Blaine Graboyes | Why Great Work is Never Done

Srini Rao: .

Blaine, welcome to the unmistakable creative. Thanks so much for taking the time to join us.

Blaine Graboyes: Hi Srini, thanks for having me. Yeah, it is my pleasure

Srini Rao: to have you here. As I was saying before we hit record, I was introduced to you by way of our mutual friend, Michael Shine, who seems to be a steady source of amazing people that he refers to this show.

So no pressure at all, but before we get started I actually wanted to start asking what I think is a relevant question. And a question that I've actually never started the show with before. And that is what was the very first video game that you ever owned? And how did that end up influencing the choices that you ended up making with your life and career?

Blaine Graboyes: Wow, that is a great question. I will certainly the first game I can remember owning and playing. And this actually ties in with our mutual friend. Mike Shine was chess on my Commodore 64. Using a dial up modem with my best friend, Adam, who lived three streets away, who is Mike's cousin, which is how we know each other.

So that was quite a prescient question that you asked. I would say the first sort of video game would definitely be Atari 2600. And thinking of games like tank and some of the other really early Atari games.

Srini Rao: I very distinctly remember the Commodore 64 commercials on TV when I was growing up because it was the eighties.

And I think this was pre Nintendo. And I remember the Atari 2600 as well, because that was the first console that any one of my friends got. So what do you think it is about gaming in particular that just. It leads to this just rich and enormous subculture.

Blaine Graboyes: That's a great question. And I guess I have my own opinion about it, which is the open endedness of interactivity.

I think really is for me, what makes video games so unique from all other forms of entertainment and all other forms of just computer technology. as well as they are inherently and adamantly interactive. There's very little that you can do in and with a video game in which you're not interacting.

And I think that just instantly changes the engagement mechanism for everyone involved and it almost certainly creates a new kind of engagement paradigm, if you will. And for me, it's what really opens up the creativity of how could you see these little eight bit blocks on your Atari 2600 as a tank or a Dungeons and Dungeons Dungeons and Dragons character, or a spaceship or anything like that.

It's the combination of interactivity and creativity. I very distantly remember like the fight with my parents was go do your studies, then you get to play Nintendo. And I'm curious with your own parents, what your relationship with them was like when it came to video games, because I feel like.

Srini Rao: In today's generation, every parent is like concerned that video games are violent. Video games make people stupid. Obviously, I disagree with these things. I don't think people should be couch potatoes and sit in front of a console all day long. But I being an avid gamer myself, I'm the weirdo who plays sports video games, but could give two damn shits about what's actually happening in professional sports.

I really don't know and don't care, but I love sports video games and

Blaine Graboyes: always have. I I understand that there's I think that's the case for so many gamers is you don't have to love a sport to play a sport video game. You don't have to love cars, but probably you do if you play Forza or one of the racing games, but you don't necessarily have to be an expert or super engaged in the original inspiration for the game.

And I think it's great because. Shown new ways to connect with audiences. And certainly that's led to incredible things like e sports where most of the e sports athletes are in athletes and the underlying game that it's based on like a soccer game or a football game or any of the sports games.

And it absolutely just reaches entirely new audiences. I would say for me. My parents were definitely very supportive. I remember in grade school, we had a class called Special Interest, and in that class, we played Oregon Trail as part of our class in school across multiple years, I remember. And I think it might have started out on paper before it actually even moved to a computer.

Cause this would have been like late seventies, early eighties. You might predate me that

Srini Rao: on this to tell you my story about that in a second. But I would say from a very early age and exposure to computers and video games, my parents were certainly very open and supportive. That said to your counterpoint, I and all of my friends were very outdoor active.

Blaine Graboyes: We lived by the woods. We live by the Delaware River, which we call it the creek and we would go fishing and swimming and a rope swing and build forts in the woods and play a lot of sports. So I think it was a really good balance. Yeah it's funny that you mentioned being outdoors and I was just telling my dad the other day because I've been at my parents house for a little bit.

Srini Rao: How in the 20 years that they've lived in this neighborhood, I honestly told him, I said, I think I can count on one hand, the number of times that I've seen a couple of kids outside playing, and it's like a very upscale residential neighborhood. And I was like, doesn't that seem odd? How is that not odd to anybody?

Because to your point, when we were growing up in the eighties your parents like basically said, be back by dinner. And that was it. You pretty much walked out the door. And yeah, if you were in the house, it was cause you were playing something like video games or board games, but we were outside a lot.

So what do you think has happened to kids in this generation, particularly in the context of gaming and what do you say to parents who are absolutely concerned about this because we've had the CEO we've had the commissioner of the NBA two K league here as a guest. I had this former CEO of take two a company that makes grand theft auto.

He was pretty reluctant to talk about some of these things, I think, probably because it basically a PR gag order kept him on certain talking points. But from your perspective, talk to me about all that.

Blaine Graboyes: Sure. We were the streetlight group, so we had to be home by the time the streetlights were on.

