Gagan Biyani: Building Silicon Valley Startups

Gagan Biyani: Building Silicon Valley Startups North Star Podcast


My guest today is Gagan Biyani, the current CEO of an education startup (where I’m both an investor and an advisor) that helps teachers run Cohort-Based Courses on the Internet and has students from around the world. Gagan also founded a multi-billion dollar online education platform called Udemy. Afterward, he founded Sprig, a food delivery platform that grew to a nine-digit valuation but eventually failed. So today, he has the distinct pleasure of being both the founder of a unicorn and the founder of a massive failure.

In this conversation, we talk about what he’s learned playing the Silicon Valley startup game. Then, we talk about our visions for the future of the online education industry, and how he’s learned so much about cooking and restaurant operations. Please enjoy my conversation with Gagan Biyani.

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Preview of Gagan’s New Education Startup

Show Notes

2:11 – How Gagan comes up with and develops his startup ideas.

7:38 – Why Gagan believes that the market is the best thing we have, but that it is still deeply random and flawed.

10:14 – The lessons we should be learning from Silicon Valley and what people in Silicon Valley need to learn themselves.

14:51 – The dogma and necessities of startups that Gagan has seen in Silicon Valley that are proven to be untrue.

21:17 – How the duality of total rationalization and going with your gut fits together.

25:18 – How the “soul” plays into optimizing our lives and why Gagan sees the future of human connection.

30:50 – What inspired Gagan to become fascinated and so knowledgeable about food.

35:58 – What changes when making food at scale and why recipes don’t multiply easily.

43:01 – What Gagan looks for in determining whether a restaurant is worth going to.

47:41 – How lifelong learning changes the way you see the world.

52:22 – Why the way a company does one thing will show you how it does everything.

56:17 – Why knowledge should be something that is shared, not something that pushes people away.

1:02:54 – How the classical cohort-based learning model has evolved on the internet.

1:09:35 – How colleges and traditional institutions are adapting to the new learning paradigm.

1:11:03 – What Gagan envisions in an ideal future-thinking educational company.

1:22:45 – How cohort-based courses can be improved and where Gagan saw these flaws in his own and in other courses.

1:26:17 – What in Gagan’s early life made him so driven and motivated to do what he wanted to do.

1:36:51 – Gagan’s trip to the Amazon, and what he learned from the indigenous tribes that he visited.

1:43:01 – The infantilization of different ways of life, and why it is a more ethically dense topic than people realize.


David: One of the most interesting things about your story is that you’ve started multiple startups. And I want to talk to you about how you think about startup ideas. You were working at Lyft and you looked at what was happening at Postmates at the time. And that led you to say, “Food delivery isn’t really where it should be.” You ended up being too early and ended up shutting down the company too. But tell me, how do you actually think about both creating and finding startup ideas?

Gagan: It’s a great question because I really didn’t understand this until I spent the two or three years off on sabbatical. And when I started to study artists and how artists come up with their works, I think I started to understand the analogy for entrepreneurs, which is that it is an extremely unstructured background process in your brain that is constantly rubbing and trying to come up with something that might be interesting.

And so my way of coming up with startup ideas is immersing myself in normal everyday life and witnessing things that frustrate me, usually writing them down and then slowly noticing which of those ideas is occurring most regularly. And eventually I end up usually with a list of less than five ideas that really feel right to me. And I start to explore them. And particularly I’m not just exploring a specific idea. I’m really just exploring a space that I think is interesting or intriguing to learn more about.

So in the context of Sprig, it was food delivery. I was already a major consumer of food delivery, but I’m a consumer of, I don’t know, thousand products every week or month. I’m sure you are too. And so this happened to be an area that I was particularly frustrated in, and I started to play with all of the different applications and options that I had at my fingertips for food. And I started to think, “This just isn’t that good compared to what’s possible.” And that usually brings me to the moment where I start to say, “Okay, I’ll pick my head up. This sounds interesting. Let me pick my head up and see what other people are doing in the same space.” And so I looked at Postmates and Montreal and DoorDash at that time, and just, wasn’t quite satisfied with the products that they were putting out. Of course, I ended up being dead wrong and we can certainly talk about that.

But I think what’s interesting here is that the process of really coming up with original ideas, it’s much more about immersing herself and just being like your potential customers, like your future potential customers of an idea you don’t know you have yet, right? Then it is talking to lots of other people in the field. Then it is reading a lot of industry information, which I tend not to do during those creative times. I don’t find it in movies or books or any other form of art either. I don’t look at futurists or those kinds of things. For me, it’s really just being a normal human and trying to live as normal of a life as possible.

David: Peter Thiel has a famous contrarian question where he asks, what is something that you believe about the world that other people don’t believe? It’s a secret. That’s how he frames it. Where do you see it the same as him, and where do you see things differently?

Gagan: Yeah, I think in this context, I totally see it the same, which is that you go through life or I go through life and I see things that don’t seem to be working in the optimal way. And the secret is that it’s possible to fix it. And I think one of the things that I learned at a very young age is that in my opinion, the world is very random, that the construct that we live in today is defined by a series of events, millions of them, that were all at random chance. And so I don’t look at the world as something that is ordained or predictable or in any way functioning in the most optimal way. In fact, my underlying assumption about the world is that most things don’t operate for a reason in the way that they do today. They just happen that way.

With that as my frame, when I’m operating in daily life, I’m often looking at thousands of things over the course of weeks and months that are wrong, that I don’t love. And I think that’s pretty common amongst entrepreneurs, that we look at the world as something that is not perfect and that constantly needs to be changed or modified.

David: One of the things that I think a lot about is the second and third order effects of the efficient market hypothesis as it’s permeated through culture. So that is this idea that markets are efficient and they’re really good at pricing things. And that’s relevant for startups because it makes entrepreneurs say, “Well, all the good ideas have been taken.” But I believe that there are opportunities for radical change, that markets aren’t actually that efficient, and you need to take seriously the idea that the world hasn’t been designed in an intentional way, that it’s broken and flawed. And this is the second condition here, that you can also change it. You can mold it and shape it. And as an individual, you have that power.

Gagan: Yeah. And I completely agree, I don’t think markets are efficient. In fact, I think they’re the best thing that we have, and yet they are deeply random in the way that they play out. Some markets end up being monopolistic that maybe could have been oligopolistic. There is usually a range of potential outcomes to be clear, some potential futures are more likely and less likely than others, but that range tends to be a lot wider than we expect.

I think it’s interesting when venture capitalists or angel investors, like there’s a very common theme in the Valley of making it sound like companies were destined to be, and I’ve never been compelled by that. I’d say both in the case of online education and in the case of food delivery, and ride sharing frankly, I saw many quirks of the way that these industries came about, that seem inexplicable if you were to Harvard-case-study these industries, and try to predict what’s going to happen. I think the reality is that if deeply the players and the sort of market dynamics that occurred during those times, you’d realize that actually it was kind of random that for example, Travis Kalanick ended up getting fired at Uber or that DoorDash beat Postmates or-

David: Or Lyft even exists now at all.

Gagan: Right, that Lyft exists and a Sidecar doesn’t, which is kind of amazing. Or that Udemy struggled so hard to get venture capital for three years. And all of a sudden in sort of 2012, there was a total onslaught in venture capital going towards education. And so all of these things happen for relatively random, in my opinion reasons. And I think just with the insider knowledge that I’ve gained over the last decade or so, I’ve started to just notice more and more of these happenstances that we sometimes overanalyze as though they were predetermined.

David: What do you think, having spent time both in the Valley, but then also now living in Austin, having taken a three-year sabbatical living in the United Kingdom, what is the thing that Silicon Valley most misses about the world and what is the thing that the world most misses that is actually the wisdom that we need to be taking from Silicon Valley?

Gagan: This is such a good question. In terms of the latter, which is easier to answer, the world simply doesn’t understand how fast things can change and how many opportunities are out there. I think the abundance mentality of investors and entrepreneurs in Silicon Valley is unparalleled anywhere else in the that I’ve been to. This idea that almost anything is possible from a business standpoint. And I think that if you look at… The best example, obviously it’s Elon and Tesla and SpaceX, somehow the world looks at these stories and doesn’t quite understand how remarkable they are.

On the flip side, Silicon Valley is relatively ignorant about most things that most people deal with on a daily basis. So the lack of empathy for others, frankly, in the United States broadly is really disappointing. The modern American essentially, and I’ll broadly say American, and I just say, this is more heightened in Silicon Valley, but the modern American doesn’t quite realize how unique their situation is, both in the context of human history, but also in the context of the world. And I don’t know, it’s very surprising to me to watch what conclusions people end up drawing about how the world operates. And I think what this means is that Silicon Valley generally tends to underestimate the possibilities that come from, for example, internationalization, or really scaling their own work beyond the borders of either Silicon Valley or of the United States.

David: But what about Facebook or something, that’s global? What about Twitter, that’s global? Google is everywhere. What are you saying here about, it seems like in debit within Silicon Valley, it’s like, “We’re going to scale. We’re going to be everywhere.” And I see what you’re saying, but I’m just sort of asking you to clarify that.

