Daniel Scrivner is an award-winning designer working with many brands such as Apple, Nike, Square, Disney, and Target, and is the host of the podcast Outlier Academy. Today, Daniel is a design-centric venture capitalist, serving as General Partner at Ligature and an angel investor in over 100 companies.

In this conversation, we distill the lessons Daniel learned from his experiences as a designer, operator, and investor. You’ll learn the keys to a successful company turnaround, strategies for getting access to competitive investment deals, and how to unlock the superpower of design for your brand.

For the video, transcript, and show notes, visit https://forcingfunctionhour.com/daniel-scrivner.

Welcome to Forcing Function Hour, a conversation series exploring the boundaries of peak performance. Join me, Chris Sparks, as I interview elite performers to reveal principles, systems, and strategies for achieving a competitive edge in business. If you are an executive or investor ready to take yourself to the next level, download my workbook at experimentwithoutlimits.com. For all episodes and show notes go to forcingfunctionhour.com.

Today I'm honored to introduce our guest, Daniel Scrivner. Daniel Scrivner is an award-winning designer working with many brands, such as Apple, Nike, Square, Disney, and Target. And, Daniel is the host of one of my favorite podcasts, Outlier Academy. Today, Daniel is a design-centric venture capitalist. He serves as a general partner at Ligature, and he's an angel investor in over one hundred companies.

Thanks for joining me, Daniel. Very excited for this.

Thanks for having me on, Chris. I'm really excited to be here with you.

So, you've worn many hats over the years, but I would say if you identify with one the most, it seems to be the hat of designer. So, tell us, what does it mean to be a designer? How does one become a designer?

It's a good question. I mean, so one helpful detail to know about me is that I just happen to be self-taught in everything that I do. And so, design for me, I frankly stumbled into it. When I was getting ready to leave high school, I thought what I wanted to do was marketing. I didn't really have a great reason why, but I was excited by business. I had an uncle in my family that owned his own business that I really looked up to, I loved the lifestyle that he got to kind of live. And so, for me, you know, when you're young you have so few references. That was a key reference that I pulled from.

And, you know, and so I knew that I wanted to do something with business, marketing kind of felt very symbiotic with business.

So I thought that's what I was gonna do, but then I ended up taking a course one summer in HTML, and frankly (one) learned a skill set where I could take an idea in my mind, I could build it, I could share it with others. And I got really addicted to that feedback loop. And then I stumbled into the conundrum that led me to design, which is that everything that I made looked terrible. And so while I could share it with other people, I wasn't excited to share it with people. And that made me, you know, at the time—You know, for a little bit more background, I'm not someone who would ever consider myself "artistic" growing up. My least favorite class, literally, in middle school and high school was Art. And so, I didn't think of myself as an artist, but I frankly stumbled into this problem of like, "Okay, well I now need to make this stuff look good. What is that skillset?" And so that for me was the problem space that I think of as design.

And I guess the way I would, you know, we can go a bunch of places from here, but just to put a point on it, I think the way I still think about design today, because I think—One thing I think about a lot in life is that we all have our own personal lexicon for everything. And, like, design is something that I don't think there's a great shared definition of. Everyone has their own individual definition. My definition of design is you're doing two things when you're doing design. You should be solving some difficult problem. That can be a strategic problem, that could be a marketing problem, that could be a product problem. And at the same time, you're trying to execute that in a way that it stands out from the mass of things that are out there and, you know, can honestly feel like a singular creation in a lot of ways. And I think when you've done both of those things, when you've made something that looks effortless, that feels effortless, that is surprising in some ways and solves a problem, you've achieved something really, really well.

If you haven't solved a problem and you've created something great, you haven't done anything. If you've solved a problem but it's a terrible thing to use, you also haven't done anything. And so that's kind of how I think about design.

I love that framing of the two prongs of design. You have to (a) solve a problem, and (b) do it in a unique, differentiated way. Those both need to exist for a good design.

You mentioned that a lot of what drove you in the beginning was to close this gap between your tastes and your ability. How did you begin to close that gap?

You know, looking back on it I would say that probably the best description, if I could look down at myself from thirty thousand feet, would be flailing around. And what I mean by that is like, I feel like when you're trying to close that gap, at that point in time I didn't have a system for it. You know, maybe today I can try to think about what that system would look like, you know, if I were to redo it, but at that point in time—I mean, the best way that I still think about it is like, you're in a video game. You're dropped in a dark room you've never been in before, and you just literally have to figure out what kind of room you are in, what objects are in the room, where are things located. And that's something that I think about a lot, that I would say, that was—Honestly, it was, you know, so to kind of go back in time, it probably took me two to three years to close that gap.

And to close that gap, what did I do? You know, and I still think it's still the thing you have to do. Maybe there's some other ways you would think about it, some other ways you would kind of time box it or bound it or inform how you do it, but at the end of the day the only way you get there is via a lot of repetition. And so, you know, maybe it might be helpful to come at it from a different angle.

One question I've gotten a lot over my career, from just people that stumble across my story or learn about my background, is—You know, you're self-taught. How did you teach yourself, and how do I become great at design? And my answer every single time is (one) you need to love it, so that you're willing to kind of throw yourself into it with reckless abandon, because it's going to take you a long time, and then the second piece is you just need to—A way of thinking about it would be like, imagine you've never gone to the gym before, and you have a completely atrophied muscle. Now you need to build up that muscle. It's gonna take you a long time. And so, you know, how would I think about it today, and maybe what were some of the things I was doing back then—I think there's a couple things that you do whenever you're developing. At that point in time, the way I would describe what I was doing is (one) developing an aesthetic, because I don't think I really had one, and then I think the second thing was finding my own aesthetic and finding my own perspective and my own point of view.

And I think that's something I would just call out, is whenever you talk about an aesthetic, there is no one aesthetic. There is no "this is the way to do it." Aesthetics in general is a massively subjective field. And one of the things that's fascinating, I've worked with a lot of really talented designers, we all have—Myself, every designer I've ever worked with, there's some overlap, but there's wildly different, you know, strengths, weaknesses, approaches to solving different problems, likes for this approach versus that approach. So it's enormously subjective. But I would say the two things you're doing is at that time I was reading voraciously and consuming anything that to me had some reference to design or some reference to aesthetics.

It was everything from—And I still have this, I have a massive reference library at home. I would buy books of designers whose work I really loved, and I would have reference books on the shelf that I would pull down. I had books that I stumbled across. At one point in my career when I was at Square, I was helping us launch the Japanese market, became massively in love with Japanese design and would find myself in bookstores buying every conceivable random book about Japanese aesthetics. There's a wonderful book I have that probably has three thousand Japanese company logos in it. And so you're just taking in a lot. And I think what you're trying to do there is just build up this database in your mind that you can then triangulate across the different ways that you can solve a problem, and the different ways you can do things.

And then secondarily, you can't just learn. You also have to be doing. 'Cause I think only at the intersection of learning and doing do you actually develop anything and kind of develop a real skillset. And so that learning for me was initially doing any project that I could do that someone would give me. So I started out working for free, because I didn't have a portfolio, no one was gonna pay me. I wanted to do it, so I would find people and do work for free. You know, slowly built up a portfolio, did a little bit more work. But each point in time, you know, I was trying to do two things. I was trying to, obviously, solve the problem I was given as well as I could at the time—So as an example, you know, really early on, I would be making a business card and a website, maybe a logo for a realtor. Not the sexiest problem.

But what I found in those early days, too, is you can turn almost any problem into a really interesting challenge for yourself. And so I would make it a game for myself, can I think of ten logos for this? Can I take a wildly different—You know, sure, I'll do what the client wants, but then I'm gonna do a wildly different take. I might not even show the client, but I'm just doing it for myself as a way of experimenting and playing.

And so I would take these, you know, relatively simple, kind of mundane projects and turn them into something that was challenging. But I think that's kind of the overview and the math.

I love that. We're very big on turning things into games here, that there is always a dimension to be trained, and that a lot of finding depth in an experience is zooming in on one aspect and finding ways to play with the rules, to play with these principles.

Something that always I wondered about is, when is a design done? So, I know you work with, you know, you advise, when you were in the past working with brands, there's always a deadline. Right? The design needs to be finished, but you haven't necessarily explored that whole problem space yet, or maybe you haven't reached this point where you know it could be. So, deadline aside, when is a design done in your mind?

It's a great question. I would, you know, first start out by saying that I think if you talk to any designer or creator or artist, they will tell you that nothing is ever done. And what they mean by that, I think, is kind of two-fold. One, as a designer, one of the skill sets—As a creative, you know, one of the skillsets you're using all the time is iteration. And so there's always another iteration left. You know, you're always looking at something. I think this is one of the great frustrations of being a designer, is you're always looking at the world and you're looking at your own work and you're seeing the gaps. The gaps you see much more clearly than the things that are actually done well. The things that you should be proud of, the things you should be excited about. The stuff that stares back at you is all of the things that you're like, "Argh, I don't know if that's it. I don't know what it is yet, but I don't think this element of this piece or this kind of—That the design is as good as it could be."