So I, I know exactly what you mean, and it was pretty much expected that you were out of the house during that time. I would say a lot of things contribute to a very skewed situation culturally because you really mentioned, I think a couple of things that are in some ways very separate, but can be conflated into one thing regarding this question of like video games versus outdoor activities, let's say.

Certainly the Grand Theft Auto example you brought up, there's You know, a terrible, misguided, non science based narrative that video games cause violence or antisocial behavior. I'm not aware of any scientific backing for that. It really was just a terrible narrative that got developed and don't want to assume what the motivations were for the folks that were developing it, but it was a really good talking point and a really strong narrative that they created, particularly because it touched on cultural divides and generational divides, right?

So if you and I were kids of the 80s, we're growing up exposed to computers, but our parents and grandparents and legislators and various quote unquote adults weren't. So just like past technology changes and revolutions, if you will, it's easy to become antithetical to the. Paradigm change.

Oh, this didn't exist before, so it's not good. I definitely think that is one. I do think it's hard not to notice that there is an unfortunate trend, which you pointed out, of a lack of Or a reduction to be fair, because I'm always afraid of hyperbolic language. I think it's a little unproductive, right?

So you saw some kids outside playing. You just didn't see as many as you were used to when you were a kid. And I think that there's probably a lot of reasons for that reduction. And I would say a big part of it that I see is really the physical structure of U S I guess you would say towns and.

Neighborhoods and cities. They're not very walkable. We used to walk to all of our friends' houses, we would ride our bikes to someplace or ride our skateboards to pretty far away. And I wouldn't necessarily say, sure there was that trend of kids should be afraid of being far away and strangers.

I don't really feel like that's a huge driver of it, but, If my parents have to drive me in a car to go see my friends, I think that is a huge barrier to entry. That just creates a lot of challenges. And if you go to a school that's 10 15 minutes drive away we could walk back and forth to school when we were kids.

I don't know that everyone could, but everything was very walkable and very accessible in a way that I just don't see in many towns and cities and neighborhoods nowadays.

Srini Rao: Absolutely. It's funny because I, one of my best friends I've met and became friends with him, he ended up being my roommate for three years because we played a video game together.

Literally every Wednesday we would get together and we'd play NBA 2K for three to four hours. And at times he would question whether we were being productive after we'd moved in together. I said, you realize the reason we're living together because this ridiculous game it's what bonded us.

Which I I think that to me speaks to the positive aspects of gaming. But how in the world do you go from being somebody who is tinkering with this stuff as a kid and you don't want to kids play games, but not many think this is what I want to make a career out of.

So how do you go from being this kid who's got this early interest in games to doing all the things you have

Blaine Graboyes: in the industry? I credit near everything with attending Bennington College. I went to Bennington as a photography major. I had amazing exposure to the arts and sciences. But while I was at Bennington, and this was a time when Bennington was extremely small.

Maybe 350 or fewer students on the entire campus. Somehow the school won a grand from a consortium called the new media center that was led by companies like Apple and Adobe and Kodak macro media, which doesn't exist anymore, and they provided technology grants to primarily Ivy league schools. And again, I don't fully understand how Bennington got brought into this consortium, but it ended up that we had a lot of computer equipment really early.

So this would have been early nineties multimedia equipment, scanners, cameras, computers. Early Kodak, the first ever, in fact, Kodak digital camera that we had access to. And because there were no computers on campus before, we didn't have internet. We barely had phones. We didn't have TV. My photography professor, a gentleman named Neil Rappaport, who unfortunately has passed away since.

And my mathematics professor, Ruben Puente Dora. Were the ones leading the effort to build out the new media center. And somehow when I found out about it, I was just instantly excited about the idea and opportunity and started dedicating myself to volunteering and eventually working there. And for me, that was really the start of everything of realizing the.

First of all, potential of all of this technology from a creative standpoint, a storytelling standpoint the ability to make change in the world. But then also from a business and career standpoint, we, I, along with a handful of other students, we started our first company while we were there doing CD ROMs and websites, dating ourselves with the CD ROM bit.

Yeah, we started our first business there at school.

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Srini Rao: Thanks. I hear two different versions of this story when it comes to college for people, those who basically spend the bulk of their college career doing something they hate, working jobs they hate, which is my story. Then I hear stories like yours where people are lucky enough to discover something that sort of drives them towards it at a very young age.

One, why do you think that people miss it? And for young people who are in an educational institution, how do they? Create an environment that basically allows for the discovery of these kinds of experiences and opportunities. I can speak to my experience, which was probably unique ish.

Blaine Graboyes: First of all, I didn't go to college directly after high school. I took a semester off and traveled a bit in the U. S. And that really gave me the time to think more about where I wanted to go to school. Not so much what my career goals were, but the type of environment that I wanted to be in. And ultimately for me, I decided I wanted to be in a rural, not urban environment.

And I really wanted to be in an open ended, creative environment. And Bennington certainly checked all those boxes. I had been lucky enough to be exposed to Bennington. And my. High school girlfriend went to the summer program at Bennington, and when I went up there to visit her, I was just so blown away by the beauty and the resources of the school that it was just a very exciting prospect.

