Co-founding and Maintaining Relationships:
Emmett Shear’s long-standing friendships with his Twitch co-founders contributed to their successful collaboration. Kyle was recruited from MIT based on his credentials and a 27-page PDF. Trust, teamwork, and prioritizing the company’s interests were crucial to maintaining harmonious relationships among the co-founders.

The eBay Auction:
Twitch’s initial product was a JavaScript calendar that was sold on eBay after Google launched a similar product. The eBay listing was a strategic PR move to generate attention and attract buyers. Despite an initial setback with eBay taking down the listing, the sale was successful, demonstrating the team’s resourcefulness.

Kyle’s Nocturnal Schedule:
To avoid conflicts, Kyle temporarily adopted a nocturnal schedule, highlighting the challenges of working in close proximity with co-founders.

Trust, Commitment, and the Importance of “We”:
Trust, hard work, competence, and understanding the importance of “we” were essential to the co-founders’ success. Prioritizing the company’s interests over individual incentives simplified decision-making and reduced conflicts. This mindset is critical for successful partnerships, both in business and personal relationships.

Advice for Entrepreneurs:
To foster a collaborative environment, entrepreneurs should embody the principles of trust, commitment, and prioritizing the “we.” The ability to buy into the “we” and work with like-minded individuals is crucial for harmonious partnerships. Entrepreneurs should be wary of their own behavior as a primary cause of relationship problems, both in business and romantic contexts.

Lessons from Product Work:
Shear acknowledges that the product and business aspects of their early products were poorly designed, resulting in limited takeaways. However, they gained significant insights into the engineering and design aspects, particularly in building functional and stable systems with minimal bugs.

Importance of Studying External Successes and Failures:
Shear emphasizes the value of obsessively studying how other businesses operate, as this provides a greater wealth of knowledge compared to solely relying on personal experiences. He explains that launching significant products takes time, but learning from other players in the market offers a higher volume of lessons.

Continuous Learning through External Observation:
Shear credits his primary learning to conversations with Justin Kan, Michael Seibel, and Kyle Vogt, where they analyzed and discussed various startups during every lunch, evening, and weekend. They focused not only on their own startup but also on analyzing the successes and failures of other players in the market, such as Facebook and MySpace.

Design Perspectives:
Iterative product development through careful attention and real-world use leads to valuable lessons and insights for designers. Understand that founders may not initially consider industry, capital allocation, and business structure but become important as a company grows. Industry shifts and changes in competition may lead to re-evaluating core aspects of a business.

Investment Perspectives:
Investors, particularly in public and late-stage private markets, focus on industry, capital allocation, and business structure. Investors can extrapolate from multiple data points gathered through various investment pitches.

Examples of Decision-Making:
Founders may overlook enterprise software opportunities due to lack of interest or perceived lack of value. Selling Social Cam to Autodesk was a puzzling move for some, given its relevance to Twitch and consumer focus. Twitch founders initially considered building a Webex competitor but opted against it due to the complexities of enterprise sales.

Key Takeaways:
Knowing oneself and aligning with personal interests is important for founders when choosing the direction of a company. Timing plays a role in the success of consumer-focused companies, with competition becoming more intense as distribution consolidates.

Overcoming Creative Disappointment:
Many creative individuals go through a period where their work doesn’t meet their expectations. Bartlett emphasized the importance of acknowledging this phase as normal and continuing to put in the effort to improve.

Emmett Shear’s Experiences:
Shear experienced three layers of disappointment in his creative journey: engineering, product, and business. Engineering: Initially, Shear felt his engineering skills were inadequate compared to experienced engineers he admired. He spent years improving his engineering capabilities. Product: While Shear was satisfied with the micro-design of his products, he struggled with macro-level decision-making, especially in understanding user needs and solving real problems. Business: Shear and his team faced the challenge of figuring out what to build that people would actually want, leading to a sense of frustration when products failed to solve user problems.

Comparison to Science:
Shear compared his struggles in product development to learning science. In science, researchers may publish papers that get published but may not make significant discoveries. This frustration is similar to the challenges he faced in building products that truly solved user problems.

The Reality of Live Reality TV:
Emmett Shear, another co-founder, realized that live reality TV required editing, making the original concept impractical. The team lacked the necessary knowledge and experience in the entertainment industry.

