How consumer fintech Titan is navigating the financial crisis.
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I'm James Vincent, a founding partner at Foundr. And you're listening to the Most Innovative Companies podcast from Fast Company, where we speak to visionary founders to understand how they think, how they innovate, and what lessons they have to help you and businesses of every shape and size. ♪

Innovation is a hard word to define. I think sometimes people confuse it with disruption. I think disruption is making a change to something, sometimes without the intentionality of understanding the implication of it. And what's most important is that you consider the impact of technology on the human condition. For me, innovation is improving the human condition. Disruption is simply disrupting something and changing it. That is not necessarily a good thing.

My example here from my time working with Steve Jobs at Apple is his definition of innovation is that it would improve the human condition. His thought around how to think about that was every question involves a thousand no's for every yes.

Intentionality, good strategy means saying no to things. Perhaps one of the challenges of the last decade is that so much opportunity has led to too many yeses and not enough nos. A good day is actually okay to say no a few times because no to a few things means more wood behind the arrows of the yes.

And what that means is you become an intentional company. You don't become a company that is in what I like to say, constant beta. We're constantly trying this and constantly trying that. I think the brands of today are in meta. What I mean is they have an intention, they know where they're going, and they make a very clear beeline for that with every product they build. Let me give you an example. Steve's belief in privacy pretty much preceded the internet. At the

At the time, people didn't really understand why Steve was so pronounced.

He wrote a white paper on how important privacy was, knowing and understanding what was about to happen. I think we've seen today the implications of privacy not being taken as seriously as they should have been. His commitment to privacy meant that Apple has never used individuals' data and sold it to other people, nor used it in a way that's not befitting of the trust that you would give a company like Apple.

They aggregate data and make better products. That's fine. That's called federated learning. It's an AI term. It means you put all the data together and you learn stuff. But if you take individual data and you then exploit it because you gave it for free, that's not a good exchange. That's not a free lunch.

And those things are not, for me, innovation. That's simply disruption for the sake of it, and it does not improve the world. And innovation is there to improve the world. I think the strength of Steve Jobs was he's the first humanist in technology. Since then, there have been a number attempting to manage that interaction between the human condition and technology in a mindful and intentional way.

My next guest is Joe from Titan, who I believe is also of that mind. And here's my conversation with Joe.

Joe, what's up, man? How are you? What's going on? Good to see you again. Yeah, nice to see you too. This is Joe from Titan. Thanks for coming. Great to have you. Joe is a co-founder and co-CEO of a terrific fintech. We're going to cover a lot today. I think he's got a lot to teach people about how you run a company, a small company, very successful in a challenging time. But before I describe it, Joe, tell us just a quick pricey on Titan, how it

how it came about, what it's about, what you do, and how come it's doing so well. Thanks for having me, James. Titan's an investment management platform. We're looking to be the Schwab for our generation or the Fidelity for our generation. Ultimately brought me here to do this. I'm from a small town in New Jersey called Hillsboro. There's roughly 40,000 people there. So when I went to go study at Penn, Wharton for undergrad, I had a really significant culture shock.

Nobody taught me what to do with my money despite me studying finance, had to pay off student loans, then went to work at Goldman Sachs. Same drill, lots of culture shock, great place. Then had the opportunity to continue working at really awesome institutions. It just seemed like this money problem, which I had personally once I paid off my student loans.

Everyone was sending me a bunch of stuff, places where I could buy ETFs, places where I could trade myself. I was like, got it. But I know a lot of the smartest friends I know of from undergrad, what they're doing with their careers. And those are not places where I could put my own money or my friends and family. Like that is just,

a locked world. And so ultimately, Titan was started out of emotional frustration on the perception that there's all this stuff. Joe, how come you're not happy with how you're investing your money? To me, wanting to build a bridge to a world I knew was possible. And then it since has evolved.

Fantastic. What a crazy time to have this conversation. I want to make sure that as we go through the conversation that people in the Fast Company community are really gaining the benefit of the insight that you have in running not just a FinTech,

but also a small company through a very challenging period. I'd love to really start right now. I mean, here we are June 2022, and there's been a major readjustment to the marketplace. I found myself at tech conferences just in the last couple of weeks in London and in Stockholm, and everybody's kind of sharing their different points of view on how, you know, is this a U-shape, a V-shape?

Is it 2001? Is it 2008, 9? Is 2022 a different kind of showdown

So maybe we start there because, you know, you run a FinTech, maybe you know a thing or two about this. No, it's a really interesting time period for sure. It's almost like you've had this. We use, internally, we use weather analogies a lot. So you can say, like, the world's been extremely sunny, 72 degrees, you're on the beach, anything you do is up and to the right. And, you know, the weather has changed. Like, it is insane.