But I would say the big turning point for me was about a year and a half into going to Bennington. I realized I wasn't taking it seriously. And at the time, Bennington was the most expensive college in the country. And I was paying for a large portion of it, including having a job where I woke

,

up at, I think six in the morning to go make clay in the ceramic studio so that I could bang out my college job before the day started. And I just realized I wasn't taking it seriously and I decided to drop out. And originally I wasn't planning to go back. I traveled in the U. S. and ultimately in Europe. And in connecting back with students from Beddington that happened to be In Paris on an international program, I really came to see the mistakes that I had made not taking the previous time seriously and what I could get out of applying myself.

And so for me, it was really reevaluating the choice of why was I there and coming to a resolution of if I was going to be there, I was going to be dedicated. And I went back and I started taking five classes instead of four. I was very lucky, as I mentioned earlier, with exposure to the new media center.

I started doing a lot of hands on work that I just never would have applied myself to before. I guess to generalize that, it's really to have a deep look inside of yourself of why are you doing this? Now what do you get, wanna get out of it? Which I think is often the case, but really, why are you doing this?

Srini Rao: That's one of those questions that I think that is so important and like some version of that comes up in nearly every conversation I have. And the thing I always say is if somebody had asked me to look at that question as an 18 year old kid, I would've thought, this sounds like a bunch of new age nonsense.

You have no idea what you're talking about. But I reflect on it now, and I always wonder, like, how do you integrate something into a curriculum that facilitates this kind of thinking that enables people to look beyond just, hey, I need to take these classes to get this degree to get this job, but really look at, okay, what is the purpose of all this?

What do I want to do? And how does it align with my life goals? And at the same time at that age, I don't think you know enough about yourself or the world to make a long term commitment or decision. I agreed for me, Ben, Bennington, it was a very unique time at Bennington. That's a whole other podcast, but one of the big things about Bennington at the time, I'm not quite sure if it's still exactly the same is.

Blaine Graboyes: You didn't get grades, you get comments, and the comments would range from being very academic to being very open ended. But also, at the time, if you didn't apply yourself, you weren't really going to get a lot of pushback or problem from the institution. But you also weren't going to get a lot of attention from your peers and professors.

And so I thought that self regulation, at least for me, worked really well. It wasn't about getting good grades or bad grades. It was actually about how seriously was everyone around you taking what you were doing. And because of that, I think people that are in those positions where they really have to be responsible for their own outcome and their own success.

For me, it went on to be the foundation to be an entrepreneur. It was very tied into that, and I realized early on I didn't wanna have a job. I didn't wanna just be an employee. That anything I did, I wanted to have now what I would call extreme ownership. It's one of my favorite. Business management books and ideas of extreme ownership, but that I really wanted to be doing something where I was responsible for the outcome.

Srini Rao: Yeah, absolutely. Talking about the sort of stage we were at when you finished college in terms of generation of consoles. And I guess for the sake of my own timeline, like I think of generations of consoles in the following order, it's Nintendo's Sega Genesis Then the Dreamcast era, then we get to PlayStation and then we get to now, which is insane, like the X Box era.

Blaine Graboyes: So I think for us it was all about PS2. Keep in mind, we were somewhat poor college students, so it was very precious. This was also the era of Blockbuster. So you could go rent a game for the weekend at Blockbuster. And certainly the game I remember the most was, I don't know if it was Driver or Driver 2.

Now that's a little fine detail, but for me, it was the greatest driving game ever, had the best physics ever, which is always a problem in every driving game. And we could sit around playing that game on PS2 for hours and days on end. Yeah. I think that the thing that has always struck me, cause I'll go back and watch YouTube clips of some of the video games that we used to play as kids especially because my primary video game is NBA 2k.

Srini Rao: That's I play that in Madden and that's pretty much it. I guess I remember even when we were buying the Xbox series X or the one that came after Xbox one. My friend said, he's it's you don't need to get the more expensive one. You and I only both play one game anyway. So who cares if you don't have more hard drive space?

We're like, good point. But I think that the thing that has always struck me when I compare the video games from the like mid nineties or late eighties to what we see on the screen today. is just how much progress we've made in terms of the graphic design. I can't tell you that there's been more than a handful of times where my dad will come into our home theater, he'll see me playing a game and he's oh, are you guys watching a game on TV?

I'm like, no, this is a video game. Because they've gotten that good so one obviously the technology has evolved significantly to be able to do things like that, but what actually goes into the creative process of building a game from scratch? Like how does something go from like an idea to NBA 2K, which we've gotten every year for

Blaine Graboyes: 20 years?

Yeah certainly graphics quality, I think is. Incredible today. But as we were talking about earlier, one of the things that I've always loved about video games is how immersive they are in your own internal creative mind. And again, we always saw the characters. I didn't see them as like pixelated.