Gagan: Yeah, it’s great. So Google, Facebook are past Silicon Valley, right? They’re post the startup part of the Valley. And if you look at the history and I don’t know specifically enough about Google and Facebook’s internationalization, but generally speaking, most companies internationalize very late. And they not only internationalize late, they also tend to hire people from abroad late. They tend to be relatively underestimating of people they can hire who come from places outside of their own area or knowledge base. And so I think that’s really where I see it, is in the early to mid stages of companies. I can’t say for certain, and I would say that it’s very much one of the things that most later stage entrepreneurs seem to recognize and lament is that they wish they had internationalized sooner, or perhaps they wish they had considered a broader set of potential employees or others.

David: Yeah. I think that it also applies domestically. I was to an investor this week and I asked him, “What is the most surprising thing that you’re seeing right now?” And he said, “How successful the direct to consumer companies that are focusing on the middle of the country are. And how they tend to be based, not in major cities, but they’re focused on the kinds of markets that you don’t think a lot about Silicon Valley or in this case, New York direct to consumer. Like you will walk around New York and there’s this funny thing that you can always tell in New York who just raised venture money by the subway ads that you see when you’re going from 3rd and 1st street on the L train into Williamsburg, because that’s always the place where they’re advertising.” And I thought that was a very surprising response.

Gagan: On the subway thing, that’s now true in cities all over the world. That’s true in the London Tube, that’s true in the Metro and even Tokyo, you’ll see subway ads of the hottest startups in each of those areas because the rise of venture capital has been global. So whether Silicon Valley likes it or not, there’re VCs and very successful ones that have popped up all over the world in almost every major market. And they fund that initial subway ad spend. One thing about Silicon Valley that I think people in the Valley misunderstand is just how myopic their viewpoint is on what is possible of the story they tell themselves of how companies get built and what they look like.

So when I was starting up in the Valley, it was 2008. So it was the start of this last sort of 12 year cycle. And the number of things that people told me were dogma about how companies get started that were wrong, is extremely surprising.

David: Like what.

Gagan: So examples, age, there was definitely dogma around how you should be relatively young if you’re going to start a successful company and that’s been proven completely untrue. There’s dogma around pedigree, whether you’re a Stanford or a Harvard graduate. There’s dogma around founding teams, knowing each other for a very long period of time, which I don’t believe to be true. There’s dogma around the type of growth, for a long time, Silicon Valley believed that everything was monopolistic. I think it’s fairly obvious that the vast majority of startup successes are not monopolistic. And Silicon Valley also felt like all products should be free. And again, it’s obvious today that there are many products out there on the consumer side specifically that are not free and haven’t been free for a long time.

David: Why is the teams and knowing each other, why is that wrong? That seems totally intuitive me. Hey, you grew up with someone, better team. You have this trust. And this came out of, I think Y Combinator in part where what they saw was that co-founder splits were one of the biggest reasons that companies began to fail. And to the best of my knowledge, that is something that they look for. So what is it about your experience, the way that you see things that has you with a variant perception here?

Gagan: So my personal experience is that I’ve started three startups and a number of other small business ventures. And I’ve worked with close friends and I’ve worked with a lot of people I never met before the startup was founded. And I have not experienced a significant difference in the quality of our ability to execute as a team. So personally, I’m not convinced. From a market standpoint, if you look at the founding teams, of course, there’s a positivity bias here, where because venture capitalists believe that founding teams that know each other are better, they tend to invest in founding teams that know each other. But if you look at, there are countless examples, the Lyft founders are a great example of a team that met sort of through Lyft or through Zimride the original company. And so many other examples of companies where that hasn’t happened and the company still seems to be successful.

And personally, I know so many people who have lost longtime friends because they started a company with them and it didn’t work out. I just think it’s silly to have such a dogmatic view about really anything. I’m not an investor, I don’t plan to be one in any sort of full-time capacity anytime soon. But if I were investing, I would be much more open-minded about letting deals come to me and trying to evaluate them as much on their own merits and not explicitly looking for clear patterns, but rather letting my gut develop those patterns. So I very much believed that your gut has a lot more or whatever it is, your subconscious, has a lot more information than your conscious. And so when you try or force yourself to articulate a thesis, extremely specifically, such as founding teams should know each other for a long time, you lend yourself to making very big errors.

I think you’re much better off generally understanding that founding teams that… Like there’s a thesis that makes sense there, founding teams that know each other for a long time are more likely to succeed, applying it dogmatically is the problem. So then you have that thesis and you think, “Okay, that’s interesting.” But as you meet founding teams, if you see a similar level of trust between two people or three people who have just gotten to know each other recently, you may be able to pattern-match that to a founding team that know each other for a very long time and vice versa. You may find a founding team that know each other for a very long time, but something feels not quite right in their dynamic. And I think it’s useful to listen to that.

David: Yeah. This idea of following gut and intuition is something that I’ve been thinking a lot about. And because it’s sort of a nascent idea, it’s sort of abstract, but there’s something about this enlightenment notion of total rationality and of total logic and the idea that humans have the mental cognitive capacity to actually synthesize and structure the complexity of the world. I just find to be total bogus and bias. And I don’t think that we can actually get there. And it’s funny because my answer to what Silicon Valley misses and to actually where a lot of what modernity misses is what I call the Goodhart’s law economy, where once a measure becomes a target, it stops me a good measure at all. And then if you take that idea and you combine it with not everything that counts can be counted, I think that you end up in these places that can be really destructive.

And I think that part of what the gut allows you to take care of is all of the sort of ineffable qualities of the world. I was talking to my mom today about creating a liveliness in a space, in a room, in a building. And I was like, “Mom, it’s so frustrating.” Right? Like we have these words like feng shui, right? But what I love about that word is, embedded within the word is the fact that you can’t define it, but everyone knows that feng shui is real, certain rooms come alive when you’re in them and certain rooms sort of is dead in your soul and you just can’t really describe it.

Gagan: And I just see this everywhere. There’s such a obsession over science and logic that in some ways it actually defies observed reality. And the best example for me is when Soylent came out, and I welcome the science, proving me wrong here. But I think that all of the data points that I have in front of me, both scientific and non-scientific, anecdotal and observed show that when you blend food all the way down and break it apart and then re-put it together into a drink, for example, it destroys the qualities of food.

And I remember talking to someone who’s definitely the type of person… We’re in Austin and Austin has all these sort of diehard, biohacking type people. And I actually love that people do this and are learning more, but I just wish that they learn more while understanding that they know nothing at the same time.

And so I remember asking someone or talking to them about Soylent with them, and they’re like, “What, so you don’t believe in calories in, calories out?” And I remember kind of thinking in my head like, “We’re never going to be friends.” There’s absolutely no logic to me in calories in calories out, or the idea that you can just take food… And that we understand enough about nutrition and the basic, like fibers that are whatever is the caloric, as well as the vitamin and the nutrient value of food, that we understand how that interacts with the body well enough that we can actually quantify it. I think we can loosely quantify it, we’re getting better and better, but we probably still only know about five or 10% of the total body of knowledge that there is to know about how food interacts with our body.

And if you assume that all of your insights about food are only going to come from science or all of your insights about anything, whether it’s human interaction or feng shui, or art are only going to come from logic and science, you’re missing 90% of the information, or maybe even more, because more likely than not, we simply don’t even have enough of the inputs or enough of the frameworks to understand these things through science and logic. And so we have to at least embrace, not embrace irrational arguments in the opposite that are just like, “Oh, I just feel this way. And that’s all that matters.” Or, “I think that all people are like this because this is the observed reality I have.” I’m not talking about ludicrous statements of grandeur, I’m more just saying that we should be aware of our own naivete here. And the human race is still very, very naive when it comes to its understanding of the world around us. And I think Silicon Valley… Perhaps I would correct my previous statement with this, that Silicon Valley believes too much in its own ability to understand and predict what is going on around it.

David: Yeah. And I will sort of take what you’re saying and take it one step farther. I think that logic and trying to understand the world happens in concentric circles. You were just talking about nutrition, but there were two people who in the last three, four years have died, who have devastated me. The first is Kobe Bryant. I’ll never get over it till the day I die. The second was Anthony Bourdain.

And the central message of Anthony Bourdain is you can go travel the world, you can be anywhere and people can connect over shared bread. And what Soylent does, beyond nutrition is it takes away the ability for people to come together over the joy of food. Now, that sort of assumes that Soylent is going to take over every meal, but there are certain people who say, “No, I want Soylent for every meal. It’s the most efficient thing to do.” But you know from three years on your sabbatical, how many of those places had food as a central tenant of culture.

Gagan: Yeah. So I’ll play both arguments here. On the one hand, I think being soulless is a fairly empty feeling, whether you realize you have it or not. And soul to me includes art, it includes music, it includes love, it includes food and culture. And I think too often, the type of person who we’re talking about a Silicon Valley sort of caricature, over a Silicon Valley person because I’d say the majority of my friends in Silicon Valley are not like this, but the caricature of a Silicon Valley person would be someone who lacks that soul. And in that way, I agree with you. And part of that soul is the joy of breaking bread with someone and thinking of every sort of minute of every day as a minute to be optimized. And in optimizing those minutes, you actually lose the entire value of those minutes to begin with. Similar to how optimizing nutrients and food might actually ensure that you lose the value of the food to begin with, right?