It is rainy, it's cloudy, there's some thunderstorms. So it's like a real opportunity for the folks who said when it's really easy,

It's a sunshine. I'm going to be a long-term thinker. I'm going to be a long-term builder. It's all really easy to say when the weather's going your way. How do you then stick to those principles and not only be principle-driven, but very in tune with reality? Now sort of is where everybody had their practice over the last five to seven years. You can think of now almost as game day in a way as operators. Right. I mean, one of the features of the venture-backed world, of course, is that, you know,

that money has been cheap and plentiful. And there've been many, many operators chasing big opportunities. But the expectation is that over the next three to six months, there'll be some thinning out of that. And so I just want to try and understand the challenges of running a company through that period.

and the opportunities of running a company through that period. I'd almost use like a nautical metaphor here, which is sort of set sail. You have a really grand vision. Here's where we're going to go. We're going to go to the new world. We're going to bring all of our customers to the new world.

And when you think about it, the goal then for folks who are at the helm is to determine where you should point the sales. Do we have to go north? Do we have to go south? Do we have to take a slight detour? And so right now is a really, really interesting opportunity for folks to not just do what consensus is saying and say, hey, shore up your balance sheet, trim some costs. You might need more runway than you think. That's definitely consensus and it's table stakes.

But where can you play offense? Where can you be pointing to the sales to actually go get to your destination faster despite the headline that the weather's changed? That's like what we're thinking about all the time. Like we're in the financial technology space. So how that applies to us is what are the financial products, services, and tools that people will need in a recession?

And that's what we're waking up in sort of from a call of duty standpoint. So it's something we're thinking about nonstop. Where do we point the sails? How do we not just play defense, which the world is calling you to do, but what will be needed? How do you play offense during this time? Because the ship still needs to go to the destination. Right.

It's interesting, highly concentrated in the venture world particularly, and we work with so many different founders that we get a lot of experience and a lot of the advice that certainly venture-backed board members are giving is stop spending. On one level, it's kind of understandable, right? You look at the numbers and you go, whoa, wait a second, that's not going in the right direction and it's not looking too good in the future. And on the other level, it's

It's almost precisely the moment where you should deploy in certain areas and find if all of your competitors are not spending, that might well be the very opportunity when you should. How do you think about that? Yeah, I totally agree. If you take a look even at us internally, we're about to hit the highest level of output that we're ever going to have as a business is right now during a recession.

I think it's totally wise to ensure your ship is sturdy, it can last through the storm. But if you abandon your customers, abandon innovating, abandon thinking about what do they need right in this moment, you're really abdicating not only from a mission standpoint, but also a business standpoint, a really amazing opportunity to grow.

And so the thing that folks are wrestling with is you've been getting a lot of almost like mixed messages the last few years. It's a bull market. What should you keep doing? What should you not keep doing? Right now, it's sort of the thing everybody's been preparing for, which are when, you know,

When tides get a little more choppy, you really find out, like, do you have a sturdy boat? And are you good at navigating those shifting tides? So I believe that if you have a lot of experience working with businesses in previous market cycles too, if you're going to do something great and you're going to try to do something societal, you actually need, counterintuitively, a disorienting event to build something transcendental.

And so you've seen Airbnb, I know you've seen Apple, like both of those companies sort of had like really hallmark moments, not during the bull cycle, but actually during bear markets. Yeah. You know, one of the most challenging recessions was post.com. And there was that challenging moment in 2001, 2002. If you have a lot of money, then you try a bunch of stuff. You do a bunch of growth marketing. You spend extra money over here. You try three different ways instead of one, but maybe there's some discipline to business.

that says, we're really good at this one thing. Let's make sure we're really good at it. And then we'll do the next thing. And then maybe we'll do the next thing. Whereas if there's plentiful cash and lots of opportunity, maybe you try all three things and there's not intentionality behind the company. And so I think some of that self-rigor that maybe a downturn imposes is healthy. Super healthy. I totally agree. It's like one of the things we've been thinking through is what should change

in response to historic market conditions and what doesn't change. And like you were suggesting with like Apple and Airbnb, vision, long-term building, we are nonstop going to build the best for our customers, doesn't change.

And then what you're commenting on is like if capital and resourcing is more limited, you're not going to just in theory bloat the organization with headcount. You're going to try to find ways to do more with less. That means you have to take fewer at-bats is what you're saying. And so hence, from a process standpoint, focus really becomes critical. Like how do you pick the couple things? Like what are the two to three ideas that a company has in any given year? Right. Okay.