And it's important to say that, because I think that one of the things I've learned in life is that expectations have an outsized role in how you think about things and how you frame things in your own mind. And so I think it's incredible—One of the things I think about all the time is, what are the realistic expectations I should have when something? And I would say with design, one of the realistic expectations is if you truly love your craft, you're gonna be thrilled to ship work, and there's always gonna be a piece of you that's like, "It's not done yet. I have more to do." You have to learn to cut it off at a certain point in time.

And so, you know, there was a story I was reading recently. I'm a huge fan of Steven Pressfield. You know, and for people listening to this, one of the books that I really like is The War of Art. Not The Art of War, but The War of Art. And you know, Steven Pressfield talks about it. He's an incredible writer. He's written some of my favorite books. I highly recommend The Gates of Fire. It's probably the best realistic, historical account of the Spartan war. The Spartan three hundred—You know, if you're familiar with that story. You've seen the Hollywood version, probably. This is the real version. It's done really well. He's also written a bunch of books.

But you know, one of the things that he talks about is—And this is in a separate book that builds off of this idea. And I think every creative person has to have this in your mind or you're either gonna go crazy or you're gonna be out of touch, is there has to be a part of you that sees your work as just a giant sausage of links, and you always are just grinding out the next link in the sausage. And you have to remember that, because nothing can be precious, and at some point in time you have to be done with it, you have to move on to the next link in the sausage.

And it's, like, an incredibly unsexy metaphor. But I think that there has to be a side of you that is always asking that voice, "Is it time to—" You know, "Is this good enough to be able to ship to be able to put down?"

And then there's the other side of this, the other side of you that will always perpetually be looking for things that can be done better. And I would say for a creative person, really, when you've done something really—When you're really proud of your work, you've had enough time to sufficiently explore the problem space and find interesting and intriguing solutions to it, and you've had enough time to polish it so that you feel proud of it. And that is a very temporary thing. You're proud of it, I would say, for maybe a week, two weeks, maybe a couple of months. And then that voice kicks back in and then you look back at your work. And this is all healthy, this is all natural. But you'll look back at your work, if all goes well, sixty days, ninety days later, and think, "Eh, I could do that a little bit better."

So, you've been involved in a lot of design processes over the years. Both sides of the table, as a designer, as a leader of designers. What do you think makes a good design process? If you're advising someone who is going out and bringing on some design help, what advice would you give them?

Yeah. That's a great question. I would say, and this is going to seem maybe overly simplistic, but I'll start at a really high level. I think there are a few inputs that are just non-negotiable. One of those is you—I think in order to do great design work you have to have a very high bar and very high expectations of what you're gonna produce. Which is just another way of saying that I think the best designers wanna be on teams that when you launch into something you're not just checking a box. You are trying to create something that you are proud of, create something that the company that you're a part of can be part of. And you're trying to do something that goes above and beyond what most people would expect.

And what I mean by that is just I think all—One thing that you learn over time by looking at this enough is all good design has some degree of surprise embedded in it. If it doesn't have surprise embedded in it, it generally falls flat. Which is just another way of saying that just biologically, we notice the things that stand out, the things that are different, and we kind of mute and background-process the things that fit in. So, any time you're doing anything, it can be the simplest, dumbest thing ever. You're doing a, you know, at Square we would do everything from table tests, describing what Square was, and showing the Square reader. We would do short TV commercials, we would do a landing page. And with all of those things, it can seem like a very maybe overly-simple problem. But if you're on a great team and you still have a very high bar for yourself, and you're trying to find the surprise embedded within that, and trying to be able to kind of—Each time you're doing a project, you wanna try to ratchet up the bar just a little bit more. So that's one thing, I think just really high expectations going into it.

Another one I would say is, and this one is controversial, not in that—If, for anyone listening that's been on a design team, they will hear what I am about to say and be like, "Well, duh. Of course that's how it is." But I think a lot of founders that I talk with, this is actually very surprising to them. And it's basically this concept that I think, and maybe I'll tell it through a story or tell it through an experience, 'cause I learned this, really, when I was at Apple. At Apple, you know, I was on our marketing communications team. One of the types of projects I got to be on was when we were creating a new marketing site to launch some new product. And this happens all the time at Apple. You know, if you go to apple.com, it feels very much like the rings of a tree, where if you go to the recent launches you're gonna see the newest version of Apple's aesthetic and the new things they're trying. If you go to something they launched a year ago, you're gonna see something that feels like it's a year old. And Apple kind of embraces that, which I think is a great lesson for a lot of people to take away, is to just kinda live with that.

But one of the things that we did whenever we launched on one of these projects is we over-indexed on expiration time. And what I mean by that is, when I talk to founders now, let's say they're working on a rebranding project, and they think realistically to execute, meaning not exploration, but just to execute this idea, it's going to take two months. You know, I ask them to basically multiply that by 1.5 to 2x, and invest that upfront in exploration. And that can seem as a founder, you're like, "What? So now you've just doubled the time on this thing I need to get done. It needs to be done now, it needs to be done yesterday."

But the reason is really important, and the reason is that for every project, if you think of it like a topographical map, if you're just trying to work as quickly as possible, as efficiently as possible, you are going to explore almost no area of that map, which is just another way of saying that you're not going to find anything surprising, you're not gonna execute anything that's better than what's out there. You're just gonna do what makes sense, do what fits in, do what's the best version of this that you've seen. If you invest more time up front, you can explore all of that surface area and really try to find the surprises. And so when I was at Apple, the thing we would do is before we would not execute, meaning not like put together the final pages and the final deliverables until probably a month to two months into a project. And we would spend all of that time—And these were small teams. So it would be a team of say five or six people. Mostly designers at different levels, a couple of our directors, maybe a creative director in the room as well, too. And for that time, all we were doing was doing wild explorations. And this is also as a designer, everyone's bringing their own aesthetic.

So for a moment, they're taking off the Apple hat a little bit and saying, "Well, what would I do if I had carte blanche to do anything?" And so everyone's throwing out all these crazy ideas.

What do you learn from that, and what does that get you? Well, you learn two things. One of the things you learn is that in order to get to good stuff, you have to look at a lot of stuff and throw out the vast majority of it. Which is another way of saying that to get to an "aha" moment in design, you have to have a big exhaust trail. There has to be a lot of stuff you've tried, has to be a lot of stuff you've thrown away. And that is actually very, very, very, very valuable.

And so I think for me embedded in that is this idea that if you're trying to get to "okay," you can get to "okay" and bias for efficiency. If you're trying to get to "great" or "exceptional," you have to bake in time for exploration to find those surprising moments, to look at a lot of things and throw away those ideas. So, maybe those two things would be the most important ones, I would say.

Yeah. Like any process, needing to go in with, "What is success? What does that mean?" And if you are trying to create something great, creating the conditions for that, which generally means having lots of space to explore the possibilities, and that great versions of anything usually emerge iteratively after many not-so-great versions, but where small discoveries occur along the way that can be built on.

In terms of final products, so as an investor, when you're demoing a product for the first time, or even just as a casual consumer, what are some commonalities that you see amongst products that are well-designed?

Yeah. I'll get to that in one second. I wanted to add one more point onto that last piece that I just said, which is one other way that I think people can think about that advice is, if I'm a founder or if I'm someone that's hiring a designer, what am I going to be biased for? And I think what I just said, another way of saying that is if I'm going out and I'm hiring the best of the best, I have to know that in order for them to actually execute on why I'm hiring them, why I found them, why I'm paying them all this money, I have to create those conditions, and actually build in some times for productive waste, as I kind of think about it or have termed it sometimes. Like, the stuff you know you're gonna throw away most of it, but that's also where all the gold is, that's also where the jewels are.

You know, another way of thinking about it's, like, if you want to get from A to B, you're not gonna—You know, imagine these are cars. If you're in the city, you're just trying to go five blocks away, the Ferrari is probably not the car to go five blocks linearly. The Ferrari's the thing you put on the race track and go have fun with and go be wild with. You know, it's like the Prius is the thing to kind of get in the car and go five blocks. So just think about that when you're hiring teams, because I think it's another moment where I guess the lesson I would draw away is one of the biggest things I've learned over my career is that there's actually a lot of inputs that go into creating exceptional design work, and all of them also have to be aligned, and all of them have to be, you know, symmetrical in terms of what you're trying to achieve and why. So, just say that.

In terms of qualities of well-designed products, honestly, at the end of the day it's clarity of thought. And what I mean by that, you know, I recently—I think what struck this home for me, reminded me of this in the last couple of weeks was Paul Graham, you know, tweeted something, and it was like, you know, good writing is so good because it's just clarity and thought, and that's also why it's so difficult. And I think that's, you know, there's a lot of similarities there with design. When you see something that's well-designed—And I'm gonna blow this definition out in a really big way for a second. Well-designed can be the chair that you're sitting in. Well-designed can be, you know, the fitness wearable that you put on. Well-designed can be the clothes that you're wearing or the movie that you just went to go and see. Design, you know, in my mind is like you're solving this problem, you're trying to do it with, embed surprise and delight and do something that's new and interesting for people.