Now on the flip side, “the rest of the world,” as we’re creating this sort of interesting dichotomy, the rest of the world somehow makes this mistake, that things cannot reinvent themselves. And so I challenge your notion that somehow breaking bread is not replaceable in some way. And I’m someone who absolutely at his deep core loves breaking bread. Like I’m going to make us dinner tonight, right? And that was important to me that we were going to do that. So I love breaking bread. I love hosting and making food with my hands. I can totally see a world 20 years in the future that does not lack soul, and yet still has a reduced reliance upon breaking bread with people because you could do other things, you could dance with people, you could play games with them. And I’m talking about physical games, not just video games, but physical games. You can go out and just walk around. There are so many ways to engage with people. And what we’ve seen with the internet is consistently this argument of, “Hey, but we’re going to lose X if this becomes real.”

So simple example, restaurant reservations, “We’re going to lose our connection to our customer if we can’t talk to them on the phone before they reserve this restaurant.” That was a classic argument that was made back in the 90s and 2000s as open table was coming up. And it’s very obvious that nobody really lost that. Instead they saved a ton of time and effort. And we’re able to put that time and effort on both sides, on both of the person booking and also the person taking the booking into other things. Or you just got that time and money back and you put it into the time you were staying at that restaurant or the time you were walking there or whatever else. So I think we underestimate how much things can change over time and we can still be satisfied with them.

David: That’s a great answer because restaurant bookings rock. They just rock, you don’t have to go on the phone, calling people is Terrible. I look at a company like Tock and even reserving a restaurant booking with Tock is fantastic. In terms of this word soul, I think about this all the time. One of the sort of axioms that I have is at least something that is really difficult to do, is to scale with anything and maintain soul. Is scale sort of at odds with soul necessarily, or is it highly correlated?

Gagan: Well, as someone who hopes to build a company that has a large impact on the world and therefore probably has a relatively large organization, I’ve wrestled with this question for my entire time as an entrepreneur. I don’t know the answer. I think it’s impossible to imagine that the founders of Stripe or Airbnb or Lyft, right? These are people who, some of whom I’ve met or known, they are so smart and they have such a good understanding of humans and presence, and all three of those companies have soul. Yet it’s obvious to me that if you meet someone who joins one of those three companies today, that they would not have the same depth of soul or passion for the business as the first 10 or 20 employees did when they joined. So obviously this is either such a hard problem that it is yet to be solved and may not be solved for a very long time, or it’s just impossible to solve. I think it’s very likely that it’s impossible, in which case what’s the difference between correlation and causation here? Not a whole lot, right?

David: Yeah. One of the things, when it does come, we’ve spoken about breaking bread, we’ve spoken about soul. The thing that… There’s always, “I knew you from the internet, you had taken right of passage, I’d followed you on Twitter, read your writing,” but the single most surprising thing that I’ve gotten from you since we started hanging out, is how much you know about food. What the hell, man? How did you learn all this? It almost sounds like you majored in food history or something like that. What happened there? I mean, I know that you built Sprig, but how did you actually go about the process of learning about food?

Gagan: So in my mind, I did major in food history and understanding the food business, perhaps, more accurately. I think it’s quite silly that we assume that the best way to learn about food would be to learn about it in school. So I’ll explain how I learned about it. I knew a fair bit about food growing up, passively, because my mother is an outstanding cook, but I didn’t myself know how to make anything and was an extremely picky eater. So I wouldn’t say, by any means, that I grew up a natural when it comes to food and understanding it. I didn’t eat any meat other than chicken until I was in my late teens and getting into college. I was insufferably picky to the point where my mother could probably talk for days about all the things I wouldn’t eat and all of the challenges she had trying to feed me.

I also was absurdly slow at eating. I have times where I remember a birthday party where I took two hours to eat a meal while all my friends decided to go outside, play a game of football and come back and still find me there. So I was terrible at food growing up. My vengeance came when I started Sprig… Well a little bit before Sprig, when I was dealing with my weight issues. I had started gaining weight at Udemy, and I had to learn how to cook again. I used Tim Ferriss’ book, which I thought was amazing, The Four Hour Chef, to learn, and great example of optimization in food.

David: Right.

Gagan: Yeah. I think Tim is a great example of someone who started, perhaps if you look at his earlier work, as someone who was extremely meticulous about the science of everything, and who has become, if you listen to his podcast recently much more artistic and has added that in. He was always artistic. Right? But he just has started to talk about things in an artistic way. He’s moved in this sort of self-help direction, as opposed to this biohacking or sort of optimization, or workplace optimization or life optimization. He still does. He brings both of these to the table now, but I think he’s a great example, to me, of a vindication for the thesis that I have about being overly optimizing about life.

So back to food, when I started Sprig, I realized very quickly that I did not know anything about food and the food business. I had to learn as fast as possible so that I could make the decisions necessary to run that company. While we obviously had the wrong strategy, I think from a food perspective, I learned quite a bit over those four years. I still think that I was not the right founder for a food business. So to be fair, I never quite got there as an entrepreneur for food, but as an aficionado, I’m sure I got there. I feel confident in that.

Essentially what I did is I just day in and day out obsessed over food in many different ways. So examples would be that I ate at every top restaurant and every chain restaurant that was successful or well-known, or well-respected possible. So I just got a lot of reps in. The difference between reps before, because of course I was eating the same amount of food. There was some times where we did days where we would literally eat and spit. So you actually eat, you taste the food and then you spit it out. That wasn’t common for me. So I did eat more food technically during this time, but for the most part you can’t really change how much you consume in a given day.

So what I was doing was just paying a lot more attention, right? So paying a lot more attention was one thing that really changed in getting the reps in while paying attention. So if you’re exercising and you’re actually looking at your shoulders, or you’re not looking at your shoulders, you notice a huge difference in the quality of your exercising. Just simply the act of noticing your shoulders will make a difference on how you do a shoulder press, for example, or a push-up. The same thing is true with any other aspect, whether it’s looking at art, or going for a walk, or in this case eating. So I started to pay attention to a lot more things. I paid attention to the menus and how they were written. I paid attention to the waiters, and what they were doing and how they were acting. I talked to chefs. So I was immersed in observation and obsessed over this.

The second thing is that I found experts who knew a lot more than me and I surrounded myself with them. We were quite lucky at Sprig in that we, unlike in the Udemy case, in the Sprig case we had a lot of early success with chefs and with potential advisers. So two people in particular… Well, three people, I guess… Our first executive chef was Nate Keller from Google. He was a second executive chef at Google and sort of had an extremely wide breadth of knowledge on how to make good food at scale. Then I had an advisor who we-

David: Can I ask you a question about that?

Gagan: Yeah.

David: What is something non-obvious that you need to change when you make good food at scale versus good food for, hey Thanksgiving, hey it’s Christmas families coming over?

Gagan: Yeah. Recipes don’t multiply in an easy way. So you can’t just take a recipe for rotisserie chicken, and cook it in the oven, and then just multiply that by 20 or 50 and put it in a bigger oven and succeed. There are a bunch of things we don’t quite understand on a molecular level about how things change. For example, when you have lots of things in one oven, or when you put salt on a very, very large dish versus a small dish that we have to, at least right now, we cannot just create a formula, or at least I’ve not seen anyone who creates a formula that can accurately predict how much salt you need when you’re creating a sheet pan or an entire kettle of soup, for example, instead of creating some soup in your house. So that’s one example of many the other non-obvious example that is obvious once you hear it is that the people scale is actually very different.

So when you’re making the same dish a hundred times, each individual person can have fatigue on that dish. Then also of course, you’re going to ask a less skilled and less careful person to put the carrots in that dish, or to slice the onions or whatever you’re going to do, that’s wrote and that needs to be done repeatedly. So these are some of the many things that make scaling food such a difficult challenge. It is both a scientific or a recipe challenge, and an equipment challenge, which I didn’t talk about, but it’s another complexity, as well as a human challenge. It’s probably one of the most complex forms of operational challenge that exists.

I mean, I think if you compare it to, for example, the challenge of running Amazon, right? Running an equally big food business is probably at least 10 times more complicated and difficult, right? That’s because everything that Amazon does from a warehousing and delivery standpoint is objective, and food is fundamentally not objective it’s subjective, right? Every person tastes the same dish differently, and we all have our own taste buds, but also our own perceptions and histories. So-

David: The old medium rare argument. No, we put it in and it was the right temperature. “I swear, I cook steak all the time. It’s not medium rare.” I hear this conversation at restaurants all the time.

Gagan: Totally. The medium rare one is a great one. I definitely do not respect people who fully cook well their meats. When I say don’t respect, I just mean in the context of how they eat meat, not in the context of anything else. So the immersion model of learning is interesting because it is fairly regularly proven to be the best model. So where do you learn how to do your job the best? By doing the job. If you want to learn to be a great baseball player, you’re much better off just getting up to bat, up to the plate thousands of times than you are doing a lot of reps at the gym. Now, doing both happens to be particularly valuable, but just doing the gym isn’t enough, right? You must do the reps because there’s, again, so much nuance and learning.