I saw them as like real people and real environments. And I think the fact that the technology is, if you will, backfilling. That for each individual is incredibly exciting. I had an interesting experience the other day where I was watching television and I felt like the TV show I was watching, which was live action to me, looked like, and felt like a video game.

And in this case, it wasn't anything that was meant to look like, or had anything to do really with a video game. It was just how. The lighting and the camera technology and the fact that we're often watching things on screens like an iPad or a computer. So I think it's amazing how it's all really converged, if you will, as well.

And for me, another separate topic is how it's opened up the potential for new types of narrative. Which I think is really exciting. But to your point or question about how do you make a video game? It is, in my opinion, the most difficult creative process in the world that I am familiar with.

As I've always said, if you're making a game, you're going to want to spend every second and every dollar making the best game possible. You will never be done with it, which I think is what most painters or visual artists say. It's not that you're done. It's that you stop. And you have to be.

Absolutely committed to perfection at every single aspect of it, from the original concept, to the writing, to the user interface, to the physics, if that's relative, to the gameplay, to ultimately then the publishing and marketing, which most people don't necessarily think about, but Typically, your marketing budget is going to be equal to, if not greater than, your production budget.

Very similar to Hollywood feature films. Yeah. The amount of effort and investment, whether you're making a small independent game, Or a AAA video game is, as I said before, beyond anything else that I can think of. And in fact, it incorporates almost all of the other creative industries and endeavors into it, right?

Music, visual arts, animation, film, writing graphic design, user interface, programming packaging, marketing, advertising, like basically Industry that you think of comes together to make a video game. Yeah. I think I don't remember which grand theft auto it was. It might've been for if it was, I might be dating myself, but if I remember correctly, it was 2008 when it came out and I remember I had a PlayStation two and I bought it.

Srini Rao: And I remember somewhere reading a headline that video game had generated more money in a weekend than Spider Man had. And I was it blew my mind when I told a friend that he's that's insane. And I said, yeah, but if you think about the demographic of video games it's actually not little kids.

It's people like you and me, because we were the ones who grew up playing this stuff. And I thought about it. I was like, okay who has 60, 70 to spend on a video game? People your age and my age won't bat an eyelash. Cause I remember when you'd ask your parents for a Nintendo game when you were a kid in the mid eighties, it was like 40.

I got maybe one or two a year if I was lucky. And so we played Super Mario Brothers endlessly because it came

Blaine Graboyes: with the console. Yeah, it was definitely birthday and Hanukkah for me to get a new game when I was a kid. Absolutely. The age has continued to increase. I've been a little out of the industry for a couple of years, so I don't know the latest typically your average gamer would be in their early to mid thirties, so they're not teenagers in their parents basement, which is the old stereotype.

They probably going on now to have huge segments in their forties and even early fifties. As you said, they have disposable income. They grew up playing video games. And I think really importantly, and we talked about this a little bit earlier, to a decent degree, not totally, the stereotypes have really been broken down and dismissed.

Yeah. Everyone plays video games. It's the most widely engaged in entertainment globally. And it's not just seen as like geeks and nerds, even though it still might be You know, packaged that way or presented in pop culture that way. Yeah. This ACAST podcast is sponsored by NetSuite, 36, 000, the number of businesses which have upgraded to the number one cloud financial system, NetSuite by Oracle.

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That was the kind of thing it was in our household. She would like, we would be fighting over the controller and she's it's my turn. Which is hilarious. My, my brother in law is my age and his son is in is eight years old and they play video games together. And now you're going to have a new generation growing up playing video game.

Blaine Graboyes: And it's a experience that they can bond on and share to the point we're having earlier, just as much as them going out and playing soccer on a Saturday, which they do as well.

Srini Rao: So talk to me about your post video game career. What has happened since video games, like what have you been into?

And then let's talk about the future of what gaming is going to

Blaine Graboyes: look like. Sure. So I've had the benefit being over in Europe for the last few years and really thinking about the kinds of projects that I want to work on. And for me, the things that I want to work on are things that have really positive global impact.

And so one of the projects

,

that I'm working on that's just on the cusp of launching, so I love sharing it here. is a new coffee brand, which is very different from everything that I've done in the past, but again, utilizes so much of the skills that I've developed. And what's really unique about the coffee brand is that we share 50% of the profits from each bag sold.

With the farmers in Uganda. And so it's not a donation. It's not a charity. It's a new type of global supply chain where everyone can be treated equitably and can not only sell their product at market rates, but can also benefit from the retail side of the business where more of the value is created because of the.

Markup in a product for retail sales. So long winded way of saying what I've been working on for most of the last year is a new coffee brand called Carico. It's online at carico. shop. That'll be launching in the next few days. And it's really been something new for me, but where I've been able to apply so much of my skill set that 25 plus years as an entrepreneur in the technology industry.

Srini Rao: So you mentioned this whole idea of supply chain and farmers, so talk about the conditions are like for them prior to somebody like you coming along, like when they're having to deal, for example, with a Starbucks from I know that the, Basic public relations line is to basically say, Oh we treat our farmers well, blah, blah, blah, blah, blah.

