Episode 17: Today, hosts Alex Lieberman (@businessbarista) and Jesse Pujji (@jspujji) are joined by fellow startup entrepreneur Jonathan Swanson. Jonathan is the co-founder and chairman of Thumbtack—a massive technology leader building the modern home management platform. In this episode, Jonathan tells Alex and Jesse all about how he and his co-founders came up with the idea for Thumbtack, the turning points and "Oh sh*t" moments of growing the business, and his genius delegation tactics that save him hundreds of hours over the course of a year.
(00:50) - Intro
(01:51) - Start of Jonathan Swanson interview
(04:04) - What keeps Jonathan motivated, even after all of his career success
(05:21) - Jonathan Swanson’s upbringing and background
(06:20) - Why Jonathan decided to pursue entrepreneurship
(09:23) - The early days of starting Thumbtack
(15:48) - The moment that changed everything for Thumbtack
(17:09) - How Jonathan navigates his co-founder relationship
(22:00) - The event that almost killed Thumbtack
(27:00) - The overseas employee that changed Jonathan’s trajectory
(30:20) - Jonathan’s career path after Thumbtack
(33:40) - Jonathan’s tips for how to delegate as a leader
(41:21) - Jonathan’s other businesses
(45:00) - How Jonathan hacks his personal life
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Alex Lieberman (@businessbarista)
Jesse Pujji (@jspujji)
Jonathan Swanson: Google Capital came to us and said, "We're interested in investing." We weren't fundraising. And we said, "Okay, we'll talk to you." And five days later, they gave us a term sheet for $100 million. I still remember sitting in the conference room when they made the offer. I was with Marco. We ended the call, and I sat down on the floor and put my head in my hands, and was just like, "Holy shit."
It felt like this gap between what we thought our potential was and what the world thought suddenly collapsed. And for years, people had said, "You don't have the potential you think you do." And in that moment, these investors said, "We believe." And that was super validating.
Alex Lieberman: What's up, everyone? I'm Alex Lieberman.
Jesse Pujji: Yo, this is Jesse Pujji.
Alex Lieberman: And this is The Crazy Ones. What's up, Crazy Ones listeners? We are back with another episode of the show. And as promised, we are testing a lot of stuff in this new year. We tested last week the new format with going through the Twitter thread, riffing about it.
Today we have our first guest, and it's coming full circle because the first person that I ever interviewed when starting Morning Brew was the CEO of Thumbtack, the Amazon for services: Marco Zappacosta. And today, our first guest is his co-founder, Jonathan Swanson. Jesse, this was a fun one.
Jesse Pujji: Yeah, listen up. You're going to learn about building billion-dollar businesses, one person having six EAs, and how to cure men testosterone issues.
Alex Lieberman: Take a listen and let us know what you think. Shoot us an email at firstname.lastname@example.org and let us know if you want some more good interviews like this.
Jonathan Swanson, thank you so much for joining The Crazy Ones.
Jonathan Swanson: Thank you for having me.
Alex Lieberman: You're guest number one. I feel like there's...actually, this is the most appropriate thing, because you are a man that lives by experimentation. You've literally written Medium posts about your life experiments, and you are a live experiment of this show right now.
Jonathan Swanson: Good.
Alex Lieberman: We're trying to see if people enjoy the guest banter. And it's cool also to reconnect. I first learned about you in our post-exit founders group. You did a really cool Zoom call with all of us. It's full circle because eight, seven years ago, when we were starting Morning Brew, the first person I ever interviewed for Morning Brew was your co-founder for Thumbtack, Marco.
Jonathan Swanson: Oh, wow. Cool. Awesome.
Alex Lieberman: It's a crazy thing that the first interview for Crazy Ones is also a Thumbtack guy.
Jonathan Swanson: Nice. We'll keep it in the family.
Alex Lieberman: And I know you've talked to Jesse in the past. Yeah, man.
Jesse Pujji: Yeah. Well, we have a crazy story. I don't think I told you this, Alex, that when Ampush was starting, we were looking for an awesome first engineer, and we found this amazing guy from Minnesota. Forgetting his name, Jonathan, I wish I remembered his name. But anyway, he was like...
Jonathan Swanson: Chris Mueller?
Jesse Pujji: Yes, Chris Mueller. And we were like, "Oh, this guy's the best. He's amazing," and he calls us, and he breaks our heart. He's like, "I'm gonna go to this other startup that's really building something that I think a lot of people..." He just loved the product vision. And then later on he was like, "You should come meet my founders." And I went to this little backstreet in Minna in the worst part of San Francisco, and walk into this thing, and that's Marco and Jonathan. It was like, "Hey, guys."
Jonathan Swanson: That's right.
Jesse Pujji: And we've known each other since then and shared a love for growth marketing, growth hacking, and offshore labor, and everything else, everything in between.
Jonathan Swanson: Yeah, I love it. That office was in the worst neighborhood in SoMa.
Jesse Pujji: Worst, yeah.
Jonathan Swanson: You get accosted on the way to the office daily.
Jesse Pujji: Oh my god.
Alex Lieberman: Well, we're gonna explore a lot of these topics, but I want to start with maybe a little bit of a deeper question to allow us to talk about some of your businesses and what you're doing today. You obviously have had a number of big wins from a professional perspective; I would say Thumbtack being one of them. The business is incredible. You've raised $700 million. I believe last valuation I saw was a report of $3 billion. You have that win. And so I'm always fascinated when founders have a win, what is it that motivates them to do anything else? You're now working on Athena. You're working on Powerset. You're doing a lot of shit in your life. What is it that propels you forward, after that first win?