I can give you a million Steve anecdotes, but I'd love you to talk about Titan because I really think being a member, knowing and understanding it pretty well, you and I have worked on it together. I think there's a bunch of FinTech apps that allow you to go on there and do things quick. They remove friction. They don't tell you everything.

They tell you what you can do. They don't tell you some of the things that maybe you should know before you do that thing. So I just want you to talk about that in a different way. You raised a really good point earlier, which is just about, in particular right now, how important history is. With us, money is a really, really old category.

And in particular right now, you know, some of the the four persons who built other businesses might pat us on the head and be like, you have your first market cycle. This is par for the course. We had to build ours through several world wars. You could talk about Fidelity, which had a lead through the Second World War. I know Schwab, I think, went public a few weeks before the 87 crash.

And so here we are in our first market correction and they'd probably be like, get used to it. It's par for the course. With respect to how like human beings and experiences, I fully believe human beings are more similar over time than we are different.

And money, when you think about what are the offline experiences of money today, if you can afford it, you likely have a private wealth advisor. What that wealth advisor does is effectively provide two things for you. One is what we call the information layer. James, I'm your source of confidence. I'm going to help dissect all this crazy information that you're seeing in the world. And I'm going to really figure out what it means for you and provide you really smart perspectives. That's the information layer.

Then you have the financial layer. Hey, James, we're going to invest you in China internet or emerging markets. Let's put a little bit in venture capital, a little bit in charitable causes that you're a fan of. We'll have a large portion of it in blue chip stocks. So this is effectively an offline behavior. If you can afford it, largely inaccessible, you can think of, let's call it like Morgan Stanley, Goldman, you name it. They all have really big units that are great if you can afford it.

Then you've totally flipped the script. Like, all right, how does an everyday human manage your money? You probably have a commoditized tool where they just sort of shoo-shoo you aside. And he said, go ham, do whatever you want, buy whatever stocks you want, buy an NFT, go ham. Like, we do not care about your risk-adjusted returns. All we care about is that you can do whatever you want in the lowest, cheapest way possible. And it's a really, really

bad dichotomy in the world that I obsess over trying to fix. So yeah, I think to your point, it's just so rooted in the human experience. And it's very, very

easy to just see despite all this consumer fintech stuff. It's effectively the wild west. I often use, we're very, very rigorous on product metrics and so on. I often resort to very simplistic means to gut check things in the world. I call it like the bagel shop test. If you walked up to someone in the bagel shop, would you think their problem is solved? So for example, if you walked up to someone here in New York and

And you said, you've walked in a bagel shop and you say, hey, how do I get a taxi? They're going to probably look at you and laugh. They're going to be like, there's this app. And in fact, there's two of them. One has a black logo. The other has a purple logo. Uber and Lyft. You push a button and the taxi comes to you. Don't ask me dumb questions sort of thing. If you go into a bagel shop and you ask someone, how do you manage your money? You'll probably get a markedly different answer. One would be sort of this

shoulder shrug, you know, sort of cobble it together, blah, blah, blah, right? You get a mix of answers. Or you'll get someone who tries to feign really intense confidence despite, you know, not necessarily having studied investing.

Yeah, I think about stuff at a societal level, passing those sorts of really clear toll roads that are the human to human tests, whether a product really is solving the problem. We have yet to see in the new age of the consumer fintech category, someone that's actually solved the problem that passes that test.

You know, you raise such an interesting issue because I mean, I'm going to put a point on it. I think be careful what you democratize. Love that. It's interesting because I think everybody just kind of assumes that you go ahead and democratize everything and everybody has access to everything. And to a degree, that's the right thing to do. Democratization of technology was always at the core of Apple. Democratization of travel was at the core of Airbnb.

But at the same time, I think there's a responsibility as you go democratize. Actually, this is democracy using the very word democracy, which is a challenging institution and requires a lot of information and knowledge, some of which gets out, some of which doesn't get out, which may be under question right now.

But be careful what you democratize. So if you tell people, lie on the couch, go invest your money, if it happens to be on Reddit and there's a really good whatever and all your buddies are all investing in it, then why don't you take all of your hard-earned savings for the last five years and throw it all in there because it's going up.

And I think that's challenging because the rest of the world kind of works that way. But it's the difference between something that you should just go ahead and fool around with and something that you should actually think about. It's, of course, easy for companies to come along and say, everything should be democratized. You should go ahead and do whatever you like. Like, everybody should have access to absolutely everything.

