed it could be super slow. And he thought the site was too restrictive about what it let people post.

CHRIS: There were bands on the site, that would set up profiles on Friendster. They would get taken down. You could set up a profile with your dog being your primary photo. They would take that down.And it seemed a little bit too dictatorial for where the web was going.

LISA: And some of Friendster’s users agreed. Tila Tequila, who was a little known model when she joined Friendster, complained to Howard Stern about being kicked off for not following the rules.

TILA TEQUILA: They would always delete my profile so I’d make another one, so they deleted me 5 times. So I said fuck you Friendster.

LISA: Tila says Tom Anderson from MySpace saw this happening and recruited her to join him at his new website.

TILA: So then I joined Myspace and I was like oh my gosh nobody is over here. I feel like a loser. There’s like the cool party over there and I’m here by myself with all these dorks. And so I used my website, and said hey guys. Fuck Friendster. They kicked me off so why would you guys want to be on a lame site like that anyway, and

HOWARD STERN: And you went to myspace

TILA: I’m on myspace now. Come join me here…so I kind helped them blow up.

HOWARD: Right.

LISA: Tila Tequila went on to be a reality TV star. She was booted from Twitter last year after a photo showed her doing a Nazi salute. But at the time she was a young pretty woman racking up friends on a brand new social media platform. And it wasn’t just the Tila Tequilas of the world who started preferring Myspace. Tommy Nguyen was an early Friendster user.

TOMMY NGUYEN: my friend Amy Wang sent an e-mail to our group of friends on an e-mail and basically said, “hey guys I got a new website called MySpace sort of like Friendster but a little souped up. There’s more bells and whistles to it.”

LISA: Myspace gave people all kinds of options. You could make your page whatever colors you wanted, have whatever photos you wanted in the background, even have music playing on your page. And not only was Myspace seen as a freer more laid back world, it had another huge advantage. It was fast. Myspace didn’t have the same page load problems as Friendster. That’s because Chris and Tom started it as a side project at a much large tech company called eUniverse — which meant they had infrastructure, resources, and server capacity. All of this made MySpace a big threat. Here’s Chip again, from Friendster customer support.

CHIP: We knew that there was going to be some jumping ship if we couldn’t do something about it pretty quick.

LISA: MySpace wasn’t the only one. New competitors were popping up every day like Bebo, Tribe and Orkut. Friendster was still the number one social networking site, but its position was quickly eroding. And so Friendster’s executive team thought, let’s join forces with one of our competitors. Maybe one of them can help us with our technical issues. Friendster approached Myspace. Chris and Tom were not interested. Friendster met with another social networking site called Bebo. They said no. Jim Scheinman was head of business development at the time and was setting up all these meetings for Friendster. He says they also approached another little startup they’d heard about, founded by some 19 year olds from Harvard. Facebook.

JIM SCHEINMAN: By the way, this is controversial because there are people at Friendster at the time who were like, “Harvard only. OK so they’re doing well at Harvard. But come on. We were so much bigger than they were.” But if you look at the growth trajectory, actually, in the engagement numbers, they were actually doing quite well relative to how we were doing. I knew it. But it was hard to admit it because of ego and we’re still much bigger.

LISA: And so there were actually people at Friendster who were like, “No way, we’re not going to buy this company.”

JIM: Yes. Who pushed back — like this is stupid. They’re two kids! Who’s going to — why are we going to pay them 10 million dollars, I don’t know what the number was — why are we going to give them millions of dollars, you know? But you know to the credit of the executive team and the board, they said, “Yeah, great.” So they met him multiple times and they were — we made an offer.

LISA: At the time Mark Zuckerberg was also talking to Silicon Valley investors. And ultimately, he chose them.

JIM: You know look — Zuck had a vision and he didn’t need to sell out to Friendster.

LISA: So another potential deal was dead.

JIM: Friendster was still adding users, so it did have that going for it. But there was something a little unusual about that growth….something that would develop into a bigger problem for the company. Chris Lunt, the engineer, remembers the first time he saw it.

CHRIS: I sort of noticed that seems like traffic has been shifting later, and so why don’t I take a look at some traffic graphs. And I found that, 2 in the morning was the peak of traffic that we were receiving. I spent some time trying to convince myself that it was college students on the west coast up really late, and realized that something wasn’t right about those numbers. So I went and I looked at the map to see where the traffic was coming from and that was the point that we discovered that the site was exploding in the Philippines.