Jonathan Swanson: So I think two things. One, I don't feel like I've won. When you go back to what Marco and Sander and I were talking about when we started Thumbtack, our ambition was to be the Amazon of local services. We made a lot of progress. We've got a big team now, raised lots of capital, but we're not there yet. And so there's a lot left to do at Thumbtack. But even if Thumbtack does reach its full potential and become the Amazon of local services, I just always want to swing bigger. It's like, we've got one life to live, and I want to start as many businesses as we can, do as much as we can. Yeah, it's like life is short, so swing for the fences.
Jesse Pujji: Yeah. I'm curious, just if for everyone listening you could back up, maybe. I don't know if I've ever asked you this. What's your story? Tell us about how you grew up. And how did you end up becoming an entrepreneur? And how did Thumbtack come to be?
Jonathan Swanson: Yeah, so grew up in the Midwest like you, Jesse. Both my parents grew up on farms. I went out east for school, studied philosophy and economics. And I was a political junkie, so I went to work at the White House, which was cool life experience. Got to work in the West Wing and have some pretty fun life experiences. But I knew I didn't want to be in politics forever because politics is a circus, and really just motivated to do something big. I wanted to be part of something that mattered and something that really challenged me personally.
I was a shy kid, growing up. And first time the chief of staff at the White House came up to me and asked me to do something, I was fucking terrified. But being able to rise to those occasions just showed me and I was like, man, there's so much more potential if I'm challenged constantly. It seemed like starting a business would be the best way to be challenged constantly, and it absolutely is.
And so with a couple of friends, we started brainstorming ideas. Every Sunday we got together, and we would brainstorm startups, to start. Most of our ideas were dumb, or idiotic, or didn't go anywhere.
Alex Lieberman: Do you remember any of those early ideas that you didn't push forward with?
Jonathan Swanson: Oh, we had lots of them. I mean, like dog rental.
Alex Lieberman: No offense to any dog rental entrepreneurs out there.
Jonathan Swanson: Yeah, we had one that we started moving forward with that was a financial accounts aggregator that would connect all of your financial accounts, put it in one place so you could track it in one place. Some of you may have heard of Mint that launched.
Alex Lieberman: Yep.
Jonathan Swanson: It launched...we had been thinking about this for a couple of months, and we saw that thing launch, and we're like, "Whoa. They've nailed it. There's no chance for us." So we went back to the drawing board.
And fortunate for us, we came back to this idea of local services, which turned out to be a 10x bigger idea. The motivation there was Amazon's making it trivially easy to buy any product, and the same should be true of any service. We were ambitious and naive and just jumped in and started working on it. It's certainly harder than we ever expected, but we've made great progress, and yeah, we're closer to bringing that vision to life than we ever have.
Jesse Pujji: Did you have any entrepreneurial inclinations growing up? Were your parents entrepreneurs? I'm just curious because it comes for different people from different places. Where'd it come from for you?
Jonathan Swanson: Yeah. I don't like rules or constraints. I think that's common among many entrepreneurs, is like, how can you hack a system and be unconstrained? In college I started this very geeky nonprofit called Students for Saving Social Security. It was about reforming Social Security. It took off, and there's chapters all across the country. I went to DC, took time off from school. It was really my first taste of what it was like to harness a group of people and have a shared mission and swing for the fences. We failed, because Social Security's still messed up. But that gave me the taste for it in college, and I knew I wanted to do something again.
In fact, we pitched Peter Thiel for that nonprofit, I'm just remembering. He offered to help because he was interested in this cause. And we said, "We actually don't want your investment here because we think we're going to come back with a better idea one day. So we'll come back when we have a technology business you can fund."
Alex Lieberman: Did Peter Thiel end up investing in Thumbtack?
Jonathan Swanson: And then we tried to get Peter Thiel and Founders Fund to invest, and they passed.
Alex Lieberman: On that note, my understanding is, first two years of Thumbtack, you slept in a closet, and you were rejected by 42 VCs. What was the biggest reason people gave nos?
Jonathan Swanson: I mean, all the reasons. We weren't making any money. There were lots of dead bodies. Lots of people had tried to start a local service marketplace and failed. We had a process for signing up lots of service pros at scale that was pretty cool, but we hadn't figured out payments, or invoicing, or how to make money and all these things.
Yeah, the first few years were really tough. We didn't have any money, and it was just a small team of 10 of us working out of a house. It's kind of like, do or die. You work all day long, all night long, and just hope you can survive to fight another day.
Alex Lieberman: One thing that I'm also interested about, and this is kind of nuanced to what you guys built, but there's a lot of people trying to build networks and marketplaces out there. Obviously the now old adage that Andrew Chen talks about and has written about in his book, The Cold Start Problem. How did you guys crack that problem in the early days?
Jonathan Swanson: Yeah. You either have to get supply or demand, and ultimately have to get both. We started with supply because we said, "Hey, if we get demand, and there's no service pros, then this doesn't work." So we tried a number of different ways of acquiring service pros, but one way really worked, and that was Craigslist. All these service pros were listing their jobs on Craigslist. We went out and found them and said, "Hey, there's a new platform for you. You can sign up with us. And instead of posting a job ad every week on Craigslist, which is really dumb, you post with us once, and then we'll help you find jobs forever." We actually created a way for the pros to sign up and create their profile on Thumbtack, and then auto-post that on Craigslist as well, because that's where the demand was.