Food is similar. You just have to do the reps. So one of the things I find fascinating about our education system, bringing it to online learning and learning in general, is the idea that we’ve completely lost the idea of practice in learning. To the point that we have political science majors… I think probably 99%, I would guess, of political science majors never talked to a single person in government during their entire political science degree. One-on-one and probably not really even in a group. The number of history majors who visit the location of their study is probably much better than 99%, but probably still much worse than what it should be. And we’re talking about even if you went to Stanford or Harvard, right? So what is it like if you go to a state school in the Midwest or a private school in the Northeast or whatever? Depending on where you go… No matter where you go, the construct that you must learn everything in the classroom is totally, it’s insane, honestly.

Then the other part of this that’s equally interesting is when you get into more practical sciences. Of course, as we get closer to science medical school is more certainly than psychology is, which is more practical than say… Practical, meaning that the form of study is more thoughtful in ensuring that you learn the subject. I don’t mean that it’s a more practical subject to learn. I think that’s a whole nother conversation. I actually think learning liberal arts things is a great thing for people and I’m totally pro liberal arts education, but should it have more practice involved in that? I think the answer is yes. Writing essays is not the only way to learn about political science, and certainly not the best way to evaluate someone’s knowledge of political science.

So anyways, I very much believe in an immersive learning approach and learning by doing. So I think I did get a master’s degree or multiple master’s degrees in food, because over four years I ate around the world. I probably ate it… I’ve now eaten at 15 to 20 of the top 50 restaurants in the world by the best 50 list, and maybe 25 to 40 of the top hundred over the last five years. I’ve also eaten at a large number of fast food and fast casual chains, and spoken to and gotten tours of kitchens of those places. Visited large warehouses where they stay or food and distribute food. Talked to at least a hundred plus restaurant tours and a hundred plus chefs, one-on-one or one to five. So those reps, I think, helped me learn enough that now, just for fun while I’m going down the street, I’ll look at the menus of restaurants to get a sense for them.

I think one of the hallmarks of being sufficiently good at food is both the questions. Asking questions where the waiter says, “Wow, you actually are asking a question that’s hard or that I have some respect for.” I mean, I ask lots of dumb questions, let’s be clear. And you saw me ask lots of questions that I think were quite simple. But the other side of this is when you can walk down the street and identify a restaurant that is not highly rated or recommended, or even doesn’t necessarily have a good facade, and you can recognize that it has good food. How would you know? It’s such a hard question to answer, because like I said, it’s a gut or a subconscious thing.

There are a number of factors when you look at a menu and a restaurant that may help you determine how good the food is going to be. Menus are written by humans and usually written by the chef. So no matter how basic or minimal the menu is, it still conveys information about dishes. Usually you’ll find on a menu that three to five items are always written with more enthusiasm. Even if that enthusiasm is extremely muted, so it’s not one of those kitschy menus that sort of talks… Which I’ve nothing against kitschy menu, I actually think it’s fun sometimes… But it’s not a kitschy menu where it talks about what our favorite is, or this dishes bangin’, or the house special.

But let’s say you ignore those simple words. Even beyond that, in just words like describing the dish and how thoughtfully it’s prepared. So the next level down would be something like, 24 hour braise, or it’s homemade or house-made ketchup, or crinkle cut fries as an example of details that if they are presented in some items and not in others, you would certainly assume that those items are likely more interesting to the chef and therefore more important to the chef. Then of course, there’s even more subtlety beyond that, which is just what level of detail do they describe the sauce? When you think about that sauce, imagine those flavors in your mind swirling about, and coming up with a delightful outcome or not. You can generally read a menu and do that. Then of course you can also look at the facade, you can look at the cleanliness of the restaurant.

Of course, cleanliness needs to be looked at in more detail. You can’t just look at whether or not the tables are nice, because many people don’t want to spend the money to buy new tables, but they might have great food. But it’s very rare for them not to wipe down the tables in a thoughtful way if they don’t have good food at a great restaurant. So even, I’m thinking right now, I’m imagining a meal I had in Hanoi with my girlfriend. I’m imagining the quality of the effort that the waiter put in to cleaning off the plastic tables and plastic stools that we sat on huddled in this very small open air, sort of mixed open air, indoor restaurant, where we got some of the best pho and bomb bun me, as they say. I don’t think my pronunciation is perfect, but as they say it.

If you just imagine that scenario… I’m imagining that scenario, and I’m thinking, yeah, even there, there was a level of care in cleaning off this extremely ugly and very stained plastic tabletop that we were eating on. Yet, if you just take the moment to look past the spice stains on the table, you realize that actually someone took the time to clean this thing this morning.

David: Yeah. There, gosh, so many things that came to mind there. So the first is a general theme of this conversation so far, is basically there is so much more information in the world than you think. You look at a chair, you look at plants, you look at the way something is made. There are levels of depth there where a lot of people just see, “Oh, it’s just something.” I’ve been learning a lot about meteorology. It’s been one of my recent rabbit holes.

Gagan: Wow. That’s so cool.

David: I just learned about cloudy and Nimbus clouds. So now when I’m sitting and I’m working, I look at clouds, I see so much. I can just look at a cloud and immediately know how that influences the potential for thunder, and lightning, and rain. Something that was just totally superfluous to me now is sort of a layered with meaning and texture. I think that the message here, and this is one of the reasons why I encourage writing. I always say writing makes the world pop. It is that, what does it take? What can we get from ourselves in terms of always maintaining this posture towards the world of trying to soak up as much of the knowledge, and using that knowledge to then appreciate what is given to you, and to see understanding as a way of making the world more vibrant and colorful.

Gagan: I love that. I totally agree. I think that as I’ve learned more things… And I would say I am definitely the poster child of lifelong learning, which is appropriate given my profession. As I’ve learned more things, I feel like the world has become more three-dimensional, and I love the “pop” word as well. It’s like, I look at the curtains in this room that we’re in, and I see not just the thoughtfulness of creating curtains that are extremely tall given the fact that these windows are extremely tall, but also the fact that this would be a very difficult set of curtains to make in a factory, because it would be pretty hard for an individual human to navigate this entire sheet. So you would need a certain… I know nothing about factories, so I could be totally wrong here, but I know this about food so I can sort of analogize.

So I know these are handmade. These curtains are handmade by the designer here who did this in a very scrappy way apparently. It wasn’t an expensive curtain. It’s just simply put together, but it’s super long and it’s particularly probably difficult to manufacture. That adds a whole nother element. You talked about the chair. What is interesting about a chair is not just the design of it as you see it, but also the fact that that design is informed by the replicability or not of the chair producing process. The costs that go into both the materials in that chair, but also the fabrication of that chair and the delivery of that chair. The demand of that chair, which then correlates to how many pieces they can make and they can sell, which also affects whether or not what the type of chair that that is.

So there are so many layers. Then of course the business model of furniture and how it gets to you, and how much that… There’s so many details on something as simple as a chair. Personally, I’m just ever fascinated with the layers of nuance, like the cloud layer that you added. I don’t look at clouds very thoughtfully, and now I’m going to pepper you with questions one day when we can spend some good time outside, or maybe go on a flight. We need to go on a flight.

David: Let’s do it.

Gagan: But pepper you with questions about what you see in the skies, because I will say I haven’t spent enough time looking upwards in my life, and I’d be fascinated to learn about that.

David: The other thing that I think really stands out is this idea of the way that you do small things. I think about this every… It’s so cliche. I think about this every morning with how I make my bed. It’s just because I want to nail the first thing that I do every day. I heard one time that it was some guy or woman who was exec at McDonald’s, and the message was something like this. If you want to quickly judge the quality of a McDonald’s franchise? Don’t go taste the food, don’t go to the kitchen, look at the bathroom. And I love that idea.

The second thing, this was when I realized that Stripe was going to be a game changing company. So when you live in New York, one of the things that’s ridiculous is they spend millions and millions and millions of dollars on these magnificent buildings. These giant lobbies. They’re Epic. Then the door people who greet you, who sit behind the desks, they have no pride, they have no care that they bring to their work and some people do, but just as an industry the door people are never kind to you. So I was really used to that. It’s just the sort of the fact of life. Those people are going to ask for your ID, it’s going to be really bland and kind of vanilla conversation.

One time I walked into Stripe. It was my first time ever at Stripe. I walk in and this woman who is radiating with energy, wakes up and goes, “Welcome, David, it’s great to see you,” before I even introduced myself. They had had in the system that I was coming in, she had already seen my photo and then immediately began to treat me like I was at the Four Seasons as I was walking into a meeting at Stripe. I was just like, “If they can do that right, they can build a payments company.” Because no one is thinking about these things.

Gagan: It’s so true. The detail is definitely one of those things that you learn in the restaurant industry, especially. I mean, in the kitchen, they can be so ornery about the detail in their kitchens. That, for example, I learned that it’s not accepted in most fine dining kitchens to rip the masking tape that you use to label meticulously. Every item that goes into containers that go into your fridge and your dry storage, you shouldn’t rip the tape, you should cut it with scissors. So anytime you find masking tape in a fine dining kitchen, you will usually find on a string, you’ll find a pair of scissors right next to it because people will cut the masking tape or whatever the blue tape, the painter’s tape that they use.