And I think that the thoughtful answer, as I'm hearing you say it, is not a lack of access because I know that your minimums are like a hundred bucks. Like this isn't like a hedge fund that you're good. I got $10 million to get the smartest people from Wharton and McKinsey and Goldman, which I know you guys are always.

I know you're too humble to say that, but that's like the level of the education of you and Clay, your partner and the team is at the very highest level. And all they did was manage billionaires hedge funds. And here they are running an app called Titan, which allows you to go in with a hundred bucks and invest in a basket and a series of billionaires.

very, very thoughtfully managed funds, each one of which they communicate with you every single day. Every single day I get an email, there's a video, there's a, we just did this. Here's what we think about the market. This is what we think about crypto. This is how you should think about long-term, short-term. We should be on offshore. This is what. So the way I think about that with you is you are democratizing access, but you're democratizing access to knowledge, right?

as much as to money. For sure. And so you took that responsibility and you said, right, consciously or unconsciously, I'm sure very consciously, you're like, if we're going to let people do this, then let's put a level of

safety around it, put it in a basket and have a professional manager that understands it. But also as we're doing that, because everybody wants to be involved, right? They all want to be involved. They want that little dopamine hit. So I feel like I get a dopamine hit from Titan because you send me an email every day where I'm like, oh, that's interesting. Oh, that's interesting. And they're not boring. You know, I'm with some other institutions that are some of the ones you mentioned before, and I don't read those.

They're just not that interesting. You guys are like a little poppy in the way you say things. Clay says some stuff. You say some stuff on emails. And I'm like, this really helps me understand what's going on with inflation or with interest rates or with the stock market. So I think, yes, you're democratizing things, but that it's the knowledge that you're democratizing as much as it is the access

So being able to invest in that manner. Am I putting words in your mouth or would you say it another way? I should just keep giving you the microphone. We think about it almost like Maslow's hierarchy of needs, at least from products and services. So it's like the base layer, democratize all the features and tools, ensure they're tech-enabled and that they can be used.

And then from there, you started to get to higher order needs. So what is the outcome-oriented layer? What's the responsibility layer? You've seen a lot of the social platforms start to think about the data layer now that they've effectively got the technology to work. And so in our category, it's sort of the same. We've seen investing infrastructure API companies be built. We've been how to connect your bank. There's several companies that do that. There's underlying custodians. There's been a lot of do-it-yourself trading platforms. So great, that's sort of like the

bottom part of Maslow's hierarchy of needs necessary. But when you zoom out and you think about just from an outcome orientation, whether it's not just can you rent

a vacation property, but will you feel like you had a great experience and connect with the underlying community there? You start to realize a new approach to the problems required. So you almost can see how Airbnb was a natural evolution from like hotels.com. And then with us, you can sort of see like the evolution from there's a lot of just do-it-yourself players. And that was great. That's sort of like the second generation of fintech companies. But that is ultimately just one aisle in what I would call the money store. And that's

there are many other problems that need to be solved if the end goal isn't just get customer and aisle one of the money store. If the end goal is customer walks out feeling really confident about where their capital's invested, feeling super educated, and ultimately does have an amazing wealth outcome based upon their goals,

that is a way different problem to solve for. You have to think about the other aisles of the store. You have to think about how, if required, you handhold a customer through the store because no one in university taught them what to do with their finances. It's how you think about their engagement with a specific product. So this is more nuanced, but for example, if you buy, I don't know, a share of Google,

Google isn't going to talk back to you. Like the CFO of Google isn't going to say, hey, James, welcome aboard to Google stock. We're glad to have you. With technology, the same tools you give to LeBron James and Serena Williams to give us sports highlights on Instagram, in theory, you could start to give it to an investment manager to have one-to-many client relationships. So these are sort of principles I believe the next money store will operate by. So it's really exciting to

to be able to start thinking about, going back to where this started, how do you think about your long-term vision in the context of the reality of the market climate of any given day? Here's a very natural one for us, which is, all right, if you're going to go rebuild the money store, you should probably focus then on all the all-weather parts of the aisles, knowing we're in an all-weather environment. And so not only the best businesses, but the wealthiest investors,

I can tell you, and I don't want to name firms, those firms smell blood in the water and they're about to start deploying capital like they've never seen before. And no normal person thinks about it that way. That was kind of what I picked up being in these various tech conferences was this sense that some people are seeing the bottom and seeing the opportunity in that. I mean, look, here we are in the middle of Wall Street.