This scaled up to a point where it was a quarter of all Craigslist service volume, all these posts from Thumbtack pros. And then, not surprisingly, we got a cease and desist that told us we should stop this, and we'd been banned from Craigslist. And that was one of those moments where, like, "Shit. This was working. We were signing up tens of thousands of pros a week, and now this main channel's been shut down." And we had to find a new way.
The question we asked ourselves was, what's bigger than Craigslist? And we said, "Well, what about the internet? What if we crawl the whole internet, use text classification to identify the handyman's blog post, the wedding photographer's website?" And from these billions of pages we crawled, we created an index of tens of millions of service pros' websites who were looking for active work. And then we created a mechanism to reach out to them programmatically and get them to sign up for Thumbtack.
Jesse Pujji: That's awesome.
Alex Lieberman: Were they creating signups or profiles after you reached out? Or was it the type of thing, you were scraping their interest in jobs, turning them into jobs on the site? If there was demand for it, then you would just let them know that someone's trying to hire you for a job, now come sign up?
Jonathan Swanson: Exactly, both. When we could sign them up directly, we did, but if Alex came and said, "Hey, I'm looking for a dog walker on our site," we would syndicate it, we called, to a bunch of dog walkers who hadn't yet signed up. And we'd say, "Hey, here's a live customer. They're looking to work with someone exactly like you. Click here, and you can talk to him for free. And before you can do that, you've gotta create your profile."
And that created this machine that allowed us to reach out to hundreds of thousands of pros, sign them up. And then by virtue of them creating profiles, that created a magnet for traffic from Google. And then we had our first virtuous flywheel.
Jesse Pujji: That's awesome. By the way, as a quick aside, there's that classic vertical Craigslist image that people have seen, where every category on Craigslist is going to become a big business. I feel like there's another graphic we can make that doesn't exist, which is how Craigslist has fueled the growth of all these...like Uber, 25% of their drivers have come from there. DoorDash...there's so many businesses that have hacked Craigslist in some way to become the behemoths that they are, and I just think it's a funny, all roads lead back to Craigslist in some way or the other.
Jonathan Swanson: Totally. It's easy to give Craigslist a hard time for not innovating on product, but if they did, we wouldn't be here, so it's the greatest gift.
Jesse Pujji: Yeah, maybe bigger than Amazon. Maybe like WeChat in China or something; everyone just go to Craigslist for everything.
Jonathan Swanson: Oh, the amount of unmonetized distribution that they have given companies over the years is wild.
Jesse Pujji: Yeah. Jonathan, I had a moment like this in my journey. I'm curious if you remember yours, or had one and remember it. Was there a moment where you maybe looked at yourself in the mirror, you looked at Marco and the team, and you go, like, "This is it. I'm not questioning being an entrepreneur anymore. This is the job for me. This is what I want to do with my life." Do you remember what it...did that happen to you? And if so, what was it like?
Jonathan Swanson: From the moment we started, I loved it, and it was hard. If you asked me of the last decade plus at Thumbtack, "How often were you killing it?" I would say less than 20% of the time. 80% of the time, I felt like we were failing. We weren't meeting our potential. We were growing too slow. "It sucks. We're actually going to fail. We're running out of money."
There was brief windows where everything was going right, and I just got addicted to chasing that. I think from the very beginning I liked it. I wasn't sure if it was going to work. Four or five years into Thumbtack, I remember thinking, "Man, this could fail, and I would have accomplished nothing, and I would have no real skills that are transferable." Now, you know, at some point I was like, "Well, now, I've actually... "
Jesse Pujji: Craigslist hacker aside.
Jonathan Swanson: Yeah, exactly. At some point, I've learned some real skills, and I can take those to other positions. But yeah, there was certainly lots of more existential angst at the beginning.
Jesse Pujji: Do you remember when it went away, or how it went away? Did it go away? Do you still feel it?
Jonathan Swanson: There was one moment...yeah, it's never gone away, but there's one moment that really transformed things. We had really struggled to fundraise. Pitched 42 investors for a Series A, got 42 nos, gonna run out of money, but fast forward a couple years later, things were going better. Google Capital came to us and said, "We're interested in investing." We weren't fundraising. And we said, "Okay, we'll talk to you." And five days later they gave us a term sheet for $100 million. I still remember sitting in the conference room when they made the offer. I was with Marco. We ended the call, and I sat down on the floor and put my head in my hands and was just like, "Holy shit."
It felt like this gap between what we thought our potential was and what the world thought suddenly collapsed. For years, people had said, "You don't have the potential you think you do," and in that moment, these investors said, "We believe," and that was super validating. Yeah, it didn't take existential risk off the table, but it meant we could get aggressive.
Alex Lieberman: Yeah. I want to, in a minute, move on to all the other cool stuff you're doing, but two more questions about Thumbtack. We'll start with the first. What are the most intentional things you did over the life of the business to navigate the co-founder relationship? Which I think any really important, intense relationship has its challenges, but also its beauty. What are decisions you made to make it work over the years?
Jonathan Swanson: I think it's lots of talking and check-ins. I think this is true of all relationships. It's like if you stew on something, it's not going to make it better. And my co-founders and I got in a habit of doing monthly breakfasts, quarterly reviews with each other, executive coaches. It's all just a way of saying we talk to each other a lot. And if something is bothering us, you talk about it. You don't always resolve it, but most of the time, 90% of the frustration goes away if you have a good conversation. I was lucky to pick partners who I fundamentally trust and respect. So absolutely, tension or disappointments or frustrations along the way, but if you've got that foundation, you can work through stuff, as long as you're talking about it.