And so at the end of the day, all well-designed products have clarity of thought baked into that. And you know, what do I mean by that, what does that really mean? Well, when you think about what simplicity is, you know, and I remember we would have this conversation all the time, myself and the other design leads at Square, or like, "What is simplicity?" And one of the things that we would always come back to is, you know, you're removing anything extraneous, but then also making sure that what's left has soul inside it, and has some spark to it. Because simplicity—You can take that way too far, and you can get to a point where you have created something that, yes, it is simple. It is also completely uninteresting and no one will care about it at all.

And so I think, you know, there's this idea of, how do you get to something that's simple, that's useful, that's clear, that's easy to use, that's surprising? And you know, when I list those things—And this is also I think an interesting insight into design—What are those things producing? Well, in my brain I don't feel any friction, because it's simple to use and it's well-thought. So I can just pick it up and use it. You know, you've, everyone's felt this, if you've gotten a well—And this is gonna seem super stupid. If you've just gotten a well-designed tool at a hardware store, there is a difference between a five dollar hammer and a twenty dollar German hammer. And it's typically the grip and some of the materials, but it's this sense that when you pick it up, you just—It feels like an extension of your body. You can use it. We all really like that experience.

We also like something that has surprise and delight embedded into it. And every time I use it, I think about it, and it actually, you know, is a positive moment in the day. And that's not to say that this hammer or the knife in your kitchen or whatever is gonna make or break your day, but I think every designer, every creative is trying to embed a bit of soul into what they're creating, because they know at the end of the day that that is what people are receiving on the other end.

You know, I think Johnny Ive said this another way, where it's like, what design really is is you're putting care and soul into something. And it's almost like the hospitality industry. And so as the person using it, you can feel that. And you might not know all the work that went into it, but you can feel it. And so just to put a point on it, you know, I would say all well-designed products, they lack friction.

And this is very true in software. In software, one of the biggest things you're trying to figure out when you're designing an experience is you're trying to get rid of all the crap that slows someone down, that overwhelms you, that makes you think about ten things when you should only be thinking about two. You're trying to remove cognitive overload. And in my mind, that goes to this theme that what design's really trying to do is make everybody feel superhuman. We're trying to give, we're trying to take these relatively mundane things and just turn them into this effortless, beautiful, wonderful extension of your body that's about you and it's not about this thing that you're using.

So, clarity of thought. It's created with soul and with love, and you can feel that, and it comes across. That maybe gets a little woo-woo. And has some surprise or delight embedded into it. And I think if you can do all three of those things—And you know, there's many things beneath that, like just basic quality control. But if you can do those three things, I think loosely speaking you're gonna get yourself within that kind of field.

So, I'm imagining that this viewpoint of being a designer is not something you can just turn off. That it affects your experience of day-to-day life, how you look at companies, how you look at projects. Are there any common principles from your work in design that extend to other areas of life or business?

That's a good question. That's a really good question. So, yeah, on the note of it showing up in my daily life, it absolutely does. And you know, it's this mix of—There's two things that are constantly happening. Number one, in the front of my brain I'm typically thinking out loud about the things I'm seeing and feeling in the world. And what most of that sounds like is just griping over how crappy stuff is. I feel like the perpetual experience I have day in and day out is the feeling that things are falling short of what they could be. And, you know, I think that's just a reality in the human world. You come across like—And this is one of the difficult things about being a designer and also being an investor and an entrepreneur, if you know, you do realize that yes, you wanna make everything beautiful, but there's also big businesses, successful businesses, that are just producing the lowest-cost products.

You know, it makes me think of something like Rubbermaid trash cans and Rubbermaid recycling cans. You know, they have this whole industrial brand. These aren't particularly well-designed. So there is a business to be made out of producing low-cost things that just check a box, and you can't discard that from your brain, but I still, you know, I think the quest that I'm always on is trying to fit design to whatever problem and business model that someone is approaching. And then, again, just use design to try to make every part of the experience better-made.

And so I would say, you know, the curse of being a designer is I'm constantly thinking about what I'm experiencing in the real world, how it could be better, just, you know, the stupidest, smallest details and why they matter. But that's really important, because I think as a designer one of the skills that you always wanna have—'Cause this is the skill of being a designer, is, I think it's observing the world and thinking about how things could be better, and having that be at the forefront of your mind. 'Cause what you realize is a lot of it is not aesthetic. You know, and when a lot of people think about design they think of colors and shapes, and when I think about design, yes, that stuff matters, but that is a subset of design. And when you really think about how much of that goes into a final product, it's maybe, like, twenty percent. You know, it's a very—I think relatively speaking it's a very small percentage of what makes the final product the final product.

A lot of the things that make the final product the final product are just clarity of thought. Is it well-made? Can I tell that someone wasn't cutting corners and was kind of imbuing a lot of craftsmanship into something? So I would say those, you know, that's the curse of being a designer, that's what's always happening in front of your brain.

Can't turn it off. One commonality that I see perhaps amongst the way that I do things and the way that you do things is this sensitivity to friction, whereas I'm doing something or someone is describing something they're trying to do, I can't help but notice the ways it could be streamlined. It could be made more repeatable, higher leverage. And this is a blessing and a curse. The blessing is you're always identifying ways that things could be made more frictionless, more streamlined. But you can't help but notice all the ways. So it's trying to strike that balance, if you can't turn it off. And trying to find the benefits outweighing the costs.

I came across an interesting idea recently. A core belief at Forcing Function is this idea that all of our behavior serves us in some way. So there's really no form of self-sabotage. Everything we're doing is satisfying some deep-seated need. And you brought up this maybe conundrum that there are products, companies that succeed despite not being well-designed. That perhaps there is some purpose that's being served—You mention Rubbermaid, for example, being a really industrial design. That perhaps that is a successful design aesthetic as well. It's not your aesthetic, it's not the aesthetic that you would choose, but it has certain values that it signals. In this case, if it looks low-cost, then it will feel low-cost.

I came across this idea in terms of budget airlines, where someone was wondering aloud, "Why are budget airlines so ugly?" You look at the colors of the seats. You know, most airlines are some sort of muted tan or gray, but with budget airlines it's like purple or bright yellow, and everything is, it seems to be, this is not the aesthetic you would choose if you were trying to have any form of design sense whatsoever. But it brought up the idea, well, if it's not cheaper to design in such a way, why would they choose to design in such a way? Well, one box is checked that you brought up earlier, Daniel. It's surprising. It's something that stands out. But they made this really interesting conclusion, that it looks cheap on purpose in order to remind people what a great decision they made by choosing this low-cost carrier. Look how ugly it is, look how much money that you're saving.

So, I think it's a really interesting idea if we look at the things around us, the products that we use every day, and what is the purpose that's trying to be achieved. If it is successful, assuming that it's successful for a reason, we might not agree, it might not be the way that we have done it, but there is a purpose being served, and I think that's a really interesting mindset to take to—

No, it is. I mean, it immediately makes me think of Costco. I feel like maybe Costco is the most well-respected low-cost aesthetic. 'Cause you go inside, it's just concrete floors. Polished concrete floors. Everything's utilitarian. They use the shipping containers to display the products. And it works, because—I think they are the key, and this is what's really interesting, and this is something I think I've spent a lot more time thinking about philosophically over the last five years, is design's role as being very different in different use cases. And a lot of those use cases are informed by a business model. But if you have a business model where if you understand what Costco is doing, if you understand what low-cost airlines are doing, it is literally a flywheel of cost-savings that perpetually work to lower the cost of what they're doing. And so I, you know, there, could you drop Apple designers into Costco and Apple-ify Costco, and would that make any sense or work? Absolutely not. It doesn't make any sense, it doesn't—You know, that's like oil and water. Those wouldn't fit together.

And so I do think, and this is something I've thought of in terms of the arc of design careers, and I'll make this really short. But, you know, one way I think about designers gaining experience—'Cause I had this experience myself, and I think a lot of designers do, but it's not necessarily conscious. When you first start out designing, for better or for worse, (one) you don't have a ton of data to triangulate across, you don't have a, you know, you can't look at a problem and really come at it with anything else than "what do I think." 'Cause you haven't done it five different ways, you can't pull across those experiences yet. And so you're naturally just going with what makes sense for you.

And so at the start of your career, everything that you make, for better or for worse, everything that you make is very narrowly defined in terms of an aesthetic. And I think as you get more experience—Not all designers approach it this way, but this is the approach to design that really resonates with me—As you get more experience—You know, the best designers I've worked with, they would work at a company for six months and then leave and go to another company. And at first you might look at that and be like, "Well, what are you doing? That doesn't make any sense?" But when you would go and talk to them, for them it was really, "Well, I'm here and I'm flexing this muscle for six months." You know, and say I'm at Apple. "And I'm gonna go to Adobe. It's a very different design aesthetic. Everything's different about how work gets reviewed, everything's different about the expectations, everything's different about the philosophy they bring to it. I'm gonna go and learn those muscles, then I'm gonna go to Sonos, then I'm gonna go to Pinterest." And so, you know, over the course of say two years, they've gotten four really deep data points on very different processes and organizational structures and design aesthetics, where you could just be flexing the one.