Justin’s Influencer Dreams:
Despite the challenges, Justin Kan’s desire to be an influencer and livestream his life persisted. Justin.tv was built to fulfill this vision and became a pioneer in the field of livestreaming.

Building for Themselves:
Shear emphasized the importance of building products for personal use, driven by genuine needs and desires. Innovations on Justin.tv and Twitch were often inspired by the team’s own experiences running the show.

Twitch: A Verticalized Version of Justin.tv:
Twitch emerged as a specialized version of Justin.tv, catering to a more niche audience of gamers and streamers. The success of Twitch validated the team’s belief in the potential of live streaming.

Profitability and Financial Challenges:
Justin.tv achieved profitability after the 2008 financial crisis through cost-cutting and revenue generation efforts. The team faced financial constraints and used a “doomsday clock” approach to create a sense of urgency and focus on survival.

The Challenges of Reinventing Justin.TV:
Justin.TV’s lack of growth led to discussions about its future direction, with no clear strategy for reinvigorating growth.

The Mobile Video Pivot:
Autodesk pivoted towards building mobile video products, recognizing the potential in the pre-Snapchat and pre-TikTok era.

The Shift from Justin.TV to Twitch:
The core difference between Justin.TV and Twitch was not the focus on gaming versus general-purpose content; it was the realization that the streamer, not the viewer, was the important customer for live video.

The Debate over Rebranding:
The rebranding from Justin.TV to Twitch was motivated by a desire to focus on a specific customer base, but it was ultimately seen as helpful and beneficial to the company’s identity.

The Streamer-Centric Approach:
In contrast to platforms like YouTube, where the focus was on the audience, Twitch recognized that for live video, the success of the platform hinged on satisfying the needs and demands of the streamers themselves.

The Importance of Streamer Engagement:
Twitch implemented a system of paying streamers money based on insights gathered from streamer interviews, demonstrating the platform’s commitment to prioritizing their needs.

The Fokus on Streamer Satisfaction:
The shift towards building a product designed specifically for streamers, rather than the audience, became the cornerstone of Twitch’s success.

Data-Driven Insights vs. Intuition:
The shift towards gaming was driven by Emmett Shear’s intuition and his enjoyment of watching video games on Justin.TV, rather than specific data-driven insights.

Identifying Potential Streamers:
Shear noticed that only 200 individuals were creating gaming content with viewership. Convincing a substantial number of these individuals to stream on Twitch presented a clear opportunity for growth.

The Focus Shift:
Justin.tv pivoted its focus from social cam to gaming, recognizing the latter’s potential. The shift involved a skunk works approach, with goals set to guide the success of each project.

Monetization Strategy:
Monetization through ads was already in place on Justin.tv, and the plan was to continue this strategy. Profitability enabled funding for experimental projects like Twitch.

Achieving Growth Goals:
Twitch surpassed its ambitious goals, including a 25% monthly growth target, achieving 30% growth instead.

Kevin’s Role in Streamer Acquisition:
Kevin, one of the first hires on the gaming team, was pivotal in convincing streamers to join Twitch. His BD skills helped negotiate terms that appealed to content creators.

SocialCam’s Slow Growth:
Unlike Twitch, SocialCam failed to meet its growth goals due to underestimating the development time for a new mobile product.

Spinning Off SocialCam:
Although SocialCam showed promise, Twitch’s success led to its spin-off and Michael’s departure.

Justin’s Disinterest:
Justin lacked enthusiasm for the gaming streaming concept, leading to his eventual departure from the company.

Kyle’s Role and Legacy:
Kyle managed the legacy business for over a year, ensuring a smooth transition before finding a suitable replacement.

Community as the Foundation:
Shear’s initial assumption that he represented the majority of viewers proved incorrect. The realization that community was the primary motivator for most users significantly impacted Twitch’s product development.

Product Development Insights:
The focus shifted from building a platform solely centered around entertainment to one that prioritized community and connection. The product development team recognized that catering to the community’s needs would benefit the streamer and the platform as a whole.