Alex Lieberman: Yeah.
Jesse Pujji: Was there a big "Aha" example you could share that came up as you guys talked more and more, that was very powerful or useful?
Jonathan Swanson: For me...I can't speak to them. I'm sure I do things that annoy them, to this day. But for me, the kind of Zen moment was accepting my co-founders for who they are and not expecting them to change. They have amazing strengths, and we all have weaknesses. And when I focused on the things I wanted to change about them, it's just a recipe for frustration. It's true of relationship with your partner, or friends, or anything. I think if I could give myself one piece of advice from 20 years ago is accept people for who they are. Don't try to change them. And you're lucky if they do. Some of your best friends or partners may be willing to change for you, but if you expect it, you're just gonna be disappointed most of the time. That's been pretty profound.
Jesse Pujji: How do you coach somebody else to do that? If there was another founder that you were mentoring, and they kept having a frustration because you saw them doing that, what would you tell them to do?
Jonathan Swanson: Yeah, look. I think you have to decide, "Is this someone I want to work with? Is it someone I'm willing to work with if they don't change?" I counsel people, guys who are getting ready to go get married, and they're like, "Hey, I'd like to marry this person, but I really hope X or Y, Z changes." And I'm like, "Dude, that's a bad idea." If you're happy today and nothing changes, that's a great relationship. And then you should work to change things. I'm very growth-minded, and I work with people who are. But if the expectation is nothing changes, it's a much more stoical approach to life, and you're much more set up for success.
Alex Lieberman: Totally.
Jesse Pujji: Yeah, I think there's a really big nuance there that took me a long time to grapple with, which was people can want to change and work towards change without expecting it or needing it. And you're kind of saying that. But it's like, people, they go, "Wait." It's like, "Wait. If I accept my partner, whether it's my co-founder or my wife, for exactly who they are, then they're never going to change. No, no, that's not okay. I need them to change, need them to change. No, no, so I can't do that. I have to actually create tension, and I have to make it so that they're gonna change."
Alex Lieberman: Well, and to that point...
Jesse Pujji: Go ahead, Alex.
Alex Lieberman: It's like why those...it sounds so cliché, but these fundamental values of trust and being aligned on what the ultimate mission is, and knowing that you can always lean on that person no matter what the situation is. It's like, the stuff is cliché, but it's, generally clichés are pretty true, which is all that stuff is the bedrock. Yeah, it's like gravy if you can get people to evolve and grow in ways that just continue to sweeten the deal.
Jonathan Swanson: Totally. Yeah, I mean, with founders, it's you have all the intensity of a marriage relationship, but there's no make-up sex. So you have to find other ways that you can bond, whether it's going for a long run, or having a drink, or whatever it might be.
Jesse Pujji: Vegas trips. We used to do Vegas trips.
Jonathan Swanson: Yes.
Alex Lieberman: That is the most incredible quote. I am absolutely stealing that.
Jesse Pujji: Before we move on, I have one question.
Alex Lieberman: Yeah.
Jesse Pujji: I want to hear again, like successful...Alex said three billion, all this cool stuff. What was a really, really tough, near-death moment for you, for the business, the time you wanted to quit the most? Tell us about the really hard time.
Jonathan Swanson: The time we got closest to just getting absolutely kneecapped, I woke up on a Saturday morning, and I had a message from a team member in the Philippines who was awake overnight, and said, "Jonathan, I've searched for Thumbtack in Google, and it doesn't show up. Not like..."
Alex Lieberman: Oh god.
Jonathan Swanson: ...handyman in San Francisco doesn't show up. I search for thumbtack.com, and there's no results."
Jesse Pujji: Oh my god.
Jonathan Swanson: Google, at the time, was our number one source of traffic. We had built a very successful SEO machine. And when I saw this, I knew something was horrible. I went to Google Analytics, and our traffic had not fallen by 10% or 20%, but 100%. Zero. We were de-indexed. We were completely removed from Google. It was like being unpersonned by Google, and we had no idea why.
I was supposed to be leaving a couple of days later for a wedding, and then after the wedding I was going to propose to my wife...
Alex Lieberman: Great timing.
Jonathan Swanson: ...or my then-fiancée. Yeah, so it was terrible timing. And on Monday, we had a new class of Thumbtackers starting. I remember there was like 30 new people starting, that I had to do Thumbtack orientation for. It was just all hands on deck for 18 hours a day for the next couple of weeks. Basically, we eventually figured out what had happened. There was a miscommunication about the way Google had interpreted one of our link-building strategies. They had thought we were doing something shady, which we weren't, and they punished us severely. It was the most intense, definitely, period because if we didn't fix it, we were gonna die—not in a year, but in weeks. Because traffic's just zero and revenue's zero, and you're dead. And we had probably a couple hundred employees at this point.
And so I just remember shuttling between new hire orientation, calling someone on the press, trying to get them to not write a story about how we were dying. Meanwhile, coordinated with our engineers to figure out how we could solve this problem with Google. It was insanely intense, but it was actually my favorite two weeks...
Alex Lieberman: Why?
Jonathan Swanson: ...in Thumbtack history. Because we survived. Had we died, I wouldn't say that. It'd be like my worst two weeks. But it was one of those moments where you're backed into the corner, and it's just about survival. You're just like mother bear, and you've got 200 cubs that you want to protect, and you're just gonna do whatever it takes to fix the problem. And to me, that...
Jesse Pujji: What was the craziest, most resourceful, wild thing you did during that two weeks that you did, like it was just totally creative and weird, to try to resolve it?