It’s such a stupid thing. I mean, it’s hard to overstate how completely irrelevant this may seem to most people. Yet it’s indicative of the level of care that they put into everything, and it’s why your dish comes out looking exactly the same every time you go to the great three Michelin star restaurant. Even though it has a different farmer, it has a different cook usually touching it, it often might be years between your visit to that same restaurant, and yet it looks and tastes and feels the same. Why is that? Well, because they pay attention to the details.

David: I once asked my friend, Patrick, who’s been living in Japan for many, many years. I asked him, what’s one memory from Japan that’s striking to you, that’s indicative of the culture? He once met a guy who had been working on scissor sharpener for 40 years. He spent his whole life studying how scissors move through different materials. That kind of craftsmanship is something that I don’t know a lot of people who are just so obsessive really focused on that one small thing. If you ever seen the documentary Somal?

Gagan: Yes.

David: Yeah. It’s that same thing. It’s about Somalia, the rigor, the grind, and also just the dedication that they bring to that craft. I remember so vividly one of the guys, he tastes some wine, he swivels it around in his mouth and he starts describing it as tennis ball. He’s like, “That is a flavor.”

Gagan: Or fresh cut grass.

David: Or fresh cut grass. Exactly. I bought wine this morning and what did I do? I walked right in. I said, “What’s not too cheap? What’s also not too expensive?” I’m a 1495 to 1895 kind of guy. Picked three off the shelf that looked like they were a little bit more expensive than that. Honestly, as long as it’s not gas station wine, it kind of tastes the same to me. I’m sort of ashamed to admit that, but my point is that within the world, there are these layers and layers and layers. The key me, and I’ve been watching a lot of Feynman lectures, and this is what I get from him. It is how do you learn and how do you bring a posture towards knowledge that is one of sharing, and that is one of abundance, like you were talking about earlier and not one of this cold elite pretentiousness that I think has degraded a lot of what learning is. You look at Feynman and he’s smiling and he’s laughing. He’s like, “Let me tell you about quantum electrodynamics, let me share this with you.” Rather than the classic, stuck up, old guy who was just like, “Oh, you don’t know that.” Makes you feel terrible for your lack of knowledge.

Gagan: Yes. And I think you shouldn’t feel poorly about the wine thing at all, because everyone has areas that they don’t know about. I think the real miss is, and I’ve been guilty of this so much in my life and I’m glad that I’ve gotten over this, but the real miss is when you discount something just because you don’t understand it.

I have this vivid memory and I’m just so ashamed of this. When I was in college, of visiting one of my close friend. I’ve known this guy since we were, I think, eight years old, so I’ve known him for a very long time and we went to the same university. And so I went to his dorm room and I saw inside the closet, a print of a Picasso painting and I was like, “Why do you have this garbage in your closet? What is this, a joke essentially?” I don’t remember the exact words but I scoffed at it.

And in retrospect, I just feel so classless and so silly, but I grew up in a family that didn’t have that kind of awareness. I didn’t grow up well off and didn’t grow up cultured at all. My mother today, I think, has also grown up with me and is very different but when we were growing up we went to McDonald’s and we ate fast food. And we went to the Eiffel Tower when we went to Paris and didn’t know how to really navigate the city in a way that’s cultured. And so we did all those things and he looked at me and just he couldn’t even talk to me about the subject. He just had to laugh at me and move on.

And I felt really dumb back then but I feel much dumber now about it. And I’d say the lesson to me is when someone who I respect and even not respect about everything, just who seems to know this in at a reasonable level, seems to have depth, when someone else seems to have depth on a given subject, I just assume that there’s depth there that I don’t understand and so no matter what subject even something like reality TV, right?

And I would say there is a class hierarchy here of what has more artistic energy to it, and what’s more effort and stuff that you can create, but McDonald’s should not be compared to Eleven Madison Park. Eleven Madison Park is just better hands down, but at the same time there was a lot of beauty in McDonald’s to be clear, it’s amazing. I mean, lots of people have talked about the beauty of McDonald’s actually.

But my point is that I’ve realized that everything out there, someone put time and effort into and has thought of and is an expert in. And so I should always just assume that there’s something I don’t know about whatever subject that someone else is interested in. And if I come at that with curiosity, I found that my mind opens up much faster and I learn it much better.

The best example, back to food since it’s become such a theme of this conversation, the best example to me is when people say they really don’t X food, right? This is a total pet peeve if any of my friends are listening.

David: This was you when you were growing up.

Gagan: They’ll laugh. Of course it was me growing up. And someone says they don’t broccoli or they don’t like peas or whatever it is and I’m always like, “Look, there might be on the very edge case, right? Cilantro tastes like soap to you. I get it. That’s a genetic thing, we know that. There are probably some other things like some people are more sensitive to salt or sweet or whatever and therefore certain food items are very difficult for them to like but 99% of the time that’s total bullshit.

You don’t actually not broccoli. You both could benefit from additional mental flexibility in learning how to change your own mind, that’s the base thing and then also curiosity of this specific thing of broccoli. And if you really force yourself to be curious and understand what is broccoli? What makes it great? What is it about broccoli that it’s a living thing it has value to it, right?

All living things in my opinion, do really anything that someone’s put effort into can have some value to it. And if you really just take time to appreciate it and understand it, I really believe you can change your mind about broccoli. Now because it’s a biological thing it can take years rather than months, so it’s not something that I think always happens right away. You might have to have lots of cross-learning, meaning that in order to like broccoli, you may need to learn how to Picasso, because it may be that whatever is preventing you from liking broccoli gets unlocked by Picasso and doesn’t get unlocked by broccoli.

I don’t know what it is. This is a very difficult thing to figure out how to open someone’s mind in this way. I bet psychedelics could do something with it to be fair. But I do think that anyone can anything, basically, you really can bend your mind in that way. And I think that when you have that perspective and you target it towards the right types of things, your world can become richer.

David: I want to switch gears and talk a little bit about just where education is going, especially online education that you coined this term, this the highest compliment I can give. I’m pissed I didn’t coin it. Cohort based courses is so good and you coined the term and it’s one of the great failures of my life that you have this trophy but it’s okay, I’ll get over it.

And I think with both of us really see is that there’s something really magical happening in four to eight week courses where a term that I came up with this morning is what I call the soul-cycle effect, where people come together and they begin to really be in a group. And with that group, that group pushes them harder, it makes them excited about whatever they’re doing. And it has people do things that they ordinarily would have backed out of that now they say, “Yes.” And they begin to opt into.

And then also it seems the time is right with the way that technology is moving for cohort-based courses to explode, whether that’s because of the rise of Zoom, the familiarity that people have with computer platforms and video chat. And then also the very real anger and dissatisfaction that people have with the traditional education system, universities, both in the quality of education and how much it costs people.

Gagan: I remember the day when we talked about coining a term for the types of courses that we were creating. And I remember you saying, “I’ll come up with a term.” And I’m not saying this to get one over on you-

David: You win, okay?

Gagan: … I couldn’t’ care less about that. But it’s more just to tell that when MOOCs got invented as a category, I was furious because it was such a horrible name and I also don’t love the name Udemy an example. I think the name has grown well and actually worked better over its life cycle than when it started. But ever since then I’ve worked at Sprig I think was very well named and I think that this next company hopefully will be well-named as well, because I think these things matter and MOOC was such a silly name.

And so I remember thinking when you said that I was like, “Great. I would love David to name this because David will come up with a better name than MOOC.” And that obviously created this subconscious thing in my mind that eventually germinated the idea for the name cohort-based course and I puzzled over it not intentionally, but unintentionally many times.

And I think that the thing that’s so funny about this, right, is that all courses are cohort-based prior to 2009, right, when we made video-based learning or MOOCs mainstream. Of course it took us a number of years to do that we started Udemy in 2009. So pre-2009, if someone told you they were taking a course, you would almost assume that there was a cohort involved, meaning that there was a group of people who were going to get together and take this course at the same time. Right.

For all of human history. I mean, I just spent a year visiting my girlfriend in Oxford, is living in Austin, but flying to Oxford pretty regularly. And Oxford is the second oldest college institution in the world, it dates back to 1000, maybe 10 AD or something like that, it’s the 11th century. Right. And obviously even before then there were already classrooms and courses and all of those were always taught in cohorts almost entirely, and so cohorts has been central to learning since forever.

So what’s really happening right now in my mind is finally the Internet has reached critical mass, and has on the underlying building blocks that I believe are fundamental to making cohort-based courses a thing. And to essentially, I don’t think they will supplant video-based learning in that. I think video-based learning will still be valuable for certain reasons for certain activities.

But I think that the number and the diversity of options for what people are going to be willing to learn on the Internet is going to dramatically increase with the rise of cohort-based courses. And cohort based courses are uniquely possible today because of the depth in which the Internet has infiltrated our lives. So as the Internet becomes more and more relevant and immersed, as we become more immersed in the Internet, new opportunities are created.