I mean, we're right down here in the heart of Manhattan. It's the world capital of capitalism, of the capital order, let's say. And one of the things when you and I and our teams, you and Clay and Stephen and Nick and Becker, all of our teams work together. One of the things we talked about was this notion of a new capital order and how opportunity

can be presented to people that don't necessarily. And you told that wonderful story about the restaurant, which, and the off menu. So people come in the front door, I'll do the short version. People come in the front door and they get this menu that has like five things on it. And they're like, okay, great. The McDonald's menu. I was like, oh, you want it with cheese or no cheese? You're like, okay, great. And it turns out, of course,

People with money are not looking at that menu. They're going in to go talk to the chef to figure out exactly what they want. And so where do you fit in that sort of five things on the menu to like, how do you think about that? It's your story, so I don't want to steal it from you. Goals to build every page of the menu for everyone. And it's like really, really exciting. Like when you think about it, for anybody listening that's a founder, like if you're going to

try to go found something and work on a problem. It better be a lifelong problem. This one should take a while. I think capital is inherently biological. And I feel like with the digitization of money, you've lost the inherent biology of like what it means to go make an investment in something and reap the possible gains. Like the concept of like a literal treasure chest, which was a physical thing and it's a box.

and there's gold coming out of it. That's sort of a like physical marker of like one's wealth and you watch it grow. The digitization of it almost makes it really easy to day trade. So when you think about capital being biological, it seems like you're, like the way we've structured society, we're going to give you a brief period and you're going to have to get smart. And that's like year zero to 18.

But then after that, good luck. Get ready. And the way it works, at least domestically in the United States, is you then work. We pay you currency to signal that effort. And then you can go take that and you can go spend it. But a key part of what's really exciting is you can take your work and you can say, I want to contribute it back to the world.

And because of this, the world is going to grow. So collectively, all of our earnings, whenever anybody buys Google stock or Amazon stock, that's effectively the world saying, hey, Andy Jassy, who now is the CEO of Amazon, we believe you deserve our hard work and our savings. And then Andy says, great, I'm going to go put it to use. I'm going to go help e-commerce take up a broader percent of

of the online spend. And then hence the people who invested, they get some capital back. And that's an inherent sort of like little infinity sign. And that's what I mean by capital is biological. And it's really, really important that we all come together via the market and determine what should live and what should die. And I feel like folks under appreciate their ability to play judge and jury on causes, companies, ideas in the world.

And knowing right now that we're in a time where capital is not going to be as free flowing, it's a really important exercise, which venture backed, uh,

theses, should we back? Should we not back? Which public companies that are on their heels and let's say the stock's down 40, 50%, where should we be investors and be giving them a minute to breathe? And that's like a really, really important question that we have yet to answer from like a Maslow hierarchy of needs standpoint, at least in the category. Yeah. Since you mentioned it, one of the obviously challenging places is ESG, sustainability, like those kinds of areas. I've spent a lot of time in Europe and

Frankly, all investing is ESG or better, meaning that just everybody has some rating, some sense of how good or bad the companies are that they invest in. And so where does that take us with a generation coming through who we know to be very concerned about these issues, wanting to make real material change?

How will that impact investing in the future? How do you see that going? So ESG right now, I believe, is a peripheral concept of something really important. The thing that's really important is that you're either building or investing, you're building technology or investing your own capital with purpose and positive intent to make sure that the world doesn't suffer because of it, because then you have bigger issues.

So let's say that's like sort of the root thing. Then on the periphery, you've created certain financial products called ESG, which try to do that in a very, very, I would call it surface level approach. Like, let's just take a look at governance principles.

But it goes way, way, way deeper. Like there are just broader ways and themes that you should be able to embed purpose into both the products and services you're offering. So you shouldn't just try to sell customers an ESG ETF.

You should try to ensure that, let's say, they're not trading in and out of a product during a down market because then ultimately their wealth outcome is really harmed. Or you shouldn't just call, just try to invest in, let's say, certain sectors of the world that others have deemed less ESG friendly. We should really try to figure out very savvy and sophisticated ways to power the world forward

in an environmentally conscious way so an example of this and there's a emerging whispers that like carbon offsets are becoming a really exciting investment opportunity and so that's just like a next generation thought so i think the the principles like that where you were mentioning it just to me has signaled there's something much much much deeper just the beginning and i call esg v1 and vf is going to v final is going to be a lot more robust yeah um

I mean, our sense at Foundr is we're working with at least half the companies we work with are working on something related to sustainability, whether it's new foods or ag tech or biology, bioremedial, the age of biology and bioengineering and the ability to create all kinds of things that will sort of take us past the chemical age.

