Transcript of Interview with Marcus Ryu of Guidewire

How Philosophy Prepared Him for Entrepreneurship | Marcus Ryu, Guidewire CEO

0. Introduction

Johnathan Bi: Marcus Ryu, was top of his class at Princeton and Oxford, before abandoning his philosophical career and founding Guidewire, now worth $15 billion. Marcus attributes a great deal of his entrepreneurial success with applying a simple philosophical technique to startups, which we'll talk about in the very beginning of this discussion. But philosophy also prepared Marcus in a much deeper and humanistic way. In this interview, you're going to learn how Nietzsche, Hegel, Marx, and Wittgenstein, became invaluable resources through the toughest moments of Marcus' journey, and how we may synthesize action and contemplation in our own lives. My name is Johnathan Bi. I'm a founding member of Cosmos. We fund research, incubate and invest in AI startups, and believe that philosophy is critical to building technology. If you want to join our ecosystem of philosopher builders, you can find roles we're hiring for, events we're hosting, and other ways to get involved on Johnathanbi.com/cosmos. Without further ado, Marcus Ryu.

1. How To Unalienate Labor

Johnathan Bi: In our last conversation, you said that Marx is one of the most brilliant thinkers you’ve ever read. So what do you think Marx got right? And why do you still self describe as a capitalist, nonetheless?

Marcus Ryu: Oh, yeah. Well, so Marx had an incredibly acute description of what capitalism was. Now, he was writing in the 19th century, but so much of what he said feels salient today. He characterized a tendency to monopoly capitalism, and what happens in that. And I think there are clearly parts of our world today, where we're seeing the corrosive effects of monopoly capitalism. He talked about the way that the cultural production is an expression of an underlying material world, and a relationship between the different factors of who owns the means of production. And I think the thing that Marx talked about that I really identified at a personal level with, was alienation. He talked about alienation, and he has a very poetic description of alienation, which is, what did he mean...

Johnathan Bi: Hold on. When building Guidewire or McKinsey?

Marcus Ryu: No, my whole life. My whole life. Even my first summer jobs. So what is alienation? Alienation is when you are divorced from the results of your own efforts, your own labor. We're endowed with these faculties to change and move the world, and you are exerting yourself, but the product of what you are creating belongs to someone else. And this is the characteristic experience of capitalism, for the vast majority of people. You're a barista, you're sitting there making coffees all day that other people are drinking, and you're just a robot. You are, in a way, unplugging from your human faculties of creativity, of expression, and so forth, in order to be a beast of burden to get something done. And his description of that alienation is... And of course, he was talking about people doing...

Johnathan Bi: Factory work.

Marcus Ryu: Yeah. Doing the most brutal kinds of agricultural or industrial work. But poetically, I really, really... Who has not related to that? That feeling of alienation, and the way that that alienation is intensified and it seems to be accelerating.

Johnathan Bi: Yeah. Gig work, for example, where you're... Even from your workforce and stuff.

Marcus Ryu: And the thing is, it's not necessary. It's not like, well, that's just necessary. There's no other way that work could get done. That's not true. That's not true. Work can be done in an artisanal way. People can have great pride in its creation. Just the fact that the work itself is not glamorous, doesn't mean that it has to be alienated. And he says there is something structural in capitalism, that drives ever greater alienation, that turns people more and more, treats people more and more like instruments. And there is some truth to this. There is unmistakably some truth to this and our current crisis.

Johnathan Bi: Did you feel less alienated when you were building your own company?

Marcus Ryu: Well, that's the difference, and that's yet another motivation. Because when you start a company... And of course, I was poetic about this with people... But I said, look, I don't know if we're going to succeed. We're up against much bigger competitors. And the work we're doing, let's be clear, it's very, very difficult, and it's very difficult to build our software, it's very difficult to sell it, and it's very difficult to implement it. There's lots of reasons that we may fail. But we're going to do it as a craft. You're going to be treated as ends, not means. And we're going to build something great together, or we're going to fail together. Within the four walls of our shabby little office here, the work is not alienated. We are all one. And we may have different roles, we have different ownership, even, in this company. We're taking different levels of risk, but we are part of one larger project which treats each of us like an end.

Johnathan Bi: Wow! So in, Estranged Labor, that is his essay where he mostly outlines the different forms of alienation, alienation from the end product, alienation from your co-workers, for example. Guidewire's, sort of, values is almost an attempt to respond to Marx within capitalism.

Marcus Ryu: Yes. Well, I didn't frame it that way. In a very high minded sense, we said, the one thing that we have under our power is that we get to... This is not a workers' collective. We're trying to succeed in a capitalist world, ultimately. But the way that we are going to work here, is not going to be alienated.

Johnathan Bi: Right. Not just for you, but also for your employees.

Marcus Ryu: No, no. For everyone. And that's going to be our offer to you. And everything else here is humble. We cannot offer you any glamour, any possibility of riches. We can offer you below market wages because that's what we're paying ourselves. But you will, at least, not be alienated here. You are going to be afforded full transparency in the project. You will know your role within it. And we were going to succeed and fail together. And the people who are calling the shots, the leadership of this company, are going to be working harder than you.