LISA: Chris says by 2004, a year after Friendster launched publicly, 50 percent of new users were coming from the Philippines. And it was bad news because these users … who appeared to be a lot more patient when it came to page load times … they were starting to crowd out users in the U.S.

CHRIS: You can believe that you’re the most egalitarian person on the planet, and if you walk into a bar and everyone in there is Filipino and you aren’t. You’re going to turn around and walk out. And we started to see that as a public forms in places where people were maybe weren’t already connected started to be dominated by Filipino topics, it started to erode our traffic elsewhere in the world.

LISA: Chris says he and other people at the company came up with all kinds of ideas for dealing with the growth in Asia.

CHRIS: “Should we just block the traffic from the Philippines?” And I think it would have been a very bold move, and we decided, that no we couldn’t do that, that it was a large audience that was getting a lot of value out of this site and that we should focus on trying to find a way to monetize that audience.

LISA: But monetizing that audience wasn’t easy. To big advertisers, users in the Philippines just weren’t as valuable as users in the U.S. Jim Scheinman, the head of business development and an early employee at Friendster, was getting increasingly frustrated.

JIM: I still remember that feeling in my gut like, I think I’m having an ulcer. I can’t. Stand the fact that we’re so close to building something so amazing We all knew, we all knew we were onto something very special. We all knew this was a 100 billion dollar idea. We also knew that we were losing. Things were not going in the right direction.

LISA: And so two years after joining the company, Jim left. Then Scott Sassa, the former TV executive that the board brought in to lead the company and boost ad revenue … he left as well. That made three CEOs in three years. Jonathan Abrams, an interim CEO, and now Scott Sassa. By this point, Myspace had eclipsed Friendster. It had more users. And the company that once feared growth… was now desperate for it. Especially in the U.S. The board brought in a new CEO, a guy named Taek Kwon, who came from Citysearch. His job: to turn things around at Friendster in a big way. And to do that, he hired a new head of product, a woman named Larissa Dinh.

LARISSA DINH:I love a good challenge um I’m not gonna take over a product that’s you know already successful and it’s just on maintenance mode it was exciting to me to to the thought of turning around this company that people had pretty much given up on was was huge.

LISA: After the break, Larissa sets out to remake Friendster. Launching some new features that are both addictive … and controversial…

[BREAK]
LISA: Welcome back to Startup. So Friendster was on its fourth CEO with a new head of product. Larissa Dinh. She went hard out of the gate, working to innovate at Friendster. She started by cleaning up the site… getting rid of features that people weren’t using…. for example, a feature that displayed users’ horoscopes. She thought it was weird. And then she started experimenting, trying to give users more of a reason to come back to the site. She and her team launched something called a friend tracker, which was similar to the newsfeed on Facebook. But before Facebook had the newsfeed. Then she discovered something else that she thought might stick.

LARISSA: It was like a backdoor feature that one of our engineers had built to see and he wanted to see who was looking at his profile.

LISA: Who viewed your profile … a feature that’s now incredibly popular on Linkedin … it was Friendster that came out with it first.

LARISSA: It was controversial because it wasn’t in our terms of service or our privacy policy so people hadn’t opted into this but I knew it would get people coming back to the site. I knew they would be curious to see who was looking at their profile and it would give us an uptick

LISA: The team went back and forth on this but ultimately they decided to go ahead and release this feature. Chip Benson, who worked in customer support, saw the reaction from users.

CHIP: Overnight, I mean overnight they turned it on the next day. We had over 10,000 messages and they were all people going nuts about why we did that. And like an example was that some guy wrote, “My boss just called me up and he’s going to fire me because he found that I was looking at his wife’s profile. Turn this thing off!”

LARISSA: It pissed off some users but you know we have to take a chance and it was Friendster was dying and it was on life support and I was trying to bring it back to life. So you know I did what I could. To get the numbers up and it worked.

LISA: It worked for a little bit. Friendster got some press, got a bump in users. But in the end, it wasn’t enough… It was 2006. Myspace was the biggest social network in the U.S. And by now Facebook had also overtaken Friendster, taking the number two spot. By this point, Friendster’s board had made a big decision. They wanted to sell the company. But so much of Friendster’s traffic was now coming from the Philippines and across Asia that it had become a liability. U.S. companies weren’t interested …. So after 10 months, CEO number 4. Taek Kwon was gone. This is Reid Hoffman… an early investor in Friendster.

REID HOFFMAN: I was watching from the outside but it was like oh my gosh is that a trainwreck.

LISA: OK so why did you think it was a train wreck.