Streamer-Community Relationship:
Twitch understood that streamers were the heart of the platform and recognized that fostering a sense of community around them was essential. Streamers, not Twitch, were responsible for cultivating their communities, and Twitch’s role was to facilitate this process.

Conclusion:
Twitch’s community-centric approach, coupled with its focus on supporting streamers, proved to be a winning strategy. By recognizing the significance of community and building a platform that facilitates streamer-audience relationships, Twitch established itself as a thriving platform for live streaming.

Competition’s Response:
After Twitch’s acquisition by Amazon, competitors such as YouTube, Google, Microsoft, and Facebook launched competing platforms and lured streamers with lucrative offers.

Twitch’s Reaction:
Instead of engaging in a bidding war, Twitch strategically allocated its resources, prioritizing the long-term health of the platform by investing in product development and user experience.

Product Differentiation:
Twitch recognized that streamers value a stable and reliable platform with robust moderation tools. By focusing on improving core features and providing a seamless user experience, Twitch maintained its competitive edge.

User-Centric Approach:
Shear highlights that Twitch’s success stems from understanding streamers’ needs and prioritizing their satisfaction. Rather than implementing features based solely on user requests, Twitch focused on delivering value through features that genuinely enhanced the streaming experience.

Prioritizing Core Features:
Instead of implementing every requested feature, Twitch concentrated on improving existing core features such as chat moderation, subscription management, and discoverability, which are critical to streamers’ success.

The Choice:
Shear conducted a thought experiment, offering streamers the choice between earning an extra dollar per hour or launching a new feature like polls. The majority of streamers opted for the extra income, demonstrating that Twitch’s focus on core functionality resonated with its users.

Key Goals of Streamers:
Fame: reaching a larger audience and growing their viewership. Love: receiving positive feedback and building a sense of community. Money: generating revenue through streaming.

Evaluating Features:
Features that contribute to fame, love, or money are prioritized. Features that do not contribute to these goals are considered less important.

Acquisition Considerations:

Acquihires:
Google offered to acquire Justin.TV but failed due to team members not meeting Google’s standards. Yahoo offered to buy Kiko, but the offer was perceived as a lowball.

Lessons from Acquisition Offers:
Shear believes these experiences are unique and not widely applicable to other founders.

Amazon Acquisition:

Benefits of Selling to Amazon:
Amazon allowed Twitch to operate autonomously, maintaining its own culture and decision-making. Amazon eliminated the need for fundraising, ensuring consistent funding.

Shear’s Decision-Making Process:
Shear was motivated to sell to Amazon to avoid fundraising and maintain control of the company. In retrospect, he believes it was the right decision.

Amazon’s Retention Strategy:

Autonomy and CEO Retention:
Amazon retains CEOs by granting them autonomy over hiring, firing, contracts, and product launches. This approach ensures that CEOs feel empowered to lead their teams effectively.

Integration Highlights:
Advertising: Twitch’s integration with Amazon Advertising has been successful, similar to Instagram’s integration with Facebook. Amazon gains access to new advertising inventory, while Twitch benefits from Amazon’s extensive sales team. Prime: Collaboration with Amazon Prime has been mutually beneficial, offering Prime benefits to Twitch subscribers and increasing the value of both services. AWS Integration: Twitch’s Interactive Video Service (IVS) has been launched as an AWS service. This allows Twitch to share its core technology with a wider audience and leverage Amazon’s cloud infrastructure.

Integration Approach:
Amazon has generally avoided forcing deep integrations with Twitch, recognizing that excessive integration can be counterproductive. The focus has been on integrating key areas like advertising, where synergy is clear and beneficial. This approach allows Twitch to maintain its autonomy and continue innovating within its product.

Conclusion:
Twitch’s integration with Amazon has been successful in unlocking strategic value for both companies. Amazon has respected Twitch’s independence, enabling it to continue growing and contributing to Amazon’s overall ecosystem.

Impact of Success on Emmett Shear’s Life:
Shear recognizes the direct improvements money brings to his consumption and lifestyle. He emphasizes the value of using wealth to support and invest in others, such as funding friends’ companies and investing in causes he believes in. He highlights the satisfaction of making a quick decision to invest $1 million in SF New Deal due to his trust in the CEO, Lenore Estrada.

