Phil Libin's 2-Week Method for Finding Billion-Dollar Ideas

"I shouldn't only work with people I like. I should work with as many different people as possible, and then I should like the ones that are effective." It's a counterintuitive hiring philosophy that goes against every instinct most founders have.

Phil Libin, the five-time startup founder best known for building Evernote, has spent decades perfecting the art of company building. Now as co-founder and CEO of All Turtles and creator of mmhmm, he's applying hard-won lessons about talent, timing, and taking calculated risks in an increasingly distributed world.

In this candid conversation, Phil reveals his 2-week methodology for finding billion-dollar product ideas, why most communication failures are killing businesses, and how luck plays a bigger role in success than anyone wants to admit.

Phil Libin: I shouldn't only work with people I like. I should work with as many different people as possible, and then I should like the ones that are effective, right? So I'd almost rather have that be backwards. I'd almost rather work with people whether I like them or not. I just want to work with them and then if they do a good job, then I start to like them because otherwise you get way too much bias, right?

It's way too easy to hire people just that are just like me, which is what happens in the beginning of a lot of startups. A lot of startups have to hire very quickly and so they just hire their friends, but you have to stop that as soon as you can because otherwise you just get a company where everyone is too narrow. Everyone looks the same, everyone's got the same opinions, everyone likes the same movies, everyone likes the same music, everyone has the same tastes. You can't build very good products like that.

I try not to think about who I like. I try to think about who can be the most effective at this job, and then I really like people who are effective at their job, but it's not a type of person first.

Phil Libin: I have a methodology that we like to follow for totally new products, but it's pretty simple. I call it the 2 week plus 2 week method.

I spend 2 weeks observing everything that I do very in detail, everything. So when I wake up in the morning, I brush my teeth and I make coffee and everything. I just want to be mindful of everything I do for 2 weeks and I'm looking for things that I do several times during that 2 week period. I do it all the time. Or at least I've done it a few times, so I'm looking for things that I do that I don't like doing. I already do them, but I don't like it.

And then I spend 2 weeks. I have a list, and then I spend another 2 weeks observing the people in my community, in my target market, and I do the same thing. I watch everything that they do for 2 weeks, and I'm looking for things that they do a lot, but they don't like it. It's a bad experience.

And now I have this list, and then I think, OK, of the things on this list that people are already doing all the time but they don't like doing it, what has changed in the past couple of years that lets me take one of these things and improve the experience. That's the methodology, and you can always find something like that.

Phil Libin: If you look at that for mmhmm it obviously passes that test that we were looking at what do we do for 2 weeks. Well, we're always on Zoom calls, but we don't like it. Well, can we make it better? Yeah, I think we can make it better, but how can we make it better now that we wouldn't have been able to do it 3 years ago? Well, it's because there's much better computer vision, much better APIs. There's a lot of technology that makes it possible that would have been much harder a few years ago, so it makes sense.

Phil Libin: In March of 2020, we closed all of our offices and we all were working from home. It was just very sad. We were all very busy. We had a lot of work, but it was just endless Zoom meetings. They were kind of boring and they were kind of depressing. And so we just started playing around with video just to make ourselves laugh a little bit.

I had this green towel, like a camping towel, and I hung it up on the wall behind me and I used it to project images in Zoom, like during some of the meetings, and people would laugh. And so we hacked together this prototype. We thought we would just play with it for a couple of weeks, but every time we started using it, people really liked it.

And then I had this experience where I had to teach a class. It was about startup metrics, and I always teach it in person and I couldn't do it in person because of COVID and so I had to do it on Zoom. Then I thought, what if I redid the whole class not to just have the same slides that I would show in person? What if I did it specifically for video and I used this product?

Phil Libin: It was very rough. It was very low production value, but it was really engaging. People really liked it. I liked giving it. The students really liked it and got great feedback. And so I just started thinking maybe this is a real product.

I texted a few people whose product opinions I really like, friends of mine. Kevin Systrom and Mike Krieger, the co-founders of Instagram, and I just showed it to a few people like that, and they all encouraged me. They all said, 'Yeah, this is really good. You should make this into a company,' and it just kind of went from there.

Phil Libin: We made a 4 year business plan for mmhmm which was just one slide, and it had 4 words, one word per year. The only business slide that I showed any of the investors and my team, we had a 4 year plan.

So the first year the focus was to get started, basically to make something, to raise some money, hire some people. Make a company put something in the world. The 2nd year we were looking for product market fit. We would make a product in the 2nd year that we knew was very important in improving the lives of somebody. We said we'll know that because we'll talk to our customers, we'll talk to our users, and if some of them say you are improving my life in important ways, then we know we accomplished that objective.

Before we decided we're going to try to get big, we said we want to get to impact first, so we want to make a product that we know is having an important effect on somebody. And we just ended year two, and the word for year 3 is scale, and the main way to do that is to make the product simpler.

Our older product was really meant for power users. It was people like me. It was people who were very motivated, and it was great for that, but it was a little bit difficult to use. So we recently launched a web version which is much simpler. We're continuing to simplify it and what we're measuring now is the scale. How many people can we get it to, and we're gonna spend the year doing that. And then next year is year 4. The word is profit that it could become self-sustaining.