All of them are not ready today. But I think one of the reasons that keeps us future optimistic is the sense of working with some of these really leading and bleeding edge companies who have actually through COVID, because COVID, it's almost forgotten that we just had two years of COVID. I was saying maybe a year or so ago, is it 2030 already? Did we skip forward a generation?

because we moved so fast into this sort of like digitally acceptable version, you know, where even now hybrid really means like you work one or two days a week, you know? And so-

You move into a situation where the future has happened much faster than we had expected. And there's good and bad to that, of course. There's sort of the wobbles that people get as that change happens so fast. But at the same time, your grandmother can do telemedicine and then press click and order food and medicine that arrives when they maybe couldn't do that in the past.

And so there are certainly opportunities from that. But it seems to me that in that leap forward, there's definitely this, as we enter this new age, which is

about understanding that as a company, you're kind of an interaction with a new world rather than a reaction to an old world. One of the senses I get with, and some of the challenges with larger companies that have been established in a period previous to this, maybe 20 years ago, maybe 50, 100 years ago,

is a challenge of how to solve the innovators dilemma. So imagine yourself not in a startup of 120 people well-financed and off as a rocket ship, but imagine yourself as an innovation person within a larger company that has an established base that's been going for decades,

And maybe actually companies like yours nipping at their heels. If I turn to the Fast Company community and ask myself, what should they be doing? How should they be thinking about the challenge, the opportunity of resolving that innovator's dilemma? Do you have ideas about how you might take what you've learned as an innovator, as a CEO, co-CEO of a small venture-backed fintech company and talk about

about how that might have impacts and lessons for people in larger companies of different shapes and sizes. Definitely. One of the things that's really interesting is how it should apply at the larger scale. And like candidly, just to be very humble, it seems like we're in a phase where

you know it's really sexy to be a founder and so on but in reality if you can nail innovation right at these larger companies you can you can disseminate that innovation much faster than an early stage company that doesn't yet have distribution so it's really important for folks who are at these larger companies to start thinking about innovation obviously there's it's a it can possibly move slower uh you need to gather more folks along so i think the key

thing for folks to think about is the process by which innovation occurs at these larger businesses. And so, for example, one one tactical thing that we think about all the time is what communication infrastructure do you need to have in place so that you can have really intense output? And what I mean by that is let's do a tactical example like feedback.

Most people, let's say you have a manager, either upwards feedback or downwards feedback you want to give. They'll wait to, let's say, an event where someone's underperformed and then you start having your thoughts. Okay, do I have to wait for our next one-on-one? Do I have to wait for the quarterly cycle? Okay, let me log it in a notepad. And so a key unlock there is imagine right when you're kicking off a relationship with someone at work. You say, hey, really excited to work with you.

I know I'll make mistakes. You might make some mistakes. I'll do something super well. You'll do things super well. Imagine if we could just create a channel,

where we can just talk in real time about that stuff. And then what we've seen is you sort of hack feedback and communication at new levels that have never been seen before. So let's call that an example of putting in place feedback infrastructure before you even need to give feedback and why that's so important. I don't work at a large company today, so I'm only conjecturing and adding a few hypotheses. One example of maybe something tactical folks could test is do you need to have an

innovation infrastructure in place before you even start to think about innovating. So maybe it's at the annual cycle. Hey, of our resources that we're going to allocate this year, how many should we be allocating to innovation? And what does that look like on a monthly cadence?

And what stuff would we just say, all right, that's not for us. That's a little too early stage versus where are we going to really embrace? I like the sort of attitudinal shift that you suggested, which was kind of like, no, I've been in this company for 12 years and see where I'm going to go. And it was like, no, no, no. Hey, new guy, new project, new thing. How are we going to like, let's make this be like the best it can be. Like, what's the challenge?

Let's have an open dialogue. Let's figure out how we do it, which is kind of the go-to sprint mentality of a founder-based company because you don't have that much time. You don't have that much runway. Let's imagine a company that has a three to four to five to 10-year runway if they've just carried on doing the same old thing, right? I might argue in the 90s, that's what Microsoft did.

They had Office and Windows and they didn't bother innovating and we just ate their lunch and brought the iPhone in the App Store and Microsoft lost the consumer. It's actually created a fairly decent, a very successful corporate business for itself.

It had to regenerate itself because it basically had the owners of the company, the major people in the company, were too vested in the current. But I'll maybe just go back a little bit and tell you the story that Brian at Airbnb told me about how to solve the innovator's dilemma. He said, look, we're a whatever they were. They were a few thousand people already because they grew rather fast.

