>> he has been called tech's boy genius. a nonconformist. perhaps the only ceo who has refused to keep a schedule. david karp started tumblr before he was 20. he sold it to yahoo! before he was 30. it is now one of the most creative and social blogging platforms, all from a guy who dropped out of high school. joining me today on studio 1.0, tumblr founder and ceo david karp. thank you for joining us. thank you for having this on the schedule. >> i do have a schedule now.

>> now you are part of yahoo!, you have meetings. >> this has turned into a major team of 300 people. a major business we launched 1.5 years ago. >> tell me about you, where you grew up. tell me about your parents. >> i was born and raised in new york city. my mom was a teacher. she started in the music industry. my dad was a composer. he does a lot of work for television, particularly in news. i found myself surrounded by all of this creative technology growing up. in my dad's recording studio. my mom's work in the recording industry. i remember spending those nights and weekends in the recording studio. it felt like the starship enterprise. >> when did you learn how to code? >> i learned markup languages when i was 11-years-old.

when i was 13 years old or 14 years old, i started to get , just enough perl to do a little damage. one of the first things that drew me into it were these personal identities people were creating for themselves. i saw the aol profiles and away messages. i saw that in the websites people were building. i really loved that expression, that identity. the idea this could be a place to create something that represented you. >> you dropped out of high school when you were how old? >> after my freshman year, when i was 15. >> you were homeschooled. >> computer science education in high school, at least in new york city, 14 years ago when i was in school really did not exist. it just didn't back then, it just wasn't in high schools. now it is there in a huge way. kids are learning to code in grade school. i always insist that you stick around. if you have that stuff at your

disposal, hang out and spend time with teachers who are proficient and can help you get started. that is something i did not have. >> i spoke to many founders who dropped out and made a lot of money. they found it amazing companies, and they don't recommend anybody do what they did. >> if i had access to a computer science education when i was in high school, i would have stuck around. if you can find it there, stick around. get it there. >> you went to tokyo when you were 17. why? >> i had my heart broken and needed to get out of here. i bought a ticket and moved to the other side of the planet. i was really excited about tokyo, because i thought it was a future city, a place with remarkable technology and engineers. i love japan. i love tokyo. i ultimately came back to new york with a sense of american entrepreneurialism. >> you started tumblr in 2006. tell me how it began.

>> it was something i had been cooking for a couple of years. i was really noodling on it for a while. of, frankly, selfish desires i had for something that did not exist at the time. >> what were you trying to create? >> it was 2005, 2006, and the creative capabilities of the web had vaulted forward. video on youtube was possible. video is one of the hardest things to do on the internet, and all of a sudden, youtube unlocked it. >> it was the beginning of facebook. the heyday of myspace. >> twitter making it easy to publish. my frustration through all of this was as much as the technology was marching forward but the services people were building were more and more restrictive. facebook was giving you a lot more publishing capability but always on the same vanilla white page everybody else had.

you had to put your photos on flickr. put your short updates and links on twitter, put your articles on word press or movable type. your videos on youtube. you ended up with different channels. your expression broken up across these networks. >> how did you decide to turn it into a business? >> it decided for itself. we had a couple of weeks between contracts, at my consulting company. we were sitting on her hands, waiting for the next gig to get started. i said, let's just go for it. i feel like we can hack together the basic features. the basic features were the ability to post anything. tumblr was one of the first platforms that let you post a single photo, a set of photos, a link. a quote, a video you just recorded and edited. it could all go to one place, one blog that was yours. the ability to customize everything, which was also pretty novel at the time. >> elon musk has said starting a

company is like staring into the abyss of death. i have heard other entrepreneurs say it's like swallowing shattered glass. here you are, 20 years old. did you have those moments? >> of course. it was horrifying. there have been some, plenty of absolutely stomach turning moments. plenty of nights without sleep. moments where you feel like you totally screwed everything up. it is all over. you get used to those moments. you get through them, at least in my role. you get through them knowing the team needs you to be an optimist, to be positive. to see through to the end of it. even when you can't really see you need to be the one to paint , the path forward, how the team -- show the team how we are

going to keep going. the big moment for us, a public one, was a few years in when we started to get some popularity in traction. all of the sudden, the site started going down. we could not keep up with the scale or the growth we were seeing. the embarrassing thing for me and the team was, we thought we were really clever. we thought we had figured this out and we would scale this to infinity. little did we know what we did not know. we found ourselves underwater all of the sudden. the site is going down. we are developing a reputation for the site going down. the most stomach turning pardon all of this -- part in all of this is that we had these brilliant creators, people using tumblr to do remarkable things. using it as their home, for their incredible work. we are taking their scouts -- their stuff off of the internet and out of the world.