Johnathan Bi: Okay.

Marcus Ryu: And that was incredibly high minded idea that had nothing to do with our market, the fact we were selling to insurance companies. It doesn't matter. But I believe there was something magical about that. Early stage companies talk about culture all the time, but I think they talk about the wrong aspects. Like, we're going to move fast, we're going to be honest with each other. It's a lot of superficial bullshit. Not that it doesn't matter, of course you should be honest with each other, of course, whatever. But the deeper sense that this is a collective in which everyone is an end, not a means, is incredibly powerful, l if you can actually instantiate that and live up to it.

Johnathan Bi: What does that look like?

Marcus Ryu: Well, it's not true of the company today, for example. Things change. And I have regrets about that because I actually have a theory, if I could replay the tape, that I could have extended that much, much longer.

Johnathan Bi: Oh, so now it is alienated again?

Marcus Ryu: It's a strong word. I'm saying it's lost that crucible, like collective sense of feeling that it had during the really formative years.

Johnathan Bi: What does it mean to treat employees as ends and not means?

Marcus Ryu: Well, it's to say that you are as indispensable as any other one of us.

Johnathan Bi: But they aren't, right?

Marcus Ryu: Well, the founders of the company are not indispensable in that sense. You're indispensable in that you're not just a unit of labor. You have interests in the success of this collective, and your interests will be folded in. And your health, your well being, your sense of professional fulfillment, your advancement, all of these things, are part of the calculus of what we're going to do because we're trying to create a successful company, but we're trying to create a successful collective. And those two things are not incidentally related. We will be successful as a company precisely because the people here are bound in a deeper way than the alienated serfs that work for our competitors, right?

Johnathan Bi: Right.

Marcus Ryu: That was a very high minded idea. And you could say it was naive. But the people who were part of those early years, were intensely bound by it and came to believe it. And it made all the difference.

Johnathan Bi: Marx's critique in Estranged Labor, is aimed not at specific manifestations of capitalism, but aimed at all kinds of capitalistic enterprises. So you would basically push back against that. You'd say, there is a way to un-estrange labor within capitalism itself.

Marcus Ryu: Oh. Well, he has this brilliant critique of the way that capitalism is alienated. And of course, the deepest part of his critique of alienation was that the capitalist is alienated.

Marcus Ryu: The person who owns the means of production is actually the most alienated. And why? Because he no longer knows how to make anything. He's useless. He's just an owner. And this is the most beautiful argument, in a literary sense. It's so beautiful.

Johnathan Bi: It's kind of like the, X is not X, kind of post modern intuition.

Marcus Ryu: Yes. That the guy who seems to have all the power, has lost his power because he no longer understands how anything is built. Or he can no longer do anything. He's useless. And amazingly, the oppressed end up finding a new source of power that allows for that inversion. There is a deep psychological truth, I think, to that estrangement. And I see it here, in Silicon Valley. I know... Not just in Silicon Valley, just in the world. I know some incredibly wealthy people that are deeply estranged and have lost... Have found unhappiness in the midst of astronomical abundance because...

Johnathan Bi: Precisely because of the abundance.

Marcus Ryu: Because of the abundance and because they've lost a mastery. Like, their only mastery is further accumulation. They've lost a mastery, a creativity, an ability to be anything constructive. I have witnessed that. And there's other kinds of emotional and familial dysfunction that can unfold from that. But where does Marx, where is he incoherent obviously, where does this lead? Well, first of all, he's part of this... As you know, he adopted the Hegelian framework, which is, all of these things have to happen. All of these painful stages of feudalism, and brutal capitalism, all that has to happen because they all unfold into something better. What's that better thing? Well, it's a socialist utopia where the wellspring of abundance just opens. And suddenly, there's so much surplus that...

Johnathan Bi: We'll go fishing in the morning, we'll critique in the evening.

Marcus Ryu: We'll paint in the afternoons, and we'll write philosophy in the evening. And that's fantasy, of course, and you have to just stop reading at that point. It's wishful thinking. But I think that diagnosis is where aspects of it are profoundly relevant.

Johnathan Bi: I see. Let me give you another quote from yourself.

“Severe inequality in income and wealth are not in the long-term interests of any citizens, not even the very wealthy. Extreme inequality is corroding our civil society, poisoning our politics, and undermining our effectiveness as a nation.” - Marcus Ryu, “Why Corporate Tax Cuts Won't Create Jobs”

Johnathan Bi: Is inequality, today, in America, too much?

Marcus Ryu: I think so. And I say this as a wealthy person, a very wealthy person. There's no question that a certain level of inequality is very helpful. It's motivating, it's necessary. You can't have a meritocracy if people aren't allowed to reap the rewards of their differentiated effort and talent.

Johnathan Bi: Of course.