Jonathan Swanson: Yeah. The way Google works is wild. They have this portal where you can go and see a message from their search quality team. They're basically like, "You've been de-indexed for doing something wrong. We won't tell you what." And they then basically ask you to explain yourself, or make some sort of human sacrifice to appease the Google gods. It took a whole team of engineers to basically...we put ourselves in their shoes. They think we've done something wrong. What could that be? We try to reverse engineer all the things that they're looking at. We then present those proposals, like, "Do you think we're doing this or that? If it's this, it's in the clear." And yeah, it was like, we pretended to be on the search quality team at Google for a couple weeks, and we just kept making human sacrifices, we called them, until one was acceptable. And then we all moved on with our lives.
Alex Lieberman: I think that the number one lesson from this entire experience is, don't fuck with Google or get them upset, because they will make your life very painful.
Jonathan Swanson: Yeah. I mean, we were just talking about one of my favorite moments at Thumbtack, which is when Google gave us a $100 million. They were both our investors, our greatest source of traffic, and a pain in our ass at the same time. But we were lucky to have them as investors then.
Alex Lieberman: The irony of if Google would have killed you while they were your biggest check into the business would've been wild.
Jesse Pujji: It's like those businesses where people buy from one part of the military and sell to the other part of the military.
Jonathan Swanson: Oh yeah.
Jesse Pujji: There's like people who make tens of millions of dollars just buying surplus from one part and selling it to the other part.
Alex Lieberman: Wild.
Jonathan Swanson: Yeah, I think Google's insane. It's more powerful than most countries today. It's...a greatest business that has ever existed, and we get to witness it. It's pretty cool.
Alex Lieberman: Jonathan, I've listened to you tell a pretty amazing story. I want to say it was like seven years ago at this point: the story of Mikan. Can you share just the journey of your experience with Mikan and the impact it had on you? Because I also think it's an amazing bridge between what you built at Thumbtack, but also what you're doing at Athena.
Jonathan Swanson: Yeah. When Thumbtack was scaling up, we had all these service pros, a handyman, a DJ signing up. They would create profiles where they described their services. It turns out a plumber is great at plumbing, but not very good at writing marketing copy about themselves. So Marco and I would rewrite all these profiles by hand to help them put their best foot forward.
We did this for the first few hundred service pros, thinking that there's this broken window theory where if we did the first 100, then everyone would raise to that bar. But that turned out to be totally wrong, and it was clear we were just going to have to proofread these things forever. So I put a job ad up on a site called oDesk at the time; it's now Upwork, for proofreaders. We had applications from all around the world, from Philippines, India, Jamaica, the United States, at all price points.
I thought, this was cool, I'll run a couple of dozen people through a practice test, and we'll see who wins. And to my absolute amazement, this woman in the Philippines named Mikan beat the Americans and everyone else, not just on price, but on quality. She was a better English proofreader than Americans. This just was a jaw-dropping moment for me, where it opened my eyes to this world of talent outside of America. Obviously I knew that intellectually, but I hadn't really viscerally experienced it.
So we hired Mikan, and she did proofreading for us. She was great. She grew up in Manila, in what we would call poverty. Her dad earned $2 a day. This was her first job, and she did a great job. So I said, "Hey, let's build a team of proofreaders around you," and I helped mentor her to become a manager. So she went from individual contributor to a manager of five and 10 proofreaders, to then eventually a general manager of a team of a few hundred, to eventually the head of our team in the Philippines, managing over 1,000 people.
So this is this woman from poverty; her first job is with us as a proofreader, and then she grows on to manage thousand-plus people. To me, this was probably one of the most gratifying experiences I've ever had, because I got to be part of someone growing like that. She did the hard work, but I was there to support her. It felt just so good to help unlock that potential. That's really what motivated me to get into entrepreneurship is like, unlock my potential, similar to you guys, probably. And to see that with Mikan was just life-changing.
Jesse Pujji: Wow. Yeah, it's such a powerful...I think there's entrepreneurs who want to maybe change certain behaviors in the world. I think a lot of entrepreneurs, myself included, just love helping other people learn and grow. It's hard to find anything more gratifying than that, especially when they're people who are close to you, or you're having an impact.
Talk about the next chapter. Maybe talk a little bit about your transition out of Thumbtack, but then how you started to think about what was next, kind of in the second act, the trials and tribulations, and how you ultimately netted out where you are.
Jonathan Swanson: Yeah, so I love Thumbtack, but at some point, it became a bigger company. I think lots of entrepreneurs are more motivated by the small scrappy stage, and that's certainly true for me. So I moved to chairman at Thumbtack. And I had this experience with Mikan in the back of my head, of how many other Mikans in the world are there that are undiscovered, who are working in poverty because they haven't been connected with the right opportunity.
People like the three of us are just so fortunate to have unlimited opportunity because we live in America, and we have some tech skills and all sorts of things, but lots of people aren't in countries where they have that opportunity. But with the internet, you can digitally travel to America every day. You don't need an American passport. You just need internet connection.
I'd had an amazing experience working with a woman named Marni, different than Mikan, on our team in the Philippines, as my personal assistant at Thumbtack. We started off doing the basic stuff: scheduling, email, travel, and then I just started experimenting. Every week, I was like, "Let's run a new experiment. You try doing something new with me." And most of those experiments fail, as experiments do, but lots of them worked, and we kept adding new things.