we thought it was so unforgivable. so terrible. it was crushing for me and the team to be screwing up in that way. it was exacerbated by the fact that we had not built out the big robust engineering team we needed at the time to get through to the other side. >> you started as a teenager. you go through these highs and lows. how did you develop your own personality and style as a leader? how hard was that? >> i have been lucky to have great investors and mentors from early on. i have great partners with me to steer me to what i should have been doing with my time. for every moment in our history. the way the team has this works has changed usually over the

last 10 years. -- hugely over the last 10 years. the people have changed. >> tell me about selling to yahoo! did you want to sell or did you feel like you had to? ♪

>> tell me about selling to yahoo! how did you make that decision, how to the process start? how did you start talking to marissa? >> the conversation with marissa was a fun one. we were looking for partners for strategic investment. we were in the process of raising money. more than just have an investor cut us a check. actually show up with some technology we can lean on. resources, distribution, content that could make our network better. there were a ton of things to do with yahoo! but also, with marissa -- her vision for what she was trying to do with the company. was really aligned with what we were doing with tumblr. where we were going next and

what we would need. the other thing was, marissa, we found an unstoppable positivity and optimism which we had come to appreciate. it is not universal across this industry. there are plenty of people with brash personalities and occasionally an intense negativity. that i have always him and my team always has been pretty allergic to you. >> did you want to sell, or did you feel like you had to sell? >> we needed to raise some money. just for profitability. the conversation with marissa was one of the most exciting conversations we had been having at the time. it escalated from cutting us a check and finding ways to partner together to let's make this official. we wanted to do all of it. that was something big to chew on. it was an incredible offer and opportunity.

a real promise she was making. a year into this thing, something i can say she has lived up to. >> tumblr is technically a separate company. you are still ceo. >> we are a wholly owned subsidiary. we have our own leadership team. we have our own head of hr, sales finance, all of that. , >> what is it like having a boss? >> not all that different than having a board. i feel like you always answer to somebody. as soon as it is official, the board says goodbye. they send you nice notes, congratulate you, but they basically say goodbye. they are not your board anymore. >> it is worse than going off to college. [laughter] >> it is terrifying. these guys who had been partners, mentors of mine on the team, hugely involved. some of them for like seven years. you are now all of the sudden parting ways.

that was a really jarring moment. we are incredibly lucky that we have amazing support and an amazing mentor in marissa. that was a big shift. >> what does marissa want from you and tumblr? >> the thing that got her so excited, what got us so excited, she saw the pathway were on. >> what have you been able to do with yahoo!? that you wouldn't have been able ?o do without >> the big one came about six months in. we launched tumblr ad products sponsored by yahoo! ad tech. that was a really big deal. we could go to the market with really, really robust ad technology. with this expressive canvas we had been working on for the last seven years. those two things together were a pretty monster combination for this industry. that suddenly gets to benefit from the work we had been doing. and all of the real ad tech the yahoo! had.

>> one of your investors recently talked about companies at some point need to turn into a real business. they need to focus on monetization and profits. he said, tumblr had to be sold even though they had potential. the annual burn rate was almost 50% of the entire fund. three exclamation points. how do you respond to that? >> we were making money. we had a big burn rate. we would have been able to -- the options in front of us were raise what you call like a growth round. get somebody to cut you a big check. or find and acquire, take on the burn rate. until you cross over to profitability. >> what about user growth? give me number is in terms of where tumblr is today. how many blogs, how many countries? >> at the time of the acquisition, we were 100 million blogs. we crossed over 200 million blogs. we reached 450 million people all over the world.