And so I think a lot of evolving as a designer is (one) being able to set your aesthetic aside and really focus on the problem, and the company that you're doing it for and what's gonna make sense there. And then I think the second one is, and I think about this all the time when we hire designers, is just looking for people that have a lot of data points. I hate seeing designers that have one thing on their résumé and they were there for five or ten years, 'cause I just know what that's like at the end of the day. They're gonna come in and they're just gonna have that one set of glasses that they bring to every single problem, which isn't gonna work.

That's a really interesting point of a real commonality in the skillset, is the adaptability to constraints, and that you're working within one problem set and optimizing for those variables. And that the more data points you have, the more proof and experience that, "Hey, I can adapt to different sets of constraints and still find ways to creatively solve the problem."

Yeah. And I would just, just to add on that, in my mind the reason that that's so important is adapting your approach to the company and the product and the space that you're working in is because I think a lot of what makes any company's aesthetic iconic is the fact that it's singular. And what does singular mean? Singular, you know, one way of thinking about it is like, English is English and Spanish is Spanish. If you try to make a Spanglish, it's not gonna be super pretty. You wanna have these very different, very divergent properties, and then you wanna go really deeply to kind of flesh those out and have those make sense.

I'll throw out another way of thinking about it. But, you know, a lot of—I've always been a fan of directors and films and movies, and so a lot of how I think about design kind of pulls in that perspective. But think about someone like James Cameron creating Avatar. What are you doing when you're trying to create a world like Avatar, or you're trying to create a world like Marvel? Well, one, you're trying to make something that's very singular, and then you're trying to go so, so, so, so deep and granular on how to hold that aesthetic together.

And so this is one of my favorite things. You know, one of—I had a handful of these books at homes, where it's concept art from a given movie. And you look at something like, oh, just to pick a random example, I'm gonna pick Wall-E. And you look at them fleshing out the Wall-E world, it's like, it's dystopian. Everything has a little bit of dystopian embedded into it. It's these robots, and it's this mix of kind of junky older robots with really new hyper-technical kind of peak of technology robots. But, you know, ultimately what is a director and what is the creative team of concept artists and art directors and everyone behind the scenes doing? They're trying to flesh out this world. And I think a lot of, you know, for designers or for founders, in my mind a lot of what makes something really successful isn't just saying, "We're not gonna do that, we're gonna do this," but then owning that, staying there, and tunneling as deeply as you can into what that is at its heart, and refining that. Because I think that's how you get to something that no one else can emulate and that is very unique and singular and stands out.

That brings up an interesting point for me in creating something that's unique and singular, is it seems so much of the value of design is intangible. There's this emphasis on trying to create measurable progress, and that if it's better it'll show up in the data, but a lot of times if you try to over-focus on measuring, you know, what you're trying to measure escapes your grasp. And many of these aspects of design are not things that you would be able to measure, or should even try to measure. How do you think about this in terms of trying to push a vision forward but not having this objective proof that what you're doing is having a result?

I'm gonna share something, you know, controversial in a second. Kind of a controversial point of view on that. But I would just start by saying in design there are definitely clear areas where data is very helpful, but it typically is when you're—You're not in exploration mode. I don't think data's helpful when you're in exploration mode. Data is very helpful when you're in refinement mode, particularly when what you're working on is very important to some metric within the business. And so—And this is another thing, I think, that a lot of designers struggle with. And it's something that I feel grateful for the fact that I am naturally interested in business. There's always a part of my brain that's thinking about that, and I'm bringing that to the problems that I work on, because I think for a lot of designers working on something—I'll give you an example. Like, one of the most impactful things that we did, and we spent an enormous amount of time on this in the early years of Square, was the conversion funnel and the sign up flow. And this is something, if you say, you know, "conversion funnel, sign up flow" to any founder, they'll be like, "Oh my," you know, everyone knows, everyone's optimizing it.

And what's fascinating there is that design in the aesthetic sense doesn't play a huge role. The biggest way that you can move that needle that I've found is by removing steps, which is much more of a back end engineering—It's more of an engineering task, or it's a task of progressive disclosure. Saying, "We don't need this now, we can get this later on," you're kind of breaking up and chopping up the problem.

So there are areas when you're in this refining mode where data is very, very, very helpful, and I think it's kind of the only guide you need to know whether you're moving the needle. But it's because the whole point is to maximize the metric, and obviously tracking that metric is gonna help you maximize it. So it's a very specific type of problem.

The intangible part of design—I'll be super honest in that I struggled with that a lot early on, and what I mean by that is I think for me I've always been really good at exploring, and I've used exploring in iteration to try to get to what feels really good. And then I had this experience at a couple points in my career where I would work with someone and they wouldn't really need to do any exploring or exploration. They would just be able to intuit this thing to go and do. And honestly, you know, as I encountered more and more of these people, there was this loop in my mind of, like, "Is something broken? Do I not know how to do that? How do I learn how to kind of intuit what something is? How do I lean into more of this intangible part of design?"

And the biggest lesson I've taken away grappling with that over a long time is there are many, many, many examples you can point to where great products are built not at all by tracking metrics or by interviewing users, but by scratching your own itch and creating something that's—You're solving a problem that you yourself have, and you're getting to a moment where you are so excited about the product that you know other people will be delighted by it. So there is magic in having a very strong point of view that's not checked by data.

It also can get you into a lot of trouble if you're taking that approach with the wrong product. You know, give you an example, I think products that are very—When you're creating something that's net-new, where you're trying to do a new version of something—So, I'll give you an example. There is an endless stream of productivity apps. Productivity apps at the end of the day are very simple form factors. You know, you have a checkbox, you have a date. If you take every productivity app and strip it apart, it has the exact same parts. You know, so it's like you have ten cars, you take 'em apart, they all have the exact same parts.

So, a lot of design in a lot of—I think that productivity is a good example, the way that a new player emerges in the space is someone tries something radically different. A great example of this was Monday.com. You know, so you had Asana, that was kind of taking productivity apps for teams and pushing that concept forward as much as possible. Then you had Monday, which was really just saying, "We just need a simple, simple, simple board of what our priorities are. And all this is serving for us isn't some—We're not looking at sprints and tracking everyone's productivity on a Gantt chart. All we want to know is, what are the ten things that my team needs to do today and how does that matter?"

And so you know, you can take a wildly different point of view on something, which should inevitably get you to a wildly different form factor and expression of that idea. And by doing that, you can get to something that's really amazing. But I would say, generally, that approach from what I've seen can be fraught with challenges. And so ultimately where I net out is I think you need both. But all of the best companies I've worked at have very, very strong internal points of view about what we're building and why, and then they're just checking that with data and dialing up the data knob if it makes sense for the project.

So, I wanna double click on this. So those of you guys listening, Daniel's spent a lot of the last two years leading the team at Flow, which is a beautiful team productivity app. So as he speaks about these different design features—

Yeah, I've done that.

—And points of view on productivity, he has seen how the sausage gets made. How has your perspective on what works for team productivity changed from having this perspective of creating the product?

Well, yeah. So, for a little bit of backstory, you know, I had been a designer for most of my early career, and effectively worked my way up from designing church websites, you know, realtor websites, all the way up to you know, building and leading design teams at companies like Apple. You know, after I had been at Apple for six years and, you know, I had joined when the company was very small, around fifty, I left after we IPOed. In many ways when I still think about that experience, it feels like the Goldilocks experience. I know many people that have been at a startup for five years or ten years and they have not had the all in one short period every beat of the story gets played out in that period, so it was a fascinating experience, and when I got to the end of it, I wasn't sure if I wanted to do that again immediately, meaning work on one problem.

And so I wanted—What I was kind of drawn to was investing, because investing for me is I get to interact with a lot of different founders that are focused on a lot of different problems. I'm incredibly curious, I'm very drawn to ideas and discussing ideas and working on how you can bring them to life. So there's just so much about investing that I love. But one of the things, you know, one of the issues I had as an investor is if you're a venture investor and you've never been a founder and there's not a part of you that goes, "I am clearly missing something," I think you're missing something in your mind. And so I kept having this experience of just, I didn't know what I would learn, but I felt like I would learn an enormous amount and be a better investor and a better partner to founders if I had an experience myself where I was running a company.

And so a couple of years ago, it wasn't like I was looking for a CEO position or to turn around a company, but I had known for a number of years Andrew Wilkinson and Chris Sparling, who built an enormous company called "Tiny" in Canada. I have an enormous amount of respect for them and what they've built. They do do venture capital, but they're generally very venture capital adverse. And you know, here I am as a designer, and I mostly do venture capital investments, but I also spend an enormous amount of time reading Warren Buffett, reading Markel's annual letters. When I think about the businesses that I admire, they're businesses that are real that have to survive on the cash flow they produce, they have these very tight constraints.