And one of those experiments was a monthly entrepreneur dinner where I would host people at my house, get a chef, and I would meet new entrepreneurs. My motivation was I didn't really have any friends outside of Thumbtack. I told Marni, I was like, "Can you help me make friends? Because I just work all the time." So we planned these monthly dinners. I met most of my good friends through that. One of the friends I made through one of those dinners, name was Katherine. And a few years later, Marni was helping plan our wedding.
Jesse Pujji: Wow.
Alex Lieberman: Wow.
Jonathan Swanson: This experience of having Marni help with basic stuff to relationship stuff, to ultimately helping me meet and marrying my wife, was so powerful. I wanted to see if I could connect these two dots of how can we discover more talented people in the world, and then connect them with entrepreneurs, investors, ambitious people like you two, to give them more leverage. So I started Athena a couple of years ago.
Athena recruits and trains top 1% assistants in the Philippines and matches them with ambitious people. Our goal is to build both the talent machine as well as the technology and tools around delegation. There are entrepreneurs who are better at me than in almost all dimensions: product and operation, then management, but what I'm really good at is delegating. Athena's mission is to own the art and science of delegation and to give more leverage to smart, ambitious people.
Jesse Pujji: On delegation, we can't not ask. What are the biggest mistakes you see CEOs, high-powered people, making in delegation? Or what's the Swanson playbook for delegation?
Jonathan Swanson: Yeah, I mean, most...
Alex Lieberman: Oh god. You have opened a can of worms, absolute can of worms right now.
Jonathan Swanson: We can talk about this a lot. How long we got? I would say most CEOs and founders are actually pretty mediocre delegators when it comes to working with an assistant. We've worked with a thousand plus at Athena and some of the best YC Sequoia-backed companies, and most founders never graduate beyond the beginner levels.
The biggest mistakes? Number one, the cardinal sin of delegation is thinking it's faster or better to do something yourself. Of course it is. You can always do something faster or better yourself, but the way you gain leverage is you spend more time up front, delegating something, so that you can train your assistant to do that for you every time. I might talk to a founder who's like, "Oh, it's not worth my time to delegate RSVPing for a party to my assistant. I can do that in two clicks." I'm like, "Sure, but I trained my EA to do it once, and I've never done it again."
I don't put my credit card in the internet. Why would I waste the two minutes that it takes to check out, if my assistant can do that? I don't wait on the phone to talk to the bank. My assistant can get in on the hold, wait for me, and then dial me at the last minute. This incessant craving for more is certainly one of the strongest dimensions that we see in the best delegators, and mediocre delegators tend to just be satisfied with the way things are. So that's number one.
I mean, the next biggest problem CEOs tend to make is they don't invest long-term. They have one EA for a couple of years, and then another one for a couple of years. These relationships compound over time. You want to invest for a decade plus. You want to spend time every week. I have a standing meeting with my assistant. We've been working together for a long time, and I still spend time with her face to face during the week, so that we can share what's working, what's not, new things to experiment with.
And then I think you just need to have a very high tolerance for experimentation and failure. Most things won't work. I work with lots of founders who work with an assistant for a little bit, and they're like, "Hey, I tried these three things, and they weren't that great." I'm like, "Well, you should try a lot more. You need to try dozens of things. Maybe 50%, 75% won't work as well as you hope, especially out of the gate, but if you keep experimenting, you just layer on more and more powerful things over time." I'm happy to share all sorts of crazy stuff I delegate.
Jesse Pujji: Does your delegation skills, do they go beyond...do you have special insights for delegating to VPs and managers? Or is it very focused on the EAs and stuff?
Jonathan Swanson: Yeah, I mean, what I'm talking about now is with an assistant. You obviously need to delegate very differently for an assistant to a CFO.
Jesse Pujji: Sure. Sure.
Jonathan Swanson: C level reports, you need to give total autonomy and freedom to. You empower them at the highest level and hold them accountable against the very highest goals of the company. With an assistant, you need to be much more prescriptive and more detailed in how you delegate.
We have levels of delegation. We talk about Athena, which I'm happy to walk you guys through, from beginner to mastery, and what that looks like with an assistant. What we find is most people go through the same journey. They start at the most basic way of delegating, which is delegating by task. And over time, you can delegate to the very highest level, which is delegating through goals, and there's steps in between.
Alex Lieberman: Yeah. I want to get into this pyramid, the Maslow's hierarchy of delegation. I want to do that through talking about it within the context of your life. But before we switch to that, I want to talk about, within Athena, how you have run this business differently, now that it's your second time around.
A profound conversation that I had with one of the co-founders of FanDuel probably a year and a half ago, was, he was...he has three or four companies now, and I was like, "How do you do all this stuff? How are you running these four businesses while being happily married?" He talked about delegation, but he's also like, "The first time I was an entrepreneur, 80% of my time was spent the wrong way. It was a waste." So he's like, "I just spend my time on the 20% of things now."
So for you, what are the 20% of things that you spend your time on now? And what are things that, say, an entrepreneur or CEO thinks that they should be spending their time on that you do not spend your time on and you've delegated, whether it's to EAs or to other people within your company now?
Jonathan Swanson: Yeah, great question. Thumbtack was a very traditional venture-backed experience. We raised money. We did all the things that venture-backed companies do. I did whatever was best for Thumbtack, always, even if it wasn't what I wanted. This person may not be the person I'm most excited to work with, but they're right for the role. 12 hours of interviews today sounds terrible, but it's what Thumbtack needs.