Marcus Ryu: But there's clearly a level at which it becomes corrosive. There's clearly a level where you end up with political capture, and cultural capture, informational capture. And where you end up with profound estrangement of a huge number of people, and where civil society itself, just can't function anymore because it's dominated by just too few individuals, whose whims just carry too much weight. There's a deep incompatibility with that and a healthy civil society. Now are we there? I don't know. I'm not sure. But there are things that are really worrying. And I say that as a very patriotic American, a person who's profoundly grateful to this country.

Marcus Ryu: My parents came here... They weren't impoverished, but they were very limited means. And I was able to live every aspect of the American dream to the hilt. But I see the enablers of that happen... I see, in full retreat, everywhere.

Johnathan Bi: For example?

Marcus Ryu: The contempt for institutions. I mean, I revered... My parents came here in reverence of those institutions. That the highest attainment in culture was to perform at Lincoln Center. The highest achievement in education was to go to Harvard University. The highest achievement in journalism was the New York Times. And that kind of reverence maybe was a little bit fetishized, but it was a beautiful thing. They anchored our understanding of the world. Now, everyone's a citizen scientist. Maybe injecting horse hormones is a way to insulate ourselves against vaccines, because there's a global conspiracy that... Some crazy straw reasoning that lead to places of complete incoherence, distrust and paranoia. This is terrifying. And many, many people have spoken about this, but the epistemic collapse, where we can no longer agree on a shared set of facts, is deeply terrifying. And this is happening. We're seeing it.

Johnathan Bi: And you attribute the causality, the root cause, as inequality? Or that's another manifestation that's unrelated?

Marcus Ryu: Well, I think that there's a particularly demonic connection between the shattering of collective, epistemically coherent universe, and inequality, precisely because some of the greatest engines of extreme inequality, have been control of information. If I had to pick a single enemy in all of it, it would be social media, what's happened with it. Because it has somehow shattered our understanding of a common reality, of a common set of facts. A really tiny number of individuals have extremely outsized influence on people's basic understanding of the facts, basic information. And that is profoundly undemocratic, that's profoundly dangerous. The natural monopolies that are in the information ecosystem are crushingly powerful. They're more powerful than any monopoly that existed in the physical world, or the extractive industries in the past.

Johnathan Bi: You're talking about Instagram, Facebook, X?

Marcus Ryu: Indeed, yeah. I mean, they are crushingly dominant, and it's because of this completely unappreciated power of the ad-tech model, until it was too late. And we're living in an era of monopoly capitalism now, where a ludicrous portion of the total enterprise value, of even publicly traded companies, is concentrated in less than 10 companies. And that deforms everything. It deforms talent, it deforms entrepreneurship, it deforms innovation. And everyone knows this, everyone in Silicon Valley understands this. But nothing is changing it. In fact, we're just ending up with more regulatory capture, ever greater concentration of power. And it's actually distressing when you are... Because part of the Silicon Valley ideology, of course, is that no matter how mighty the incumbent, no matter how powerful the emperor, it's always possible for...

Johnathan Bi: To blow up the Death Star.

Marcus Ryu: It's always possible. The rebels can get there. But one has to question, one has to wonder now. And that's disturbing to me as a capitalist, as an entrepreneur. One of the most obvious and pernicious aspects of monopoly is that the products just stagnate, things get worse. There was a time in, let's say the early 2000s, where Google was magical. And year after year, it would release new products that were completely mind blowingly magical. Like, the geolocation of every single useful destination that you may want to go to. And it's free. You have all the movie times that you may want. Oh, you have Google Docs. You can now collaborate in real time on documents, for free. Just, incredible sequence of innovations. It's been complete stagnation, 20 years of a company that's now just been in extractive mode. Everything has gotten worse. Search has gotten worse. Google Docs has gotten worse. Geolocation has gotten worse. Everything has gotten worse. Right?

Johnathan Bi: Right.

Marcus Ryu: And you could argue the same for Microsoft. You could say the same for many other tech products. And so that's the clearest indicator.

2. Synthesis

2.1 Synthesis: How Philosophy Helped Entrepreneurship

Johnathan Bi: What are the most important ways, you think, your training in philosophy, if however subtly, prepared you to build this deca billion dollar company?

Marcus Ryu: Well, we had the strategy right. And then we executed on that. Sounds so straightforward. Well, a philosophical training is very helpful for defining what a strategy is. For example, one of the things that professional philosophers do, at least in the analytic tradition, is that they value simplicity and clarity in their communication, and they tend to write things as propositions. When they get to the real heart of their argument, they will often number their points and propositions.

Johnathan Bi: 1, 1a, 1b... Yeah.

Marcus Ryu: And they say, well, Point 3 follows from Point 2, intrinsically. Point 5 is only true if either 1 or 2 must be correct. And it's a basic propositional logic that you learn as a basic language in philosophical training. And this is immensely helpful, because... It's what I urge entrepreneurs to do a lot, is to take your own beliefs about the market, your own diagnosis of the market, and your own intentions, and to write them as propositions, in the simplest form, unadorned with marketing or self promotion. And then you can interrogate the actual logical relationships between