He said, "I feel like I need to solve the innovator's dilemma." He talked to me about this book called Zone to Win, which is a very old book actually, but it basically describes that most of the people in your core company are doing the thing that you told them to do, and they're very good at it. Then that's the top square and the bottom square below that is all the improvements you're going to make to that experience or product. You're going to carry on doing that and you will just carry on doing that and that's fine if you want to carry on on that trajectory.

But back in 2015, Brian very distinctly said to me, he said, I'm in the accommodation business and it's half a trillion dollars. By the time I IPO, I want to be in the travel business because that's a $3 trillion business. And so the way I do that is I get people to understand that when they go to Airbnb, they don't just stay, but they live in the travel that they're a part of. And so I need to, I have this amazing community. So how do I create a product that connects the community with the host? You know, back to the points I was making before.

And so after a year of working at Airbnb two days a week, I was able to sort of help them and they mostly developed it themselves. I just sort of pushed them a little bit in some places, but created the Experiences platform that then became the Trips platform, which was this, he stood in front, it was kind of an Apple-like keynote, and he stood in front with all these little icons of all these trips he could take. And it began to change the perception of Airbnb in everybody's lives.

So I think solving the innovator's dilemma for people in larger companies, we were at the Fast Company Impact Council just a couple of weeks ago, and I met a whole bunch of people from all manner of company. And they were often asking the question of what can we learn? What can we learn from founders? And I think a part of this whole podcast series is going to be what can we pass on?

Like what are the lessons that people that are not in a small, I've got a brand new idea, let's go. But I've got an idea that's established, doing pretty well. Where do I go next? How do I make sure my people are as motivated

to create innovation in a company that is relatively secure. Yeah, it's really hard. One of the, when I was hearing, one of the things that came to mind was just how important people are to that side of the equation. Like one instant way someone can really make the company more innovative is appropriately assessing that variable in hiring. If you just hire a whole crop of

un-innovated people who are, let's say, more risk-off, who just want to do more of the status quo, you've already probably have too much of an uphill battle in just organizational politics to go get ahead. But if you can hire and assess and have the right performance incentives at your company, rewarding innovative behavior. So, for example,

This is probably overly tactical, but imagine if literally in the performance review for every one of those employees, there's a box, which is what new innovative idea did this person execute on and ship, even if it failed? And then are folks showing up empty-handed during performance reviews to this core box of how compensation is determined? I know you mentioned Steve and you're referencing him. Pixar is the ultimate argument in favor of you need to get the human beings right or

or else it's probably game over. Like I think Pixar has a monopoly on some of the best digital storytellers in the world. And that is one of the biggest reasons why they're able to just consistently print 95% Rotten Tomatoes on any film that comes out. Talking about Pixar is awesome, but it's also, I take inspiration not only for how we ship consumer FinTech product, like for example,

They've embedded creativity and innovation is effectively just creativity. That's right. You could say like applied creativity That's right. It's called innovation. Okay. So for example, like how did they innovate on? Like one of their films ratatouille which was set in Paris Yeah, they effectively sent the whole team to Paris including going into the sewers to understand how rats live and

And now you have this film that the New York Times reviews and says it's a masterpiece. What did we do with our product and engineering team for mini offsite? We had people go to the best consumer experiences we could find in New York because we were studying what are the best five-star experiences you can find, whether it's shopping for clothes, let's say you're searching for travel or a concierge. We had people just study like what makes an unbelievable human experience from that regard. And then how do we then take

that and put it into a mobile app. And that stuff, we're going to start shipping probably on our roadmap come mid-July, mid-August. That's an example of what anybody could do, right? Anybody could do that. That's a piece of innovation that a company of any size could say, let's go look at the people that are doing this right and say, I know we're stuck doing it this way. And most people seem relatively happy with it. But every year, 10% more people seem to want to do it that way.

But what is it about that that is so innovative? And I like the fact that you questioned that word innovation because I wanted to bring up a topic. And I think one of the questions I have is the difference between disruption and innovation. And for me, innovation is intentional innovation.

is change for the benefit of progress. And I think disruption is on its own seemingly just change. And I mean, the classic case is move fast and break things, right? It's like, well, we can, so let's go break some stuff, right? And of course, the rest is history and we don't need to go into a catalog of that company, but they can change the name as many times as you like. You're still, everyone knows exactly what we're talking about. So,

I think that era of Web 2, not that I want to get into a conversation about Web 3, but let's just imagine that the aggregators of the last, in Web 2, the last 10 years have seen those big six companies aggregate data at a mass level, become the people in between you and the thing that you really want somewhat. You know, the sort of Uberization, the Amazonization, the Facebookization, the Googleization, the one click and you get it.