When I started Athena, there's a few people from Thumbtack's team in the Philippines who came over and helped me start it. We just did a daydream where we said, "What is a dream business for us, unconstrained by the way we've built businesses before?" We said a couple of things. One: "We control our destiny, so we don't raise external money. Investors are great, but if we're in the fortunate position to self-fund it, then let's do that." And, "I don't like meetings, so let's not have meetings." So one standing meeting a week with the team in the early days, and we worked very independently.
And now, would I say this is the most optimal way to run a business if you're trying to get to Mars? No. I would get in an office, and I'd meet all the time. But I wanted to build a business that I wanted to work at for decades to come, and so I built it much more around the way I like working. So I spent the first couple of years helping us get to product-market fit. And once we unleashed product-market fit, and we had this very long waitlist, then I brought in a CEO, someone who had built...he had worked at a company in the Philippines that went from 1,000 to 20,000 people.
Alex Lieberman: Wow.
Jonathan Swanson: He managed all that growth. And I said, "Hey, we're at 100 people. Let's do it again." So he's come in. We've gone from 100 to 1,000 people, actually, since he joined 18 months ago.
Alex Lieberman: That's wild.
Jonathan Swanson: Our goal is to create tens of thousands of jobs in the Philippines and developing world and beyond. Now, he has a different style. He's running...he has more meetings than I would have done, and all sorts of things, but I've carved out a role for me where I just help the CEO focus on talent. That's the biggest thing I can help with, is finding the right people in the business. That's 10x more impactful than any project I could work on.
Jesse Pujji: Talk about some of your other ventures too, Jonathan, and maybe what's the string between them? Or how do you think...is there a string? Does that matter?
Jonathan Swanson: Yeah, my main focus, you know, started Thumbtack, chairman there, started Athena, chairman there, and really helping the CEO scale the business. And then launching a new venture fund now called Powerset. Powerset is founders backing founders venture fund. We give capital and coaching to active founders, not to invest in their company, but so that they can invest in other startups. It's basically this decentralized scout sort of model.
The thing that's interesting about this, we think, is if you look...last year, there was about $500 billion invested in venture capital. 1% or 2% of that came from active founders. Most of it came from institutional VCs. Institutional VCs are great, but active founders have the best deal flow. That's actually where VCs get most of their deal flow. And they have the most fresh and relevant operating experience.
So we think that numbers shouldn't be 1% or 2%, but 10% or 20%. So we basically go out and find elite technical founders. We give them $1 million, create their own fund. They can put other money in it if they want. And we run all the administration and do all the work for them, so there's no incremental work.
The type of people we work with are too busy to raise a fund, and it's irrational, frankly, for them to be investing because they have too much on their plate, and they're scaling a very exciting company. So we take all the work away. So instead of writing a $10k personal check, they can now write $100k or $200k larger check, and we take care of the rest. And then we split the carry with them.
Jesse Pujji: That's awesome. Why deeply technical? It's funny. I love this idea, by the way. For 10 years at Ampush...Uber came in when they were 10 cities, and said, "I need your help, Jesse." And then I met all the Kochavas and AppsFlyers when they were doing mobile measurement, when they were tiny Series As. This would've been great for me in that seat, because I literally saw hundreds of billions of market value sitting at Ampush, right?
Alex Lieberman: Yeah.
Jesse Pujji: But I'm curious why deeply technical versus people who are going to be in the flow.
Jonathan Swanson: Yeah, I mean, you've probably heard of Tom Perkins's law. It's "The more technical risk, the less market risk. And if there's no technical risk, then the more fierce the market risk." We believe lots of the generational companies in these frontier markets: artificial intelligence, bio, et cetera, will require technical unlocks. And yeah, while those technical founders may not be as prolifically social as you, Jesse, or hosting parties at their house, their friends are all writing white papers, and they're using the new tools. So they're really on the front lines of lots of these efforts. And non-technical founders tend to be more tapped into scout programs and that sort of thing. So we think it's just...
Jesse Pujji: Gotcha.
Jonathan Swanson: ...some of the most valuable founders in kind of untapped market.
Jesse Pujji: Wow. Super cool.
Alex Lieberman: We only have a few minutes left, and I'd be remiss to not talk about the way that you've employed some of your business principles in your personal life. Can you share the way in which you have taken delegation to an extreme in your personal life? You can do that by sharing, like you were talking about before, this pyramid of delegation, you know, the white belt to...
Jonathan Swanson: Mm-hmm.
Alex Lieberman: ...black belt, and also some of the most ridiculous shit that you've delegated in your life.
Jonathan Swanson: Sure. It's a long list.
Jesse Pujji: It's not ridiculous to him. It's genius to him.
Jonathan Swanson: Well, yeah. I'll just rattle off some things I do. I'm lucky. I mean, one of the great things of Athena, I'm lucky to have a half dozen EAs who support me now. I know that may sound insane to lots of people, but to me, it's obvious it's not enough. It's clear that...
Jesse Pujji: Wait, how many? I missed that.
Jonathan Swanson: A half dozen.
Jesse Pujji: Wow.
Jonathan Swanson: It's clear that they're...
Alex Lieberman: And isn't there one that manages the others?
Jonathan Swanson: Yeah, I have a chief of staff, and then a lead EA who manages others. They specialize in different areas, which I can talk about. But for my whole life, I've experienced time scarcity, where it's just like there's not enough time. People say time's the great equalizer. It's like whether you're Warren Buffett or man on the street, you've got 24 hours in the day, and that always irked me. And I'm like, "How can I bend that rule? I want 30 hours in the day, or 48."
