---
title: "Lenny's Podcast — 2023 Q2 合集"
date: "2023-01-01"
source: "Lenny's Podcast"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Podcast - 2023 Q2 (19 episodes)

This file contains 19 articles/episodes.

---

## [1/19] The ultimate guide to adding a PLG motion | Hila Qu (Reforge, GitLab)

**Hila Qu** (00:00:01):
... [inaudible 00:00:01]. Always say is actually fundamentally DLG, data led growth. So when you give away your free product, what you want to get in exchange are two things. One is a broader reach because free product spread itself is lower barrier to entry. Two, you want to understand you usage behavior of those free users, which features do they use and which features kind of correlates with a higher conversion rate, retention rate, all of that. If you don't have a foundation of data and understanding of how to analyze those data, you are giving a way of free product for nothing.

**Lenny** (00:00:44):
Welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Hila Qu. I've heard some listeners have been doing listening parties with this podcast where their team listens to an episode all at the same time over Zoom and shares their insights and lessons in a shared chat. And I would say that this episode is a great candidate for that. It's incredibly packed with advice on how to start and optimize your product led growth motion. We talk through common pitfalls that you probably run into or to get started, feel us favorite tools, what you recommends for an initial PLG oriented team, how to audit your existing funnel, plus tangents on how to improve your activation and retention and some foundational overviews of product like growth and some of the core concepts associated with it.

**Hila Qu** (00:03:29):
Thank you Lenny for having me. I'm so excited.

**Lenny** (00:03:32):
I'm excited as well. I don't know if you know this, but you have the very unique distinction of having two posts in my top 25 most read post of all time in my newsletter, which are the two parts of your series on how to add a product led growth motion. And so I'm really excited to dig into product led growth and help more people be successful product led growth.

**Hila Qu** (00:03:52):
Awesome. I should have made it three posts, three part.

**Lenny** (00:03:57):
I like that ambition. There's always more. Yeah. Well I think the next milestone is get into the top 10, get two into the top 10.

**Hila Qu** (00:04:06):
Yes.

**Lenny** (00:04:06):
Okay. Maybe this podcast will... Oh, okay. This podcast will be in the feed of the newsletter, so maybe we'll get there. No pressure. No pressure. One question I wanted to ask you is anything come out of writing those guest posts? Has anything good happened as a result?

**Hila Qu** (00:04:21):
I always take a very long-term view for writing. I enjoy writing myself. Spend actually four months on that one. After it's published, I see a lot of shares kind of and people writing very long summary of it. That's always very encouraging and also many people I didn't expect reading it reach out to me, let me know, "Hey, I read that." For example. I think Ravi, he is also on your podcast. I didn't know him personally, one day he's like, "Hila, I read that. That's awesome." And a bunch of friends in VC and they kind of read that. They told me it's great. I even have a advisory client kind of landed because of that as well. So it's awesome.

**Lenny** (00:05:10):
Amazing. It makes me really happy to hear all that. I was also curious, has anything, and we're going to get into the details of all the stuff you wrote about and even beyond what you wrote about, but is there anything you're thinking has shifted on having after having written that series in terms of PLG?

**Hila Qu** (00:05:25):
I wouldn't say it's shifted completely because I always believe you don't need to be a PLG purist. Meaning there are kind of people who are like, "PLG is the future. It's only thing, you don't need sales." Right? I was never like that, but recently by working with a few of my clients, I witnessed in reality many startups actually are having both. They have a PLG motion, they have a sales team as well. PLG motion is perfect for lowering the barrier for more people to try, broader the reach. It's a kind of volume kind of game. And then the sales motion, you can have very targeted list of big customers you go after, you close them and it's a big order. Usually revenue, a very strong foundation for a company. And I've seen actually a lot of my clients that are doing, they have both. They're doing that. They try to get the benefit of both from their early stage and it's super cool.

**Lenny** (00:06:29):
Is the simple way to think about this trend that eventually every one will need to do both. It's not one or the other, it's just both. And it's just a matter of when you add the other.

**Hila Qu** (00:06:40):
I would think so because let's say if you are in the sales motion dominated kind of traditional B2B software industry, your competitors will be adding PLG, as soon as they add it they will have a benefit of attracting more end users and end users become case to the employer, to the clients. And you lose that. And if you are only in PLG somewhere else may go after the big customers. It takes time for PLG to go to the big customer and close them. So you lose a little bit of time there as well. I think eventually you need both.

**Lenny** (00:07:19):
Cool. That's kind of the way I've been seeing it. I did a few series on traditional product led growth companies, [inaudible 00:07:28]. All those guys, and they all add sales teams eventually last famous for being product led only. And so everyone ends up adding sales team. I think more recent trend is sales led enterprise E products are all just realizing they need a product led growth component. So that's kind of what I've been seeing too.

**Hila Qu** (00:07:43):
Yeah, exactly. But I would say it is easier if you have PLG from early on. If you are pure sales led, you try to add PLG, that's the harder thing to change basically.

**Lenny** (00:07:56):
Interesting to set a little foundation. Before we get into a lot of this stuff, it'd actually be helpful just to explain what is product like growth, just simply, because people hear this term a lot and it'd be helpful just to understand it broadly. And then also just like why is it so popular? Why does everyone want a product growth component to their business?

**Hila Qu** (00:08:15):
Just use a simple example in B2C product. When you think about Facebook, when you think about a lot of the products you use every day as an end consumer, it's always by default product led growth because there's no sales team [inaudible 00:08:32]. The LTV of the product doesn't support that. I think PLG the term become popular because traditionally in B2B, word sales is the main motion. You need a sales team to close the deal After the contract is signed, the end users can now finally use it.

**Hila Qu** (00:08:51):
But nowadays, it's not necessarily a case. You can have your B2B SaaS product developed in a way to allow end users to try before you buy. So that's the reason I think this has become being more popular. And the fundamental driver behind this is the user of B2B softwares are also human. It's the same human using B2C softwares and we're already trained to use product, try, and before we make any decision. And we demand that in B2B as well. So it needs to happen. And more and more companies are capturing that trend basically, and they're trying to utilizing that as a entry point to either disrupt existing B2B players or build something really awesome for end users. So that's why it's becoming more and more popular.

**Lenny** (00:09:42):
To pull on that thread a little bit more even to help people visualize a product led growth product, what makes it product led? There's a self-serve component, what are attributes or just kind of common elements of something that's product led versus sales led? Let's say.

**Hila Qu** (00:09:59):
Yeah, definitely. I think maybe we can use a product as a example, right? Think about Zoom how me or you, maybe everyday users, how we get to know Zoom is not necessary through a sales team call me code or email me code and introducing me this, showing a demo of Zoom, and I get to know Zoom, right? It's because maybe Lenny, you hosted a webinar I joined and I get to just use this software already without even knowing it's Zoom. And then afterwards I may one day think about I want to do this myself and I just do that in a sign-up and I already create a host a webinar and I can pay if I need a paid plan or I can use a lot of more advanced features when I, let's say hit the 40 minutes limit, I can already click that and pay and become a paid customer already.

**Hila Qu** (00:10:53):
So I think the key properties also of PLG products, think about it should have a very low barrier to entry. Usually it has a free version, free trial. You don't need get approval from your boss to use it. You can use it today and then it has some sort of a self-service checkout flow. If you need a better version, you can buy yourself as well. And this product, basically the free product will spread on its own in some way or another.

**Lenny** (00:11:24):
Okay, perfect. I think that was really helpful. I think we dive into some of the meat of the discussion that we have planned and where I thought it'd be fun to start is the common pitfalls that people fall into when they're trying to add a product led growth motion. And so what are the most common ways people fail when they're trying to figure out product led growth?

**Hila Qu** (00:11:45):
The first of all, as I mentioned, you need to have some sort of vehicle. A lot of the companies, if you go to their website, especially B2B companies, you'll see the biggest CTA is called book demo. They don't have anything else. The first step for you to do is submit a form and kind of basically explain yourself to this company, I'm from who and who company and I want to use the tool, can you come back to me and allow me to see a demo of your product? That means the entry point to PLG is cut off. Instead, the first step is you need to either have a free product, free trial, some sort of a low barrier entry for anyone who stumble upon this product to give it a try. A lot of companies don't have that. That's the first I would say hurdle or peaceful.

**Hila Qu** (00:12:38):
And especially if you are a sales lead and you already have all those things figured out, you try to go to add PLG, it's not as easy as just say, add a kind of free trial CTA on your website. You need to build this free experience. You also need to convince your sales team, your existing product team, your marketing team, "Hey, let's try this out." Because before this process is super clean. Everyone only get only selected future leads and sales work on those. But now you need to allow more people in and there need to be more understanding of their behavior data, the process need to change. So it's actually a whole process. So I would say that's first one. And along with that is some companies didn't think it thoroughly and they are just kind of saying, "Oh, PLG is cool, let's do PLG."

**Hila Qu** (00:13:34):
And then they maybe spend three months build kind of some sort of a very basic free trial and then they think that's it. They think the leads will come, conversion will come, self-service revenue will come. It's not that easy. It's not that simple. It is definitely a entire motion. So I would say you need to commit to it. Maybe you can do some thinking, collecting some data, build your conviction, but to a certain point you need to commit to at least a year or even two years kind of roadmap to build this entire thing out and change the process internally sometimes as well to support that. The last one, I would say a lot of times the company's committed, they want to do this, but they don't know the right way or they don't have the foundation, they don't have the expertise of PLG.

**Hila Qu** (00:14:27):
Their internal team, they're really good at sales or maybe really good at as the traditional motion, but they don't have this part of expertise and foundation. A common thing I see is that company want to do PLG and they have no usage data at all and they're like, "I will just doing PLG. But PLG I always say is actually fundamentally DLG, data led growth. So when you give away your free product, what you want to get in exchange are two things. One is the broader reach because free product spread itself is lower barrier to entry. Two, you want to understand the usage behavior of those free users, which features do they use and which features kind of correlates with a higher conversion rate, retention rate, all of that.

**Hila Qu** (00:15:20):
If you don't have a foundation of data and understanding of how to analyze those data, you are giving a way of free product for nothing. Like you are really not being able to utilize all of that to build your PLG motion. So I think data foundation and expertise in terms of how do I design that user journey, that journey is very different from the sales user journey. Those are sometimes missing in company when they just begin to doing this. And in those cases I think it's super helpful to maybe either find someone who have done this as an advisor or hire someone like you need to have that expertise or through advisor to support your PLG motion.

**Lenny** (00:16:06):
This is great. We're going to talk about the data piece more in depth later, but on the commitment piece, I thought that was really interesting. I imagine many times founders or leaders think they have commitment and then they realize maybe not so much. Are there any kind of flags that tell you that, "Oh, you're not actually committed to working on this for a year or two years, whatever it takes."

**Hila Qu** (00:16:27):
The red flags I've seen basically sometimes, first of all, they think about PLG equals launch of free version or launch of free trial. They made this assumption in their head, "Oh, I already have a product. I already have a software that's working, customers are using. Now if I add a free version, if I open a free trial, that's it." Like that's basically PLG, and I will have conversions. I will have people becoming a product qualified leads just because I have it. "Hey, I open this for you, just come and use it and [inaudible 00:17:07]." And I think that's one red flag. Basically they are not thinking about the entire thing through understanding the implication, not only the free product, it's really just a start. You need to think about how to activate, how to design the upgrade path, how those teams, those new growth teams work with other sales and marketing teams, all of that.

**Hila Qu** (00:17:29):
So that's one. The other one is they don't have a dedicated team. They just basically assign one person to the thing. They are imagine, "Hey, you already have this. It's not that big of deal. You can just figure this out by borrowing resources from everywhere and try to coordinate all the stakeholders from sales, marketing, product." That person need to be a magician in order to be successful in that basically. And I think the third thing is basically they are really doing this because it's trendy. They didn't think about the deeper strategic reason why this is a good fit for their business. Do you have a product that's relatively low complexity, doesn't require a lot of customization for the customer to see value.

Time to value need to be relatively short or you can figure out a way to make it short. And then do you have a lot of potentially end user S&B business? They are interested in the solution. They want to try that out. If you do not have both, if you for example, develop a software for the [inaudible 00:18:42]. Companies like [inaudible 00:18:44]. Or defense companies, only three target customer exist in the entire world, you don't probably want to do PLG, right? So think deeper about the fit and then commit. And I would say those are the red flags.

**Lenny** (00:18:59):
Okay. So on that last point, I thought that was a really interesting, we talked about how every company probably should add a product led growth piece, but I think what you're also saying is actually not every company, there are some companies like defense contractors that are probably going to be sale led.

**Hila Qu** (00:19:15):
I think it's a spectrum. I would say the defense company, defense software company is a pretty extreme example. And of course in those case, I don't think it makes sense, but I think majority of B2B software, I've seen, you've seen, we've used even some more complicated ones. Like Salesforce used to be this example of sales motion. They're the pioneer of SaaS and they do this so well, but they begin to add look into sales service portal and all of that. And even a lot of the bigger players are looking into that. So I think majority of the B2B software, probably they are in the middle of the spectrum rather than the defense company.

**Lenny** (00:20:05):
You kind of shared some of the attributes of what allows you to be product led, like quick time to value. If you have this in your head, what are some of those bullet points of what you need to figure out for it to be successful potentially as product led?

**Hila Qu** (00:20:18):
The first thing is that have a... And you mentioned you are able to have a vehicle, have a free version, have a free trial. Sometimes it's a open source product. A lot of developer products start as a open source product. It has its constraints, but it is also a great kind of vehicle for PLG or if none of those are option, you can build a really realistic kind of experience. For example, I remember Amplitude, they are pursuing PLG now, but they used to have a lot of barrier. As an end user, it's hard for me to put that code into my product and see my data, but they build a really realistic interactive demo that's getting closer to PLG. So it's not PLG, but it's getting closer and you can already see the value and play with it yourself. So that's the first step. Have a vehicle.