Phil Libin: I think the biggest problem in the world right now are really due to failed communication and maybe they think they're communicating but they're not. They're misunderstanding each other. I think this results in almost everything that's wrong in the world. I think it's why it's very difficult to coordinate responses to very serious problems like climate change, war. I think the failure to communicate to keep people together, it's probably the most important thing for us to work on in the world.

This has always been a big problem. It's not new right now, but it's particularly bad. Right now when COVID happened and more and more communications got on video, communication just got worse everywhere and I think it got worse because it got boring. It's very hard to say anything if people are tired and bored like even if it's a very serious conversation, it's very hard to do if people are bored and I think now it's more important than ever to have to be great communicators.

Phil Libin: The biggest question is how much work should you do synchronously versus asynchronously. The major advantage is realizing that most of the time when you're working you don't have to be working at the same time as everyone else. You don't have to be in a meeting. There's a lot that you can do asynchronously where you happen to be sitting, whether you're together in an office or not, doesn't really matter.

It's that synchronous to asynchronous transition that's the biggest transition and every company is doing it because every company has is now forever gonna have some people that are distributed whether they're their employees or customers or partners. No one is ever gonna work where every single person you care about is physically in the same space at the same time.

Phil Libin: We think of it as a pyramid. This is like a communication pyramid at the top of the pyramid you have in person like actually like we're doing right now sitting in the same room. It's pretty expensive. It's pretty hard to scale, but it's special and when you're in person you have to make it special. You shouldn't waste it. You should never have an experience where you just spend 2 hours talking to someone sitting in a room and then you think, oh, that was boring because that's a tragedy. None of you ever get that 2 hours back. Whenever you're in person, it should be about doing something special. It should be about building the relationship. You should be having good food. You should be establishing that bond.

Then there's a layer underneath it that's live video synchronous video. This is Zoom and our product and many others. What live video is really good at is especially having a discussion when you're referring to something like if you're looking at designs or a screen and you're pointing at things and you're talking, and 100% of those should be done at the bottom of the pyramid, which is recorded video.

Whenever I'm trying to explain something, it's better if I explain it on recorded video. Whenever I'm trying to explain something that's like a medium complexity, it's better to just make a recording. I can explain, I can use slides. You can watch it whenever you have time to pay attention. Different people could watch it at different times. You can watch it at different speeds from other people. You don't have to worry about missing something because you can always rewind it. You don't have to take notes. All information transfer should be done asynchronously should be done and recorded on video.

Phil Libin: I think anyone who is even a little bit successful has been very lucky and I think that's important to understand a lot of it really is luck. Like I got lucky. There's many people who are smarter than I am who work much harder than I am, who just didn't get lucky.

It's important to understand that because I think it's too easy to, if you succeed, to think that, well, it must be because I deserve it, it must be because I work harder than everyone else or I'm smarter than everyone else, which is dangerous to think that way because then when you look at people who don't have success you blame them. You say, oh, it must be because you're not working hard enough and it's not. It doesn't mean that there's a lot of chance in the world. There's a lot of luck.

There are ways to increase the odds. I think probably better than trying to increase the odds is, or at least just as important is to recognize when it happens, take advantage of it. Sometimes you don't know that you got lucky until later. I think it's important to have that realization when it happens and really double down on it, really lean into it.

Phil Libin: Hang out in Silicon Valley, there's a lot of things that's being said about how to increase the chances of getting lucky, it basically comes down to make friends with high quality people only spend time with people who are interesting, who are good people, who are doing cool things because that just increases your chances of being around when something cool happens.

Probably the most important thing you could do is make friends with people who you like and admire and have fun with and who work hard and don't spend time with people who you know are never gonna do anything that increases your chance of being in the same room when something really magical happens.

Phil Libin: The most important thing is to be working on something that is genuinely a mission that is genuinely excited. I couldn't do it if we were working on something that I didn't care about too much. I don't know, working on some ad tech software or something. It just wasn't that interesting. I didn't think the world needed it. It'd be very hard to motivate people because I think it's difficult to motivate people with money.

The kinds of people that I'm interested in are motivated by having something really worthwhile. So the first thing is to work on something, work on a product that people really think is good for the world. And then the second part is once you have that, you really should try to make sure that everyone understands what their impact was.

We try to make it so that every person in the company knows exactly the impact that their job is having on this mission every few weeks or every few months, like no one should ever be at a position where they say, well, I worked on this thing for 2 years, but what did it do? I don't know. And that's tough to do, you have to really pay attention to that. Once you kind of establish that culture, it reinforces itself, right? It takes care of itself. I just have to set it up initially and then everyone else extends that culture, but it all starts with working on something that's genuinely meaningful and not on some bullshit that you only care about because of money.

Phil Libin: I always try to remember that whatever success I have, yes, some of it is hard work, most of it is because I have such brilliant friends and team members and they let me work with them, but a lot of it is just luck and a lot of people who don't have luck, they deserve success as much as I do. They just don't have it and so it's our job, it's our job to try to make a world that's better for everyone, not just for the ones that got lucky and had money.