Slack is a good example of a new behavior. This behavior that you may interact with your coworkers on a daily basis over text basically digitally instead of in person. And you may be a few cubicles away and you’ll have a very, very long social conversation over chat. And surprisingly that wasn’t really common prior to Slack.

And Zoom of course created an even more powerful accelerant to online learning, which is that it made it normal to interact with someone over video, and to truly engage immersively with someone that’s in a different place and view that as comparable. I don’t think it will replace in-person meetings, but view it as comparable in certain contexts to in-person interaction.

And those two transitions or inflections in the Internet, the adoption of these two formats, video-based conferencing and instant messaging essentially amongst coworkers enable a new generation of courses. And I think it will be the ultimate generation of courses until we get to AI and machine learning, which I think is a good example of a promise of 2012 that won’t come true until 2025 or later.

David: Yeah. There’s something too about the inertia right now. The pandemic will be seen in history as the thing that enabled this. And there’s an idea that I’ve always liked about it’s called crossing the adaptive valley. So I’m going to need help here trying to imagine this landscape with me, but think of a mountain. So what you have is you might be at 20,000 feet on a small peak, but then you look over or you don’t look over, maybe it’s foggy. There’s another mountain there that’s 25 or 30,000 feet, the Mount Everest of whatevers.

And often you don’t actually know that that mountain is there and the problem is you’re already in a good place. And so for you to go back down into the valley and then climb up again isn’t always worth it, it’s a pain. But then one day there is an army of people that’s coming and they have guns and they have swords and they have horses and they’re coming to attack you.

So what do you do? You run the other way, you go down and then you go back up and you’ve been huffing and puffing. You’re safe now. You got away from the military, you’re now in a higher place, but you would have never gotten there otherwise. It just would have been too much work, it would have required too much inertia. And that’s exactly what happened with online education, where we have now been forced to break our standard traditions and our models for how education should be taught and we’ve had to move it online. And so online education has been accelerated by a solid five to ten years.

Gagan: Yeah, it’s incredible. I mean, so many universities are talking about how they may have to offer hybrid education to their students. And this is a slippery slope. As soon as 20%, 10% of the class decides not to show up and to engage online, and as soon as the university decides to serve that student who doesn’t show up in person, all of a sudden everyone has the option to go online. And the entire classroom experience has to be modified by the fact that there are going to be people who are not in person and people who are in person. And so universities are reckoning with this today, and I’m sure there will be professors who after the pandemic go back to doing fully in person, but psychologically something has changed.

David: Walk me through the process of actually trying to construct what this company would look like. You founded Udemy. Udemy is now a multi-billion dollar company, so certainly you have some experience in this space but it is fundamentally shifted. So walk me through as best as you can, reconstruct this narrative, of how you actually got here with a focus on this is how I think about market creation and where something is going to go.

Gagan: Yeah. One thing that’s interesting to mention is that I spent two-and-a-half years at Udemy. So in reality out of my 11 or 12 years since the founding of that company, I was only there for a fifth of it. And so while I had the opportunity to watch, I had a front row seat to the rest of the show, I wasn’t actually in the play. And what that means is that I spent seven odd years or so, doing things other than online learning and thinking about things like ride sharing where I spend time at Lyft, food delivery and then of course travel and culture and art and those things that I did on my sabbatical.

So I had to get refreshed and actually I had no intention of being refreshed on online learning. I didn’t know for sure that that was what I was going to do. I was just trying to find my way after the sabbatical, trying to find something to latch on to to work on. And in my days of trying to get back into working more regularly and figuring out what’s next, I naturally found online courses because they solved a problem for me.

The first problem they solved for me was I thought maybe I should write a book and so I enrolled in Tucker Max’s course, which was two days in person and then the rest was online called Guided Author. This is from Scribe, his company that I am a huge fan of. And at Scribe was basically teaching us how to write a book and they walked you through that process.

What’s interesting about this is that Tucker had spent a lot of time trying to figure out how to teach this. And he got to the point where he could do video-based sessions, video learning sessions. This is pre-pandemic, right, so this is the four months leading up to the pandemic starting. And he could ask questions and get people to engage in such a way that you felt like you were really pouring your emotions out because writing a book is a very personal process. It’s very emotional process.

And so I remember one day in particular and Tucker didn’t even show up, which drove me crazy. But anyways, Tucker didn’t show up to this, but he had had me deliver a speech to the other people on the call or in my course and I cried the whole way through, because it was a really painful childhood memory I was recounting.

And that was a seminal moment for me because I realized holy shit, I just cried on camera. I was in my girlfriend’s dorm room in Oxford, bawling my eyes out to a bunch of people I’d never met before. These were not the same people who were in the in-person workshop, and obviously that is special because I don’t think that pre-sabbatical me would have ever expected to do that because back then nobody was doing video conferencing calls at all and we just weren’t familiar with that format and all of a sudden this was happening.

And then of course the pandemic hit and during that time, I realized I didn’t really want to write a book because writing a book felt like an archaic process to me for me. And I think for the people who use Tucker’s, I just want to be clear that I think if you are someone who has already got a career and building a business and wants to use a book to propel that career, I think it makes a lot of sense but I didn’t want to be known as my next chapter as the guy who wrote a book about starting companies.

I realized I probably wanted to start companies again, and it wasn’t ready to move into the retirement phase as I saw it, of being an entrepreneur. And so I decided, well and I started following people and then one day randomly I posted this thread on Twitter. I got back on Twitter. I hadn’t been on Twitter for three or four years at that point, really spent very much time on the website.

And so I got back on Twitter and I think this was probably the first thing I posted or maybe the fifth thing I’d posted in four years and I posted this thread that went viral and so I got hooked on Twitter. And then I found you, David, and I found you on Twitter early when you were still at I think 50,000 followers. And it’s crazy to watch you go well over a 100 during the last six months, just wild.

But anyways, so you were still building your brand online and I started reading your content and thinking, wow this is really good content, I love it. And then I saw Write of Passage and I’d shelved the book idea and I thought, huh, that’s interesting. I love this idea of you have this pyramid of writing where I forgot what it’s called, but what is it called?

David: The content triangle.

Gagan: The content triangle. The content triangle and at the base of it’s like dinner parties where you just talk to people or podcasts like this one where you talk about your ideas. And then you tweet about your ideas, and then you read a blog post about the idea, and then eventually maybe you write an essay or a book or something longer form. And that appealed to me much more than spending a year to two years writing a book and publishing it and just being like, “All right, that’s it.” So I took your course.

And another part of this story is that simultaneously as this what’s going on, I was also thinking to myself, wow, working every day is really hard. I just spent three years off. At that point it was two years, three years is until I started this new company. And so I had taken two and a half years off and I wasn’t used to being on a computer for more than an hour or two a day. I wasn’t used to having to respond to emails or get on the phone.

I’d forgotten about all these little things and I realized that I needed a practice business, essentially. I needed to get back into the swing of things. So what I did is I started an online course. This was during the same time as I was doing the Scribe guided author program. And so I met up with this guy in London and we taught a course on growth marketing, his name’s Matt Lerner.

And so we were teaching a fully virtual online course, which was 12 grand, 10,000 pounds so $12,000 US, I think something like that and we were teaching 10 different companies how to install growth marketing into their companies and it was fully virtual. It was Matt’s first fully-virtual course and it was my first online course in almost a decade that I had taught and we were using Zoom and Slack to do everything and again, we were amazed.

We’d made, I don’t know, what is that 100 and there’s over a 100,000 in revenue, 150, roughly I think in revenue and had 10% costs. And we had built this great online course that I think at least the majority of the people who took it really enjoyed and got value out of it and did not feel like that price was unreasonable. In fact, we only had 10 students or 10 companies of students, so we were quite involved.

And so simultaneously I was joining your course a Write of Passage while this course was happening and I started to see this amazing experience. I was like, “This is awesome.” Your course was so next level compared to what we were doing because we were still lecturing people over the Internet and you were getting people to interact with each other and so I saw this magic.

And the other thing that I thought was amazing was I was interacting with people who were not vetted or not predisposed to be, at least in my mind, writers the way that I felt I was a writer in terms of my experience, because I’d written for TechCrunch and have written online a fair bit.

I wrote all the copy for multiple companies in the early days. And so, and there were people who are right out of school or who are just discovering writing or whatever, and there were obviously people who are probably much better writers than me. And I was interacting with them and I found that because of the way that you organized the course, I still got a ton of value out of the interaction with a non-curated group of people that I was taking this course with.

So I slowly started to understand the magic of online courses in this new format, cohort-based courses. And then of course I started to think, okay, what are the courses I could teach? Somehow for whatever reason at that time, I wasn’t thinking about a platform. I was just thinking, wow. I was starting to come with business ideas that all centered around online courses.

I had this idea for a startup incubator that would be fully global that could be a course, right. I had this idea for a growth marketing or a seed acceleration business where you take companies that have already raised a seed or a series A round, and then you offer a course to them. That was the course I taught with Matt.

I had a bunch of different ideas here and then I saw this company on deck and I saw what Reforge was doing and I looked a little bit more closely at it. And then I looked at Building a Second Brain and I started to realize, and then altMBA. And I started to realize, wow, this is a trend that’s really interesting to me.