**Hila Qu** (00:21:18):
The second step step is time to value. Basically, just because you have this vehicle doesn't mean people will come and use it and see the value. So you need to figure out how do you give your users a warm start and help them get started. I was talking with a kind of company today, they just realized we have this tool and when people come in into the free trial, they are asked to do some action, but nobody know how to do that. They may not have everything ready to take that action. So we're like, "What about we gave them some sample video or sample action they can try." Right? It's not the same as they do it themselves, but it's better. It's getting closer. And after that you can ask them to try the thing on their own and they need to do more work.

**Hila Qu** (00:22:07):
So kind of think about all the ways you can reduce time to value. It doesn't need to be this big aha moment in the first five minutes, but at least give them some mini aha moments, right? So that's the second thing, third thing is think about from there. If they get aha moment, if they want to buy, you need to have this self-checkout flow ready, self-service flow. It's the foundation, if you have it, it doesn't mean they won't buy immediately, but at least it gave them this option to do that themselves. And the fourth thing I would say, between this kind of activation usage, aha moment to this conversion moment, actually there's a big gap. And what is the gap? How you can understand the gap, how you can guide people around that journey is basically you need to have a very good grasp of data.

**Hila Qu** (00:23:03):
You need to have the foundation to understand their usage, their behavior, and then you can design a user journey in the product, in email, in all those tools to guide user to the next step. So have a very strong data foundation there. I would say. I think those are the main thing. And there are other things like your pricing need to be relatively simple. If your pricing is super complicated, they need to... Whenever they pick, for example, they try the product, they love it, they have a self-checkout flow, but in order to decide how much they need to pay, they need to send your sales some information, you need to do a quote, then that's broken, right? Or they're already confused about this process. So that is another kind of important thing as well.

**Lenny** (00:23:54):
Cool. So just to summarize, I took notes on this kind of the things that you got to get. If you want to add a product led growth component, there needs to be something free and kind of self-serve that you can-

**Lenny** (00:24:00):
... growth component. There needs to be something free and kind of self-serve that you can just start using on your own. There needs to be a quick time to value, there needs to be a self-serve checkout experience. You need a data foundation. I really love the way you phrased it where one of the benefits of product growth is the data component that'll help you understand what to build on, how to monetize these folks. And then the last piece is pricing that's simple, that people understand.

**Hila Qu** (00:24:23):
Yeah, yeah, yeah. Just imagine you are building, selling something on e-commerce side. You need all of this, right. Just in order for the B2B buyer to buy your software in PLG motion, you need to make all those available to him. It doesn't mean if you view this, it'll happen, again, right. That's the data experimentation. A lot of that need to be there to support a lot of iteration and make this work.

**Lenny** (00:24:52):
Awesome. Okay, so we've been going in a lot of directions. We started with pitfalls and things you probably will... You'll run into that may set you off track. But let's zoom out again and let's get into, just say you're convinced we need to invest in adding a product-led growth motion to our product. What's the first step that you recommend for people to go down?

**Hila Qu** (00:25:12):
I think the first step actually, I would recommend founders and leaders to just understand what's PLG funnel, what's sales-led funnel with SLG funnel. Because I remember when I begin to work on PLG at GitLab, it was not that clear to me. There's a lot of things you can read, but they're not all super clear. What is PLG? How is that different? And through working on that myself, I begin to develop this conviction and kind of this clear picture. The biggest difference from SLG and PLG is that the sales funnel traditionally work like something... You have marketing team working on the top of funnel, bring visitor and then they need to have a process to turn the visitors into lead. And leads is something, it is basically very popular and vitally used in the B2B business. And you go through some qualification process and leads need to be from your target kind of customer, target industry.

**Hila Qu** (00:26:23):
The company need to meet certain size, but they also need to show interest. And how marketing team historically gauge interest is how much they interact with your marketing campaigns. Do they open an email? Do they read three white papers? Do they go to this webinar? That's how they gauge interest. And for each positive action you did as a buyer, they add some points to you. And once you reach certain points, you become this marketing qualified leads. Basically those are the better ones we featured through that process and we gave that to the sales team. And sales team has more process, but then they choose some of them, work on them, and they close some of them. So that's kind of traditionally B2B sales-led motion works. And then product-led funnel is different. It's much more similar to B2C. Basically you can still have people visit your website and they sign up for free version or free account or free trial.

**Hila Qu** (00:27:21):
The most important thing, the biggest difference, is now you want them to use the product. You can still send all the marketing emails, all of that, but those are supplemental. Those are kind of trying to get them to the product to use, to try, and the usage, product usage, is almost like the leading indicator for success for PLG, versus in the sales funnel, it's almost like how many do you get and do they interact with the marketing campaigns, which in the old days it's what you have because nobody can access your product unless the contract is signed. But nowadays that's almost like an artificial barrier. It's not there. You can totally build a product in a free version to allow people to use. So usage becomes so important. And that's the biggest difference from the usage that you have two potential conversion paths.

**Hila Qu** (00:28:18):
One is that if this product is not that expensive, the price point fits in most companies' budget. Some companies may just use their credit card and they buy online. That's also, you then don't even need sales team to be involved. And it's very similar to the B2C product, e-commerce product, buying process. And it's awesome because it's automated, you don't need to have more sales team involved. It's low cost, it's efficient, it can happen on its own every day. It will just add up to your revenue. And then the other potential conversion pass is where the product usage is high, but also this customer, this potential prospect, fits into your ideal customer profile. It's from a Fortune 500 company or it's from a target industry that you know they need your solution. Then this customer worth more of your time and you should actually not, even if they may want to buy on their own, you may want to still have your sales team or have your customer success team to reach out to them to understand a little bit more of the situation and give them some white glove service. Hopefully you can even close a bigger deal than if they would have buy on their own. So that's another pass. I call that PQL, PQA, like sales pass.

**Lenny** (00:29:47):
And that stands for product qualified lead, right?

**Hila Qu** (00:29:48):
Product qualified leads, product qualified account. So the first step is for you to understand those two funnels and then think about if you want to add PLG, right? What is this journey? What are the steps along that funnel you need to establish for your product in order for your user to be able to convert in that funnel?

**Lenny** (00:30:12):
So you talked about these two funnels. One question is, are they basically the same for almost every product or should you try to figure out what's really unique about my funnel? And then second, is there an example of product that you think about like, here's the sales led funnel for them and then here's the product-led version of that, just to make it a little more real even?

**Hila Qu** (00:30:30):
Maybe I can give an example first and then we can talk about the other question. So I can use GitLab as an example since that's where I'm most familiar. GitLab actually have a enterprise sales team, very strong sales team, from the very beginning. But the company also we started from open source product.

**Lenny** (00:30:50):
Maybe describe what GitLab is for folks that aren't super familiar with it.

**Hila Qu** (00:30:53):
Yeah, so GitLab, we are a developer platform, DevOps platform, basically engineer teams, developer teams. They use this product to manage their entire DevOps process, from storing their code, kind of managing the version control, releasing CSAD, like security scan, all of that. It's an all in one platform for that team. So for the sales-led motion, like I mentioned, the teams, our marketing team, were working bringing a lot of visitors to our website and they sign up for free trial, for free accounts. And then we have this lead nurturing and lead scoring process to surface which are the good ones for our sales team. In our sales team, we have SNB, we have the mid-market, we have enterprise, and they each kind of took their buckets of leads and work on them and close them. They become revenue.

**Hila Qu** (00:31:52):
And then how the product led funnel work for us is someone, maybe as a developer, I heard about GitLab, I go to website, I see, "Oh, I can actually sign up for a free account." I may use it for my personal project. My company may be using another solution, but I have some side project I'm doing as a developer. I want to use GitLab to host that. And I did that. And so you begin to see this, individual users having some usage but nothing to do with his company. And then one day maybe this person's employer, "We want to look into some other solutions. We have way too many point solutions for each step of DevOps. Now we want to potentially consolidate them. So what are the options?" And this engineer raise his hand, "Hey, I have been using GitLab for a very long time and I really like it. I think we should check them out." And then this team, maybe this engineer manager or CTO depending on the size of company, they're like, "Okay."

**Hila Qu** (00:32:55):
He went to their website and he kind of signed up for a free trial because that allow him to test some more advanced features. It's 30 days, but he already has... This person knows how to use it. This person already set up the foundation with the free version and they started the free trial. They use their 30 day to do a proof of concept, the entire company already using it for part of their process. And they're like, "Oh, awesome. I tried this feature, that feature, that feature. It's a great tool. It can support our workflow and I'm pretty sure we should be able to get ROI from this product." And then in this case they are like, "I only need five seats. It's cheap. I will just go to the pricing page and check out the pricing and buy from there." Or in some cases, this is a big company and we see this big company is using our product, our sales team get that data signal, they may send an email and reach out and say, "Hey, I saw you were checking it out. How can I help?" And that may start a sales conversation, eventually become a contract from there.

**Lenny** (00:34:07):
Great. Thank you for sharing that example. Maybe a last question on this first step of mapping out the funnel. Do you recommend people just get in front of a whiteboard and just sit together and like, "Here's what it would be potentially if we added a product-led growth motion?"

**Hila Qu** (00:34:20):
Yes. Yes. And I think it's not that... The devil is in the details. Just mapping out the big steps is not that hard. You think about, " I have a marketing site already. I can build a free version." And then they use the free version and I build a checkout flow and that's it. That's the story. But that's the first step. If you don't even have those components, mapping out the funnel will allow you to see a missing checkout flow, a missing free version, you already identified that. But the devil is in the detail one layer down. How do you design an experience for each of the step? What do you say on your marketing side to drive free signup? In the free signup, how do you guide them to use the three most important features? And in the checkout flow, which payment option do you offer so that customers from everywhere can buy very smoothly? So that's the next layers kind of detail that actually has so many opportunities for optimization, maximization and all of that.

**Lenny** (00:35:29):
That's actually a really good segue to the next question, which is just, okay, you've mapped out the funnel, what do you do next?

**Hila Qu** (00:35:35):
If you don't have the foundational components, you need to build all of that. But if you have something, if you already have this funnel exist, right, it's just not working perfectly at least, but it's working, it's there. I think the next step is you need to pick a starting point. Where do you want to focus first to drive the maximum impact? Personally, I'm a big fan of finding leverage. I think doing growth is always about finding leverage. If you can always find the area that with relatively small investment can give you the biggest results, that can be such a kind of momentum, can empower you through future experiments and more work. And just finding leverage is a beautiful thing in my mind. So I always want to do that. So when I think about pick a starting point, one thing I actually do with a lot of my advisory clients as a first step is, we do a full funnel audit, full PLG funnel audit.

**Hila Qu** (00:36:38):
Think about, we go through me as a kind of end user, go through the entire journey, pretend I am interested, semi interested, and I want to buy from the website. Does that kind of attract me? Is it super clear the value proposition? And then from there, going through the sign up of the free account or free trial, is that smooth? And when I begin to use the product, do I get to my aha moment fast or I am very confused and frustrated, abandoned at that moment? And from there, if I'm like, think this is good, right, I hit my aha moment, I want to buy. Can I even buy? You will never believe, like when I do this audit,, there are so many low hanging fruits usually in this process. For example, one client, when I go to the checkout flow, the kind of checkout form is so confusing.

**Hila Qu** (00:37:38):
They ask a bunch of questions that only let's say UK customer need. Every other places they don't need to answer, but they ask the question anyway. And I as a US based person is very confused and I drop off at that point. And then there are other things, for example, the aha moments like I talk about. I don't know what to do when I land inside a product for the first time, I'm super excited and ready, but I don't know what to do. I'm so lost and confused. That's usually a pretty big focus area and opportunity area. Just getting your users to aha moments. They are already over so many hurdles here, but don't just turn down them and they leave because it's so confusing.

**Lenny** (00:38:25):
It might be helpful just to explain an aha moment. I know people hear this term a lot. What's a simple way to think about what is an aha moment?

**Hila Qu** (00:38:32):
I think it as a moment, as a first time a user experienced value of your product. So it gets popular because Facebook has this example from the early growth days. I think you added 10 friends in seven days, you hit your aha moment. But there are many layers under that. The reason why Facebook used that to define its aha moment is because in early days, if you add these friends, you begin to form some connection. You can see an interesting feed, you can interact with your friends, and that social interaction, it's the core value of Facebook, and Facebook leaves by looking at a lot of data. If you meet that data metric criteria it's kind of very likely you will hit that aha moment. But I think for a lot of, especially we're talking about many SaaS product, B2B software, the value of such product is usually either you see a workflow can be supported by this, it can save your time, it can save your money, it can help you make more money, or it just solve this pain point that you never get to solve on your own without a software product.

**Hila Qu** (00:39:57):
So at GitLab we actually did a bunch of analysis. We're trying to understand what is the aha moment for our new users. We ended up have something along the line of two users, two features used in the first 14 days. So it's very similar to Facebook's kind of format. But deep down, because we are a platform, we are a team product, two users is talking about the team components. Whatever the first user is trying and using that is so valuable, he or she is confident to invite another coworker to come in. That itself is very, very valuable action and indicates this first user is seeing value. And if together they use two or more features, that means we are seeing the collaboration, the platform components of the product. And within the first 14 days, because it has to be reasonably quick but not unrealistic, because we are a complicated product, we're not Facebook, we're not Zynga or a game app, it's hard for you to figure it out in the first day. So yeah, I think it's a very important concept for any PLG company to figure out because that's often the biggest opportunity area I see.