Anyway, I was given this opportunity to come in and turn around Flow. And at the time, Flow was around eight years old. A way to think about the company was basically the first five years was, you know, hockey stick up and to the right. They were in the space and were the leading player before Asana and Monday.com and a whole host of others gained traction. You know, and Andrew and Chris will be very open about this, they failed to capitalize on that traction. And so this is a place where here they were, they had built a business that was throwing off a lot of cash, but they were adverse to not being profitable. So they didn't want to spend that money and invest in the business, they wanted to treat it as a profitable business and take those, you know, be able to redistribute those earnings. And so they didn't take that money and invest it all in on marketing and just say, "We're gonna build this flywheel and we're gonna fuel this and it's not gonna be profitable now, but we're gonna grow it much, much larger." They effectively lost that window of opportunity, and that window of opportunity started closing. And so for the previous two years before I joined, you know, the company had been declining and starting to experience some problems.

What interested me about the opportunity to go at Flow was here was a design-centric company. The reason that the company succeeded in its earliest days was because it was the best-designed tool for productivity. They served a lot of designers, they served a lot of product teams. And it was an opportunity to come in as the CEO, but not as the founder, where this was an all-in bet. As someone to come in and learn what it was really like to run an operating business. And I would also be really frank, I would probably not have taken this position if it wasn't working with Andrew and Chris. A huge part of how I always approach every part of what I do is a massive focus on who I'm gonna be able to learn from and spend time with and work with, and it was an amazing opportunity to go and to learn from Andrew and Chris. From the company that they'd built, the other people that are with them in Tiny.

It was brutally difficult. Two years to turn around that business. And we can talk in a second about what that was like, and some of the highs and lows. But you know, I think what it really opened my eyes to was (one) there are certain—And we, you know, so in investing, you know, I'll make a jump to a tangent for a second. In investing one of the things we have at Ligature, and I have this for myself as well too, is default no buckets. What do I mean by that? I mean that when I'm looking at companies, there are certain types of companies, there are certain industries that are a default "no," where basically it is always gonna be a "no" and something has to reach a high enough amount of kinda evidence and excitement and interest in what they're doing, and a sense that what they're doing is very, very, very different, that it's actually worth taking the bet.

Productivity apps are absolutely one of those places, because it is a brutally competitive industry. It is a race to the bottom. There is a, you know, in some industries, if you think about a fat tailed distribution, you know, in some industries there are one or two players that have the vast majority of the business. You know, so there's a big spike in some industries, it's a very fat long tail. Productivity is the canonical fat long tail industry. There are just so many players competing. So I'd say it's brutally difficult. You know, we definitely try to offer something different to the market, and at the end of the two year period, and I can get more into the tactics, you know, there was a lot of data that was suggesting we were headed in the right place. But I think what I learned more than anything was just some brutal lessons about what it's actually like to run a business and what it's like to compete in very zero sum industries.

What would some of those lessons be?

Ugh. So, man. So, okay. So if we actually get into the lessons that I learned, I think some of the lessons are not surprising at all. So when I was offered the opportunity to come and become the CEO, I don't think I spent enough time thinking about just how wrong things were going to be in the business when I came in. Which is just another way of saying, you know, I think the way I would reframe this if I was talking with someone that was gonna come in and try to do a turnaround is, you know, where there's smoke there's fire. So if the business is not doing well and things are not headed in the right direction, that's just what you're seeing above the water. There's a lot of dysfunction and stuff that's not working well or not set up for success once you get further underneath the surface. That was absolutely true.

You know, so the things I learned once I came in was not only did we have to effectively redesign and reboot the entire product, but there was a staggering amount of tech debt that effectively meant that we actually needed to take about twelve months and address all of this cumulative tech debt that basically unless we addressed it we couldn't grow. If we did start to grow aggressively, we were likely to have extreme outages. So it was just a not super awesome scenario for being set up for success and being able to move forward.

You know, I think one of the other lessons I learned was—And this stuff, I would say there's not, just to be really clear, it's not like what I learned was, "Here's what to do and here's what I did wrong." I think it's, here's some rules of thumb I might follow if I were to do this again, because I think, again, you have to always come in—I'm a big believer that there is no playbook for anything, you have to come in and assess it and think about it from first principles and really try to deconstruct what makes sense there. But one of the other things that—You know, I don't think I appreciated enough, was here I was as an outside CEO coming into a team, didn't know anyone on the team, I was an outsider coming in, effectively coming in to lead the company. This was a team I hadn't hired, this was a team that had been at the company working together for a very long period of time. And so in my mind, I thought initially of all the positives. I thought, "This is gonna be great, I at least have a team that gels well together, I have a team that can execute in all the different areas."

And I think if I were to start again I would have probably thought much more aggressively about cutting that team to begin with, really doing a holistic assessment when I got there of, "Who actually should be on the team going forward?" And what I mean by that is not so much—When you're coming in and you're turning around a company, one other way of thinking about that is you effectively have to completely change the culture of the company. You have to change it from a company that is losing and making incorrect decisions and is in a negative feedback loop into a company that can make its way over to a positive feedback loop that can start to win together. That is, it's very different conditions. You have much more stress and pressure, 'cause you're back to solving this zero to one problem. You have to have people that I think understand and can take bets, you can't have a team that plays it safe. You have to have a team that can be inventive, you have to have a team that knows to move with brutal speed on some things that just need to be addressed really quickly.

And so I think culturally, I didn't appreciate enough that, you know, I've—Listening to books like Frank Slootman, "Amp It Up," and talking about some of the turnarounds, where he clearly speaks about some of these principles. But I don't think I appreciated that enough.

And then I think in terms of the stuff that generally worked, maybe I'll share some of those things. You know, the things that did move the needle weren't rocket science. So, when I came in, there were a bunch of things that seemed somewhat obvious, and I think one of the lessons I've learned working with founders, being in the CEO chair myself, is that building a business is not sexy at all. It's very much like, "Let's look at what this is, let's think of the common sense approach to improve some of these things, and then let's just do it." And so, for instance, some of the things that I found was, you know, wildly under-optimized pricing. When I came in, we had two plans. I think we ended up moving to four plans. We ended up nearly doubling the price of the product. We ended up, you know, thinking much more deeply about how to actually see the features across those plans.

And when I say this, you know, maybe one way of kind of bubbling this up to a higher level is when you're taking over a business that has revenue that's coming in, that has customers, one of the things you can do you need to be very careful and thoughtful of is to think about how you might change the dynamics of how you get revenue to build a better, stronger business.

And so when I see something like move from two price points to three or four, why? Well, there's actually a bunch of reasons. One of my favorite books is, "The Confessions of a Pricing Man." It's a book, literally, of the man who ran the world's biggest pricing consultancy for a period of time. And one of the things you learn there is, like, there's a lot of science that goes into pricing. When you have three plans, it generally makes people anchor in on the middle plan. When you have two plans, people don't do any anchoring. When you move from two to four plans you can also gate features. Gating features, if you're in the software business, is a massively effective way of shaping what plans people land on and shaping where people need to go, which obviously shapes what they're going to be spending with you each month.

You know, so there were things like that that were just, like, we needed a new website that leaned on our social proof. When I came there we had amazing customers. We weren't marketing or showcasing any of these customers to the outside world, so nobody had an idea that we had all of—You know, so I think part of it, the stuff I did well was I think I did a reasonably good job of assessing what strengths we had that we weren't taking advantage of, assessing what just drop-dead simple things we could be doing that would slowly start to move the needle on the business, and those were things like the pricing plans, and then the stuff that was much more difficult is product direction. You know, we can talk about that. That was a whole 'nother piece.

Some really good lessons, and I can't help but notice the parallels with design. Talk about the real talk of complexity, on one hand having years of experience of creating and selling a product seems like an advantage, but the challenges that that creates in entrenched culture, there's a lot of inertia built around, and particularly with product, that complexity, entropy increases over time, so the more things that have been created, the larger proportion of resources that need to be dedicated just to maintaining what is already there. So the real cost that was hidden of technical debt, that was, you know, holding everything back in terms of making it harder to introduce new things, and to keep up with development, and particularly as an outsider coming in, the benefit that you have is seeing things with this fresh perspective and not taking any of these assumptions for granted, making sure that the things that are being done are looked at with this fresh eye and a fresh lens.

And I like the way you put this, of needing to change the dynamics. We talk a lot about feedback loops at Forcing Function, and this concept of you have a negative feedback loop, or what is working is not happening. So there's perpetuating patterns that are not getting to where you need to go, so needing to step back, take the zero to one mindset, and really rethink things from Plan A. And a lot of what you've just said is like, the things you're not going to be doing anymore. Who's not contributing, the things that are not working, the plans that are not leading to the place you want to be. And that seems to be a good encapsulation of why these turnarounds are so challenging, as it's a complete reimagining of how things are done. In a sense, a lot of the assets that are there actually turn out to be liabilities, and you're not quite sure which is which, from the outside.