The drill. So what is the reality of that for people?

Blaine Graboyes: I'll admit that I'm learning. We're just getting ready to launch the brand, but in fact, tomorrow I have a call with a gentleman in Uganda who is locally running a huge tree planting campaign, both to preserve the soil on the slopes where the coffee is grown.

But it also provides a very important ecosystem for the other food staples that they grow and consume locally. You can say that tree planting is really important for these farmers in the community. Also really important for providing the coffee that the Western consumer wants to have high quality specialty coffee, single origin.

Grown by farmers and very high quality products. So that's what everybody wants. But what it takes is local people who are committed to their community now having the resources to be able to enact programs and plans that they know will benefit their communities. And in that regard, there isn't much incentive or.

A U. S. based stock market listed company to do anything beyond charity and donations, which ultimately are not going to have a huge impact. There's no incentive for that company to Share revenue back, not share revenue, share profits back with those farmers who will really benefit from it.

And so as we learn more about the challenges that they're having, which are intense. What we believe is the right solution and that we're enacting is to fairly share the profits of the retail market with the farmers and then directly allow them to Use the funds the way they see best in their community.

And it's worth pointing out the Carrico group has been organizing community farmers in Uganda since 1955. And what we're doing now is finally providing them with a U S based retail reach for their product. It's been distributed wholesale and otherwise for quite a while, but penetrating the U S retail market is not straightforward.

That's

Srini Rao: such a drastic shift from making video games to selling coffee. So like, why

did you choose this in particular? I know you mentioned the idea of a global impact and there are probably a whole host of things

Blaine Graboyes: you could do. Sure. So for me, the start of this was. Wanting to create an e commerce business with my sister, who is one of the four partners in the U S business.

And we had the parameter that I stated earlier. We wanted to do, we wanted to be creating an e commerce business that had a positive global impact. Nothing against video games. And I do think that they have various positive impacts, but something that was definitively clear, positive sharing profit with farmers in Uganda.

There's not a lot of debate about the positivity of that. So we started looking into various products and. If you get into really any business, particularly e commerce, what you end up focusing on is supply chain. Do you have a solid, reliable supply chain? And in discussing it with a friend of mine who is one of the other four partners, she shared with me her involvement with the import export.

They had developed this supply chain over roughly 70 years, but they didn't have the experience and expertise for let's call it the last mile. And in many ways, that last mile isn't very different from the last mile on a video game. You've got to make the product. You've got to get it into a warehouse.

You have to find a way to market it and promote it and sell it. You've got to be able to fulfill it. You've got to be able to provide customer service. You have to be able to build a business plan, know how you're going to finance it, whatever your cost of goods and cost of sales, all of these things are the same for any business.

And now we were able to apply it to this existing supply chain. That was really just missing, as I said, that last mile. So in some ways we tripped into coffee. Neither my sister or I are very big coffee drinkers. It's not that we're coffee aficionados. But we're really good at building businesses.

We're really good at e commerce and supply chain, and now we're able to apply it to something that has more meaning, if you will, than other options we could have pursued. Talk to me about

Srini Rao: specifically building businesses, because you've been doing it since you were young. And this is something that I discovered after going to business school.

It's like business school doesn't teach you a damn thing about running a business. It teaches you how to be an employee in somebody else's. And you get out into the, when you start the first business, like there are all these sort of idiosyncrasies that don't express themselves until you do the thing, because I see so many people just standing on the sidelines Oh, I'm going to wait until I'm ready.

And I'll give you a ridiculous example. I have one friend who's been a guest here on the show and another friend I went to business school with and I remember he was working at a pretty big company, the one, the friend who I went to business school with, and he kept. Talking to me about wanting to start this business.

And he had the skills to do it. Like he was in high demand, he's getting paid very well. He printed a business card. My other friend who didn't go to any like special school or anything like that was basically. He lost his job six months before he was about to get married and he and his soon to be wife had just bought a house together.

He didn't print a business card. He didn't do anything. He literally just put up a video tutorial showing people how to use Airtable, put a link at the bottom saying book a consultation with me and he made 10, 000 in the first month and now they're on track to do a million dollars in in revenue this year.

Obviously, like there are two different ways to think about this, but you've had experience building multiple businesses like one. Let's talk about starting. What do people get wrong at the start?

Blaine Graboyes: So I've done a lot of advisory and consulting work for entrepreneurs who have ideas and want to either invest their own capital or raise capital to build businesses.

And so I think I've seen a lot of the challenges and. Issues that early entrepreneurs idea stage, as I would call it, entrepreneurs run into and I would say a big part of it for me is not about building a business plan and. What would often be, I think, business school 101 for me, a lot of it really comes down to building out a financial model that includes two very important things.

It includes the broad strokes of all of resources that you're going to need. You're not going to get it right. Every model is wrong, but at least it's going to give you a sense of wow, I'm going to need 10 employees and this much capital and that sort of thing. And then the other thing that I think is really important in a financial model is unit economics, whether that's your arbitrage of cost per acquisition versus lifetime revenue in some businesses.