**Lenny** (00:41:24):
Aha moment and activation is often interchangeable, right?

**Hila Qu** (00:41:27):
Yeah.

**Lenny** (00:41:27):
So those are kind of two things you'll hear. And just to reframe, re-say what you say, so GitLab's activation slash aha moment milestone was two users using two features in 14 days.

**Hila Qu** (00:41:38):
Mm-hmm.

**Lenny** (00:41:40):
And I imagine the way you got to that was you looked at what point does retention improve if they got to a certain milestone, right? Is that roughly how you [inaudible 00:41:48]?

**Hila Qu** (00:41:47):
Yeah, exactly. So there are how you can get to that, right? First of all, the internal team, our growth team, actually we did some brainstorming. We think about what are the potential action or behavior that indicate they're getting value. We ideally want to do something like they maybe successfully merge their first PR or they successfully run their first pipeline. All of that. There are some potential high value actions we can think of. We just list all of them. And then the next step is, we did a correlation analysis to understand, hey, those are the 10 high value actions we believe we want to look at. If a new user did this action, what's the maybe 30 day conversion rate and... Not 30 day, 90 day conversion rate. What's the 30 day retention rate? Because we look at both. Sometimes you only look at retention or you only look at conversion, it doesn't give you the full picture.

So we look at if you did this action, let's say if, Lenny, you are trying our product, you are able to successfully merge the PR in your first 30 days. Does that improve your likelihood to convert? Does that improve your likelihood to retain? And we compare across those 10 high value actions, compare with the average. And we begin to see, oh, some actions actually if you do that, it lift your conversion, lift your retention much bigger. And those are the candidates for potential aha moments. And from there, the reason why we ended up not picking one single action... For some products, actually you can pick a single action. If one action really stands out, I don't know, for Airbnb [inaudible 00:43:39] is probably, you book a hotel, you go to there, you are so happy, you leave a high star review. That's the key action for this platform.

**Hila Qu** (00:43:49):
For GitLab, we have so many different workflow components. Teams are here for different reasons. Some are here for security, some are here for like CSAD. So that's why we ended up combining like two action. It can be any of the two high value features. The next step is actually you need to launch some experiments to try to get more people to do those high value action. And you then see, do I see higher conversion? Do I see higher retention? Because in data you are only isolating correlation. You are not proving causation. You just saw people who are doing this are more likely to convert. But it doesn't mean if you get people to do that, they will convert. So experimentation is the step. You will finally kind of validate that.

**Lenny** (00:44:37):
Hila, this is amazing. This is like a mini podcast on activation. We should do another one just on this. And then in the show notes, I'll link to a couple posts that I've written with a bunch of advice on setting activation milestones and improving them. I forget if you've contributed to that post or not, but if not, we should add some of these stories. But let's get back to our core. We have enough to talk about on just product led growth. So just to summarize the audit that you do, I wrote some notes as you were talking, and maybe we can keep going from that point. What you look for when you're auditing a product to see where they may pick a starting point, what I wrote down is, one, are you just excited to try it? Is the landing page pulling you in? Two, can you actually use it on your own and just try it? Three, do you get to the aha moment where you're like, okay, I get it, [inaudible 00:45:25] it, and then can I actually buy this on my own? Is that roughly the audit? Is there anything more to that?

**Hila Qu** (00:45:30):
Exactly. And I also look at their initial first few emails they send to me, because sometimes the email magically can help a lot. If I'm frustrated the first time... The other day I'm trying a product, I'm frustrated, I'm like, I will give up. And then in the night I saw an email, I'm like, oh, maybe I just click the CTA and give it one more try. And that time actually I figured out I get to the aha moment.

**Hila Qu** (00:45:57):
So I also look at the email, the first initial emails, and then when I map this out, I ask the company to give me the data at very high level for each of the step. How many people are on your website? How many people go through signup? How many people hit this aha moment? We need to define that. We need to... Usually a lot of discussion, like how many people get to the aha moment, how many people started self-checkout and being successful. And then like that between my experience from a user perspective and the data, we usually immediately begin to see, oh, this is the biggest opportunity. Usually activation and conversion are two of the common starting places.

**Lenny** (00:46:42):
**Hila Qu** (00:47:42):
You can do a audit like this yourself, right. Just imagine if you are a B2C user trying to buy a product, you want it to be easy. Ideally, PLG for B2B can be that easy as well. So go through that process and identify, where is confusing, where do you get stuck? If you find-

**Hila Qu** (00:48:00):
... where is confusing. Where do you get stuck if you find that you have a problem with activation, meaning if you enter into the product you are like what do I do, I don't know what should I do, and maybe I just left. And then, if that's the biggest opportunity, activation, then you need to think about find the right aha moment metric as the first step, as we just talked about, because that's the success, that's the goalpost. And then, design a product experience to help more people together. And I usually think about do is better than show is better than tell, meaning you want to remove all the frictions and somehow give them a warm start, give them some sample template, give them some sample thing they can play with initially in that very moment already, and you can supplement that with your email to bring them to the product if they don't do that. So that's activation. If activation is okay, but your conversion, your self-check checkout flow, usually there are also room for improvement. Many company I work with, when I try to buy, I cannot even find where to buy. It's very hard to find where do I click to start this checkout process, or they may have some frictions in the checkout flow where it's not localized. One company, when I look at their data, they find that India has very low success rate, which is expected, but we begin to say it's because the payment solution they choose actually doesn't support that market well. And they added another payment solution, immediately they are seeing much better success rate. And if they're already in the checkout, you don't want to lose any of them, right? Just do a hundred experiments to get to as much higher kind of commercial possible, because you don't want to lose any of them. So activation, conversion, usually are two great place to start.

**Hila Qu** (00:50:08):
And then from there, I would say think about your PQL/PQA, motion, which is the other conversion pass, which is if you also want to have sales blended into this, right, product-led sales motion, how do you set up the structure, the foundation so that you can know what are some data signal to tell you those are better leads? And what are some customer criteria, in terms of size segment, you should set up, how do you get those data, and then how do you hand this to your sales team, how they can close using those data, use this knowledge? That's another very big opportunity area. That's a bigger effort, compared to those two low-hanging fruits.

**Hila Qu** (00:50:53):
And the last thing I would say, product-led acquisition is a great place to start. If your product is a collaboration software, think about Airtable and it's Figma, right? As part of my workflow, I invite my team to join, I spread this out. If you have that use case, you can build that into a product that's awesome, that's very powerful.

**Lenny** (00:51:18):
So there's a lot there. So let me try to summarize what you just shared and how it connects. So you have a self-serve product, you've gotten to a point where you can sign up and try something for free?

**Hila Qu** (00:51:28):
Mm-hmm.

**Lenny** (00:51:29):
And then you do this audit of where along this journey do we think the biggest opportunities lie and the most leverage lives? And you have these, I think, four buckets of opportunity?

**Hila Qu** (00:51:40):
Mm-hmm.

**Lenny** (00:51:40):
Acquisition, which is top of funnel, do you want to double down and invest there first, or activation, which is help people see the value more quickly?

**Hila Qu** (00:51:48):
Mm-hmm.

**Lenny** (00:51:49):
Bucket three would be, you called it conversion, which essentially help them buy it more efficiently?

**Hila Qu** (00:51:56):
Mm-hmm.

**Lenny** (00:51:56):
And then there's a bucket of retention, of just keeping them around longer, which I don't know if you mentioned this, but I know that's probably not where you want to start, so it's even not worth chatting about too much.

**Hila Qu** (00:52:04):
Yeah.

**Lenny** (00:52:05):
Cool. And so the question, basically, a founder or product team has to decide is which of these three buckets do they go in on when they're trying to add product growth, acquisition, activation or conversion?

**Hila Qu** (00:52:16):
Mm-hmm. Mm-hmm.

**Lenny** (00:52:17):
It'd be cool, maybe just one example of each of these three buckets, like what's a product that did a good job here? And then you also talked about how to know which one to start with. Maybe just again, just a quick summary of you should probably start activation if this, if you have something like that?

**Hila Qu** (00:52:32):
You should probably start with activation. Activation is actually a common good starting place for most B2B software.

**Lenny** (00:52:32):
Awesome.

**Hila Qu** (00:52:40):
Because usually B2B softwares are not designed to really get you to use quickly, historically. A good example, there are, I think, all the best PLG companies, they do a awesome job. That's almost like my criteria to say whether this is a great PLG product or not. Think about Miro, as an example. If you go through their activation experience and sign up to usage, they ask very limited questions, very targeted. They drop you, kind of, they ask you about your use case, what are you here for? Are here to do a brainstorm session? Are you here to develop a roadmap? And they quickly gave you templates to get started. Just like in maybe five minutes, you finish the entire journey from go to the website and sign up, answer a few questions, and you are already using the template they provided to do the thing you want to do. That's time to value. That's a success. I think that's a really great standard for all the PLG, like a B2B product, try to follow. So that's activation is usually a good place. If you don't know where to start, do that.

**Hila Qu** (00:53:54):
And then conversion, I would say, is a place, again, worth investing, but there are two layers. One is the self-check-hub flow, just do some experiments there. You can actually go to any E-commerce website, like, I don't know, go to Lululemon, go to Amazon, make your conversion process as easy as theirs. That should be your goal. The consumers shouldn't be confused about complicated pricing, where to find all of that, so that's a place always worth investing, testing more, because that's revenue so close to be added into your book.

**Hila Qu** (00:54:39):
And then the PQL/PQA part, the other more-complicated path, I would say that's something you want to figure out activation and self-checkout a little bit, and you want to have some reasonable user number and then invest there, otherwise it can be a little bit jumping too fast and jumping too ahead. And the acquisition, a product-led acquisition is a great place to invest, if you have a collaboration workflow, you have some inherent, internal viral components in your products. Think about Figma, think about Calendarly even, right? It can spread. This product is so easy. You can build something to allow it to spread on its own.

**Lenny** (00:55:24):
Okay. I'm hoping that was really helpful, because I think a lot of people are like where do I start, what do I do to help start moving down this road of product growth? And what I'm hearing generally is just activation is probably where you want to focus, which is essentially getting people to your value quicker. And what's cool about that, and we had a podcast with Lauryn Isford from formerly Airtable, now at Notion, talking about all the ways to do that. And interestingly, one of the biggest levers for retention, and moving retention, is often onboarding and improving activation, so win-win.

**Hila Qu** (00:56:00):
Yeah, definitely. And I could talk a little bit about retention expansion, if you think that's helpful as well?

**Lenny** (00:56:00):
Sure, let's do that here.

**Hila Qu** (00:56:08):
Yeah, I know that I didn't talk about that in the post, and there are people asking, hey, do you plan to write another post on this specific topic? So the reason why I didn't cover too much retention expansion is, as you mentioned, it's not usually a first place to start. I call retention the messy middle. It's actually a messy part of the entire funnel. A quick activation, conversion, those are fast. Those are almost sometimes shorter time span, right? You have a lot of never, and you can test very quickly, and that acquisition is a very big leverage. You need to get more users, always.

**Hila Qu** (00:56:48):
Retention is super important, but it's a little bit messy. It's over a very long period of time, and your customers can be, at any given moment, they can be retained or not, like if they just cancel or they just decided not to use anymore, you already lost them, so it's a very messy part. But how I think about retention, there are two steps. One is how to build a habit in their usage pattern, so that they are using this maybe every week, every day. The key to do that is, first of all, your product need to have a high enough frequency. If you are using this once per month, it's not likely you can build this into a habit.

**Hila Qu** (00:57:39):
Before GitLab, I worked at Acorns. We started as an investment app, and the whole thing is passive investment, passive investing. You bought some ETFs, and then you basically don't even need to check, and you just keep adding money and it will grow, and after 10 years is awesome. It's actually the right investment philosophy, but when I worked as a head of growth, it made a big challenge for me, because think about set and forget it. They don't even need to go back to a product to be successful. And that make it very hard, as a head of growth, to drive engagement, drive retention. I don't even know whether they're retained or not, if they are not coming back, right? I can only gauge from other indicators. So I think one thing I would say about building habit is think about how to build those habit feature or collaboration feature into your workflow already, into the product already. That is the reason they can retain, fundamentally, if it's high frequency, if it involves collaboration with other people, if it's part of their workflow. So that's the first step. You can obviously use a lot of the looks to reinforce that. You can send them an email if they take certain action, and get them back, and to repeat that action, but fundamentally you need to build that into your product.

**Hila Qu** (00:59:09):
And then the next part around retention is I actually think extension is part of retention. Basically you already have a steady usage flow. You are using this habitually every week, every day. What are the right moment to prompt you to think about maybe buying more? And there are three buckets of product-led extension. The first one is up upgrade to a higher tier. The second one is buying more seeds, buying more license. The third one is if you have some sort of a consumption add-on component, just consuming more, right? Like for GitLab, you can go from bronze tier to a silver tier, you can go to a higher tier, and then you can buy more seeds, and you can also buy more CSCD minutes to consume. Those are all the different moments. How you can do that is really understand data, understand usage, and trigger a lot of the right conversation at the right moment to the right person.

**Hila Qu** (01:00:17):
And you can, again, a lot of similar tactics you use in activation conversion actually can be beautifully applied in expansion, because it's almost a combination of getting people to the aha of that feature, use that feature, try that feature, getting them to convert.

**Lenny** (01:00:34):
You're leaving all these gold bricks that I have to resist not following and getting off track with, because there's so much, and like retention is its own conversation. We could have maybe just one question along those lines. What's something that you've launched that had a tremendous impact on retention? Is there an example of just like, wow, that really had a big impact, you talk about frequency maybe, but what comes to mind?