REID: Look, changing a CEO’s brain surgery. So if you said oh we’re sending the patient back in each month for a new brain surgery. It’s like, well what do you think the mortality rate is? Pretty high.

LISA: Sean Parker, who co-founded Napster when he was 19, was also involved in Friendster early on….he was an advisor to Jonathan Abrams, the company’s founder. He spoke about Friendster’s failures at a Fast Company event in 2010.

SEAN PARKER: I can tell you exactly what happened at Friendster. It was bad management.

SEAN: It was a bad management team that couldn’t keep their servers running, couldn’t maintain simple things like the integrity of their database, the login times the load times for every page were going up, and that created an opening in the marketplace where MySpace was able to enter. Myspace never would have existed if friendster had been a properly managed company. And I was close to that because most of my friends were investors, I was an advisor to the CEO. We were all screaming the sky is falling and nobody was doing anything about it. That is a classic case of where a company just blew it.

LISA: Even though Friendster had lost the top spot and couldn’t find a buyer, the company didn’t die. Instead, it pushed ahead trying to grow its users in Asia, under one of Friendster’s early employees, Kent Lindstrom. The board tapped him to be CEO number 5. Kent made headway but then the board brought in the sixth and final CEO, a guy named Richard Kimber. In 2009 he sold the site to a Malaysian company for 40 million dollars.Chip Benson, the customer support guy, worked at Friendster under all six CEOs. And he remembers the day Friendster closed its office in Mountain View.

CHIP: They had all the furniture and the computers and this and that on the office all bunched up in corners and anybody could take anything they wanted and they were going to donate the rest to schools. I actually wanted to take my chair it was so comfortable. So I brought a little station wagon from home and I loaded all my stuff in. I just drove away from the building and sort of looked in my rearview mirror and then went home. I tell my wife when we drive by the building over in Mountain View it’s on the corner of El Camino and Castro. I always wave at the building saying, you know, I kind of wish I was still over there at that job. But I was there through the bitter end and, you know, and then they closed the doors and it was all over.

LISA: Today when people talk about early social networking, they’re not usually talking about Friendster. They’re talking about Facebook. Facebook is now worth more than 400 billion dollars. And…the only mentions of Friendster are as a cautionary tale — a prime example of a company that was positioned to win big but totally screwed it up. So what can we learn from all of this? What did Facebook get right and what did Friendster get wrong? Well for one, Facebook grew in a much more controlled way than Friendster did. Facebook didn’t open up to the entire world on day 1. It started at Harvard, and then grew little by little, university by university. Jim Scheinman, Friendster’s head of business development, says the slower growth allowed Facebook to avoid some of the technology challenges that Friendster faced.

JIM: The fact that they stayed focus on scaling within a college allowed them to scale. So when they went to the next college like Yale, they had a new server that just went for Yale. And then when they went to the next one, they had a different server that scaled for them. So each of those different demographics scaled and worked properly. And actually, if you have seen the Social Networking movie about Facebook. There’s a famous quote in there from Zuck who said, “We have to remain fast and not end up like Friendster.”

LISA: Number two, Jim says that even though Facebook grew slowly at the start, they also figured out how to chase growth. Facebook had an entire team dedicated to it, and that team found a magic metric: seven friends in 10 days. If Facebook could help a user connect to seven friends in 10 days, that user would be hooked. And so they focused a lot of energy on trying to get users to connect to friends. They developed features like friend recommendations to get people to find and add new friends. Another thing Facebook did right: they built a site that users would love, not a site that would immediately rake in as much advertising money as possible.

JIM: Facebook focused on how do we make this an amazing product experience and how do we keep growing this business? From not revenue, but from the consumer standpoint. Where at Friendster — we were a like a traditional company. Now we’ve got millions of people, how do we make a lot of money, right? And at every board meeting, a big discussion was — how much revenue are we doing, how do we make more money? That was the wrong strategy at the time, right? At the time, we should’ve just been like — how do we just keep growing users, how do we get them happy? How do we keep them connected, how do we keep them engaged? Eventually, when we get to a 100 million people, we’re gonna have a 100 billion dollar business.