No, I think it's very well said. Going through that experience myself, it became very clear why turnarounds are so difficult. Because number one, you're trying to—You know, one way of thinking about it's like you have a plane flying one direction, and you're trying to turn it two hundred and forty degrees and get it to go that way, and you now need it to also be moving at twice the speed it was moving at before in order to actually be viable. And so there's just an enormous amount of shock that has to happen to any system in order for that change to happen. And I think that's—You know, when I talk about how I would have approached the team differently, it would have been much more through that lens. Like, to truly—If you're coming into a business, a lot of what you're doing is saying, "Here's what was okay yesterday. This is now where the bar is, and anything below this bar is not acceptable."

That is a massive shock to the system for everyone that's been there at the company. And, you know, this also goes to the point of when I say I would have thought a little bit more thoughtfully about who should be on the team and who would do well in that situation and who wouldn't, that's really the angle. Because when you're coming into a business, you know, it's not that you're thinking that everyone is incompetent. At Flow there was a lot that was done very well. There was a lot that made sense. But I think generally at the highest level you're trying to raise the bar, you're trying to accelerate—Well. You're trying to build momentum again and you're trying to build speed again towards the destination. It's just a very different environment to work in. And so I think that's a big piece I didn't appreciate. And then, yeah, there's a lot of—If you're coming into a business turning it around, you're ultimately inheriting a lot. You're inheriting a lot of past decisions you didn't get to make.

I won't get into all the details, but in the first I would say nine, twelve months there, it was like a different type of punch in the face every single week. You know, at one point I suddenly got invoices for a hundred thousand dollars in legal bills for a fundraise that had happened a year ago before I was even the CEO, and so it was a profitable business, this now comes out of my revenue. I didn't decide to raise this capital, this wasn't a decision that was made under me, but I now need to be responsible for fulfilling that commitment that the company made.

You know, so there's things like that, there's decisions about what tools to use and what platforms to use, some of those that are now deeply, deeply, deeply embedded in code that you would dramatically change.

So that brings up an interesting question, is integration as an outsider, coming in with trying to do something new. You described this process, turnaround, as a reinvention, questioning the way of doing things, but the constraints of needing the respect and trust and confidence of those who are already there, and particularly the people who are going to be putting these new directives into action—What did you learn from your experience at Flow about integrating yourself into a new team, gaining trust as an outsider?

Yeah. It's a great question. You know, I think this is an area where in hindsight I would have taken a very different approach. And what I mean by that was I was obsessed, probably overly-focused with this idea of building trust with the team. And I think a little bit to my detriment. And what I mean by that is a clear job of any leader is to, you know, be building and maintaining the trust of your team. And when I think about, you know, like the ingredients that go into building and maintaining trust, it's very simple. I think it's confidence and clarity around where you're headed and why, and the ability to communicate that to the team, because like it or not, as a leader you will always be judged on, "Are we headed in the right direction? Do we feel like we're making progress?" And so that one—You need to be able to paint a picture from the team of what you're doing and why, and then you need to show that you will change and adjust that plan as you move forward and get new data.

But only by doing that can you actually build the trust of your team. Your team needs to see that you have confidence and conviction in a direction and the ability to communicate that clearly and defend that to the team. And then you have to be able to line up all the decisions that you're making to that. And you know, as an example, one of the things I've been following really closely is the turnaround at Peloton. And about a week ago I read, and I do not recall the name of the CEO who's turning it around, but I read an email that he sent to the entire team, and in that memo he had to let the team know that they were shutting retail stores and laying off a bunch of retail staff, closing departments, stopping hiring—You know, all of these things that are not awesome. But he did a wonderful job in the email of just saying, "Here's why we need to make these decisions. Here's what we're doing." And then showing compassion around those difficult things and just saying what people need to hear, which is, "This sucks. I do not want to let these people go, these are great teammates, this isn't about them as a person, this is about us as a company trying to get to a better place where we can be more sustainable."

And so I think a lot of it is the tone. But again, if I was to break it down, my advice to myself would be not to be overly focused on building trust with the team, because if you're focusing on that in the abstract or by itself, you're kind of missing the bigger picture. And I think the right way to approach it is you need to have conviction and clarity around where the business needs to go and why, the ability to communicate that to the team, the ability to then line up and show in your day-to-day work that all of the decisions that you're making are laddering up to this, 'cause it's very—It gets rid of a lot of anxiety and it builds a lot of trust when people see, "Oh, where we're headed is not changing. We're headed in the same place that we were last week and a month ago, and we're making progress. It might be slow progress, you know, we may not have achieved our big goals, but I can see that we're making progress, and I can see that we're being methodical."

And so a lot of it, if I were to, I think I would have just approached it from a much higher strategic level, as opposed to truly treating it, which is the way that I did, of, "I need to build the trust of each individual member on the team."

And there is a component of that—I am a big believe that you need to go in and build rapport and have a real relationship with some substance with all the people on your team, especially the leaders on your team, but I think much, much, much more important than that is clarity of strategy and the ability to just show methodically that you're threading that needle.

Thanks, I love that. We've covered a couple different hats so far. We've been in designer, we've been in operator. I would love to put our investor hat one. You've been doing venture investments, angel investing for a number of years now. You've made over a hundred investments, and I'd be remiss to not try to get some of your lessons there as well. Carrying on this theme of coming in as an outsider, I'm curious in your perspective on adding value as an investor. When you think about succeeding in the venture game, it feels like you need to either have some sort of proprietary deal flow or some way of winning competitive deals. That most people kind of know the companies that look good, at least on paper, and the challenge is always getting allocations in those deals, because they tend to be over-subscribed. So the advice is always to find some way to add value to those founders, and a lot of investors tried, and it seems like many investors get in the way more than they actually help. How have you found your personal way of getting into competitive deals by being a value-add investor?

Yeah, it might be helpful to why I started venture investing in the beginning, and why I started venture investing was I was at Square at the time, I was a couple years into leading the design team, building out the design team at Square. And I knew a lot of people that were starting companies. It was typically an engineer founder. And I kept having this same experience where I would sit down with the founder or sit down with their team, 'cause, you know, if people are wondering why, it's 'cause we're in San Francisco and everyone—You're always meeting and talking with people that are working on interesting stuff and everyone's trying to help out one another. So go and have these conversations with some friends, or friends of friends, and what I would consistently find is people had what I thought were very strong ideas. They had some of the skills, typically the building engineer skills to actually build a product, but because honestly the complete lack of design, it was just totally unappealing.

So I just kept having these experiences where I was like, "This is a great idea, I can tell you really care about this, you've built a prototype that's terrible. It's so terrible. And we need to work on—" You know, like I think one of the things I would say is I think design is a superpower in the earliest stages of venture, because the earliest stages of venture, what are you trying to do? You have to convince people of your idea and your ability to bring it to life, and you have to show people something that is compelling. And I think that teams that have the design capabilities to be able to do that early punch way, way, way above their weight class.

So I had these experiences. I then have this background in design. I'm a rare designer, and I've actually always been interested in investing in business. You know, when I was in high school I would read books I'm sure no other high schooler was reading, like, you know, "The Millionaire Next Door" and a handful of these books. I was always interested in business and investing. And so honestly, I wanted a couple of things. I wanted to see if I could actually be useful to founders and be able to get an allocation in deals. So that was kind of like, let me—"This would be the goal, let me just start out by just giving it a shot and seeing how much progress I could make."

I wanted to learn, and so one key criteria, the way I've always thought about every investment I've made personally is I need to think about two types of return streams. One is what am I going to learn from watching you execute as an investor and being able to talk with you and being—You know, the way I kind of think about it now with a hundred plus investments is I'm a scientist in a laboratory with a hundred different experiments going at once, and I get the privilege of being able to look across them and see what's happening here and see what's happening there and, you know, triangulate between them.

So I always think about earning via learning, and, you know, I always think of that as the backstop, because eventually you're taking high-risk bets if you're investing early, and you know, there's a very high probability that business will not succeed. And then, if it is successful, that's gonna be amazing. That's gonna be the cherry on top. But a big piece of it was I wanted to learn and I wanted to broaden the set of experiences and the set of people I was learning from.

And so that's always been the through-line. So, for me, you know, when I started investing I also started advising, and advising I think of is just rather than investing with capital I'm investing with time. I'm still getting equity at the end of the day, that's my compensation, but I'm using another means or currency instead of just cash to be able to do it. But I've always thought about it as a way to learn.

Yeah, a couple of notes I would say in terms of exactly on your question. One of the best quotes I've ever heard about venture, and it speaks exactly to your point, is that it's not an asset class, it's an access class. Which is just a way of saying venture is amazing, but it's only amazing if you're exposed to the right opportunities, and if you actually—If you just were to get a, you know, if there was the S&P 500 of venture deals, it wouldn't actually be all that compelling. You'd make like twenty percent, thirty percent per year. But if you can find the right companies, the right founders, the right teams, you can do exceptionally, exceptionally well. That's another fat tail. That's another lesson in kind of the power of fat tails.