**Hila Qu** (01:00:56):
I can share some of my example at a course my-

**Lenny** (01:00:59):
Yeah.

**Hila Qu** (01:01:00):
I think there are two things. One thing is actually very similar to what you just said. When I was asked to work on retention, I did a bunch of analysis. The biggest leverage for me is actually activation. So I ended up doing tons of experiments in activation. I identified what are the features for users to take experience value quickly so that they are more likely to retain. For us, it's a feature called recurring investment, which makes sense in hindsight, but at that time nobody's caring about that. We have some other very cool investment features called roundup investment, so nobody is really paying a lot of a attention on this, but when I look at data, I saw recurring investment has a high correlation with retention. So I did a lot of work trying to get more people to set this up, and which has been a great success, actually, in a very short period of time.

**Hila Qu** (01:01:58):
And then from there, I would say we begin to add more use cases that has a higher frequency, like I mentioned, right? If you only come here once per month to check our investment, it's very hard to retain you. We don't have any lever to engagement with you as well, if you are not in the product. So we ended up adding IRA account, retirement account. We ended up adding spending account, like a debit card, like more high-frequency use cases. Those use cases come with higher frequency and better retention by nature, so now you change the problem from how do I improve retention to how do I drive adoption of higher-frequency use cases? So I did, again, a bunch of experiments how to drive more adoption of retirement account. Once you have a retirement account, an IRA, there's tax consequences, all of that. There it's very hard for you to leave. So you flip the question into, again, adoption/activation problem in that case as well.

**Lenny** (01:03:04):
Amazing. Thank you for sharing those. Oh man, there's so many other things we could talk about retention, but we have enough to talk about on product-led growth. So there's two other areas that I want to touch on. One is data and infrastructure, and what people should know about how to set that up for success, and the other is hiring your team, and how to build out your product-led growth team. So starting with the data piece, maybe just as a big picture, just like what are the buckets of data and infrastructure people should be thinking about that they're going to have to invest in or should start thinking about early?

**Hila Qu** (01:03:36):
I think there are two big buckets. The first bucket is product usage data. As I mentioned, a lot of B2B software, they're really lacking in that, because when you sell via sales team, you don't need to know so many details, so granular usage data, all of that. The second bucket is I call this customer 360 database, because product usage data is one component, is the most essential. In order for your product-led gross motion to be successful, you also need to connect that with your marketing teams, marketing campaigns, your CRM, your sales force, who are the customers, prospects, what their stage. So those ideally need to be connected so that you have a 360 picture of your customer. If I have an Airbnb as a potential, like a target account, do I know there are users from Airbnb that are using my product, which features are they using, and do I send any marketing campaigns to each of them, do they respond, all of that. All of those ideally need to be connected, but in reality is all over the place. It's all in its own tools in most of the B2B companies.

**Lenny** (01:04:57):
What are just some tools that you think people should check out, start with maybe? What's Hila's recommendations on an initial stack or areas to explore, in terms of tooling?

**Hila Qu** (01:05:08):
I say there are two piece. One is infra, the other piece are some tools that are kind of secondary. So from infrastructure perspective, on data tool, my first tool usually, one is some sort of data hub segment, right? This next one is some sort of a product analytics tool. Think about Amplitude. I know PostHog is actually a pretty popular one. It's an open-source product analytics tool. There are Mixpanel, Pandle, all of that. So have some sort of data hub, data collection tool, and have some sort of product analytics tool. That's the data infrastructure.

**Hila Qu** (01:05:49):
And then you need to have an experimentation tool because, like I said, you cannot just imagine you build everything and everything works perfectly. So you need either like Optimizely, I know Amplitude has some experimentation components. Eppo is a new and upcoming one. You need some tool to allow you to do experimentation.

**Hila Qu** (01:06:12):
The third piece I think that's pretty essential, I counted in the infra, is some sort of a lifecycle marketing tool. I know many B2B companies, they use HubSpot or they use something for their email marketing, but those are usually least nurturing. And it's very different from lifecycle marketing tool, meaning you need to connect with Segment, Amplitude. You know what customers are doing your product, your design, your email, your in-app, your push notification, based on their behavior, at the right moment, to the right person. And you measure success by do they take the right action in a product, versus the lead nurture email marketing tool is do I get them to read the article, open the email, I add 10 points to their lead score, and they are a next step further in their list funnel? So, data tool, experimentation tool, lifecycle marketing tool, those are the infra.

**Hila Qu** (01:07:10):
And then from there, there are a lot of PLD tools you can add on top to make your day-to-day much easier. Just to start, as so like that are most essential for acquisition, you need to have some sort of a like a data enrichment tool. Think about ZoomInfo, Clearbit, because the biggest difference between B2B and B2C is that you still need to know about their company. You want to know this person, but you also want to know this person's company, right? That's a very important thing, and you can get a lot out of those data enrichment tool, and then you can design your journey differently based on that.

**Hila Qu** (01:07:52):
For activation, a lot of my clients are finding a lot of value in those tools like Appcues, User-Led, basically the tools that allow you to build onboarding flow quickly in a product without engineer kind of resource. So you need to do some initial integration, but as soon as you did that a marketing manager, a PM or someone, can just build some customized onboarding step-by-step flows himself. I think that's quite neat, because you need to test the tongue in that area.

**Hila Qu** (01:08:27):
And in terms of conversion, I would say there are many product-led growth, product-led sales tools. I think those are great. If you want to build out your PQL/PQA conversion pass, think about Endgame, Pocus, Tableau and Pace. There are a couple of them.

**Lenny** (01:08:47):
Wow. Amazing. That was an awesome list and really well-structured. Is there anything else along the data or infrastructure piece that you want to touch on before we move on to hiring and the team?

**Hila Qu** (01:08:59):
I just want to go back to the point, as I mentioned, product-led growth is data-led growth deep down. So in most of the situation when I see a company want to get started, where they are really missing or they need to invest more, is data. So if you identify you have a gap in this area, don't feel bad as well. A lot of pretty big companies are in the same shoes, and if you can't invest the time, money, the team, the tool, to figure this out, the benefit of this, right, the data collection, understanding usage data, can not only power your PLG motion, it can really power your entire product team, even your customer success team. Now you gave them the ingredients they need to develop the next feature, based on not only what your top customer asked for, but also what everybody's using, right?

**Hila Qu** (01:09:59):
Your customer success team can take a much deeper view in understanding what the clients are using, rather than just talk with the executives from the client and get a rough gauge of the situation. So I think it is a area worth investing, and every B2B company should be investing in.

**Lenny** (01:10:21):
I'm trying to channel what listeners might be thinking right now, and I imagine some people might be like what if I pick the wrong tool? I'm kind of stressed, I have to do all this research. I'm kind of worried about starting, because it'll set me up for failure later. Which of these buckets do you think is most important to get right, right from the beginning, and any advice on how to just avoid messing that up?

**Hila Qu** (01:10:41):
To get started, I would say probably a product analytics tool is the first step, and maybe the data hub, such as Segment. So if you have Segment and particle tools like that, it allows you to plug into so many different tools. You can basically try all the different tools, and if it doesn't work, you just flip a switch, you can try another tool. So there is a benefit there, but it is expensive, so I know companies may just go right into the product analytics tool. I would say it's hard to get it wrong completely, right?

**Hila Qu** (01:11:19):
In order for a product analytics tool to be meaningful, the first step is you need to collect the data, you need to do some instrumentation, you need to have the foundation. And then, because it's garbage in, garbage out, if you send a bunch of garbage data into your product analytics tool, your analyst will be just even more confusing, right? It's like he doesn't know whether to trust the data, what to use. So a lot of company I work with, the first step is maybe not looking into tool, but do an audit of your data instrumentation situation, to understand how many of the key actions are intact, is the format correct, is the data, what are the gaps? And you may need to do some re-instrumenta ...

**Hila Qu** (01:12:00):
Right, what are the gaps? And you may need to do some reinstrumentation, reformatting and things like that before you even plug into a product analytics to make it useful.

**Lenny** (01:12:10):
For someone that may want to do that audit, is there a thing you would point them to, or, I don't know, a blog, a course, something to help them understand if they're doing it right? Or is it like, "Bring Hila on," and you need someone like you to kind of help them through it?

**Hila Qu** (01:12:24):
No, you can bring me, but you don't have to bring me. I think there are, if you search on Google just the data dictionary, or data product usage, data audit, a lot of companies published template and spreadsheet you can use. I can even send you a few afterwards.

**Lenny** (01:12:43):
That'd be amazing.

**Hila Qu** (01:12:44):
And then you can just scroll through. Basically the key idea is go through your product experience, identify the key actions, and go through your data instrumentation and see, "Do they match?"

**Hila Qu** (01:12:57):
And the success of this is you identify the gaps and eventually you want to establish something called the data dictionary. I basically do that for a lot of my clients. And the data dictionary will include, here are all the key actions, what's the event name for each of those, and what are the property and things like that.

**Hila Qu** (01:13:17):
But you now know, "Hey, I have this action track, this is the name. If I have a new product manager or analyst, we can all refer to this." And everyone know the same definition rather than people are interpreting differently. So that's a very important part to success even before the tooling.

**Lenny** (01:13:39):
Awesome. It also reminds me a previous guest, Crystal Widjaja, has a awesome post on why most analytics efforts fail. And she talks a lot about this, of how to set your events up for success. So we'll link to that as well.

**Hila Qu** (01:13:50):
Mm-hm.

**Lenny** (01:13:51):
Maybe one last thing here, I'm trying to think about what would screw people up most, and it's probably not having a data warehouse and ETL sorts of tooling in place, because that feeds a lot of this.

**Hila Qu** (01:13:51):
Yep.

**Lenny** (01:14:01):
Is there anything you want to add there about just the importance of a data warehouse and how to set that up?

**Hila Qu** (01:14:06):
Some of the early stage companies I work with, when they just get started in the very beginning, they don't have data warehouse. They just basically have their product and they have some sort of a Google Analytics or Amplitude, and that's it. It's pretty wild, but it's working and they can get to someplace from there.

**Hila Qu** (01:14:25):
But as soon as you begin to have data user, it's time to get serious to establish a data warehouse, have some ETL solution. I think there are the most common best practice ones, like AWS and things like that. There are also some startups that are doing this and you can utilize as well.

**Hila Qu** (01:14:49):
But again, as soon as you become a serious business, you should invest in that. Otherwise, it's pretty wild and it's pretty fragile as well.

**Lenny** (01:14:59):
And when you say AWS, you mean at Redshift, I imagine?

**Hila Qu** (01:15:01):
Yeah.

**Lenny** (01:15:02):
Cool. Awesome. Okay, final area that we have time for, which is awesome, which is around building your team. So maybe just two questions here. What is your advice for starting the initial team investing in PLG? How does that usually look and what do you think people should do? And then later, how does that evolve over time?

**Hila Qu** (01:15:21):
How I see most companies started is the founder or the leadership team realize that they need to do PLG. And they build a conviction. Maybe initially there isn't even a dedicated team, but they did something here and there, they decided to invest in this.

**Hila Qu** (01:15:40):
And the common place to start is to hire a head of growth, or it can be a lead growth PM, but someone who has a little bit of experience in this area. And then they begin to build this core growth squad as the first growth team. And I think that's a very common place to start.

**Hila Qu** (01:16:01):
The other place to start that's less common, but I also think it happening in reality, is maybe they will start a cross-functional, almost like a tiger team. Because if the initial focus area is, let's say, they want to do a product qualified lead, or basically add that funnel. That involves not only product team, that will involve data team because you want to know what are the usage pattern that indicate these is better leads. You also need to bring sales team in because they need to work on those leads to close them.

**Hila Qu** (01:16:39):
So if that's the initial starting area, a cross-functional tiger team is also possible option. But the most common way is hire a head of growth, usually a growth PM, and then start a team with engineering, design, data to support that core growth squad.

**Lenny** (01:17:00):
And the main difference between these two. One is dedicated, "We are going to dedicate full-time people to helping us grow." Like I say we talked about earlier, let's say they're going to focus on activation and that's their whole job. Versus tiger team is basically they're borrowing resources from other teams and this is kind of a side project for them.

**Hila Qu** (01:17:18):
Yeah. A little bit, for a period of time. So it's temporary. It's kind of they almost to want to get into... I would say usually the cross-functional team, the tiger team, is a little bit prior to a full commitment. They're pretty much committed, but they still want to try this out and get a final conviction, and then they begin to dedicate resources.

**Hila Qu** (01:17:43):
And you ask about how do they evolve from there.

**Lenny** (01:17:46):
Before we actually get there, maybe one more quick question. Which would you recommend? I imagine you'd recommend a dedicated team, if you can do that.

**Hila Qu** (01:17:54):
Mm-hm.

**Lenny** (01:17:55):
When would it make sense to go the tiger team route? In what cases?

**Hila Qu** (01:17:59):
One situation I would recommend is that if the initial focus area is, like I said, product qualified leads, the sales conversion path. Because if you think about you have a head of growth or a core growth PM, that person usually has a growth PM background and is in the product organization. And they're awesome if the initial focus areas are activation, conversion, those kind of involve a lot of experimentation. But activation and conversion are relatively confined, it's something the growth PM and engineer design data, they can work on.

**Hila Qu** (01:18:39):
If your initial focus area you felt like, "My biggest bit is actually do this PQL thing," it is a little bit harder for the growth PM to socialize all those cross-functional resources, because he need to get pretty deep into data. He need to have a counterpart in sales, even in marketing. So in that case, I think it's possible that maybe you start a tiger team.

**Hila Qu** (01:19:03):
You can combine both. You can have a growth PM dedicated, but have some tiger team to be working with him or her on this PQL project as well.