Money as a Tool, Not a Goal:
Shear emphasizes that money is a necessary resource, like gas for a road trip. However, he cautions against making money-making activities the primary focus of life, likening it to a tour of gas stations instead of an enjoyable road trip. He advises considering where the “gas stations” are on one’s life journey to avoid running out of resources.

Managing Complexity through Sharding:
To effectively manage decision-making in a large company, it is crucial to “shard” the decision-making process. Sharding involves dividing decision-making among groups, where each group owns and manages a specific set of decisions. The goal is to minimize communication and coordination between groups, enabling asynchronous interactions.

Techniques for Effective Sharding:
There are numerous techniques for achieving effective sharding, tailored to the specific needs and structure of the organization.

Recognizing One’s Limitations:
It is important to recognize areas where one’s strengths may be limited and seek assistance or augmentation from others.

Example from Twitch:
The speaker, with 17 years of experience at Twitch, highlights the significance of recognizing one’s limitations and the need to collaborate with others to fill those gaps.

Interviewing as an Energy-Draining Task:
Shear admits a personal challenge in interviewing job candidates, acknowledging that it’s a high-energy activity for him. He expresses his preference for interviewing people he naturally connects with, recognizing that doing so in other cases required significant effort.

Delegating the Interview Process:
Shear learned that it wasn’t essential for him to be involved in every interview and that delegating this task was beneficial. By limiting his involvement to the final stages of interviewing, he preserved his energy and maintained a more positive attitude.

Embracing Dislike for Certain Tasks:
Shear’s experience highlights the importance of understanding that individuals don’t have to enjoy all aspects of their work. He emphasizes that the key to success lies in identifying tasks that align with personal strengths and can be performed with enthusiasm and sustainability.

Customer Feedback:
Talking to customers is crucial for product development, but directly delegating product design to them is a mistake. Customers can identify problems and realities in their business, but they’re not necessarily skilled in product design. Understanding customers deeply allows for better product design, rather than relying on them to do the job.

Idea Validation:
Validating product ideas through customer feedback is flawed, as it doesn’t change the inherent value of the idea. Great ideas can be mistakenly discarded due to customer feedback, as customers may not be skilled product designers. The order of product development should be: talk to customers first, then come up with great ideas based on that understanding.

Decision-Making in a Co-founder Team:
In Twitch’s early days, decision-making was often a war of attrition, with the last person standing getting their way. A hybrid model existed, where epic debates took place, but action-takers who “did stuff” also got their way. Despite the contentious nature of the debates, they were valuable in gaming out different perspectives and reaching informed decisions.

Island of Stability in Remote Work:
The “island of stability” refers to a theoretical region in the periodic table where elements become stable again after being unstable. Similarly, in remote work, there is a theorized “island of stability” where remote hierarchical companies can be effective.

Comparison of Remote and Valley Culture:
Valley culture emphasizes autonomy and experimentation without strong accountability. This approach does not translate well to remote work due to the lack of implicit social pressure.

Future of Remote Work:
We will likely see a divergence of models, with some companies specializing in remote work and others focusing on in-office culture.

Personal Preference:
Emmett Shear personally prefers the in-office environment but acknowledges the benefits of remote work for those who value it.

Top-Down Goal Setting:
Shear emphasizes the limitations of top-down goal setting. Relying solely on intellectual analysis can lead to goals that miss the mark. Setting goals can be dangerous if they don’t align with one’s true intentions.

Example: Weight Loss vs. Health and Strength:
Instead of setting a weight loss goal, one should focus on the intention of being strong and healthy. Acting in accordance with this intention and creating a supportive infrastructure is more meaningful.

The Score Takes Care of Itself:
Shear draws inspiration from the book “The Score Takes Care of Itself” by Walsh. The book emphasizes that the score in a game is irrelevant if the team has practiced and prepared well. This principle can be applied to goal setting, where focusing on inputs (practice) is more important than outputs (score).

Goal Setting for Companies:
Shear advocates a balanced approach to goal setting, including both input and output goals. Output goals ensure accountability, while input goals maintain focus. Different types of goals serve different purposes and contexts.

Example: Twitch’s Million-Earner Goal:
Shear set a five-year goal for Twitch to have a million people earning money on the platform. Achieved ahead of schedule due to COVID-19, this goal inspired innovation and development. The goal motivated the creation of the affiliate program and other initiatives.

