#7 - The Hippie With A Billion Dollars

**Michael Birch** (0:01)
Then the Bebo story started. This was now January 2005 It took only a couple of days to develop it, and we went live and we had a million users after nine days.
Bebo.

**SPEAKER_2** (0:14)
Founder of Bebo, Michael Birch.

**Michael Birch** (0:15)
Buy low and sell high.

**SPEAKER_2** (0:17)
Bebo, which has 40 million global users.

**Michael Birch** (0:19)
Media giant Time Warner is buying the social networking website Bebo. For 850 million dollars.

**SPEAKER_2** (0:29)
All right, I'm recording this. I just finished my conversation with Michael Birch. For those of you don't know, Michael is an Internet entrepreneur. He built a social network back in the day when he competed head to head against Facebook. And although Facebook won the war, Michael didn't end up too bad. That company, Bebo, if you've ever heard that before, sold for 850 million to AOL. And when I met Michael, we got back together and we bought it back for 1 million years later. And then we actually sold that again just now to Amazon. So I've had an interesting history. I've worked with Michael for 6 years. He was my boss.
Then he gave me his job to run the company.
He's my investor. He's my friend. He's a mentor. I've learned a lot from him from building companies to investing. I mean, he's invested in 75 plus companies, things like Pinterest. He was one of the first investors. Calm, the meditation app, he was an investor when nobody believed in Calm.
And he's done all kinds of crazy things. He's built hotels. He's bought a private island off of Richard Branson. He gives tons of money to different charities like Charity Water that he supports. He's a very, very humble guy. You guys are going to hear that and you're going to hear the humble beginnings. When he quit his job as a programmer at an insurance company and made the leap of faith to build his own company, he wanted to work for himself. He wasn't planning to become a billionaire. That was a great outcome. He really just wanted to work for himself and not have a job. He wanted to work on things he was interested in. We talk about the years of struggle, all the different ideas he had. It's almost sort of in the weeds, but I think a lot of people have talked about his success with Bebo and the big sale, 850 million bucks.
Very few people have heard the backstory before that about the different products that he tried to build, the failures, the learnings, all that good stuff, before he had his big breakthrough. You'll also hear him talking about viral marketing or viral products. And for those of you who don't know, it's a method of growth where instead of doing ads or sales or paid marketing, you are relying on your users to send the product to other users.
So things grow through word of mouth just from one user to the next. And Michael was really a pioneer of this. Before people were even saying viral marketing, that's what he was doing because like you'll hear him talk about, he didn't have the money and he didn't have the sort of sales skills that wasn't fun for him. So he really focused on building products that would grow just via essentially word of mouth or user spreading it to other users, which is kind of crazy.
So he's a real legend in the growth world for that. And so I think you guys will really like this conversation.
I had a great time doing it.

**Michael Birch** (3:06)
Enjoy.

**SPEAKER_2** (3:14)
The audience wants to know who are we sitting down with today, so just tell them a little bit about you. You're Michael and?

**Michael Birch** (3:20)
Sure. I'm Michael Birch. I'm a 49-year-old hippie.
I originally from a little island called England. I've been living in San Francisco 17 years, been doing Internet stuff since 1999 Just startups early on and then went on to do a few, and obviously kind of culminated in selling Bebo 11 years ago in 2008, and then since then, doing a lot of investing. So that's a very brief politics history.

**SPEAKER_2** (3:47)
Yeah. Before I even met you, I moved to San Francisco for you almost. I was living in Australia.
I wanted to come to the startup Mecca. I was like, okay, if that's where all the action is, I just got to go there. I don't know much else besides that, but might as well go where the action is and then figure it out from there. I had never heard of you, had never heard of Bebo before, but I really liked the idea lab you had created, and so I started doing some research.