So, if it's an access class business, then you're, you know, something that you always have to be thinking about as a component of your strategy is how you are going to be able to (one) learn about deals, and there's really nothing mystical about it. I mean, the thing to know about venture is it's highly relationship-driven. And so all deals basically come to—You have to know somebody who's also an investor, or knows the founder, or the founder has to know you. It's very relational in terms of how you get deals. So that's one piece. And you can kind of—I always say anyone that can just build a big enough network and can be a stand-up person in your network, you're gonna be able to do really well there, but then comes the much harder part, which is you actually meet the founder, the founder is doing really well, they're a business you want to invest in, which means that they're way over-subscribed. How do you convince them to take your capital as opposed to somebody else's capital? And that is where the value add really comes in.

And the only thing I would say there is I think my competitive advantage is that in a world of venture, most people that are venture investors have never built something as an IC or a manager within a company. They might've been a founder, that's a wonderful experience. You know, they maybe have a background in sales, but they likely have not worked at the lowest level and worked at enough of the levels in between to really be able to add a lot of value. And so I think one of the biggest ways that we add value is we've got this—We know how to build and scale a design team, we know how to hire designers. You know, so when I talk to founders, unsurprisingly founders are very interested in having design value add, because we're also—It's just not many people that compete with us, when it comes to investing with a design background. And also, you know, the variety of problems we can solve are massive.

And so it's everything from frequently—You know, I'll give you maybe three examples of how I actually add value. So, in cases where a company does not have a designer, I can help them go from zero to one and hire that designer. That may not seem like a lot, but one of the things that you learn after you've hired designers, and you, you know, learn this as a founder, is that there's actually quite a bit of nuance to how you hire a great engineer versus how you hire a great designer versus how you hire a great product manager. There's a lot of localized, specialized knowledge. And so the things I walk through is, you know, I help them put together the job description, I help them think about how you qualify candidates before you do the phone screen by reviewing their online portfolio, I help them think about how to do the mix of in person interviews along with actually showing their work and walking you through their work.

So, that's one piece. Another example is teams that have one designer. You wouldn't realize it, but having one designer on your team means you have one very lonely creative person that has no one to share ideas with. They have questions in their mind that they really have nobody that they can bat that back and forth with. And so whenever we are talking with a company that has one designer, I know we can add value, and it's typically by just having a mentor/advisor relationship, where we're basically getting on the call, once every couple of weeks, once a month, going through ideas, talking about frustrations. Anything and everything. But it's part teammate and then it's part, you know, collaborator.

And then the third thing, I would say, is I always think of it as high risk/high reward activities. What does that mean? Inevitably when you're building a company, there's quite a few things that you need to do where you have to be successful, the costs of doing this are very, very high, and actually you have to make sure that you don't fail and you don't shoot yourself in the foot.

What do I mean by that? A new country launch is an example where there is, basically the game that you're playing is how do we mitigate all of the downside risk, and how do we maximize all of the upside of doing this?

What are other examples of that? A new product launch. You only get one chance to do that well or do that poorly. Rebranding your company. Another example where you only get one chance to do it well or do it poorly. So, in those projects, I'd loosely think of those as all falling into the same bucket, because effectively people are saying, "Can you help me solve X?" We've done X, we can help you solve X. "Can you help me basically make sure I don't shoot myself in the foot?" 'Cause it's typically a founder that has never done it before. This is one of the things most, you know, it shouldn't be surprising about founders, but they're literally always doing something they are doing for the first time. They have no past experience, and they are expected to be successful with it. And so we can add a lot of value in minimizing the downside.

And then, you know, a lot of the value that we add, frankly, is about maximizing the upside. And what do I mean by that? I mean, okay, you hired this agency to do your redesign, you've agreed to pay them a hundred and fifty thousand dollars, which you have a stomach ulcer as a founder for agreeing to that cost. Now, how do you make sure you get a hundred and fifty thousand dollar’s worth of work out of them? Well, we can be very effective there at how you tee them up for success, how you think about iterations, how every call is about building on top of the best ideas from the last call.

And so, those are some areas.

That seems very, very valuable. I like what you said about founders constantly solving problems that they've never had to solve before, facing things for the first time. And a lot of that is just—

That's like the primary job description.

— You know, minimizing the downside, not messing it up. So especially with hiring, and knowing what you're looking for, and bringing someone on, and putting them in a position that they can succeed, giving them the right resources. And that a lot of creating a good project is the process that you bring to it. So if you haven't run a design process before, there's a lot of holes that you could fall into if you didn't know they were there. So I can certainly see the value.

I would love to backtrack to your post-Square IPO and think, "Hey, I might want this dual return stream of capital and learning." Let's say you're writing a letter to that past self before you're about to make your first angel investment. What types of things would you want to tell your past self?

That's a great question. I wish I had thought about that a little bit more before this. It's really interesting in that—Maybe to take a step back and kind of help fill out a couple of maybe missing things that we haven't hit on, just a couple of things that are maybe helpful. I'm self-taught in everything that I do. So in design—And this is, I have pride in this, but it's also just the path I've happened to follow. And so there's a lot of luck kind of involved in that. But with design, I never went to a formal design school, I don't have an MFA. I learned by doing. And in investing, it was the same way. You know, a lot of venture investors start by raising a fund and investing other people's money. I started by investing my own money into—And making a lot of mistakes early on, and slowly building up a base of learnings and experiences and relationships that allowed me to do that at higher and higher levels.

So, what's the commonality when I think about these things? It's, you know, which is another way of saying what do I do that sets me up for success that's kind of a softer input? And I don't think it's anything all that crazy, but I think some things that I over-index on is I think I'm generally—I know where I wanna go and I'm very comfortable if it takes a very long time to get there. I will win the slow compounding game, I think, every single time. And I think it's a mix of if I have something that I'm interested in, in my mind it's an infinite game. So with investing, "I'm gonna stop investing if I have a bad investment." I will be an investor for the rest of my life. This is something I love doing, it's an area I'm always learning. And so for me it's just about showing up every single day and putting in a little bit of work and a little bit of effort in order to build on, you know, where I kind of left things the day before. So I would say that's one thing.

You know, and so if I were to go back to that former self, I think a lot of the advice that I would give is, "You will be just fine, and you can be very confident that you will arrive in a great place if you just don't judge yourself day over day on whether or not you're at your goal, but just show up and put in the work today." That, you know, "Whatever is in front of you that needs to be done, show up and do that work." Which is really just another way of saying, "Trust in compounding." You know, a lot of—For investors, for anyone in business, a topic that everybody likes to talk about is compounding. What is compounding? You know, ultimately a lot of people, you're trying to get to this exponential curve. Well, if you look at the math equation for the beginning of an exponential curve, it starts out super unimpressive. It starts out with just a tiny bit of incremental gain on top of a tiny bit of incremental gain.

And compounding is just really this idea, I think, if it were, if you were to take the principle and embody it in a quote, it would just be something like, "Gain traction and then don't lose traction, and build momentum." And so it's like, first you need to go from zero to one and just start doing it. Don't stop doing it. And then every single day, just show up and put in the work, and then ask yourself the question, "What do I need to get better at? What do I need to do that I'm not doing today?" And if you have those two feedback loops running all the time, I think you'll do really, really well.

So I think honestly the biggest lesson that I would communicate is just, "You will be just fine, you were meant to this, you will be good at this. Just show up every single day, enjoy the process, and trust that you're compounding a little bit every single day." Because I think the worst moments I've had as an investor, you know, I've been doing this for ten years. There are times where none of your investments are doing very well. There are times when there's no liquidity. You know, if you want to know what it's like to feel like you've made a bunch of money but not have any real money, talk to a venture investor that has it all liquid and private. You know, like, understanding illiquidity and being in a position where the vast majority of your net worth is always illiquid are two very different things.

And so I think a lot of, for me, the areas that have caused me undue stress or anxiety were all things around maybe being overly harsh on myself and judging myself and not trusting enough in the process.

How have you become more comfortable with illiquidity? I know this is one that has definitely hit me harder than I expected. How has that become something that is normal for you, or at least doesn't feel strange?

Yeah. One thing I believe that most other people don't believe is that everybody should probably have a wildly different portfolio from one another. And what I mean by that is if you think about the traditional financial industry, you go and you talk to a financial advisor. And what do they give you? Well, if you know what financial advisors do, the basic job is to have like ten models, and then fit everybody into the models, and so they're effectively just selling you the thing that they've mapped out for other people, and just saying, "You're an A, so I'm gonna put you in Model A." I think that's deeply broken, because it leans on this idea that everyone should be doing the same thing, as opposed to we're all wired very differently. And so a thought that I have that I think has enabled me to take this path is the idea that for me, when I think about building wealth and when I think making the world a better place by investing, it's investing in businesses.

And when you talk to business owners, like, the liquidity I have as an investor in a hundred plus companies is very different than the illiquidity that a founder has who has ninety plus percent of their net worth in the company that they're building now that may or may not be successful that two years from now could implode and go to zero. That, you know, is very different. But I think one of the things I've taken away from that from knowing enough founders, from knowing what the job's like, is that it's very slow. It's very slow to build something big. And so I think for me a lot of it's just philosophically, I am a massive believer in that I want the vast majority of my capital and my family's capital to be invested in business and in entrepreneurs, because when I think about what actually drives the economy, it's entrepreneurs. It's not what the Fed is doing or not doing, it's entrepreneurs that are taking risks to go out and build something that they think deserves to be in the world that needs to happen, and if they happen to be right, if they can achieve it, they do really, really, really well.