**Lenny** (01:19:14):
Got it. And I like this term tiger team, by the way. I haven't heard that before. It sounds like a lot of fun. Very dynamic. Okay, cool. And then yeah, what happens next after you have this initial team?

**Hila Qu** (01:19:24):
Once you have this initial team, it's important to give them the resources they need, and give them an initial focus area, give them support and a little bit time, allow them to try things out and get some early wins. And early win is the biggest thing I would say for, and whenever you start a new growth team, try to look for some opportunity, try to get some early wins in whichever focus area you choose.

**Hila Qu** (01:19:53):
And from there, if you get some of the wins, the team has some momentum, there are more confidence from the organization in PLG, right? It's time to potentially extend and formalize. So fundamentally I think you should not only think about the PLG team, you should think about the PLG org. Because PLG is a motion, it's cross-functional by nature, it's not just a product team or growth team.

**Hila Qu** (01:20:24):
Eventually you need to get to the place basically there is a head of growth product, that's the center of the PLG org. But there's also need to be a head of growth marketing, that's his or her counterpart in marketing organization. And then a head of product led sales, that's the counterpart in the sales organization.

**Hila Qu** (01:20:47):
Exactly where they sit, how they sit, it's different company by company. The most common one is head of growth product report to product org, head of growth marketing report to marketing, head of product led sales report to sales. But they have some sort of a very strong collaboration, because they are working in the same motion and same funnel. But I think that's next step, think about this org.

**Hila Qu** (01:21:11):
Once you have those counterparts in product, in sales, in marketing, the next step is think about what are the metrics they own to make sure you can manage this funnel, this motion, in the data-driven way. Because the PLG metrics are very different from SLG. The top of funnel is more about high quality signups. You don't want a lot of traffic, you want free signup, free trials. But it need to meet certain quality bar, it's not just anyone.

**Hila Qu** (01:21:46):
And then the head of growth product, he or her top KPI is about usage, activation. Activated teams is a very common metric. And then maybe number of PQLs, that's another. You want to get those teams to certain usage threshold basically.

**Hila Qu** (01:22:07):
And then the head of product led sales, he will be focused on converting those PQLs into revenue. So he will focus a lot on conversion rate, efficiency and maybe revenue, things like that.

**Lenny** (01:22:23):
Got it. And you're sharing a lot of org design verbally in the post, which we'll share obviously in the show notes. You can actually see a diagram of what these look like, to help kind of make it super clear.

**Lenny** (01:22:36):
I have maybe just one more question. Going back to the initial team, what are the functions you recommend they have on this like MVP PLG team?

**Hila Qu** (01:22:45):
The most important one is have a growth PM to be the lead, right? Head of growth, director of growth, lead growth PM. And then the growth PM, as you know probably very well, growth PM, he is a PM but has a much stronger skill set in analytics, experimentation, very data-driven. Think about metrics.

**Hila Qu** (01:23:06):
The growth PM's way of working is similar to other product manager, but his KPIs is actually more similar to the sales and marketing work. He's very focused on the conversion rate, the journey, the funnel versus the feature specifically itself.

**Hila Qu** (01:23:23):
And then the other functions you need to have for sure, I would often say actually a data analyst needs to be the very first hire. Sometimes even try to find a growth PM who can do analysis if you're really small, you can find that type of unicorn person.

**Hila Qu** (01:23:43):
Or even before hiring growth PM, hiring analyst, I would actually go as far as that. Because without insight, without a lot of foundation, your experimentation, your effort is really directionless in a sense.

**Hila Qu** (01:23:58):
So growth PM, analyst. And from there definitely you need some dedicated engineer, you need a designer. Designer can be somewhat not dedicated in early days, but engineer needs to be. Some sort of user research support as well, it doesn't need to be dedicated. But those are the core growth squad.

**Lenny** (01:24:18):
Okay. Real actual last question here for the growth PM. In your experience, are they most often coming from within the company already and they kind of shift to this role? Or do you recommend they find someone externally?

**Hila Qu** (01:24:30):
That's an excellent question. I have seen both. I actually recommend if you can find someone internally, maybe he's a PM, he want to do growth. Or he is an analyst who want to become more like a product role.

**Hila Qu** (01:24:48):
I even have a one client, the head of growth I work with used to be a investor relationship, like head of investor relationship. And he reports to the CEO and founder. He's very analytical. He hasn't been a PM before, but he can socialize the resource within the company to launch experiments in product, in marketing, in all of that. And I, as an advisor, will come in, guide him in the area he's not familiar with. And we actually drive pretty good results together.

**Hila Qu** (01:25:20):
So I think prefer hiring internally if possible. If not, if you really don't have anyone internally with that knowledge or with that interest, you can look outside. I would say map the initial growth PM hire to your starting point. If we already decided activation is the biggest focus area, try to find some growth PM with that experience. And if the conversion is a focus area, acquisition is the focus area, try to find someone with that experience.

**Lenny** (01:25:54):
I love that advice. We've reached our very exciting lightning round. I've got actually seven questions for you, the most ever we've had for a lightning round. Are you ready?

**Hila Qu** (01:26:04):
I'm ready.

**Lenny** (01:26:06):
Okay. What are two or three books that you've recommended most to other people?

**Hila Qu** (01:26:10):
This first one is called The Almanack Of Naval. Yeah, I don't know whether we read that one. I really love that one. That's kind of a life-changing book for me. I have it-

**Lenny** (01:26:22):
Do you have a favorite Naval-ism that comes to mind?

**Hila Qu** (01:26:26):
I learned finding leverage from him. He talked about there are four type of leverage. It can be your writing, it can be code, it can be capital, it can be team. So the reason why I invest a lot in writing is I felt like that's my leverage. And I love that.

**Hila Qu** (01:26:44):
The second book is called How Women Rise. I really love this one. I gifted this to a lot of my female team member and I really learned a lot from them.

And the third one is my book, it's called [Chinese 01:27:01]. It's only in Chinese, if you don't read Chinese you cannot read it. But I heard, my friends told me, if you are launching an email campaign, if you're doing experiments, have this book by the side, it will help with conversion rate just by its appearance.

**Lenny** (01:27:18):
That's amazing. Is there an English translation or is it only in Chinese right now?

**Hila Qu** (01:27:22):
It's only in Chinese, so you have to learn.

**Lenny** (01:27:25):
All right, I see. All right. There's an advantage there, if you can speak Chinese your email conversion will go up.

**Hila Qu** (01:27:29):
Yes.

**Lenny** (01:27:30):
And then just to the first book, it was called The Almanack Of Naval, right?

**Hila Qu** (01:27:34):
Okay.

**Lenny** (01:27:35):
Is that right?

**Hila Qu** (01:27:35):
Yes, yes.

**Lenny** (01:27:36):
Okay, cool. Sweet. And we'll link to all these. Okay, favorite recent movie or TV show?

**Hila Qu** (01:27:41):
I watched a movie, it's a sci-fi movie from China, it's called The Wandering Earth 2. It's by the famous author, Cixin Liu. He's the author of Three Bodies. I don't know whether you heard of it?

**Lenny** (01:27:53):
Mm-hm. Oh my God, love that.

**Hila Qu** (01:27:54):
That movie is awesome. It's kind of really cool. I really highly recommend it.

**Lenny** (01:28:00):
I have to go check that out. Oh my God. I heard they're bringing Three Body Problem to Apple TV or Netflix. There's like a show coming.

**Hila Qu** (01:28:06):
Yes, yes. I look forward to that as well. I watched many versions already kind of film, none of them are good. So-

**Lenny** (01:28:17):
That's the problem it's so hard to do well. Oh man, I'm not optimistic, but I'm excited anyway.

**Hila Qu** (01:28:21):
Yeah, yeah.

**Lenny** (01:28:22):
Favorite interview question that you like to ask.

**Hila Qu** (01:28:24):
When I interview a growth PM or analyst, I will always ask, "What is a experiment you launched that has a very unexpected result? And what did you do after that?"

**Lenny** (01:28:37):
What do you look for in an answer there that makes you feel like they are strong?

**Hila Qu** (01:28:41):
So first of all, they have to be launching a lot of experiments to get very unexpected answer. So if you are only... Many people remember their success for the interview, they prepare that very well. I don't want to ask, "What's your successful experiment?"

**Hila Qu** (01:28:58):
Secondly, I want to know just why it's unexpected. That reveals the deep, deep level of their thinking, how deep they are thinking. If they should expect that based on what they described, then they are not thinking deep enough, they are not understanding customer enough.

**Hila Qu** (01:29:15):
And what they do afterwards is also awesome. Like, "How do you face a failure or unexpected result? What are the clues you can pursue? What are the actions you can take? How do you learn something out of it?"

**Lenny** (01:29:28):
I love it. What's a favorite recent product you've recently discovered that you love?

**Hila Qu** (01:29:33):
I would say, similar to everyone, ChatGPT. But also Lululemon yoga pants.

**Lenny** (01:29:43):
Amazing. Great. What's something relatively minor you've changed in your product development process that has had a tremendous impact on a team's ability to execute?

**Hila Qu** (01:29:51):
Yeah. At first I added basically a section in the dock, in the ticket stack. Ask the PMs to write the success metric ahead of time. As well as adding which of the growth lever this is helping. Is this contributing to acquisition, activation, retention, monetization? And it forced them to sometimes think through deeply, "Why are we even doing this?" Sometimes they ended up not doing that by just writing it down.

**Lenny** (01:30:23):
I love that. Next question. I know you're big on children's books, do you have a favorite children's book?

**Hila Qu** (01:30:29):
My favorite children's book is called Someday, and I recommend everyone to check it out. And basically it's talking about how our children used to be our baby, become our kids, and when they are taller and more stronger than us and they will remember us.

**Lenny** (01:30:51):
I'm going to need to check that out now. And final question. I know you're big on growth concepts, you have all these frameworks and concepts. And so what is your favorite growth concept?

**Hila Qu** (01:31:02):
I would say north star metric, because I find it's not only valuable to growth, it's valuable to just everything.

**Hila Qu** (01:31:10):
When I think about what do I want to do with my career, does that fit my own personal north star metric? When I think about how I want to raise my kids, I think about what's the north star metric for successful education for my kid?

**Hila Qu** (01:31:27):
Because it forced me to think long term. It forced me to think about what's valuable to me, to them, not only by the society standards, ARR revenue, like salary. And also what's my vision for myself and for my kids.

**Lenny** (01:31:43):
I love that. It reminds me of a recent guest where she always asks, "What are you optimizing for?" Whether she's talking with her kids or her husband or her team, and it's a similar concept.

**Lenny** (01:31:54):
Hila, this was incredible. I think we've shared tens of thousands of dollars of value, and it will probably lead to millions of dollars of revenue for a lot of companies. And it's everything I hoped it would be. Thank you so much for being here and for sharing so much wisdom.

**Lenny** (01:32:08):
Two final questions. Where can folks find you online if they want to reach out and learn more? And how can listeners be useful to you?

**Hila Qu** (01:32:15):
Yeah, they can find me on LinkedIn. Just search Hila Qu, H-I-L-A Q-U. You can find me. I have a personal website that's under development, but I contracted it to my kid, to my 12-year-old. So he need to wait until summer and hopefully this summer he can finish it.

**Hila Qu** (01:32:32):
Yeah, if you are a founder, you are looking for a growth advisor, feel free to hit me up. I'm always happy to just have a call with founders and leaders, get to know more people. And I'm a growth nerd, so I always want to nerd about growth anyway.

**Lenny** (01:32:51):
Amazing. Hila, again, thank you so much for being here.

**Hila Qu** (01:32:54):
Thank you.

**Lenny** (01:32:55):
Bye, everyone.

**Hila Qu** (01:32:56):
Bye.

**Lenny** (01:32:59):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [2/19] Driving alignment and urgency within teams, work-life balance, and the changing PM landscape | Nikita Miller (The Knot, Trello)

**Nikita Miller** (00:00:00):
And many of the companies that I've either worked with or advised, coached over the past few years, it was all about outcomes. Everyone was, "Outcomes, outcomes, outcomes," which is right. You want to make sure you're doing the right thing with the right goal, and that's fine. And some folks, myself included at certain points, swung way too far on the outcomes train and forgot that output is an indicator of that. So if you have a team that's doing all of the ideation and figuring out how to make decisions quickly and getting the right documentation and setting up the right product briefs and design briefs and experiment briefs, all the things that we know go into to successful product development, that's great, but if you're also not shipping a lot of things to market quickly enough, then it just doesn't matter that much.

**Lenny** (00:00:52):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Nikita Miller. A huge thank you to Camille Ricketts for recommending Nikita and for connecting us. Nikita is senior vice president and head of product at The Knot Worldwide. Before that, she was VP of product at Dooly, and before that she was head of growth and retention at Trello for over five years. In our conversation, we dig into how product managers and people getting married are similar, a bunch of advice on getting into product management, a really cool framework for how to align roles and responsibilities within your cross-functional teams, a bunch of advice for working effectively as a remote and distributed team, and the one question that Nikita asks constantly to get the most out of her teams. Nikita is amazing and I am excited for you to learn from her. With that, I bring you Nikita Miller after a short word from our sponsors.

**Lenny** (00:01:51):
This episode is brought to you by wealth fronts. Anyone paying attention to the stock market over the past few years knows it's been a wild ride. Many people who made risky stock bets during the bull market are now facing big losses and wondering how to make better informed investments going forward. That's why I'm excited to tell you about Wealthfront's new stock investing product, which is specifically designed to help you make better stock investments. It has all the features you'd expect, including fractional share, zero commissions and $1 minimum. But what sets it apart is a unique feature called Stock Collections. These are groups of stocks created by Wealthfront's investment team that are designed around unique investment opportunities. You can think of Wealthfront Stock Collections like Spotify Discovery Playlists, but instead of helping you find new songs, they help you discover new companies and themes to invest in.