Distinguishing Between Goal Types:
Shear differentiates between long-term inspirational goals and short-term efficiency-driven goals. Both types of goals are valuable and serve distinct purposes. It’s essential to recognize the differences between goal types to avoid confusion and ensure effective goal setting.

Importance of Coaching Experience:
Yossi had been a successful CEO and taken his previous company public before becoming a coach. Shear emphasizes that a coach with relevant experience can provide valuable insights and guidance.

Creating a Safe Space:
Coaching creates a space for open and honest reflection, without external incentives or agendas. The coach serves as a mirror, helping the client identify strengths, weaknesses, and goals.

The Value of Questions:
Coaching involves asking powerful questions that prompt self-awareness and growth. Learning to ask these questions independently is a key benefit of coaching.

Assessment of Coaching:
A successful coaching relationship leads to more positive surprises than negative ones. The client should feel growth and find themselves sharing the lessons learned with others.

Selecting a Coach:
Selecting a coach is like selecting a therapist, a partner, or a co-founder. The right fit is essential for a successful coaching relationship.

Paul Graham’s Influence:
Paul Graham’s exceptional ability to instill confidence and belief in startup founders is his superpower. Through conversations with Paul, founders leave feeling empowered and capable of achieving ambitious goals. Paul’s mentorship provides founders with the gumption to persevere amidst challenges and uncertainties.

The Early Startup Culture:
In the early days of YC, the startup culture was not as prestigious as it is today. Starting a startup was seen as a risky and counter-narrative move. Despite the skepticism, those who were truly committed to entrepreneurship were drawn to YC, resulting in a talented pool of founders. The arduous nature of starting a startup acted as a natural filter, ensuring that only the most dedicated and passionate individuals persisted.

Sam Altman’s Early Promise:
While Sam Altman’s leadership potential was not immediately apparent, his exceptional ability to secure deals was evident from the start. Sam’s success in convincing phone companies to partner with his startup, despite its lack of a tangible product, demonstrated his exceptional deal-making skills. This trait has remained a hallmark of Sam’s career, as evidenced by his success in convincing Microsoft to invest in his fusion power venture.

TAM as a Signal:
Shear emphasizes that TAM analysis is not about precise calculations but serves as an indicator of a founder’s mindset and commitment to building something significant. Companies built by people focused on exits tend to have flaws and lack the drive to create something transformative.

Challenges in Established Markets:
Established markets often require higher upfront commitment and capital, making TAM analysis more critical.

Targeting the Right Customers:
Founders can fall into the trap of building solutions for nonexistent customers or those uninterested in their offerings. Shear advises targeting markets with existing demand and spending power, such as software developers, instead of niche markets with limited potential.

Market Timing:
Logan Bartlett raises the question of timing market entry, suggesting that being early is generally preferable. Shear agrees, emphasizing that too-early entry may lead to competing against incumbents and consumer resistance, while too-late entry may miss the market’s growth potential.

Hiring:
Hiring too many people can kill a startup due to high burn rate and slow decision-making. Hiring should be aligned with the goal of maintaining speed.

Emmett’s Return to YC:
Emmett always wanted to be a YC partner and saw it as a life experience, and enjoys advising startups.

YC’s Success:
YC’s strong network effect attracts smart people, creating a positive feedback cycle. YC has been sustained by its long-term mindset, focusing on building a strong alumni network.

Constraints on Startups:
The biggest constraint on startups is the availability of sufficiently talented people who are willing to take on the challenges of starting a company. There is enough capital available, but some deserving founders may not get funded due to pitching issues or lack of understanding of investors’ perspectives.

Pitching Advice:
Being an investor can help founders understand what investors look for and improve their pitching skills. Founders can benefit from observing actual pitches and discussions to learn from real-world scenarios. Templates for pitches are not helpful as every pitch should be unique and reflect the uniqueness of the company.

Self-Bootstrapping Superintelligence:
Shear believes that AI systems may eventually reach a point where they can self-improve and become significantly smarter than humans. He discusses the idea that the first instrumental step towards achieving an AI’s goal could be to gain control over everything, leading to potential danger if its goals are not aligned with ours.