Whether it's your cost of goods and cost of sales versus the retail price, whatever it is, I think it's really important to have those metrics around your unit economics. And again, you're going to get these costs wrong and you're going to get these unit economics wrong. But first of all, what it's going to let you do is gut check everything.

Is this a viable idea? Will it work at scale? What are the resources I'm going to be able that I'm going to need to be able to achieve these goals? And I think that I see very often that people don't put in the work to do that for whatever reason. And again, I'm starting from the caveat that whatever model you build will be probably 90% wrong, but the information and perspective that you will gain from building that model is some of the most priceless.

Information you will have in the early stage of your business.

Srini Rao: It's interesting. You mentioned unit economics because I, after reading Adam Smith's book, the wealth of nations, I sat down and did that for the podcast and I thought about it, I was like, okay, what most people might think is, okay, I'm just going to account for the cost of whatever service I'm using to record the podcast, Riverside FM, right?

But I was like, okay we pay a design firm every month. We pay an audio engineer every month. Then we've got our hosting costs. And I was like, okay, now it was actually very eye opening to do that. I was like, okay, now I know actually what it really costs to produce a single episode

Blaine Graboyes: every month.

Exactly. And then for a podcast, I would imagine you're making money from the advertising and sponsorship, let's say, and then you have these expenses. And so you would model out if I reach this many viewers, I could sell this much sponsorship, and this is going to be my revenue rate on that sponsorship or advertising.

And I think just doing the math on that becomes very eye opening, as you said, especially because a lot of the mathematical functions involved in this become very large, right? Using advertising as an example, it's all based typically on CPM, cost per thousand. And when you divide, start dividing things by a thousand your revenue very quickly becomes a lot smaller your audience needs to be a lot larger to be able to achieve the goals that you have to fund all of the expenses that, that you just explained.

And so I think that by just doing some really basic math you're able to very quickly be able to see, is this viable, what's it going to take? And then I think the last piece of that is also what's the real market addressable market that you're going to reach? Who are you really going to be able to reach with this product?

Is that market large enough that when you divide it by all of these other large numbers that you're going to get to a profitability at the end of it? And I think that when you start to filter all of that into a model, and for most people doing an Excel spreadsheet, isn't very fun. I actually find it very fun and almost like a artistic activity, if you will, which I think is something that people often don't want to engage with, they're like, Oh, Excel, maths, that's no fun.

I don't want to do it. But it's such an important part of the early gestational process for a startup. Yeah,

Srini Rao: it's funny. You're talking about this in particular, the math, because my dad and I were having a somewhat heated discussion. I have a cousin who's a a tech employee who got laid off and she's been talking about different business ideas for a while.

And I I said, like, why don't you start a pop up restaurant? And my dad and I were talking about this is, look, I told her to price it at 200 to start it's a small group of people. It's 20 people every month. He's that's absurd. Who's going to pay 200? I was like, you're a cheap Indian.

So you might think that nobody will pay 200. We couldn't seem to get I couldn't get him to understand the point I was like, dad, look, you can't compare a Costco or Amazon to a small business because they don't have the same numbers. Like they, those places have to charge much higher prices.

And he was like, I was like, you should absolutely be thinking about profit from day one. He was like, no, you should establish your brand. I'm like, you're a professor in agriculture. Like you've never built a business. And I think that the idea that you're not thinking about turning a profit on your first attempt is ludicrous.

Like I said, yeah, you might take a loss, but you should not be setting yourself up for one. You should have the numbers so that you don't which was, yeah, that's a whole aside. But so we're talking about this from a math standpoint. Let's talk about this from a mindset standpoint, because firsthand, this is not easy.

It's not something where somebody hands you an instruction manual. It's Hey, let me just read this book how to start a business one on one and next year I'll be worth millions. The biggest problem with textbooks and all this stuff is they don't account for different contexts.

It's very generalized information.

Blaine Graboyes: I agree with that sentiment very strongly. And ultimately being an entrepreneur, certainly in the venture capital funded spaces is not only not for everyone, it's for very few people. It is easily the most demanding environment I would say in the business world that you can get into.

And in fact, Mike and I coined a term that we call the halo syndrome, and it's a little bit about the sparkle, if you will, of the venture capital startup

,

world versus the reality of it. And that's the halo syndrome, if you will. And the reality of it is that it is going to be the most difficult, grueling work of your life.

And you really have to think about whether that is actually what you want to do, and that you are willing to sacrifice everything that you are going to be required to sacrifice to succeed. And I think you made a very important distinction, which is you said, Could you have a startup that from day one is profitable or near about day one, generating a profit?

And I think that is a really great consideration for people to have. And ultimately, that is the biggest difference between, let's say, a retail oriented or a transactional oriented startup and a venture capital funded startup. Where a venture capital funded startup, you have to raise capital to provide you with runway to develop your product, to find your product market fit and do all of that soon enough that your money doesn't run out.