>> you had 47 .3 million monthly users in august, in may, it was 39. it looks like it has dipped. how do we make sense of that? >> we use them for our advertisers. it is pretty far off our audience numbers, which are closer to a global audience of 450 million people. they do not directly measure any of our mobile traffic. it is very hard to get the full picture of it. >> marissa mayer's acquisition strategy has been criticized and tumblr is her biggest acquisition so far. critics said, tumblr was not making money or growing. how do you respond? >> we were and are growing very fast. if she wanted to buy a profitable company, there are plenty to choose from.

she saw a path forward and something she thought could be not just a big business by the business with a lot of alignments with yahoo! we are about to have a lot to brag about. >> what is tumblr's ad strategy? within yahoo!, what is the strategy for growing the business now you are within this bigger company? >> we have a novel ad platform. it's all about wide-open creative expression. trying to get the most creative parts of the industry, to give them a space, a digital space where they can tell those same stories. where they can inspire us to become customers of these brands. get us to aspire to drive the beamer. or drink the coke. yahoo! is building more and more content on top of tumblr. digital magazines, yahoo! food. and yahoo! tech and travel those

, are built on tumblr. we launched the ability to take that advertising we're developing for the tumblr network, where you come to get the reach demographics and engagement of time on the -- of the tumblr network. you take that same content and roll it out the yahoo! network. >> i want to ask you about the competition. what do you think of what they are doing? >> they have done a lot of things that nobody else is doing. at the same time, they are kind of on the other side of a fight we had been fighting for a long time. giving people more identity. letting people create something that is theirs. one of the things that drives me bonkers about medium is they try to make it a commoditized network. with lots of long articles from various people rather than a place where i can set up and have my blog. myspace, my place on the internet. they are doing cool stuff with

longform text. vine is doing novel stuff with video. >> what about facebook? and twitter? do you consider them competition? >> we are all kind of vying for attention, but it is different. we found our spot in the big internet. in this big ecosystem right now. the stuff you go to see on facebook and twitter is created by people you know or celebrities you wish you knew. it is about people. tumblr on the other hand is a little bit more like your tv. it's not about people you know, the stuff you love. >> buzz feed? >> it is cool. they are making great stuff, using tumblr to make great stuff. i was they would run it on top of tumblr. >> there has never been a $10 billion tech company coming out of new york. why not? ♪

>> how is your life different now that you have sold your company for $1 billion?

you are not even 30 years old. what do you like to do when you want to act your age. ? >> when it's not not tumblr, it is like, printing or drones or 3-d design. 3-d printing is one of the most creative technologies. that is what it's make sudden. >> what have you printed in 3-d? >> i am working on a chess set. >> really? >> a host of things from mechanical design that a temple chump like me can start to figure out because the software is so good, so accessible. you can watch a five minute youtube tutorial. >> you are doing a bit of tech investing in new york. >> mostly just in my friends' companies. >> just for fun? >> just to support my friends who are doing this stuff. >> there has never been a $10

billion tech company coming out of new york. there are several in silicon valley. >> i think it is a just a numbers game. there are more coming out of the west coast right now. we have some great ones but not nearly in the same numbers in the west coast. that's something we are working on. no shortage of ambition in new york. >> what about talent and money? can you get the best talent? >> i think so. we get a lot of talent from the west coast. new york happens to be a much better city than san francisco. >> you don't want to go there. >> for all the things that are challenges, they only make us more hungry. we have a lot to prove that i think we will prove it. >> how optimistic are you about yahoo!'s future? >> i'm excited to be a big part of it. i believe in marissa. i think she has built an extraordinary team. i'm excited about a lot of stuff they are doing on their own.

i am hopeful and excited to be a shareholder. >> you do not think you will ever start another company? >> tumblr was a bit i really wanted that did not exist. it was never about doing the tech startup. >> net neutrality is important to you and tumblr. you have a position on it. what is it? >> it is important. we should do it right. and not set up laws or rules that stop the next generation of companies, people with ideas. that you have to worry about or spend time in courts or meetings with a handful of carriers that run the world. >> david karp, founder and ceo of tumblr. thank you for joining us. >> thank you. this was fun. ♪

>> if he is right, one day, drones will be everywhere. chris anderson started playing around with robots in the backyard with his kids on a whim. his company manufactures self flying planes. helicopters, blimps, around the world. his flight to ceo has been anything but direct. he has been a punk rocker. a particle physicist. a journalist. editor-in-chief of "wired" magazine for 12 years. a three-time author. joining me today on studio 1.0 is inventor, father, and