LISA: The final big difference. Facebook has had one CEO over its entire life. A CEO with a very focused and singular vision. Friendster, on the other hand, had six CEOs in seven years. A lot of people who were involved in Friendster went on to do really well for themselves. John Doerr, from the venture capital firm Kleiner Perkins, who put millions into Friendster … has since invested in big hits like Slack, Uber and Twitter. Reid Hoffman, an early investor, went on to be cofounder of Linkedin, which sold to Microsoft last year for 26 billion dollars. Jim Scheinman, former head of business development, became the first employee at the social networking site Bebo…which sold for 850 million dollars. He’s now a VC, and advises other companies. Even the Malaysian company that ultimately bought Friendster in 2009 made a killing selling Friendster’s social network patents to Facebook. According to a news report, Jonathan Abrams, Friendster’s founder, made close to 5 million dollars when he brought outside investors into the company. That’s a lot of money by most people’s standards … but the industry Jonathan pioneered … it’s now worth hundreds of billions of dollars. And that’s left former colleagues like Jim Scheinman wondering how Jonathan feels…

JIM: I mean personally I’d be curious to hear. Does it. Like you came up with this idea. And other people made billions of dollars on it. They’re billionaires that have been created because of this idea that you created. Did it eat away at you?

LISA: So I asked Jonathan.

JONATHAN ABRAMS: The reality is it is frustrating that Friendster was not a big success. When you just think about how little Friendster ended up being worth, that’s kind of astounding. You really have to think, like, how hard was it to mismanage a company with that much potential so badly. So yeah it sucked and it’s frustrating. But I still think the idea of people feeling sorry for me because I’m a millionaire instead of a billionaire is also kinda crazy.

JONATHAN: I’m not like in denial about Friendster or forgotten it and I’m proud about a lot of stuff we did. And I’m frustrated about a lot of stuff that happened at Friendster. But you know, it was a long time ago and I’ve moved on with my life. And I mean since leaving Friendster I started 4 other companies, became an American citizen, started a family, invested in more than 50 companies, and you know a whole bunch of other stuff.

LISA: And beyond all that… talking to Jonathan I get the sense that when he looks at the social networks of today… he feels a weird kind of satisfaction… like his original vision for Friendster was right… Because when you look at the king of the social networking world.. Facebook… it didn’t build on the Myspace model, with personalization features and anonymous profiles. It’s simpler, cleaner… more like Friendster.

JONATHAN: People really ended up doing what we had always thought. I mean — using their real names, connecting with their real friends and you know. So I think, you know, a lot of the original vision of Friendster, even though we weren’t able to execute on it was valid.

LISA: Jonathan has moved on from Friendster but he still works as entrepreneur in the social media space. His latest company, Nuzzel, is in its sixth year … with six employees … and has raised 5 million dollars from investors. What does it do? It aggregates the stories that your friends are sharing on social media. Including … of course … on Facebook.

[THEME]
LISA: Next time on StartUp, an entrepreneur makes a visit to the CEO whisperer.

JERRY: What would feel comfortable talking about. And useful.

DIANA: Yeah yeah yeah. I mean, I think the biggest thing is… for me personally… Um you know… I’m like getting teary even talking about it… you know, I’m finding it challenging to navigate being a mom and being an entrepreneur.

LISA: Balancing the grueling work of starting a company, with the pains and joys of raising young children. That’s in two weeks. StartUp is hosted by me, Lisa Chow. Our show is produced by Bruce Wallace, Luke Malone, Simone Polanen and Emanuele Berry. Our senior producer is Molly Messick. We are edited by Caitlin Kenney and Pat Walters. Production assistance and fact checking by Alvin Melathe. Special thanks to Misiek Piskorski and Natalie Jones.

Mark Phillips wrote and performed our theme song. Build Buildings wrote and performed our special ad music.

Additional music by Typhoon, Jupyter, Marley Carrol and the band Hot Moms Dot Gov.

David Herman and Ian Scott mixed the episode.

To subscribe to StartUp, go to Apple Podcasts, or whichever app you like to use. Or check out the Gimlet Media website: GimletMedia.com. You can follow us on Twitter @podcaststartup.

Finally: a quick reminder that Alex Blumberg is taking listener questions… So if you want to talk to Alex about Gimlet, about being an entrepreneur… leave him a message at 812-641-1231. Some lucky callers will get a call back — and might be featured on a future episode of Startup.

Thanks for listening. We’ll see you two weeks.

We do our best to make sure these transcripts are accurate. If you would like to quote from an episode of StartUp, please check the transcript with the corresponding audio.

Hosted by

Lisa Chow

Lisa is co-host of StartUp. Previously, she was a senior editor at FiveThirtyEight and a reporter at NPR's Planet Money and WNYC. She has an MBA from Columbia .

Hosted by

Alex Blumberg

Alex is the host of StartUp, and CEO and cofounder of Gimlet. He 's an award-winning radio journalist and former producer for This American Life and the co-founder of Planet Money.

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