So, I wanna find those people. So I think part of it's just philosophically being very comfortable having a very different portfolio, being very comfortable having, you know, eighty percent of our investments in individual businesses that are mostly private, and then, you know, in terms of—I would say in my twenties that was super comfortable. As I'm now in my thirties and I have a family and kids, I have to be much more thoughtful about that. And so what I've, you know, like tactically the stuff that I've done is I have built with increasing focus other investments outside of just venture over the last five years. They will always be a smaller part of my portfolio, so effectively for me it was saying, "Okay, rather than a hundred percent of the portfolio being private, illiquid, you know, early-stage businesses, why don't we now make it seventy-five or eighty?"

Then just last thing I would say is I've taken a norm—As an investor, inevitably, a job to be done is you always need to be maintaining and building your conviction in the approach that you're taking, which is just another way of saying if you believe in compounding, the only way compounding works is if you head in one direction over a very long period of time and you're not zigzagging. So, a poor job of that is making sure that you're always buttressing up for yourself. "Why am I doing this? Why does this make sense?" And so I would say just a big part of it is I, you know, the investors—I listen to a wide variety of investor interviews, I read all sorts of crazy random esoteric, you know, investment papers over on the side. So I've had to, you know, everyone has to pull apart that for themselves and figure out what makes sense, but a lot of the stuff I've invested in is, you know, the opposite end of the spectrum from venture, and I've tried to just build off that balance over time.

It seems like a theme from today is staying in the game. Talking about the power of compounding and that compounding depends on a long time horizon. As you said, moving in one direction for a long time. What have you found over the years is best for maintaining this consistency, for putting in the reps, making sure that you're doing what's necessary for this compounding of learning and hopefully capital to continue? Are you big on goal setting? Do you prefer tracking inputs? What's your general approach?

I would say it's changed a lot over time, but I'll definitely describe what works for me now or what I've landed on that works. I would say that, again, just going back to, I think one of the things that if this wasn't true I would not be able to move in a single direction, is I have chosen a few things that I am going to keep doing that I am going to approach as infinite games. And those things are private venture investing and investing broadly, those things are design and helping companies with design. And I think that's really important, just because the people that I take deep inspiration from in life are people who treated what they were doing as an infinite game. You know, an example of that, a book I've been slowly making my way through, 'cause it's an old book and it's printed in a terrible new printing process, but it's Henry Ford's "Today and Tomorrow." And I am deeply inspired by what Henry Ford has built.

And what I mean by that is if anyone hasn't seen, go back and look at just how truly ambitious the plans were for the first Ford factory in America. And what you'll find is they brought in all their own raw materials, processed all their own raw materials, made all of the metal that went into the cars, made all of the internal components, put it all together, transported it via freight—You know, it's like when you think today about a vertically integrated company that's doing something on a truly ambitious scale, I maybe think of SpaceX. So I don't think there's many examples. But when I think of who was the forefather of something like SpaceX, it was absolutely Henry Ford. So, you know, I think a part of it's just finding deep inspiration in those people, in people who have picked a particular field and treated it as an infinite game.

It's also just the way I enjoy life. Like, for me I like doing a lot, I like pushing myself, and the only way that's fun is if it feels like a game that I'm getting slightly better every single day. Do I actually feel like I'm getting slightly better every day? Not even close. There are so many days that I'm like, "Ugh, just check the box." You know, and so I have like as an example, one of the things that I picked up a couple of years ago is I have an item in my to-do list every single day, I think it says, "Go for gold" or something like that. But it's basically just, the only time I can check that is if I can look at something during the day and think that I pushed myself to do something that I wouldn't want to do.

You know, so an example of that would be I was gonna work out for thirty minutes, but at the end of the day I have fifteen minutes. Do I just sit here and decide not to go to the gym because, "Oh, shucks, I'm not gonna make it," or do I actually go and put in fifteen minutes of a workout that actually feels like a thirty minute workout? If I do that, amazing. So I try to do little things each day to kind of stretch myself.

And then just, you know, tactically the thing I would say is—I'll give you the most valuable things, 'cause I've tried a bunch of things. I probably think about clear goals once every two to three months, and those goals are typically pretty short-term. Earlier this year as an example I was going back and forth with a friend and he was asking, you know, "What are your goals for the year?" And my goals, you know, over the last couple of years I've completely changed—You and I talked about this before we recorded. I completely changed the approach that I have for life at work. And what I mean by that is, you know, a couple of years ago I would have had, "These are the ten goals, hyper-specific, these are the ideal outputs I'm gonna get by the end of the year."

And now it's, no, I'm not even thinking about outputs. I know what my outputs are, which are the infinite games, so, which is another way of saying I don't really care where I end up at the end of the year as an investor. I'm not gonna grade myself harshly on that. But I'm gonna grade myself harshly on getting better as an investor. So now my list is all inputs. And so, you know, I was going back and forth with this friend and his list was all outputs, mine was all inputs, and it was stuff like, "Make sure that," you know, it's all of the little things, but for me it's, I have to go work out at least thirty minutes a day, there's a bunch of health-ish stuff I do. I try to drink at least an ounce of water first thing in the morning. I've started doing body work at night, which is basically just stretching. Stretching, it's kind of like a meditation, it's a great way to turn my mind off and get to my body so I can actually get some good sleep.

But the most effective things, I would say, are two things. Every single night I write out a list for the things that I wanna do the next day, and I try to go back to that as many times as I can during the day and just grade myself against that, because I've found that I can go down a rabbit hole on one item on that list and spend six hours, basically almost an entire day, on item number three on my eight item list. So now I try to think about what those core things are, time box it with a timer, and go back and think about that. And then, yeah, I would say the second thing is just focusing on inputs in the stuff that I do. But again, I would just say to kind of round it out, you have to first approach it as an infinite game, you have to know the infinite games you want to play, and then I think you have to be input focused. And I just find reflection and planning are I guess pieces—They're always the things I come back to.

I love that, and I think that's a really good place to end it. So, thinking about what is your infinite game, what is the game that you are playing to play, that you would like to be playing the rest of your life, and what does your form of training or practice look like? How can you solve this continual progress so that you're getting a little bit better? What are you going for the gold, not checking the box? Daniel, thank you so much for sharing your viewpoint, your perspective, some of the things that you've learned in the trenches. Before I let you go I just wanna give you the opportunity, any final words of wisdom, anything else you'd like to share before we wrap today?

No. I mean, I think anchoring it all around an infinite game and around focusing on inputs is I think some of the biggest unlocks I've had over the last couple of years. And then the only thing I would maybe add on why I've come to think that that's the right approach is I've spent so much of my life focused on outputs. And when you think about what outputs are, you know, at least when it comes to the goals that we typically set, it's not like a recipe that we're following in a kitchen where we just put in these five ingredients and out pops this thing. We're trying to get to something, and we often don't know the path to get there. And so what I've found over time is just by thinking about the inputs and thinking about the inputs and then judging myself on the work that I'm putting in there, number one it allows me to just feel better (every single day I feel like I'm actually making progress, I feel like I'm focusing on the right things, I feel like I'm leveling up my game).

And so for people listening, you know, if you feel like you're stuck in a bad feedback loop, if you feel like you're constantly tearing yourself down because you're not reaching these outputs, I would highly, highly, highly encourage you to rethink and reframe what you're doing around inputs, 'cause I think it's just liberating.

Daniel, anywhere you'd want to send those who are listening? Where could they go to learn a little bit more about what you're doing or to reach out?

So, I've got three things I'll share. One is my personal site where I have all of my writing. You can find that at danielscrivner.com. A second is my podcast, Chris mentioned it at the beginning of the show. I've been running it for the last two years. It's called Outlier Academy, and we try to literally profile iconic founders, world-renowned investors, best-selling authors, and then pull out what they're doing. You know, the habits, the routines, the tactics that they're doing to actually build incredible businesses or achieve incredible track records. Been doing that for two years. You can learn more about that at outlieracademy.com. And then, you know, as you mentioned I'm an angel investor, so I'm always, you know, working with founders 101. I also have a venture fund with a partner called Ligature and am spending the vast majority of my time focused there. We've got forty-four investments we made over the last year in some incredible, incredible companies. So if people are interested, you can learn more about Ligature at ligature.vc.

Thanks, yeah. I'm a big fan of what you're doing, I love Outliers, I think you've had some amazing guests on, I'm very excited to be back, I'm a proud investor in Ligature. I think you have great taste in companies and in design, and really honored to have you here.

Thanks for having me, Chris.

Thank you for listening to the Forcing Function Hour. At Forcing Function, we teach performance architecture. We work with a select group of twelve executives and investors to teach them how to multiply their output, perform at their peak, and design a life of freedom and purpose. Make sure to subscribe to Forcing Function Hour for more great episodes, or go to forcingfunctionhour.com to sign up for our newsletter so you can join us live.