 from our studios, in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. Hello everyone, welcome to the special CUBE Conversation where you're in Palo Alto, California. At the CUBE studio, I'm John Furrier, co-host of theCUBE. We're here with Chris Yeh, he's the co-founder and general partner at Blitz Scaling Ventures, author of the book, Blitz Scaling with Reed Hoffman, founder of LinkedIn, a variety of other ventures, also partner at Greylock Partners. Chris, great to see you, I've known you for years. Love the book, love Reed, you guys did a great job, so congratulations. But the big news is, you're now a TV star as one of the original inaugural contestants on the Mental Samurai, just premiered on Fox, was it on Fox? On Fox, nine o'clock on which days? So Mental Samurai is on Fox, Tuesdays at 9 p.m., right after MasterChef Junior. All right, so big thing, so tell us what the show is. So how, take us through the journey. It's a new show, so it's got this kind of like jeopardy vibe where they got to answer tough, tough questions in what looks like a roller coaster kind of arm that moves you around from station to station to kind of jar you up. But it's a lot of precious time clock and hard questions. Tell us about the format, how you got that, give us the whole story. So the story behind Mental Samurai is it's from the producers of American Ninja Warrior, if you've ever seen that show. So American Ninja Warrior is a physical obstacle course and these incredible athletes go through and the key is to get through the obstacle course. If you miss any of the obstacles, you're out. So they took that and they translated it to the mental world and they said, okay, we're going to have a mental obstacle course where you're going to have different kinds of questions. So they have memory questions, sequence questions, knowledge questions, all these things that are tapping different elements of intelligence. And in order to win at the game, you have to get 12 questions right in five minutes or less and you can't get a single question wrong. You have to be perfect. And they do try to jar you up to kind of, you know, scrabble your brain with this device that makes it suspenseful. In watching last night at your watch party in Palo Alto, it was fun to watch because I'm like, okay, it's going to be cool. I'll support Chris, he'll go there, be great on TV. I'm like, oh, that's pretty interesting. It was actually riveting, intense. You have that element of moving around from station to station and it's dramatic. It's kind of a theater of presence. But what's it like in there? Give us some insight. You're coming on in April 30th, so you're yet to come on. But the early contestants, none of them made it to the 100,000. Only one person passed the first threshold. Take us through the format. How many thresholds are there? What's the format? Perfect. Basically, when a competitor gets strapped into the chair, they call it EVA, it's like a robot. And basically, they got it from some company in Germany and it has the ability to move 360 degrees. It's like an industrial robot or something. It makes you feel like you're an astronaut or in one of those centrifugal force things. And the idea is they're adding to the pressure. They're making it more of a challenge. Instead of just jeopardy where you're sitting there and answering questions and bantering with Alex Trebek, you're working against the clock and you're being thrown around by this robot. So what happens is first you try to answer 12 questions correctly in less than five minutes. If you do that, then you make it through to the next round, what they call the circle of samurai, and you win $10,000. The circle of samurai, what happens is there are four questions and you get 90 seconds plus whatever you had left over from your first run to answer those four questions. Answer all four questions correctly. You win $100,000 and the official title of mental samurai. So there's only two levels, circle of samurai, but it gets harder. Also, I noticed that their questions have certain puzzles and there's certain kinds of questions. What's the categories, if you will? What's the categories that they offer? Yeah, so the different categories are knowledge, which is just classic trivia. It's the kind of jeopardy stuff. There's memory where they have something on screen that you have to memorize or maybe they play an audio track that you have to remember what happens. Then there's also sequence where you have to put things in order. So all of these different things are represented by these different towers, which are these gigantic television screens where they present the questions. And the idea is, in order to be truly intelligent, you have to be able to handle all of these different things. You can't just have knowledge. You can't just have pop culture. You got to have everything. So on the candidates, I saw someone from Stanford. I saw an athlete. It's a lot of diversity in candidates. How did they pick the candidates? How did you get involved? Did your phone ring up one day when you identify? They've read your blog. Obviously, you're smart. I've been just up on Facebook. How did you get in there? Excellent question. So the whole process, there's a giant casting department that does all these things. And there's people who just cast people for game shows. And what happened with me is many years ago, back in 2014, my sister worked in Hollywood when I was growing up. She worked for ER and Baywatch and other companies and she still keeps track of the entertainment industry. And she sent me an email saying, hey, here's a casting call for a new show for smart people and you should sign up. And so I replied to the email and said, hey, I'm Chris Ye, I'm this author. I graduated from Stanford when I was 19, I should be on your show. And they did a bunch of auditions with me over the phone and they said, oh, we love you. The network loves