**Lenny** (00:02:38):
For example, some popular collections right now are dividend to blue chip stocks, semiconductor leaders, and rising interest rates, and each collection includes a summary of the opportunity and trade-offs to help you make more intelligent investing decisions. To start investing with just $1, visit wealthfront.com/lenny. And note, I'm a Wealthfront client and they arranged for me to share this product with you. Important disclosures and details can be found in the show notes. Are you hiring, or on the flip side, are you looking for a new opportunity? Well, either way, check out lennysjobs.com/talent. If you're a hiring manager, you can sign up and get access to hundreds of hand curated people who are open to new opportunities.

**Lenny** (00:03:21):
Thousands of people apply to join this collective, and I personally review and accept just about 10% of them. You won't find a better place to hire product managers and growth leaders. Join almost 100 other companies who are actively hiring through this collective. And if you're looking around for a new opportunity, actively or passively, join the collective. It's free, you can be anonymous and you can even hide yourself from specific companies. You can also leave anytime and you'll only hear from companies that you want to hear from. Check out lennysjobs.com/talent. Nikita, welcome to the podcast.

**Nikita Miller** (00:03:59):
Hey, Lenny. Thank you. I'm excited to be here.

**Lenny** (00:04:02):
I'm excited to have you. So I don't know if you know this, but I'm actually having a kid in a couple months and I've been doing a lot of reading, as you do when you're going to be a parent. And I was reading a lot of stuff on The Bump, which turns out I realized was something that it was in your umbrella of products.

**Nikita Miller** (00:04:15):
It a part of The Knot Worldwide. Yeah.

**Lenny** (00:04:17):
And then I realized y'all have that for pregnancy, you have a site to help you with proposals, you have a site for obviously wedding planning and vendors and just party planning in general. And so is the general strategy to be there for every adulting milestone in life? Is that the plan?

**Nikita Miller** (00:04:34):
Yes. That's a nice way of putting it. We talk about it as being there for the big celebrations in life. We have these celebratory moments that mark adulthood, and so to be part of that journey, we primarily focus in the wedding space but yes, across the whole journey.

**Lenny** (00:04:52):
It feels like the two pieces you're missing are divorce and funerals. Is that the plan or do you want to stick to happy things?

**Nikita Miller** (00:05:00):
I think we're sticking to celebrations. I think we're leaning on the world needs a lot more celebration right now, so helping folks do that.

**Lenny** (00:05:07):
You're here. Okay, cool. It's a really smart strategy. It makes a lot of sense, once you get someone with their wedding and then they expand from there.

**Nikita Miller** (00:05:15):
And their friends too.

**Lenny** (00:05:18):
Interesting, right, because they register on The Knot and they'll know what's going on there.

**Nikita Miller** (00:05:22):
That's right. You register.

**Lenny** (00:05:24):
Genius. So we're going to talk about some of the things you've learned along your time there, but I wanted to start with your previous gig at Atlassian and specifically leading growth and retention at Trello. Many people listening to this podcast either use Trello and love Trello or are thinking about using Trello, and so I thought it'd be interesting to hear just who do you find Trello is the most ideal for? When is it good and smart to go with Trello versus Jira or Linear or Asana or something like that?

**Nikita Miller** (00:05:53):
A few things. So I think Trello initially started out as being the task management or planning tool for anyone as opposed to the others you just mentioned, which tend to be in software in our industry, and that's who we're geared towards. Trello when it first started was very much on being simplicity of design, being easy to use, tactile, easy to onboard. You don't need customization, you can use it in single-player mode or multi-player mode. And so that meant that at the beginning, we got a lot of people using the product that were small businesses, that were families, that were people planning their weddings potentially. 

**Nikita Miller** (00:06:32):
And then over time, as our users became more sophisticated or had more problems to solve, that's how I think we evolved and grew with them. So some of it's around this concept of progressive disclosure where you start with a small problem and as it gets more sophisticated, Trello grows with you, whereas I think some of the other products, they start with complexity and if you want something simpler, you kind of have to pull things away or tease things apart. And that was definitely something that helps Trello stand out. I think now, many years later, you'll find that Trello is very fully featured and fully powered and they now lean into that a lot more, but that wasn't always the case.

**Lenny** (00:07:14):
So it sounds like Trello broadly was meant for a lot more than just software teams building product?

**Nikita Miller** (00:07:18):
Yes. It started off I think being inspired by software teams and wanting to understand how to move and manage tasks easily. That was the origin story, but then very quickly became the kind of tool that anyone could use to manage anything. And now I think we're back more the product is way more towards the software development and that's a lot more of the competitive advantage, but I think the people that are excited about Trello and the ones that made Trello really impactful weren't necessarily software.

**Lenny** (00:07:50):
Got it. When you think back to your time helping grow and retain folks on Trello, is there a big win or something you're really proud of that you think back to that was a huge success in that time to help Trello grow more or be more successful?

**Nikita Miller** (00:08:07):
That's probably not what you'd guess. So when I started Trello, I actually joined to build out Trello's enterprise business. And so a lot of our growth and retention was actually about how to get more teams into the product and then spreading it throughout the org, so not only software teams but sales teams or marketing teams. And so the big push there was around collaboration. How do you create a shared perspective for everyone working on a project, not just a software team?

**Nikita Miller** (00:08:38):
So we had a good time thinking through what's the customer experience, but obviously in the context of enterprise, which for Trello at the time was really tricky because it's such a customer first product, I think shifting our mindset to understand enterprise and teams specifically as a cohort was very different. And I think we've done a pretty good job of that or the team did a good job of that, and I think being a part now of the Atlassian suite definitely leaned into that even more.

**Lenny** (00:09:09):
Was there a specific feature that unlocked a lot of opportunity or is it just broadly, there's a bunch of little things you have to add?

**Nikita Miller** (00:09:15):
I think it was broadly a bunch of little things. So all the enterprise features that you can imagine that all products need to operate at the enterprise level, smaller features around labels like how do you color them? How do you name them, when do they appear? When you invite people, do you invite individuals or do you invite teams? So a lot of the work was around going from single player or two, three player mode to 5, 10, 20 people.

**Lenny** (00:09:41):
Got it. Coming back to the question of Trello versus Jira, because I think this might be interesting to people. Just if you're trying to decide should we use Trello or should we use Jira, what's a simple way to think about which way to go as a founder maybe or as a product team?

**Nikita Miller** (00:09:55):
I think that smaller teams, especially folks that are ideating, when you haven't landed on what you're going to build yet, I think Trello's a great product for that. For pulling ideas, for prioritizing them, for tracking how we're progressing through discovery, I think Trello's really great for that. For things that have been decided and are ready to go and are really in the breakdown these tasks and assign it to people, then something like Jira is probably a better use case, but I'm sure there people that'll disagree with that.

**Lenny** (00:10:29):
Cool. Building for PMs is what you were doing while you were working in Trello. I imagine that's kind of a bittersweet experience. I imagine in some sense they're an amazing market to sell to, on the other they're probably really annoying. What's a surprise maybe or a lesson about working on building products for product managers?

**Nikita Miller** (00:10:46):
I think you're right, it is a bitter sweet place to be. I think I less thought of it as building for product managers and just thought about it in the context of productivity overall. And productivity software in itself is really what's bittersweet because there are a lot of trade-offs and when you're dealing with a software team, for instance, how you measure productivity or define it for a PM or a designer or engineer and a data scientist is probably really different. And so the impossibility of solving for all of those use cases I think is always what's challenging, and we know that no one product is actually going to solve all of those use cases, no matter what the marketing taglines are out there.

**Nikita Miller** (00:11:29):
And so it was really challenging to figure out what are the core things that a product manager might need to see or a designer or a developer, and how do you make sure that that core is there? So you get the 80% and then you spend time on the 20% that you know a very small segment of users are going to use, but they're probably your core, so maybe you spend some time there. But the answer is no one's going to be happy, and with Trello in particular it was challenging because for a while we built a product that was easy to use for everyone, and so then trying to really narrow in on well, what is a software development use case and what do we really need for that? And that might be very different from what a mom-and-pop shop is going to need or someone planning their wedding is going to need.

**Lenny** (00:12:15):
That's a good segue to something else I wanted to ask about. You used to build for product managers and now you build for people getting married. I'm curious what is similar about those two groups and what's maybe most different?

**Nikita Miller** (00:12:26):
A lot of similarity. So folks planning their weddings, think of it as an emotional, high stakes thing that you're hopefully going to do once, and so the pressure is really there. The pressure and expectations are really high, not unlike product managers or other folks in software, and ultimately wedding planning is this huge project where you have a bunch of stakeholders, friends, family. You need to manage multiple vendors, and the time horizon for a wedding once you're engaged is anywhere from 12 to 18 months, so it is a longtime project. I think there's a lot of similarities there. 

**Nikita Miller** (00:13:06):
Some of the things that are a little bit different in terms of how we're building the product is the amount of decisions probably that need that go into wedding planning are far more than you'd imagine. So one of the reasons being at the Knot is so interesting is we go all the way from planning tools, so actively, how do you help people find inspiration and plan their wedding day-to-day to two-sided marketplace. We have our e-commerce business that's supposed to be registry and paper and obviously our affiliate businesses and the ads businesses, so it's a little bit different from a SaaS productivity tool, the business that we're in, but a lot of the problems that we're solving for users are actually really simpler.

**Lenny** (00:13:48):
Which one's more, I don't know, stress inducing.

**Nikita Miller** (00:13:51):
That's a great question. I think that couples, it's such an emotional thing for people, for individuals and their families and their friends, so I personally feel like I empathize with that in a way that I don't do the same for product even though I'm a product manager, because there are many projects and there're always things that we need to manage and that's just part of the gig. Whereas planning your wedding, for couples this is for many the most meaningful time of their lives, and everyone does this differently. So we have folks that are planning their multi-hundred person weddings and then there are 10, 15 closest friends weddings, but the emotional side of it is the same and you don't want to let them down because most aren't going to do it again.

**Lenny** (00:14:38):
Yeah, okay. That's what I would've guessed. It feels like wedding couples are more stressed. I just had an idea. I imagine you think about this. We're doing a baby shower right now and it feels like you're missing a opportunity to do the baby shower invite platform.

**Nikita Miller** (00:14:51):
Yes, we've thought about it.

**Lenny** (00:14:54):
And also registry, a registry platform.

**Nikita Miller** (00:14:56):
Yes, also that.

**Lenny** (00:14:59):
Okay, okay. So many opportunities.

**Nikita Miller** (00:15:00):
All the life moments.

**Lenny** (00:15:01):
Oh my God. One last question about Trello. Do you have any just tips for someone using Trello and may not be aware of something they could do with  Trello?

**Nikita Miller** (00:15:09):
I think the biggest that people probably know about but are often underutilized are Power-Ups, which is basically our integrations. And Power-ups are folks that are usually doing things that are more complex, often. But Trello, when you think about it with other products like Asana, as you mentioned, Linear, some of what people are worried about is that it's just not powerful enough, and Power-Ups are a way to do that. And there are dozens and hundreds of integrations that you can use it for. So that's worth checking out.

**Lenny** (00:15:39):
Awesome. Great tip. Shifting a little bit and zooming out, you've worked at a lot of different companies at a lot of different levels, also a lot of different geographies and I want to chat about that last piece. But maybe just broadly, what are a few of your biggest lessons about building successful and impactful teams?

**Nikita Miller** (00:15:59):
This is kind of my jam.

**Lenny** (00:16:01):
Excellent.

**Nikita Miller** (00:16:02):
It's kind of what I spend a lot of time thinking about, and I think every company go into you approach it slightly differently. For me, it usually starts with individuals identifying very clearly early on roles and responsibilities, like what are the expectations of a role? So in software, for most of us one of the things that I think I've seen done well or contributed to and multiple companies is the triad, product, design, engineering, data. And what does it look like for these roles and data science that's like other?

**Lenny** (00:16:38):
I see you put data in there.

**Nikita Miller** (00:16:42):
I'm trying pull that in. That is my mission. I love that. My mission is product, design, engineering, data.

**Lenny** (00:16:47):
It's not a triad anymore though, but I love it.

**Nikita Miller** (00:16:50):
I know. It's a quartet something.

**Lenny** (00:16:50):
It's just a chair.

**Nikita Miller** (00:16:53):
It's a chair. Great. So I think about that a lot. What are the roles? What do you expect for each of them and how do you define the responsibilities that we have to each other? I know it sounds maybe on the softer side, but I think a lot of what we can solve for in creating strong teams is exactly that. The exercise that I often do is I generally have an idea of what I think the roles and responsibilities are and the expectations across these four roles, but the exercise especially with leaders in an org is to have them sit down and write them for each other.

**Nikita Miller** (00:17:29):
So Atlassian has some of this that they do in the form of playbooks, but it's basically I as a product leader, I'm going to write down what I think the expectations and the role and responsibilities of my engineering manager, of my designer, of my data. And then we look at it together and then we arrive at essentially a contract with one another about what we think that looks like and what that responsibility is to our teams, and from there, we cascade it throughout the org. This is very time-intensive, as you can imagine, and often leads to a lot of debate because depending on the kind of orgs or people's backgrounds, our expectations might differ, but I think that contract early on is really important.

**Lenny** (00:18:08):
This is super interesting and I want to go two levels deeper. Is there a template that you have? Is there specific questions you're answering? Is it freeform? How do you actually know what to write in one of these?