But then also do it well enough that you're going to be able to raise your next round of funding. And I think that is a very difficult and challenging environment. I can speak to that from a lot of personal experience.

Srini Rao: Yeah. And we were fortunate enough to be one of radio public's first investments.

And when they launched their fund pod fund. And that was one of the things it's more money than you've ever seen in your lifetime in your bank account. And you're like this is not mine. My job is to actually make this grow. And I had one venture capitalist here, I believe Jeffrey Veen, and he was a VP at Adobe.

And he said, he's this is a path that's virtually irreversible once you go down it. And to your point, like this is something that you have to decide that you really want. Cause I remember very distinctly this story. My friend, Joseph Logan told me when he was in a restaurant in Boulder and there were these two young founders who had just gotten their first round of funding and.

A VC who was in the restaurant, walked in and he's like, why the hell are you guys celebrating? Your life is over. This isn't the time to celebrate. Because I think that people think of funding as this like moment of celebration. It's no, now the work begins. It's like when authors get a bookie, I always tell them, it's you know what?

Like you haven't made it. Like now the real

Blaine Graboyes: work starts. And I'll take that a step further. By the way, that saying, I've never heard it put that way before, that this is virtually irreversible. I'd go so far as to say it is irreversible. But I like that. That sentiment because I think it is very true and it is lost on most people.

I'll go out on a limb and say something that might be a bit controversial and it relates to this idea of the halo syndrome. Venture funded companies, you are now working for the most demanding boss. And I don't mean leader. Boss that you will ever have. Yeah. And if you're not willing to work for the most demanding boss, again, not leader, because they're providing no leadership, they don't care about leading, they care about getting a return on their investment.

If you're not willing to work for the most demanding boss, the least understanding, The one that truly doesn't care. And again, I'm saying something a bit controversial here, but this is true. Truly doesn't care about you and only cares about you as a return on investment. And as you pointed out, you are now in an irreversible relationship with them.

And I think you have to be very eyes wide open to be successful. In that scenario. Yeah,

Srini Rao: absolutely. I think that I want to bring our conversation full circle based on something that you had said earlier when you were talking about building a game, which I think is equally true for building a company is, and that is that you're never really done and I can't help but think about that cause we've had Justine Musk, Elon's ex wife here.

And I remember her telling me, she said. Yeah, what people don't realize that this is actually a good example of halo syndrome. She's people don't see the amount of work that goes into these accomplishments for people like Elon or Google guys. She's this literally comes at the cost of everything in your life.

And she's I don't think people are aware of how much work goes into this.

Blaine Graboyes: I agree. And I think, unfortunately, particularly in the U S because there's so much admiration for billion dollar unicorns and. That sort of thing. There's nothing you can say to communicate to someone who's just entering it to really have them take that to heart.

And I certainly can say here I have lifelong debilitating ailments. One is tinnitus ringing in my ears. Lo and behold, something that you can develop purely from stress. Something that has no treatment and no cure. And for the rest of my life, I'll have tinnitus from the stress of running a venture funded startup.

Srini Rao: Absolutely. So this idea that the work has never done, I think is integral to success in any field because. I've seen this with authors like who in their mind, like they think, okay, you know what? I will have made it when I hit the New York Times bestsellers and Jolly Dumas will ask people this on his podcast.

And this is where this sort of thought process stem from. He's have you ever had an, I've made it moment. And when I heard that question, I thought, you know what? No, because the moment you think you have made it, you're done. You will rest on your laurels and you will basically stop doing everything that got you to where you're at.

And that's the thing who was at Paul Graham in the, how to start a startup podcast, he said like you might envy Mark Zuckerberg's life, but you got to remember, here's a guy from the time he was 20 years old, who has been running a hundred miles an hour. And he said, the other thing is that, even if you have problems, nobody gives a shit because nobody has any sympathy for a billionaire. And he said he's like Mark, he said Mark Zuckerberg never in his life is going to have the opportunity to go backpacking in Thailand. He's yeah, he shows up in Thailand in a private jet, but it's a total, he said literally from the time he's been 20 years old, he's been just running 100 miles an hour and hadn't and not able

Blaine Graboyes: to stop the work.

Never stops. And. What I like to think about now is the idea of personal sustainability and the time period over which you can be personally sustainable cause it's totally possible to create a startup where you work an hour or two a day and it creates enough revenue for you to have the lifestyle that you want.

It's definitely not going to be a billion dollar unicorn startup, but it very well could be. A great business that sustains yourself and your family. And the way I like to think about these timescales is it's unrealistic to think that you would be sustainable over a day, right? Sometimes you just have a bad day.

Something happens, there's a problem, what have you. Probably very realistic to be sustainable over, let's say a year, right? Could I do last year what I. Do this year probably for most startup folks. So there's some. Window in between that you or I want to find a level of sustainability.