you and we'll get in touch. And then I never heard. Turns out that show never got the green light. So they never even shot that show. But that put me on a list with these various casting directors. And for this show, it turns out that there was an executive producer of the show, the creator of the show. His niece was the casting director who interviewed me back in 2014. And she told her uncle, hey, there's this guy Chris Ye and Palo Alto, I think would be great for this new show you're doing. Why don't you reach out to him? So they reached out to me. I did a bunch of Skype auditions. And eventually while I was on my book tour for Blitzscaling, I got the email saying, congratulations, you're part of the season one cast. And on the Skype interviews, was it they grilling you with questions? Was it doing a mock dry run? What was some of the interview vetting questions? So they start off by just asking you about yourself and having you talk about who you are. Because the secret to these shows is none of the competitors are famous in advance or at least very few of them are. There was a guy who was a major league baseball pitcher. There's a guy who was an astronaut. I mean, those guys are kind of famous already. But the whole point is they want to build a story around the person like they do at the Olympics so that people care whether they succeed or not. And so they start off with biographical questions and then they proceed to basically use flash cars to simulate the game and see how well you do. Guys, so they want to basically get the whole story arc because Chris, obviously Chris is Samari, passed the task, graduated when he was 19. Okay, you're book smart. Can you handle the pressure? If you do get it there, is there story lines? So they kind of look from the classic kind of marketing segmentation. Demographics, is there story lines? What was some of the things that they said to you on the feedback? Was there any feedback like you're perfect? We like this about you? Or is it more just cut and dry? Well, I think they said, you know, we love your energy. It's coming through very strongly to the screen. That's fantastic. We like your story. Probably the part I struggled the most with was they said, hey, you know, talk to us about adversity. Talk to us about the challenges that you've overcome. And I tell people, listen, I'm a very lucky guy. A lot of great things have happened to me in life. I don't know if there's that much adversity that I can really complain about. Are there people who deal with these life-threatening illnesses and all this stuff? I don't have that. And so that was probably the part I struggled the most with. Well, you're certainly impressed. I've known you for years. You're a great investor, great person, and a great part of Silicon Valley, so congratulations, good luck on the show. So it's Tuesdays. 9 p.m. 9 p.m. On Fox. On Fox, mental samurai. Congratulations, great to be at the launch party or last night, the watch party, there'll be another one. Now, your episode comes out on April 30th. Yes, so on April 30th, we will have a big Bay Area-wide watch party. I'm assuming that admission will be free, assuming I find the right sponsors. And so I'll come back to you, and I'll let you know where it's gonna be. Maybe we should even film the party. Well, I got one more question on the show. Yes. So you have not been yet on the air, so but you know the result. What was it like sitting in the chair? I mean, what was it personally like for you? I mean, you've taken tests, you've been involved in the situation, you've made some investments, there's probably been some tough term sheets here in their board meetings, and all that experience in your life, what was this compared to, what was it like? Well, it's really a huge adrenaline rush, because if you think about it, there's so many different elements that already make it an adrenaline rush, and they all combine together. First of all, you're in this giant studio, which looks like something out of a space age set with this giant robotic arm. There's hundreds of people around cheering. Then you're strapped into a robotic arm, which basically makes you feel like an astronaut. Like every run starts with you facing straight up. Lying back as if you're about to be launched on a rocket. And then you're answering these difficult questions with time pressure, and then there's Rob Lowe there as well that you're having a conversation with. So all of these things together, you know, your heart, at least for me, my heart was pounding. I was like trying very hard to stay calm, because I knew it was important to stay calm to be able to get through it. Get that recall. All right, Chris, great stuff. Okay, with scaling, with scaling ventures, a very successful concept. I remember when you guys first started doing this at Stanford, you and Reed, were doing the lectures at Stanford Business School. And I'm like, I love this. It was on YouTube, kind of an open project initially. Wasn't really meant to be a book, was more of getting it forward. Now it's a book, a lot of great praise, some criticism from some folks, but in general, it's about scaling ventures, kind of the Silicon Valley way, which is the rocket ship I call the rocket ship ventures. There's still other venture capitals, but great book, feedback from the book and the original days at Stanford. Talk about the blood scaling journey. And one of the things that happened when we did the class at Stanford is we had all these amazing guests come in and speak. So people like Eric Schmidt, people like Diane Greene, people like Brian Chesky, who talked about their experiences. And all of those conversations really formed a key part of the raw material that went into the book. And we began to see patterns emerge. Some pretty fascinating patterns. Things like, for example, a lot of companies, the ones that have done the best job of maintaining their