**Nikita Miller** (00:18:21):
There is a template. There are templates we can probably share after this-

**Lenny** (00:18:24):
Awesome. Great.

**Nikita Miller** (00:18:25):
... to run the roles and responsibilities, and it usually comes in a couple of forms. It's what the expectations as an IC? What's the expectation as a manager or with your team? And then what is it to each other and what are the things that are shared? So when we're running an experiment, a product manager's likely to write a product brief and go into the details of what that means. The data scientist is likely to help write the actual experiment brief, but we're all putting inputs into it. But then when it comes to data and analysis, my expectation is that both of you are doing that together.

**Lenny** (00:19:01):
And is the idea the PM writes, "Here's what I'm planning to do," is it the data scientist writes on behalf of the pm, "Here's what I expect you to do?" Who's taking the charge in each of these?

**Nikita Miller** (00:19:11):
You write your own. So I as a product manager, I write what I think my role is and also what I think what my expectations of my counterparts are and they do the same, and then we review it together.

**Lenny** (00:19:23):
And you encourage every team within your domain to do this amongst themselves. 

**Nikita Miller** (00:19:28):
Yes. 

**Lenny** (00:19:29):
That is very cool. If there's an example you could share that we could put in the show notes or a template, that would be great.

**Nikita Miller** (00:19:35):
Yeah. We'll do that.

**Lenny** (00:19:36):
What have you found as impact that comes from doing this a before and after? What kind of difference do you see having done this on team?

**Nikita Miller** (00:19:45):
So I'd say recently, I'd say in the past maybe five years, one of the things that has shifted and has caught some people by surprise, I don't know if it should or not, is around project management. So I think 10, 12 years ago, everyone expected that they would have Scrum Masters, and Scrum Masters have largely in many companies just disappeared. But then you think well, where did that responsibility go, because someone has to do project management? And this is different from program management internal to a team. 

**Nikita Miller** (00:20:18):
And from my perspective, a lot of that now sits with engineering managers, which is a little bit different from how it was when I started in product where actually, a lot of that was put on PMs. And some of you might recall, it caused a lot of issues with product managers because they were the ones that were constantly like, "What's happening in the sprints? What didn't make it? Why didn't it?" Doing a lot of that work. And I think PMs are still responsible to keep track of that, but engineering managers are increasingly expected to be the ones that are actively making sure that sprint goals, for instance, are met. And that's a shift that I've seen recently that we do have to debate often.

**Lenny** (00:20:57):
I think one of the most interesting elements of this approach is that the product manager role is so I ill-defined and so different in every company, and so I imagine much of the benefit here is just what the hell is the PM's responsibility?

**Nikita Miller** (00:20:57):
100%.

**Lenny** (00:21:10):
Is there anything that you find is surprising about what teams end up taking off the PM's plate or putting on the plate that maybe other companies don't?

**Nikita Miller** (00:21:18):
I think a lot of people end up putting a lot on the PM's plate because of that misunderstanding. And so you end up looking at something as a group and saying, "Well, no one human can do all of those things all the time, so let's talk about what the shared responsibility looks like." And what I think is really powerful about the triad is that it's a recognition of there are shared responsibilities. Who's responsible for making sure that everyone understands what we're doing and why, the PM leads that, but evangelizing that is something that would be expected of designers and engineering managers and data scientists as well.

**Lenny** (00:21:57):
On the data scientist piece, you talked about how you're trying to embed that more and more into product teams. At Airbnb, data scientists were embedded in every team, so I totally get that.

**Nikita Miller** (00:22:05):
It's not everywhere.

**Lenny** (00:22:07):
Yeah, exactly. What more can you share there of just why you found that to be important and how you're approaching that?

**Nikita Miller** (00:22:13):
From my experience as a product manager, it was always a blocker. Getting your hands on the data, maybe having someone to troubleshoot with if as a PM you couldn't kind of understand or figure it out yourself, it was just always a blocker. And so then you'd also then have to go and negotiate with other teams about getting someone's resources to look at this problem, so that's one. The other is just that data scientists, as with most humans, we get better the more focused we are and the more in depth we are in understanding the product itself. So if you have someone that's dedicated to a zone or an area of the product, then it's much easier for them to spot patterns as opposed to attempting to understand what's happening every time a ticket comes in.

**Lenny** (00:22:58):
And so the shift you push for is instead of a centralized data team that you convince to give you resources, you embed the data scientist into the team.

**Nikita Miller** (00:22:58):
Right.

**Lenny** (00:23:07):
And do you call them data scientists, do you call them analysts? How do you think about that?

**Nikita Miller** (00:23:11):
That also varies per company. That depends on the organization and the work. Some teams require data scientists, not all. Some require analysts, so that just depends on what the team's working on, what's needed.

**Lenny** (00:23:27):
Got it. Coming back to the roles and responsibilities framework, do you encourage teams to revisit that every once in a while or is it like this team's done this thing and we're good for a while?

**Nikita Miller** (00:23:36):
I encourage them to revisit it and it's usually because something's fallen off the rails. I think if they were really great at it, I'd say every three months or every six months, let's have a look and see how this is going. But often it happens because there's some conflict or tension or something was missed and someone thought it was theirs or not and we have to do a quick retro.

**Lenny** (00:23:59):
What do you find is often that thing that is maybe missed or often causes tension?

**Nikita Miller** (00:24:04):
Execution. It's usually around execution and velocity.

**Lenny** (00:24:10):
Not moving fast enough?

**Nikita Miller** (00:24:11):
Not moving fast enough.

**Lenny** (00:24:13):
What do you find often is a way to help with that as a leader of teams?

**Nikita Miller** (00:24:18):
Well, one, just identifying what the velocity issue is. It can vary, so for PMs it's often around the velocity of decision-making. How long does it take us actually from saying we need to do a thing to defining it potentially, and then deciding are we actually going to do it or how? And that I think takes a long time for most companies, most people. So velocity of decision-making, so I think that tends to fall on the PM most often. The actual execution of it, the development tends to fall on both PM and engineering. So in engineering I find that depending on the org, some folks understand breaking up tickets into small pieces and why that's valuable and how to do it, and that's something that I think everyone in industry probably needs a refresher on, why that's valuable and how it works. And some of that is also shared by the PM because if you haven't articulated clearly or well enough what we're trying to do, then it is hard to break that apart. So those are the two things that are on my mind a lot.

**Lenny** (00:25:27):
Is there anything else along the lines of what you've learned about building successful teams? I really love this roles and responsibilities approach.

**Nikita Miller** (00:25:35):
Outcomes and output also comes up a lot, and many of the companies that I've either worked with or advised, coached over the past few years, it was all about outcomes. Everyone was, "Outcomes, outcomes, outcomes," which is right. You want to make sure you're doing the right thing with the right goal and that's fine. And some folks, myself included at certain points, swung way too far on the outcomes train and forgot that output is an indicator of that. 

**Nikita Miller** (00:26:10):
So if you have a team that's doing all of the ideation and figuring out how to make decisions quickly and getting the right documentation and setting up the right product briefs and design briefs and experiment briefs, all the things that we know go into to successful product development, that's great, but if you're also not shipping a lot of things to market quickly enough, then it just doesn't matter that much. So that conversation is one that I think we often have to revisit on all the teams I've ever been on that yes, outcomes are important, but also the indicator is around execution and velocity. So if that's not in line, then a lot of the other things don't matter that much.

**Lenny** (00:26:50):
And so when you say outcome, you're saying here's the goal they're achieving or the impact they're having, or is it just the idea we know what our outcome will be but they're not actually shipping anything? When you say output and outcome, what are you referring to specifically?

**Nikita Miller** (00:27:04):
The outcomes are understanding what the goals are and what we might do to get there. So OKRs is one way to talk about that. Great. But embedded in that is and how are we going to get there? And the fact is, the more tries you have at it, the likelier you are to get it right. So we're not actively monitoring how fast does it take us to ship things to market.

**Lenny** (00:27:28):
I see. So if I can rephrase it, a lot of teams know and talk about what they should be doing. They have a strategy, they have a goal, but what you're finding is that there's just not a lot of action a lot of times and there's a huge opportunity just to get a team to actually ship more often and move faster.

**Nikita Miller** (00:27:46):
Yeah. There's not a lot of understanding of our role and urgency. It's urgent, and software in particular. You probably can't forget that because someone else is likely doing something similar or better and faster.

**Lenny** (00:28:02):
Makes me think of I think Frank Slootman is his name, the Snowflake CEO. He wrote this book called Amp It Up, where he talks about how to build thriving software companies and businesses in general. One of his three most important recommendations is always have urgency, to never let off the gas of urgency. That things always need to feel urgent.

**Nikita Miller** (00:28:22):
I'll check that out. But I think product managers, I consider product to be the ones that really need to drive urgency.

**Lenny** (00:28:33):
Say more about that. What have you found helps in creating that sense of urgency and continuing to increase output?

**Nikita Miller** (00:28:39):
Mostly reminding people often. And I don't think that's a question of, "Well, show me list of everything you ship. That's never going to work." Well, that doesn't make people feel good about the work that they're doing, but let's talk about our experimentation backlog. What do we have in there? How quickly are we getting those things out? Those are the kind of conversations that I think help. I think that having a good pulse on competition helps as just a friendly reminder that there are others out there doing this and thinking about things very similarly, possibly, to how we're thinking about it, so how do we differentiate ourselves? And a lot of that is about how quickly are we getting many ideas to market? Small tangent. The competition side is interesting to me because I've worked at a few companies where I've worked with founders who are like, "We don't have competition, we're the only ones doing this," and then fast forward a few years and you're like, "Here are all the companies that were your competition that you didn't recognize then that are shipping great product now."

**Lenny** (00:29:52):
This might be a tough question, but I think there's always a sense of we can move faster. It's rare that no, we're moving fast as we can. Do you have any kind of heuristic or I don't know, gut feeling of knowing and sensing where this team's doing fine versus this team isn't moving as fast as they can?

**Nikita Miller** (00:30:09):
How much time do we spend on what I'd consider optimizations versus bigger bets, and how long does does it take for that to happen? Right? Because you know you've talked to the folks or been in the companies where you talk about something that by most measures is pretty simple. Someone goes heads down for a week or two and gets it done and you talk about it and then two quarters later, someone mentions it again and you're like, "Oh, okay. So what are all the things we did in between that time to now why that seemingly simple thing didn't get done?" And I think that's hard to say as a product manager because everything we do is all about prioritization, and I'm sure there are a bunch of other things that were prioritized, but they're these little things that come up periodically, or bug fixes. Something is broken. How long does it take us to recognize it and actually fix it?

**Lenny** (00:31:03):
Do you have a heuristic, speaking of big bets versus optimizations, of just how much time/resources to put into each bucket?

**Nikita Miller** (00:31:11):
Unfortunately, the answer is it depends. If you're working on a business that is 30 years old and has many acquisitions, it is very different from a startup or a growth stage company.I think it just varies.

**Lenny** (00:31:27):
Yep. That's often what I find. One last question along these lines that was on my mind as you were chatting. When you're finding that a team is not delivering as much output as you would think, what have you found works in helping them recognize that and not get defensive and not have all these excuses for why it's happening, just help them see what you see?

**Nikita Miller** (00:31:46):
I'll tell you what I do. I don't know, I think folks might get defensive sometime.

**Lenny** (00:31:52):
Yeah, I think.

**Nikita Miller** (00:31:53):
But I'll tell you what I try. For me the biggest thing is just if folks are working on a sprint, it's very simply, "What did you deliver this sprint?" That's it.

**Lenny** (00:32:04):
Just asking questions.

**Nikita Miller** (00:32:05):
Just ask a bunch of questions. "What did you deliver?" And more questions, "Okay, fine, but what did you deliver to production? Great. And how long have you been working on that? How long? What was the cycle time?" So these questions that are really just I think seeking to understand because I understand complexity and so that exists everywhere, but maybe helping folks see that as they're reviewing their own work or their team's work goes a long way.

**Lenny** (00:32:35):
And it comes back to your approach of just focus on the output, not what they're planning to do, what they've actually done. This episode is brought to you by Ahrefs. You probably know Ahrefs as one of the leading all-in-one SEO tools used by companies like Facebook, Uber, Shopify, LinkedIn, Pinterest, and thousands more, but Ahrefs is not just for big companies. With their new Ahrefs Webmaster Tools, you can optimize your personal website like a professional for free. You can scan your website for over 100 common SEO issues that might be hurting your performance and search engines plus get advice on how to fix those errors. 

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You can have it automatically browse your website's internal and external links and get actionable insights from your backlink profiles, and you can learn what keywords your website ranks for and see how you stack up against your competitors. Visit ahrefs.com/awt and start improving your website's visibility. That's ahrefs.com/awt. Shifting a little bit, you've been a PM for a long time, since 2010 I believe, and a lot of people move out of pm and so it's really cool to talk to someone that's been in the field for a while. What have you seen in terms of how product maybe has changed? The role of product management, the role of product leadership, and also maybe other functions like designer engineering?

**Nikita Miller** (00:33:51):
I think the biggest change for product at macro is how mainstream it is. I still find fascinating getting degrees in product management and going to business school to transition into product management and the whole discipline. And there's a whole business, honestly, around the business of product management, which I find really fascinating and it didn't exist. And I think for better or worse, that comes with a lot of good and in some ways might have removed some of the quirkiness and creativity that probably is required of product, but that's probably a different podcast. So that's one, just macro. In terms of the roles, I think that what we were talking before about roles and responsibilities and defining those for product managers, I think product managers are increasingly I think a bit more technical or expected to be. I think there was a moment where they were technical and then it was, "No, no, we're all generalists," and now I think we're going back to PMs need to be more technical.