At this point now we’re fast forwarding. So the pandemic started in March and that was about the time that Write of Passage was in the throws Write of Passage. During the middle of Write of Passage, in the middle of the 10×10 course, the acceleration program that Matt and I started.

And then we got to July and I still didn’t have an idea, but I was starting to realize that this was a trend that I was excited by. That it wasn’t going to be a course like just one course that was going to scale and be online but rather that maybe I could create many courses in some way.

And at some point for one reason or another, one or two of the other opportunities that I was thinking about just didn’t pan out. And I was at this moment where I was like, “Okay, well, I’m back to square zero. My other ideas and business partners fell through or whatever, the things I was thinking about. And so I was back to square zero and I thought, what am I going to do? And then it just hit me in almost a desperation, right.

Desperation for and the context was, I’d given myself a September deadline to come up with an idea. It was September was the earliest time I was allowed to come up with an idea. So I’d given myself from September to September. Essentially my girlfriend’s Oxford MBA program is a one-year program, so it starts in September, ends in September.

And so while she was an MBA, I gave myself that 12-month period to figure it out. And so I knew, and I had in the back of my head, this September deadline and we’re in the middle of July and all of a sudden it hit me. There’s a common theme here and these courses do not operate optimally.

David: No they don’t, my friend!

Gagan: And I think it took me a while to figure that out. For a while I thought, “Write of Passage.” The first time I took it, I was just like, “This is amazing.” I knew that there were things wrong with it, but it didn’t quite hit me yet what was wrong with it and what I thought could be improved. What I eventually realized could be improved is that it was quite a clunky experience. And not just Write of Passage, but On Deck was a clunky experience, and so as the 10 By 10 program that we ran and so was Tucker Max’s program. It was clunky because as a user, I am an extremely bad user of one of these courses, because as I told you, I was transitioning from both being extremely on sabbatical and essentially on the beach and not working very hard so I wasn’t checking my calendar to someone who then, of course at some point, had a very busy calendar and was working very hard during the pandemic time. I was teaching a bunch of courses and stuff like that.

It became very clear to me… And I was just having a lot of trouble keeping up with these courses. I didn’t know what I was supposed to do next. I didn’t know who I was supposed to interact with. I found it very weird that I was paired with completely random people in Write of Passage rather than curating the group of people I was paired with, as an example. I started to notice all of these opportunities for improvement, right? And of course these… And so then all of a sudden it hit me. I think it took less than a week between the moment the idea germinated and the moment I decided, “All right, this is it.” It hit me, and I don’t think I had the term cohort-based courses, but I knew that cohorts was a centralized theme here. These courses, these next generation courses, will need a platform to build on because they’re very hard to manage, and that’s when the idea for this new company came about.

David: Yeah. I think that one of the things that we’ve found is that most of these people are solo creators. They’re the people who you’re going to work with, the person who I am is somebody who just loves to make things. The mentality that you need to make things is so counter to the one that you need to run these things, and we’ve just been figuring it out. We’re on the frontier trying to figure this stuff out. It has always been clunky. Even though I think that we do it really well, behind the scenes, which is what I thought you were going to get to, it is so hard to run these things. The last cohort that I did was six months ago, and I still am scared of the next cohort that I’m going to run because it burned me out. It’s so hard. It grinded me to my core.

But one of the things that I wanted to ask you about is, I remember when you were at Oxford, we had a call one time and you were talking to me about, hey, what would it look like to help you grow Write of Passage, maybe run Write of Passage, sort of the early stages of your thinking. The overwhelming impression that I had from you is that you are one of the most driven and ambitious and I need to get what I want people that I know. What is behind that? You have a level of get-after-it-ness that is actually quite jarring when you first meet someone, but it’s also why I’m an investor in your company because I see that it’s very rare.

Gagan: I don’t think I had a choice. My parents… Of course, I didn’t realize any of these. I wouldn’t have had a good answer for you until years of therapy, right? But we’ll distill half decade or a decade of therapy of lessons into a short conversation here, which is that I was part of a fairly successful family on the outside. My dad was a software engineer, had moved from a very, very poor background in India and traveled to the United States and lived the American dream, bought a home, et cetera. Married my mother, who was it was an arranged marriage, and then my mother came over and was also incredibly smart. They were both came from fairly poor backgrounds and I had a good middle-class life. And then in in the aftermath of the 2000 dot com bust and whether it was directly correlated to this or not is not super relevant, but in the aftermath of that, my parents ended up divorcing.

In that divorce, we lost a lot of our net worth. We almost lost our house. We certainly had to dramatically pair back our expenses. I was about 12 or 13 when this occurred and so my teenage years, I had to all of a sudden grapple with this reality, which was that I didn’t have the resources that I had before, and yet I had ambition because I was an Indian kid in the Bay area. I think every Indian kid in the Bay area is taught the same fundamental things about school. I was a relatively precocious kid also, so I did fairly well in school. What this whole turmoil manifested itself in was a couple flips switched in my mind. One is that I started to go from someone who really loved school to someone who hated doing things he was forced to do by actors he did not respect. So, I started to see through adults in my early teens. Maybe something that should happen in your late teens or in your early 20s, I did it in my early teens, see through adults and therefore see through some of my teachers.

I also think that it just so happens that my high school had much worse teachers than my junior high. I think that is fundamentally true and there’s a bunch of reasons for that that are governmental in nature, right? They’re regulatory, and I think our school districts are pretty poorly run, but high schools in particular are very poorly run. They are the most poorly run out of all of the institutions that we have, at least in the Bay area, in Fremont, California, where I grew up. So, I saw through my teachers and was not a fan and so my grades started to slip pretty quickly. They were still great, by the way. I just went from a 4.0 to a 3.8 or something like that.

David: Nice. You’re talking to about 2.82 high school graduate GPA right here.

Gagan: I’m sorry. I’m not going to deny. I’m not going to hide who I am. I was a fairly good student, but I slipped and I got worse than 3.8 at some point. I think eventually it got worse than that. But the point is it wasn’t terrible. The second thing that happened is that I wanted to continue to achieve what I was achieving as a kid. So, as a kid, for example, I was a fairly successful chess player and I traveled around the country a little bit, not a lot, but a little bit to compete in chess tournaments and did okay. I had found a new activity in my teens called speech and debate that also costed money to travel and to compete in and to learn because it costs money to hire coaches or to go to camps or whatever.

My mom started to tell me we didn’t have money for these things, and it’s a pretty crushing thing. Obviously it’s nothing like what 99% of the world’s population or maybe 95% of the world’s population deal with from a money standpoint, but for a kid who’s in the top 1% to drop into the top 5% is actually quite disappointing. I grappled with this and somehow through a matter of luck and some good friends that I had, I stumbled upon the idea to build my own camp. It wasn’t even my camp in the beginning, it was someone else’s camp. Someone else had come up with it in the past and they had raised like a thousand dollars one summer. These were people who were older than me, kids who were older than me.

And then one of my friends said, “Why don’t we resurrect this camp and make some money off of it and do it privately instead of public, instead of through the school?” And so then slowly we built this camp and it actually ended up changing “co-founders,” quote-unquote, throughout that process. So, I had been through a co-founder breakup and all of that all through high school. In my teenage years, I feel like I developed this. I cultivated what was already there. I was already an aggressive kid. I was already a kid who had grown up with fairly hard knock parents in reality, more hard knock than other Indian kids that I knew. Indian kids in general are pretty hard knocks, so more hard knock parents. I didn’t realize it at the time, but this is true in retrospect.

I had already gotten pretty tough and then I had to get a hell of a lot tougher and grow up pretty quickly in high school. Yeah, I grew up in high school and I became who I am today, I think, very much in those years. I was very abrasive at that time because I was really rough around the edges and I had nobody, no role model, nobody who was both believing in me and telling me that I needed to improve. I had people who really disliked me. I was in the principal’s office regularly. I got shunned various times by various friends or second degree friends, if you will, because I was abrasive. And then my mom relentlessly believed in me and was just a fantastically positive force throughout all of this, even though she was going through her own challenges trying to figure out how to keep this family together.

The combination of those two things meant that I didn’t really know how to deal with this, and it took another five to 10 years or so to get there. I’d say it wasn’t until after Udemy, after I got fired from Udemy or around the time before I got fired that I finally had people who believed in me. Because one of the things that’s great about Silicon Valley is Silicon Valley really believes in its founders and believes in really young people who are inexperienced and might make lots of mistakes and believes in them to know end to be able to improve and change and be living, breathing, changing human beings.

This is, of course, why all this stuff in the press when they take down founders can sometimes be so actually just inaccurate is actually the right way to think of it. If the press is a source of truth, it’s actually extremely inaccurate to take down a founder of a company and act and have this veneer that somehow a founder should not be flawed. In taking them down, you are actually assuming that them behaving well is an expectation. It’s not because actually the vast majority of successful companies have been built by very, very deeply flawed human beings.