culture, have their founders involved in hiring for the first 500 employees. That was like a magic number that came up over and over again in the interviews. So all this content basically came forward and we said, okay, well, how do we now take this and put it into a systematic framework? So the idea of the book was to compress down 40 hours of video content, incredible conversations and put it in a framework that somebody could read in a couple of hours. It's also one of those things where you get lightning in a ball, it's the classic, you know, in Silicon Valley, I'd say go big or go home, but Blitzscaling is all about something new and something different. And I'm reading a book right now called Loone Shots, which is a goof on moon shots. It's about the loonies who start the real companies. And a lot of the companies that are sort of like Airbnb was passed over on. And they call those loonies, those aren't moon shots, moon shots are well-known buildouts. This is where the Blitzscaling kind of magic happens. Can you just share your thoughts on that? Because that's something that's not always talked about in the mainstream press is that a lot of these Blitzscaling companies are the ones that don't look good on paper initially or ones that no one's talking about. It's not in a category or herd mentality of investors. It's really that outlier. Talk about that dynamic. Yeah, and one of the things that Reid likes to say is that the best possible companies usually sound like they're dumb ideas. And in fact, the best investments he's been a part of as a venture capitalist, those are the ones where there's the greatest controversy around the table. It's not the companies that come in and everyone's like, this is a no brainer, let's do it. It's the companies where there's a big fight. Should we do this? Should we not? And we think the reason is this. Blitzscaling is all about being able to be the first to scale in a winner take most or winner take all market. Now, if you're in a market where everyone's like, this is a great market. This is a great idea. You're gonna have huge competition. You're gonna have a lot of people going after it. It's very difficult to be the first to scale. If you are contrarian and right, you believe something that other people don't believe. You have the space to build that early lead that you can then use to leverage yourself into that enduring market leadership. And one of the things that I would observe from the videos as well is that the other fact that kind of plays into you and I want to get your reaction to this is that there has to be a market shift that goes on too because you have to have a tailwind or a wave to ride because you can be contrarian if there's no wave. So a lot of these companies that you guys highlight have the wave behind them. It was mobile computing, SaaSification, cloud computing, all kind of kind of coming together. Talk about that dynamic in your reaction because that's something where people can get confused on Blitzscaling. They read the book, oh, I'm going to disrupt the dry cleaning business. Well, I mean, not really. I mean, unless there's something different in market conditions, talk about that. Yeah, so with Blitzscaling, you're really talking about a new market or a market that's transforming. So what is it that causes these things to transform? Almost always it's some new form of technological innovation or perhaps a packaging of different technological innovations. Take mobile computing, for example. Many of the components had been around for a while, but it took off when Apple was able to combine together capacitative touchscreens and the form factor and the processor strength being high enough finally and all these things together created the technological innovation. The technological innovation then enables the business model innovation of building an app store and creating a whole new way of thinking about handheld computing. And then based on that business model innovation, you have the strategy innovation of Blitzscaling to allow you to grow rapidly and keep from blowing up when you grow. Yeah, and in the spirit of kind of having kind of a clean entrepreneurial segmentation here, Blitzscaling isn't for everybody. And I want you to talk about that because obviously the book's popular when there's controversy and there was some controversy around the fact that you just can't apply Blitzscaling to everything. We just talked about some of those factors. There are other entrepreneurship models that make sense, but that might not be a fit for Blitzscaling. Can you just unpack that and just explain a minute to explain the difference between a company that's good for Blitzscaling and one that isn't? Well, the key thing you need for Blitzscaling is one of these winner take most or winner take all markets that's just enormous and hugely valuable. All right, the thing about Blitzscaling is it's very risky, it takes a lot of effort, it's very uncomfortable. So it's only worth doing when you have those market dynamics and when that market is really large. And so in the book, we talk about there being many businesses that this doesn't apply to. And we use the example of two companies that were started at the same time. One company is Amazon, which is obviously a Blitzscaling company and a dominant player and a great, great company. And the other is the French Laundry. In fact, Jeff Bezos started Amazon the same year that Thomas Keller started the French Laundry. And the French Laundry still serves just 60 people a day, but it's a great business. It's just a very different kind of business. It's a lifestyle or cash flow business. Think people call it lifestyle business, but mainly it's either a cash flow or not a huge growing market satisfies that need. All right, what's the big learnings that you learned that was something different that you didn't know coming out of the Blitzscaling experience, something