And for me, mathematically, I've been thinking about it a lot. I think it's about nine days. It's a little more than a week. And if I could have nine days that I could basically do those nine days forever. Some are going to be worse, some are going to be better, some are going to have ups, some are going to have downs, some will be life changing, some will be boring, but if I can have some sustainability in that, for me, I think that is the goal that most entrepreneurs, most artists, because artists are entrepreneurs.

Most producers of let's say film, TV, music, artists, writers like yourself, as you mentioned, that's the level of sustainability that I really think people should be striving for because I just think they're going to find a lot more happiness in it than this idea that I'm chasing the ultimate cash out, if you

Srini Rao: will.

Totally. There are two things that I think about from all of this after doing the first round, I started thinking about a series a and one of my friends told me, he said, you realize he's your lifestyle is basically you like to go out and snowboard whenever you want. You travel whenever you want take surf trips.

He's that's going to change. He said, you got to remember, like you built this and you're going to create the very thing. You tried to you built this to avoid, which is having to go to an office every day and deal with people. He said, you want to build a hundred million dollar unicorn. That's not going to happen.

He's you're going to have to be in an office. You're going to have to deal with teams. You're going to have to hire people. He's the question is, do you really want that? And it was one of those come to Jesus moments where I was like I am buying into this halo effect because it was like, Oh, that is glamorous on paper.

And, but the reality of it is very different.

Blaine Graboyes: I think that communicates. That idea so incredibly well of sure it seems cool or glamorous or aspirational private jet by somewhere do all of these really exclusive things, but you're probably. Not doing that in a sustainable way, meaning you're not doing that every nine days.

You're probably doing that once or twice a year, and you're essentially cramming for it on all sides to make room for it. You probably have a bunch of problems that you deal with during that time. Maybe there's another paradigm that has a lot of the same facets of that. You do get to go on a holiday.

It is in a great place. You do interact with really cool people, but you're doing it in a very, I keep using the word sustainable. I think another word for it would be humane wedding.

Srini Rao: Yeah, absolutely. There's one last thing that I want to talk to you about Sam Altman in the Y Combinator Startup School podcast, which I go through that every couple of months just because I find it to be like an MBA in a nine hour podcast better than business school.

There's something that he says to founders, the two things that always stayed with me. One was this idea of long term commitment. He says your greatest competitive advantage is a long term commitment. And then he defined it as 10 years. And he said, a lot of people think that I'm going to work on this thing for three to four years.

And to your point sit on the beach like counting my cash and investing in startups or whatever it is that they dream of. And he said, and the reality is it's a tenure commitment at a minimum. Then the other thing that he said in the very end, he talks about managing your psychology.

And he said people think it gets better when you become successful, but the truth is it actually gets worse. Which I thought was so striking. He said like you basically have a world of problems. And he said like the higher you rise, the greater the fall more or less I'm paraphrasing.

I can see why he would say that, right? Like it's a whole other level of challenges that you just are not prepared to deal with. Like I doubt Zuckerberg when he was sitting in his dorm room at college thought one day I'm going to be held responsible for the disruption of a fucking presidential election.

Blaine Graboyes: I perceive that hopefully he wasn't thinking that and probably unlikely. I think that advice is spot on that. It's going to be 10 years and it's only going to get more difficult. When you start out, you don't have competitors because you don't have a product. You're not doing anything yet. It's only as you start to create the disruption that you set out to do that now.

You have people that see you as a competitor, see you as someone who's disrupting, let's say maybe a industry or a paradigm that they don't want changed. I think that the advice that Altman's giving is spot on. It's going to be longer and more difficult and it's going to continue to get more difficult.

And it's going to come to a crescendo at the exit, because that's the most difficult point. That is the greatest point of risk. So in fact, what you said is true. It is inverse proportional in terms of success to the challenge and difficulty that you are going to be having, and it is ultimately going to come to an apex.

As you ultimately end up hopefully having some kind of a, an exit scenario for the business, which by the way, of course is the only reason anyone invested. Absolutely. This has been incredible. I feel like you could basically teach business school for creatives based on just this conversation alone.

Srini Rao: I have one final question for you, which is how we finish all of our interviews at the unmistakable creative. What do you think it is that makes somebody, or something unmistakable. Being true to yourself. Amazing. I can't thank you enough for taking the time to join us and share your story and your wisdom and your insights with our listeners.

Where can people find out more about you, your work and everything that you're up to?

Blaine Graboyes: Sure. Anyone can find me online at Blaine Global. The website or most socials. And we'd look forward to hearing from folks. Awesome.

Srini Rao: And for everybody listening, we will wrap the show with that.

Blaine Graboyes: This ACAS podcast is sponsored by NetSuite, 36, 000. The number of businesses which have upgraded to the number one cloud financial system, NetSuite by Oracle, 25. NetSuite just turned 25. That's 25 years of helping businesses streamline their finances and reduce costs, one. Because your unique business deserves a customized solution.

And that's NetSuite. Learn more when you download NetSuite's popular Key Performance Indicators Checklist. Absolutely free at netsuite. com slash optimize. That's netsuite. com slash optimize.