David: Yeah. It’s funny that you say that. So, I’ve been studying Richard Wagner, the famous composer, and he has the Solzhenitsyn line, that “The line of good and evil cuts through every human heart.” I’ve always really resonated with that sentence. He studied what was happening in the Russian gulags. It’s the same thing with Wagner where Wagner is this magnificent composer who had these epic and grand sounds. But at the same time, he is so deeply associated with anti-Semitism and he was Hitler’s favorite composer. Alex Ross just wrote a book about him and one of the things that Ross says is that Wagner is actually very human and that we should study Wagner. We should actually appreciate who he is because the fact that he is associated with the best of who we are and the worst who we are, the beautiful and the ugly, the kind and the evil, that actually makes him deeply human.

I am drawn to that idea, that rather than trying to sweep everything under the rug and put on this grand public relations spectacle, that we should actually realize that everyone has that Solzhenitsyn, “The line between good and evil cuts through every human heart.”

Gagan: I love that quote. I think that the idea… One of the obvious lessons of history is not that every German that participated in the horrific things that the Germans did in the early 20th Century, not just the Holocaust but even World War I, frankly, that the lesson is not that German men were particularly evil. The lesson is actually that all of us have a little bit of this in us and all of us also have the opportunity not to be like that and to be the heroes of that time period.

What I think is so special about Silicon Valley is Silicon Valley enables people and empowers people and supports them through that growth. I was supported by Silicon Valley to become a more balanced and thoughtful and leader, I think. That’s not a question you asked, but something that I think is relevant to say, that I would like to think I’m less abrasive, but I’m still the same guy underneath. You still see me show up with this, like, “Yeah, I can fucking do anything.” I think that is part of how I had to be in order to survive as a teenage head of household, new head of household in the time that I was in what I was trying to accomplish in my life and what I felt like I needed to to feel important and whole.

David: You’ve spent some time with a super rural tribe in the Amazon rainforest. Talk a little bit about how you got there, what living in this village was like, and paint a picture of just how rural it was.

Gagan: Yeah. While traveling, I took pretty copious notes about ideas that people gave me for what to do. I started to create a bucket list of interesting adventures that I might be able to go on to learn more about. I’d say my main goal while traveling was just to learn more about humans around the world. So, I wanted to get a really good cross section of people, and that meant going all the way to understanding the most challenged people in the world or destitute or poor to the most well off, although I didn’t spend too much time at the very top, I felt like America is the very top, and everything in between. I did this in many different ways, but one of the ways I did it was I had one week long adventures and I took this one week long adventure to the Amazon rainforest and took four flights, because I was coming from another adventure in Antarctica.

Four flights to get there, and then a three-hour car ride and then a five-hour boat ride on this small little canoe with a motor behind it. So, we’re going at a decent speed to this village, which is one of seven villages that the Yawanawa have of the Yawanawa tribe in the Amazon rainforest in the southwestern part of the Brazilian Amazon. Once you get to the village, the end of that drive when you start the boat, you’re essentially out of cell range and out of modern civilization. So, the tribe that I visited, they do get supplies from this village on a daily or maybe on a weekly basis in order to live. They don’t farm and they don’t live subsistently off of their own land. They buy stuff off of money that they get from the government and governmental support.

But this village is very, very rural, I would say. So, a friend turned me on to this and I coordinated with the chief of the tribe over WhatsApp and the chief of the tribe decided for some reason to send us to a village that had yet to have many visitors. So, traditionally if you hear about someone visiting a tribe in the Amazon, most likely they visited a moderately touristed village. We visited one that was very rarely touristed. So, this village in particular had only had three visitors over the last five years, three groups of visitors over the last five years. So, they rarely interact with other humans and it was a fascinating experience. We lived with this tribe for a week. We lived in a straw hut and we essentially learned what it was like and built relationships with these people who live in a world that’s just completely different from what we live in in America or even in modern civilization anywhere around the world.

David: So, what do you take away from an experience like that? I mean, you’re talking about a place where they didn’t have toilets with doors, so people would walk by you and they would see you squatting. You’re talking about a place where you would bathe in the river. You were sleeping on the ground instead of on some kind of bed, and you’re with a couple buddies tenting style in the same hut, I would presume. So, what do you actually take away from an experience like that? You were talking earlier about getting back on your computer, answering emails. How in the world do you actually go in to do that after you’ve left?

Gagan: What I took away from this experience is that this was like going back in time. So, one of the things that I took away from it is this is what life was like for 90% of our ancestors 500 years ago, 1000 years ago, 2000 years ago, depending on which ancestors you’re referring to. Obviously this was less quote-unquote “civilized.” I don’t mean that as a derogatory term. I just mean that as the amount of development that occurred and how the infrastructure of the city, this was a less developed place than perhaps some of the early settlements in India or Africa when humans first started to build cities. So, this is really, really, really rural. You realize that life was really hard back then. Yet at the same time, you realize that they’re still extremely happy because they don’t know what they don’t know and maybe even in spite of knowing what they know, because they love where they live. They are proud of their, not just proud. I loved it. I loved spending time with the Yawanawa.

I have people who I have a lifelong bond with. Probably the bond is stronger in my mind than it is in theirs. I don’t know how much they think about us, but I think about them all the time. Of all of the friends I made on my travels, these people stuck with me. Because of how beautiful their lives were they were connected to the earth in a way that you don’t find in modern civilization. I felt like I had a 360 degree experience being in the Amazon, in the rainforest, the way that the senses were overloaded. My senses were overloaded constantly in the Amazon with the number of living beings that were around me at any given time, right?

I had never had that density of living beings, be that insects or the people I was with or the plants and the garden that I was living in and the density of the foliage. That was a whole different experience for me. I personally just, I can’t even explain all the things that I took away from it, but I took away this lesson of, there are a lot of different ways to live in this world and a lot of ways to be happy, and yet I am still extremely grateful for the experiences that I’ve had and the world that I live in.

David: To the extent that indigenous tribes choose to stay indigenous, what do you think is behind that? Is there some kind of Faustian bargain around the gospel of wealth or are they just tied to their way of life in some kind of sense that we can’t quite articulate?

Gagan: It’s really hard to answer that question because in order to answer that question, you have to ask about the philosophy of human choice. On the one hand, there were definitely people there who did not want to leave and had no desire whatsoever to see the outside world. In that way, they were happy and content with their lives. On the other hand, there were many people there who definitely asked us and wanted to have a different experience and wanted to leave and did not have that option because they couldn’t afford to and because the structures in that tribe do not allow them to. There were people in the tribe who did get to leave, but not those people.

There’s definitely a modern infantilization of these tribes or obsession with indigenous people that makes it sound like we should preserve these people at all costs. I’ve shared this theory now with many people who live amongst indigenous populations so I would like to think that this theory has been vetted by at least a few experts, but I’m not going to say that I know this like someone who’s studied this for decades. I believe we overly worship the alternate way of life that exists out there in a way that sometimes actually keeps people in those situations. So, it would be quite a faux pas in modern American culture, and by the way, in a modern American culture, I think the situation is very different and I don’t know it, to talk about reaching out to these people and giving them an opportunity to move elsewhere because we would be uprooting them from their homes. But what if it was by choice? Would it still be uprooting them from their homes? How many people would leave, and is it sad that they’re leaving or is it good that they’re leaving?

I think these are questions that are really hard to answer. I tend to be on the side of feeling like we would benefit by at least confronting these questions and allowing the people who we’re referring to confront these questions and not just indigenous people, but people in America or in cities who live in areas where they may want or prefer social mobility, should they get that opportunity, but are not given that opportunity in a really thoughtful and kind and effective way. I think that this applies to all types of people, that all people deserve to know what the options are and then to choose based on those options. That’s my belief.

David: Yeah. I think that this is a really deep question. You could write a whole book about this. So, I think that there’s two questions here. The first is social mobility. So, Raj Chetty is an economist at Harvard who’s done some amazing studies on social mobility among different neighborhoods in different cities and Charlotte, North Carolina ranks 50 out of 50 in terms of people who grew up poor in Charlotte seem to have the most difficult time getting out of that poverty of any major city. I think that’s terrible and I think that because as a class, they want to move up, we should do everything in our power to do that. This is my issue. My issue is with the homogenization of upward mobility and the way that most of the most interesting culture that I’ve experienced seems to be in middle-class and not super high-class. I find high-class cultures all over the world seem to be so similar in a way that middle-class and lower-class cultures aren’t, and that homogenization would worry me. I say that with maybe 30, 40% confidence, but that’s where my intuition is taking me.

Gagan: I completely agree. I would not want everyone to suddenly be super rich. But I wish anyone who wants to be super rich should be able to be super rich. So that’s, to be clear, there’s a distinction there. I think it would be so arrogant for me to be like, “I just wish everyone stayed poor,” right? That is what some people implicitly say that when they say that they wish all indigenous people, for example, got to keep all parts of their culture. That is actually in some ways, making that statement tantamount to making the statement that you wish that they would stay poor because parts of their culture are keeping them from achieving social mobility.

So, in this case, I think that it’s a bit of a challenge, but it is a bargain that is often worth taking at least to some extent, to trade in some of your culture for upward mobility, but there is also a limit to which that is appropriate and helpful for each individual person, and the person should just choose what they want.

David: That’s a beautiful place to close. Thank you very much.

Gagan: Thanks so much, David. I really enjoyed it.