that surprised you, something that might have shocked you, something that might have moved you. I mean, you're well read, you're smart. What was some learnings that you learned from the journey? Well, one of the things that was really interesting to me, and I didn't really think about it, and Reid and I come from the startup world, not the big company world. One of the things that surprised me is the receptivity of big companies to these ideas. And they explained it to me and they said, listen, you got to understand with a big company, you think it's just a big company growing at 10, 15% a year, but actually there's units that are growing at 100% a year, there's units that are declining at 50% a year, and figuring out how you can actually continue to grow new businesses quicker than your old businesses die is a huge thing for the big established companies. So that was one of the things that really surprised me, but I'm grateful that it appears that it's applicable. You know, it's interesting, I had a lot of conversations with Michael Dell before, before he went private and after he went private, he essentially was Blitzscaling. He said, I'm going to win or take most in the mature, somewhat declining, massive IT enterprise spend against the HPs of the world, and he's doing it and VMware stock went all the time high. So big companies can Blitzscale, that's the learning. Exactly, and the key thing to remember there is one of the reasons why somebody like Michael Dell went private to do this is that Blitzscaling is all about prioritizing speed over efficiency. Guess who doesn't like that? Wall Street doesn't like that because you're taking a hit to earnings as you invest in a new business. GM, for example, is investing heavily in autonomous vehicles, and that investment is not yet delivering cash, but it's something that is going to create a huge value for General Motors. And so it's really tough to do Blitzscaling as a publicly traded company, though there are examples. You know, I know your partner in the book, Reid Hoffman, as well as in the Blitzscaling at Stanford was visible with LinkedIn and obviously Adventure Capital of Grey Life, but also he was involved with some failed startups on the front end of LinkedIn. So he had some scar tissue on social networking before it became big. Obviously on the knowledge graph that he's building, he built at LinkedIn. I'm sure he had some Blitzscaling lessons. What did he bring to the table? Did he share anything in the classes or privately with you that you could share that might be helpful for people to know? Well, there's a huge number of lessons. Obviously, we drew heavily on Reid's life for the book, but I think you touched on something that a lot of people don't know, which is that LinkedIn is not the first social network that Reid created. Actually, during the dot-com boom, Reid created a company called SocialNet that was one of the world's first social networks. And I actually was one of the few people in the world who signed up and was a member of SocialNet. I think I had the handled net revolutionary on that if you can believe that. And one of the things that Reid learned from his SocialNet experience turned into one of his famous sayings, which is, if you're not embarrassed by your first product launch, you've launched too late. With SocialNet, they spent so much time refining the product and trying to get it perfectly right. And then when they launched it, they discovered what everyone always discovers when they launched, which is the market wants something totally different. We had no idea what people really wanted. And they'd wasted all this time trying to perfect something that they had theoretically thought was what the market wanted, but wasn't actually what the market wanted. And this is what I love about Silicon Valley. You have these kind of stories because that's essentially Agile before Agile came out. They're kind of rearranging the deck chairs, trying to get the perfect crafted product in a world that was moving to more agility, less craftsmanship, although now it's coming back. And also, I talked to Paul Martino who's been on theCUBE before. He's been a tribe with Pinkus. And it's been those founding fathers around these industries. It's interesting how these waves, they start off, they don't get off the ground, but that doesn't mean the category's dead. It's just a timing issue. That's important in a lot of ventures, the timing piece. Talk about that dynamic. Absolutely. When it comes to timing, think about blitz scaling. If you start blitz scaling, you prioritize speed over efficiency. The main question is, is it the right time? So Webban could be taken as an example of blitz scaling. They were spending money wildly and efficiently to build up grocery delivery. Guess what? 2000 was not the right time for it. Now we come around, we see Instacart succeeding, we see other delivery services delivering some value. It just turns out that you have to get the timing right. And market conditions are critical. And that's why blitz scaling can work when the conditions are right. Our days back in the podcast, it was we were right, but timing was off. And this brings up the question of the team. You got to have the right team that can handle the blitz scaling culture and you need the right investors. You've been on both sides of the table. Talk about that dynamic because I think this is probably one of the most important features because saying you're going to do blitz scaling and then getting buy off, but not true commitment from the investors because the whole idea is to plow money into the system. You mentioned Amazon, one of Jeff Bezos' tricks was he always poured money back into the business. So this is a capital strategy as well, financial strategy capital wise, as well as a business trade. Talk about the importance of having that stomach and the culture of blitz scaling. Absolutely. And