And one of the things that, back to, careful what you democratize, but that one of the things that's obviously irresistible to people and one of the things that has made people, the world the way it is today.

is this notion that you can go to an app and I'm begging for forgiveness because I helped bring that. I forgive you in advance. I don't know whether I'm forgiven. Before applications used to be on a computer and now they're apps on a phone. And when you hit that app on a phone within three hits, you've got what you want. And if it's not three hits, it should be two. And if it's not two, it's one.

And, um, though the speed with which that happens, you don't worry about the dopamine hit is so strong. And then of course what's happened is certain forms of venture has become arbitrage that has allowed certain companies like an Uber to just like absolutely dominate the market. Right. I remember being in London when they launched in London, actually, I was actually actually in London. And I remember someone saying they paid $10 million to all the drivers to sit on street corners.

And then they launched the app and everybody said, why don't you try it out? Click. There's a car here in two minutes. Click. There's a car here in two minutes. Click. There's a car here in two minutes. Wildfire. Every pub in London is talking about how Uber has a car there in two minutes. So they took their money, paid a bunch of drivers to sit on street corners, launched the app. Bang. Everybody's there. Network effect. Let's not get into the intricacies of Uber. I think that in general, there's a ton of benefits to the

the lack of friction, the ease of use, all of those things. There's obviously complication with regard to that and Uber Eats and the complication with regard to drivers and all of those things, which we can get into another time. But I think the point I was trying to get to was Web 2 for me has been about the aggregators.

The big companies who have got in between you and the thing that you want, they've promised you free. And you have hit that thing and you've loved that thing and you'll take it. And you will sacrifice your data, your freedom, your access. I think most people see that as a reasonable trade-off.

One of the challenges is that over time, I think there is a generation of people growing up who given the chance, and I don't think this is a, I'll give up my removal of friction for privacy, but I think there's a bunch of companies, because I know because we're working with them, who are giving you privacy and all of the removal of friction. And I know exactly what this generation will vote for. They will vote for the one where they don't have to trade because it's not, no such thing as a free lunch. They were paying every single time.

And that pay was with their data. Makes a lot of sense. Like we're watching different evolutions of what's been playing out in the world. And then companies effectively have all shipped a thing, which is like, we are the toll road. And one of the costs of the toll road is your data. Right. And here's the feature on the other side of the toll road. And then you have people voting, uh,

via sometimes yelling and screaming that like we do not like this cost of the toll road and so much so we might go try to build a whole new highway called web 3 and now what you're what we're seeing is how then those toll road operators the aggregators are responding to that feedback and

Are they going to say, "Got it, let us go then build that," or are they going to call the challenge flag and say, "Well, who's going to service and operate that highway even at a decentralized scale? We imagine you're going to come right back." So it's really fascinating just to study and watch what's going on at that scale because it does seem like a really important issue folks are discussing. Web3 is so clearly not clear exactly what it is.

You know, some elements of which resolve some of the privacy dilemmas, some elements of which make the sustainability issue worse, certainly deregulated for good and for bad. You know, one man's terrorist is another man's freedom fighter. So that's potentially where Tim Berners-Lee originally wanted the Internet to go, because I know he was not happy with where it went.

But at the same time, you know, some of the things about Web3 is just that, again, I just don't think there are good choices. Not yet. We're just too early. It feels a little bit like .com to me, particularly crypto. And I just stick my neck right out there. It just feels like it's just a little too early. And that whole topic is probably enough for an entire podcast, but probably not one we'll cover today.

Joe, I want to really thank you for coming today. It's been terrific. As expected, always a pleasure. Thanks for having me. It was really fun. From Web3 to Lightyear. We talked about a lot. Everything in between. Yeah, exactly. Everything in between. That's all for this episode. If you're a new listener, be sure to subscribe to Most Innovative Companies wherever you listen. If you like this episode, leave us a rating and a review on Apple Podcasts.

We want to hear from you. Let us know what you'd like to hear more about on this show. Email us at podcasts at fastcompany.com or tweet us with the hashtag most innovative companies. Most Innovative Companies is a production of Fast Company in partnership with founder FNDR. We just couldn't afford the vowels.

Our executive producer is Joshua Christensen. Sound design and editing is Nicholas Torres. Writing by Mateus Sanchez. Our booker is Alex Webster. Production coordinator, Nikki Checkley. And this podcast was done in collaboration with my amazing partners, Stephen Butler, Rebecca Jeffries, and Nick Barham, all partners at Founder and the entire team at Founder at large.