What I've discovered, with an assistant, you can. You literally get more hours in the day. So as I've layered on more assistants, I've gone from time scarcity to what I call time abundance. I've got a couple of venture-backed businesses. Athena's 1,000 people, this new venture fund. And multiple days a week, I will get to lunch, and I'll say, "I've finished my work for the day. What should I do this afternoon?" And that feeling of time abundance is what allows me to tackle new things. That's only possible with a great team that supports me.
Some examples of things the team helps me with: One is building relationships. So my wife's mom just had her 75th birthday. We wanted to do something special for her. So we had our assistant connect with her, use our Facebook account, and then reach out to every one of her Facebook friends and say, "Hey, it's her birthday coming up. Can you write a special note with something you love and respect, or a good memory about her?" We collected all of these, and then for every day on her 75th year, she got a note in the morning that was from one of her friends. It was a birthday gift, was 365 notes every day.
Jesse Pujji: Wow.
Jonathan Swanson: Now, doing a project like this, if I was doing it myself, it would be insane. I'd have to be unemployed, and it would just be a two-week project. But being we have a team that can tackle this, we just came up with idea, we delegated it, and it was done. That allowed us to give this cool gift to her mom.
I avoid lots of annoyance by delegating. I don't put my credit card in the internet. I don't wait on hold. I don't do anything that's rote or monotonous. The team helps me hire. If I wanted to hire a nanny, without an assistant, I might put a job ad up and talk to three or four candidates. But with our team, we put up job ads all across the Midwest, and we vetted a thousand-plus candidates for a role that is super important to us. That allows us to find undiscovered talent and just do things at this scale that you wouldn't do if you were doing it on your own.
Alex Lieberman: I need you to talk about one more. Sorry, I'm just...I can't stop thinking about it, is your interest in and your delegation of things containing phthalates.
Jonathan Swanson: Sure. Yeah. I mean, the first thing with our EA, we had her first create a digital health record. I've always wanted all my health stuff in one place. So I was like, "Hey, can you reach out to every doctor I've ever worked with for the last 20 years from my email, and ask for all our digital health records?" So we pulled all of those in and had them in one place, and that felt good.
And then I was listening to this podcast by Shanna Swan on Rogan. Some of you may have heard of her. There's this mystery. There has been a mystery about testosterone falling 1% per year for the last couple of decades, and miscarriage rates increasing 1% per year. These are bad trend lines. And people weren't sure what was behind this. Her theory is that it's phthalates, which are this chemical in plastic. Basically it's in plastics and cosmetics and chemicals. It's everywhere. This chemical disrupts your endocrine system, which lowers your testosterone. I mean, it's bad for you as an adult, but really bad for babies and kids. So if I didn't have an EA, I probably would've, honestly, listened to this podcast and be like, "Well, we're screwed. What am I going to do about it?" I mean, it's like, I've got lots of other things on my plate.
But since I have a great team, I said, "Hey, here's a book on this topic. Will you go read it?" So yeah, I asked them to read a book for me. And then I was like, "As you read the book, create a spreadsheet of every product in the book that we shouldn't have in our house." It's just everywhere. It's in shampoos. It's in tea bags. It is the most insane thing. So they made this spreadsheet of a hundred-plus offending items, and then we created a game plan where we had our nannies walk through the house, find all the offending items, remove them, throw them away, donate them. And then we ordered all the replacements. It honestly took us months. We're like three months into it, and we're still finding offending items, but it feels pretty awesome. I've got a new babe on the way, and it's cool to know that...
Jesse Pujji: That's awesome. Congrats.
Alex Lieberman: Congrats.
Jonathan Swanson: Thank you. That babe doesn't have these toxins in their system, and good for me and my wife too. That's just the power of having assistants.
Jesse Pujji: In 30 years, they're going to write a study about that baby, and how you cured the testosterone...that'll be the big thing you did, all because of EAs.
Alex Lieberman: Well, out of curiosity, we have to bring it full circle, because this is the theory around phthalates. Did it change your testosterone, taking it out of your consumption?
Jonathan Swanson: Yeah. I measured free testosterone before and after, and it was 10% higher. So it was great. You know, there's lots of moving factors with exercise and diet.
Alex Lieberman: Yeah, yeah.
Jonathan Swanson: I actually just ordered a test kit that will measure your phthalate exposure in your urine. I'm a guinea pig. We're going to be running these on ourselves soon.
Alex Lieberman: Love it. Jesse, anything else before we wrap this?
Jesse Pujji: Yeah. Yeah, you mentioned going bigger at the top of the episode. What keeps you sustained? What do you think will keep you doing these things, experimenting, building new things until you're an old man, if that's what you want to do. Or is that what you want to do? And if it is, what do you think will keep you sustained?
Jonathan Swanson: Yeah, I'm just a maximizer. I just want to optimize everything. It's not for everyone. If you're a satisficer, you may actually reach happiness easier than me, but for me, I just want to optimize everything in life. That's a fun thing to chase. Yeah, I hope to live as long as we can, start as many companies as I can, have as many friends as I can.
You started this conversation about what's it feel like to succeed. We've certainly had success, but I feel like it's just starting, and I want to see how big can we go. It's like, we got one life. Let's put the chips in the middle, swing for the fences and see what the next level gets us. It's a video game. Let's level up.
Alex Lieberman: Love it. Jonathan Swanson...
Jesse Pujji: Love it.
Alex Lieberman: ...thank you so much for joining The Crazy Ones.
Jonathan Swanson: Yeah, it was fun being with you guys.
Alex Lieberman: Yeah, man.