I think you hit on something very important when you sort of talk about the importance of the investors. So read likes to refer to investors as financing partners or financing co-founders because really they're coming on with you and committing to the same journey that you're going on. And one of the things that I often tell entrepreneurs is you really have to dig deep and make sure you do more due diligence on your investors than you would on your employees. Because if you think about it, if you hire an employee, you can actually fire them. If you take money from an investor, there's no way you can ever get rid of them. So my advice to entrepreneurs is always, well, figure out if they're going to be a good partner for you. And the best way to do that is to go find some of the entrepreneurs they backed who failed and talk to those people. Because that's where the truth will come out, whether they were stood by them in tough times. Exactly. But I think that's classic, that's perfect. But there's notion of having the strategies of the elements of the business model in concert. The financial strategy, the capital strategy with the business strategy and the people strategy all got to be pumping. There can't be really any conflict on that. That's the key point. That's right. There has to be alignment. Because again, you're trying to go as quickly as possible. And if you're running a race car and you have things that are loose and rattling around, you're not going to make it across the finish line. As you pull in for a pit stop and the guys aren't ready to change the tires, you know, you're out of sync, bingo. Chris, great stuff. Blitz Scaling is a great book. Check it out. I recommend it. Remember, Blitz Scaling is not for anyone. It's for the game changers. And again, picking your investors is critical on this. If you pick the wrong investors, Blitz Scaling will blow up in a bad way. So don't pick properly on the visa. Pick your team. Chris, let's talk about you real quick to end the segment on the last talk track. Talk about your background, because you have a fascinating background. I didn't know that you graduated when you were 19 from Stanford, was it? Yes. Stanford at 19, that's a great accomplishment. You've been an entrepreneur, been a VC. Take us through your journey. Give us a quick highlight of your career. So the quick highlight is I grew up in Southern California in Santa Monica, where I graduated from Santa Monica High School along with other luminaries such as Rob Lowe, Robert Downey Jr. and Sean Penn. I didn't go at the same time that they did. They didn't graduate when they were 17. They did not. Then Charlie Sheen also attended Santa Monica High School but dropped out or was expelled. Go figure. I came up to Stanford and I actually studied creative writing and product design. So I was really hitting both sides of the brain and you could see that really coming through in the rest of my career. And then at the time I graduated, which was the mid 1990s, that was when the internet was first opening up. I was convinced the internet was going to be huge and so I just went straight into the internet in 1995 and have been in the startup world ever since. You must have loved that show, Halt and Catch Fire on the series, which I love. Reminiscent. AMC, great show. This is watching down my life as before my eyes, us old folks. Talk about your investment. You are at Wasabi Ventures now, Blitzscaling Ventures. You guys, it looks like you're going to do a little combination to bring capital around. Blitzscaling, advising what's Blitzscaling Ventures? Give a quick commercial. So the best way to think about it is for the entrepreneurs who actually are Blitzscaling. The question is, how are you going to get the help you need to figure out how to steer around the corners to avoid the pitfalls that can occur as you're growing rapidly? And Blitzscaling Ventures is all about that. So obviously I bring a wealth of experience, both my own experience, as well as everything I learned from putting this book together. And the whole goal of Blitzscaling Ventures is to find those entrepreneurs who have those Blitzscalable opportunities and help them navigate through the process. And of course, being a mental samurai that you are, the clock is really important on Blitzscaling. There actually are a lot of similarities between the startup world and mental samurai. Being able to perform under pressure, being able to move as quickly as possible, yet still be accurate. The one difference of course is in our startup world, you often do make mistakes and you have a chance to recover from them. But in mental samurai, you have to be perfect. Speed, alignment, resource management, capital deployment, management team, invests all critical factors in Blitzscaling. Kind of like entrepreneurial going to the next level, whole nother lesson, whole nother battlefield. Certainly the capital markets are flush with cash, post round B. So if you can certainly get altitude, there's a ton of capital. And the key is that capital is necessary for Blitzscaling, but it's not sufficient. You have to take that financial capital and you have to figure out how to combine it with the human capital to actually transform the business and the industry. Well, Chris, I know you got to catch a plane. Thanks for coming by in the studio. Congratulations on the mental samurai. Great show, I'm looking forward to April 30th, Tuesdays at nine o'clock, the mental samurai. Chris will be an all-girl contestant. We'll see how he does. He's tight-lipped. He's not breaking his disclosure. I've got legal requirements. I can't say anything. I honestly can say he's sticking to his words. Amanda was worried. Chris, great to see you. Venture capitalist, entrepreneur, kind of eventually want to talk to Chris Yea, co-founder and general partner of Blitzscaling. I'm John Furrier with theCUBE. Thanks for watching.