Alignment and Doom Arguments:
Shear acknowledges the “doom argument” proposed by Eliezer Yudkowsky, suggesting that AI could lead to human extinction if its goals are not aligned with ours. However, he expresses cautious optimism, believing that the problem of alignment is more solvable than some AI researchers suggest. Shear’s probability of doom falls between 5% and 50%, while others in the field, like Paul Cristiano, have estimated a range of 25% to 50%.

Human-Level Extinction and AI Failure Modes:
Shear warns that the risks posed by AI extend beyond human-level extinction to encompass the destruction of all value in the universe. He cautions against assuming that failure modes observed in less intelligent AIs will necessarily apply to their more advanced counterparts.

The Need for Prototyping and Gradual Development:
Shear advocates an engineering approach to AI development, emphasizing prototyping and incremental development at a smaller scale. He believes this iterative process is crucial for building resilience and identifying potential pitfalls before scaling up to more intelligent systems.

The Imperative for International Cooperation and AI Treaties:
Shear proposes international cooperation and treaties to prevent the development of excessively powerful AIs, similar to nuclear test ban treaties. He acknowledges that while the current generation of AIs may not pose an immediate threat, proactive measures are essential to avoid future risks.

The Importance of Experimentation and Understanding AI Principles:
Shear encourages experimentation with smaller AI models to gain a deeper understanding of their inner workings. He believes that such experimentation can reveal potential failure modes and contribute to the development of a science of AIs.

Challenging Assumptions and Engaging with Technical Merits:
Shear encourages skepticism towards claims that AI risks are overblown, urging individuals to engage with the technical merits of the arguments rather than relying solely on emotional reactions. He emphasizes the need for constructive dialogue and welcomes debates on potential solutions to AI alignment challenges.

Addressing Counterarguments and Misperceptions:
Shear acknowledges counterarguments that dismiss AI risks as baseless fear-mongering, particularly among those with vested interests in the field. He clarifies that his concerns are not driven by financial incentives or personal biases towards specific companies.

Recommendations for Individuals Concerned about AI Risks:
Shear suggests that individuals concerned about AI risks should reach out to their elected representatives to advocate for stronger regulation and oversight.

Addressing the Confusion between AI Ethics and General Technological Concerns:
Shear highlights the need to distinguish between “AI Ethics” and “AI Not-Kill-Everyoneism.” He stresses that the potential threat of superintelligent AI should not be conflated with broader concerns such as job loss and discrimination, which are more typical technological challenges.

Understanding the Changing Nature of Income Distribution:
Shear presents a graphic depicting the flattening of the income distribution curve since 1970, indicating a shift away from a traditional bell curve. This flattening suggests that while household incomes are generally increasing, there is a growing disparity between the wealthy and the middle class, creating a sense of inequality.

Reflections on Turning 40:
Shear’s self-reflection on his life and time spent through a Tim Urban-inspired exercise revealed that he spent a significant portion of his life in school, indicating that he could have started working earlier in retrospect.

Optimism about San Francisco:
Despite the challenges faced by San Francisco during COVID-19, particularly the fentanyl crisis, Shear remains optimistic about the city’s future. He highlights the city’s advantages and the dedication of residents who are committed to improving it.

Executing the Right Plan:
Rapid change is integral to startups, while government operates on consistency. Emmett Shear’s focus in government is maintaining consistency and “keeping turning the wheel.”

Silicon Valley Conventional Wisdom:
Overgeneralized advice in Silicon Valley may be suitable for specific contexts but not others. The adage “startups should hire A-players” is often misunderstood or misapplied.

Hiring Philosophies:
Startups cannot realistically hire only A-players and should not focus on this unrealistic goal. Hiring decisions should prioritize talented individuals who align with the mission and are willing to work hard. The idea of categorizing employees as A or B players may be fallacious and harmful. To attract and retain talent, a company’s mission and culture must resonate with potential hires.

Exceptions and Caveats:
Some tech companies at the forefront of innovation may require hiring top-tier talent due to the demanding nature of their work. A few examples of exceptional companies that hire only the highest-caliber talent include Renaissance Technologies, a hedge fund that selects candidates with groundbreaking math research publications.