**Nikita Miller** (00:34:54):
I think designers, the expectation is that they'll be more business-oriented, design as a means, honestly, to an end. I think that's trending and probably for the better. I think the best designers I've ever worked with are also exceptionally savvy business people. And I think engineers are increasingly becoming what more product-focused, more user-focused. So product engineers is something Trello I think did really well. This idea that great ideas can come from anywhere in the org at any function I think is really magical. So as you're seeing PM's becoming more technical, I think designers becoming more business-oriented, engineers are becoming a lot more product/user-focused, to me that's amazing because it means that we're getting closer to what I'd consider really deep collaboration. And it's not to say that we're not experts. There are expertise within that that we expect of folks, but that care for other disciplines I think is where a lot of magic happens.

**Lenny** (00:35:57):
That's really interesting. When you say PMs  getting more technical, when you're hiring, interviewing, what are you looking for? Do PMs need to learn to code? How technical do you find they need to be?

**Nikita Miller** (00:36:08):
I don't think so, necessarily. I think a lot more PMs are. A lot more PMs are taking boot camps or coding classes, which I think is all to the good. I don't know that it's a requirement, but there is more of that and I think is very helpful. Similarly, a lot more PMs are taking more classes or digging more into data analysis, also really valuable. I don't think it's a requirement. I am not a technical PM, I don't have a tech background. I think I've been doing it long enough at this point to do okay, but I think it's a benefit.

**Lenny** (00:36:42):
You said that the PM is becoming more of just a thing with training classes and courses like that? 

**Nikita Miller** (00:36:47):
Yeah.

**Lenny** (00:36:48):
I did a search once on LinkedIn for how many product managers there are. Guess many PMs there are in the world, that have the title PM in their LinkedIn profile?

**Nikita Miller** (00:36:57):
A lot. I'm guessing a lot.

**Lenny** (00:36:59):
2 million.

**Nikita Miller** (00:37:01):
That's wild. 

**Lenny** (00:37:02):
That's wild. And there's 800,000 just in the US.

**Nikita Miller** (00:37:05):
Wow. 

**Lenny** (00:37:06):
That's a large group that I didn't expect.

**Nikita Miller** (00:37:10):
Back in my EdTech days, a friend of mine, her kids were in school and she came in one day, her son was in grade school at the time, in elementary school and he had this match to what careers, what you see, and they had a person at a computer, this image, and it was product manager. There was an option for product manager. And that's when I knew, I was like, "Okay, this is mainstream. We're about to become consultants."

**Lenny** (00:37:37):
I always used to joke, no one grows up and is like, "I want to be a product manager when I grow up," but I think that's starting to-

**Nikita Miller** (00:37:41):
It's a starting. It's a thing.

**Lenny** (00:37:45):
While we're on that topic, I imagine people often ask you for advice on how to get into product management. Do you have any advice there for folks that are listening that maybe want to get into that?

**Nikita Miller** (00:37:54):
There are many ways now. I think there are a lot of the typical programs that a lot of the big tech companies have, I think is one way. I think getting into startups as a product manager is a pretty awesome way to get into product because it's just a lot of problem-solving. The problem with that is you don't have anyone to teach you the right way, but the product will teach you the right and wrong way if you're with a team that is moving quickly. I still think working on smaller products and companies is a way great way to get into product management in part because you'll get to touch all of the functions that are required parts of the product discipline, and I think it's hard to get that experience otherwise.

**Lenny** (00:38:40):
The PM role, we haven't talked about this, it's just very hard and very stressful and mostly sucks in many ways. 

**Nikita Miller** (00:38:48):
Yes.

**Lenny** (00:38:48):
And we could talk about that if you want, but it was more of a segue to work-life balance, which I know you have some strong opinions about. So I don't know, you could take it either direction, but just thoughts on work-life balance/how hard the PM role is.

**Nikita Miller** (00:39:01):
The PM role is really hard. I feel especially now that I'm managing a lot of teams and PMs at a lot of different levels, I do find that periodically I remind them with the core of my being that, "I know this is hard." It is hard. There are a lot of expectations. You're expected to be competent across many areas all the time, you're expected to have an answer and you're expected to keep your calm and not lose your shit, and that's really hard. It just is. It's stressful. So I think I spend quite a bit of time with my team, my PMs, helping them understand that I understand that. And so when we're problem-solving, let's probably not solve for everything. Let's focus on one of many things that are expected. It's really hard. On work-life balance, as I mentioned to you I think about this a lot, I'm currently a mom and as you can imagine, that's a lot to manage at any given time.

**Nikita Miller** (00:40:05):
And so recently, when I think about work-life balance, I don't use the word balance, I use optimization. It's this question of what are you optimizing for right now? Whether it's today or this court or this year, with the understanding that I don't think you can have it all at the same time all the time. And so I'm increasingly coming to peace with that. Where that's been interesting over the course of my career, I was chatting with my husband about this yesterday and was thinking about, early in my career I remember when we had big releases, folks would just work nonstop for a couple of weeks. We would stay in the office late, we would come in early. If it was international, we just probably wouldn't sleep because we wanted to make sure we QA'd everything before we released it, and that was an expected part of the product development life cycle.

And that was a lot of my early product years and I just did it and it was very exciting and I quite enjoyed it, but even then, the flip side of it for me was I also was a runner back then, so if I was training for a half marathon or a marathon, then the next week I'd probably do my long run in the morning and not start work until 10:00 AM. That was my version of balance. And I think many of us are lucky enough, especially in tech, that a lot of companies get that form of flexibility. So now fast forward 13 years, it is very similar. I don't do all of the drop-offs and pickups for the kids, but there are some weeks where I'm like, "This is the week I'm going to do all of the drop-offs and pickups," or, "This is the day," and that's felt much healthier for me than this expectation that I'm somehow going to balance it all and everything is going to be equally great or cared for all the time.

**Lenny** (00:41:56):
I think what I'm hearing essentially, which I really like and agree with, is sometimes you're just going to have to go sprint and go hard and work really hard and go long hours and then that doesn't need to last forever. And then when it's not, enjoy that extra time and build and recharge and do the things you got to do.

**Nikita Miller** (00:42:18):
Yeah. That's about right.

**Lenny** (00:42:18):
I find the same thing. I find that just working hard is very correlated with success, and a lot of times that's just a lot of long hours and sometimes you can't balance it for periods of time.

**Nikita Miller** (00:42:30):
Right. And it can also be at different points in your life, right? So right now at this particular moment in my life, I'm probably not going to go hard at a super early stage startup because I believe that you probably need to be in person and working really hard together for long periods of time. And not everyone feel this way, I know that. I've had these conversations with lots of friends and colleagues. So personally for me, that's probably not the decision I would make at this moment in my life.

**Lenny** (00:43:02):
I get that. Another area I wanted to touch on is remote work and distributed work. I believe most of your career, you were remote or you worked with remote teams and distributed teams and that's such a on-trend thing now where a lot of teams are working hybrid, working remotely, working with distributed teams. What have you learned about being successful working with distributed and remote teams?

**Nikita Miller** (00:43:23):
Yes. My entire career has been with remote or distributed teams. That's right. When I started early my career, I lived abroad for a while. I lived in Shanghai. I had a core team there, but also worked for the distributed team in Europe and Latin America, which meant all kinds of crazy hours and lots of sprints like we just talked about. Things that worked well, one, documentation. It's a thing. Asynchronous communication, everyone just has to get used to it and better at it, so increasingly just being better communicators, whether it's on a video or written.

**Nikita Miller** (00:44:00):
I think that's just really important, and everyone building up that muscle is really important. For all of the roles I've been in, this notion of what does it mean to have really meaningful and valuable in-person time that can sustain you for the remote and distributed time is a really important. I think a lot of what's happened now in COVID and even now, a lot of teams have never met their coworkers. They don't onboard in person, they don't have events or offsites as frequently. And I think flexibility is really great, but I think that really, that makes it really hard, and to me, what I've figured out I think is that it especially makes it hard to solve hard problems.

**Nikita Miller** (00:44:43):
Solving a hard problem remotely with folks that you haven't spent in-person time with, that you haven't broken bread with, that you haven't disagreed with in person and built that trust is just really hard. In fact, it's much harder. So some of the things I've done even here at The Knot Worldwide is periodically when there's a really gnarly problem, I wave the flag and I say, "Hey everyone, why don't we try and get together for two days and hash some of this stuff out, and then we can go back to our remote lives?" And I think folks have been maybe unsurprisingly very open to that because I think they see not only the efficiency but the camaraderie that can happen there as opposed to what was happening potentially on a Hangouts or a Zoom call.

**Lenny** (00:45:28):
What does that event look like? Where do you do it? What's roughly an agenda?

**Nikita Miller** (00:45:32):
One, the agenda is pretty tight before we get there. Myself or someone else are responsible for making sure that that's a well-articulated agenda that we all kind of agree on before we even get there, so I think that's one. I think 48 hours, two nights, and that's important to me because it tends to still just be hours in a conference room or a meeting room during the day, but you do need to build in the, "And let's go have dinner since we're all in person anyway, or let's have an extended lunch and maybe an extended day." I think that's just really important. And even early in my career when I was working more internationally, the company I worked for was pretty amazing because two or three times a year, the entire company globally came together for a week or two and it made a huge difference, and many of the folks that I worked with there are still friends and mentors.

**Lenny** (00:46:29):
Are you able to share what was the challenge you're trying to overcome in one of these times? 

**Nikita Miller** (00:46:34):
I can speak about it generally, which was just we had a change in strategy and we needed to land a couple of core decisions about what we might build. And there were lots of documents and lots of conversations, and back to the velocity of decision-making, remotely that can be really hard because with time zones, someone sends a doc, you comment on it, you get to the other day by the end of the week. And so days and days have passed and we still haven't landed it, and people have really strong opinions obviously that's something that big, so it's like, "Nope. Okay, great. Wave the flag." And not everyone could make it. Most people could, and the folks who could not were, yes, on a screen.

**Lenny** (00:47:15):
Was there anything specific in that offsite that helped you get to a resolution?

**Nikita Miller** (00:47:21):
In that particular one, it was one, very cross-functional and the unlock there was giving the data person the space to educate all of us. That was it. It was like, "You have the floor, educate."

**Lenny** (00:47:40):
I find that's often the solution is people just don't have all the same information that they're basing their decision on, so make sure everyone starts with the same foundation. Awesome. And that comes back to your push to get data integrated into every team and make that part of the four quad triad.

**Nikita Miller** (00:47:57):
That chair. It's the chair.

**Lenny** (00:47:59):
Anything else around remote work or distributed work that you found to be incredibly impactful or important?

**Nikita Miller** (00:48:04):
Well, the flexibility of it that I'm sure you've talked about with others, that is really important. I do think that Trello and Atlassian did this really well, is having standards around a couple things. The biggest one I think was overlapping work hours. So everyone had general flexibility, but there were some set of hours where everyone needed to be online at the same time for the most part every day, and that made a big difference. Onboarding happened in person. I think that in-person onboarding for new folks is really important for everyone. For any new person to an organization, I think how we work culturally, having a contact that you can reach out to, all of that I think is really crucial. I'm definitely of the so much of my early learning was in person and I have no idea how we're going to replicate that in a non-office setting. It's just really hard.

**Lenny** (00:49:04):
How long do you try to have that person in the office for onboarding? Is it a week? Is it a few days?

**Nikita Miller** (00:49:09):
A week.

**Lenny** (00:49:09):
Awesome. Shifting a little bit, just a few more questions. You mentioned you worked in China, you also worked in the UK for a while, obviously in the US now. What have you found to be some of the biggest differences in maybe the product culture or just culture in general working in these different areas?

**Nikita Miller** (00:49:26):
The confusion around what product management is is universal. That's not specific to US I think, and the fact that it's changing, that I think was the same. I don't know that I've found that many differences in terms of how we approached goal-setting, all very similar. The need for urgency, all those principles I think this are the same no matter where you are. Part of what I experienced when I started in Shanghai was the feeling that the product manager was expected to have all the answers, which as you can imagine was really overwhelming. And so I remember because I was young and I didn't know that much about product management, and I definitely did not have all the answers, I spent a lot of time helping the team help me get answers and that was a little bit of a culture shift in our team at the time. 

**Nikita Miller** (00:50:25):
And I actually think that's kind of carried me through my entire career, which is trying to figure out how to share the product management load so we're equally responsible for what we're building. So that was a good unintentional learning that I think has been really important for my career. I think that part of that learning that I've had obviously here and in London as well was the figuring out how to make room for creativity. So in Shanghai and also in London at the time, this was a decade now so many things have changed since then, there just didn't seem to be as much room for ideas to come from anywhere, which I think is also related to what I've seen before. 

**Nikita Miller** (00:51:13):
So making space for people across functions to share ideas and then across geographies to share ideas, especially in companies where English might have been the primary language but most of the employees were not native English speakers, there was a lot of time I think that I felt that I wanted to spend, and I did, on just creating space for people to comfortably share their ideas honestly. And that for me was really formative because I think it's really impacted how I've approached my entire career and I don't know that I would have, had I not had those experiences.

**Lenny** (00:51:52):
I was browsing through your LinkedIn post and you said something just like that on LinkedIn of just how formative that experience was for you. I know it's not something people can just say, "Hey, I'm going to go to China and work for a startup," but it sounds like you recommend working at companies of different cultures because it feels like it is a lens.

**Nikita Miller** (00:52:10):
Yeah. I do. I also think my family, I'm Jamaican, I'm a Jamaican immigrant, and so all of our experiences inform how we perform our jobs and how we think about problems. And being able to expand that, yes, I would recommend it to every and anyone that gets the opportunity. And I think it's really important as product managers because I think it's really hard to be a product manager if you cannot empathize with the people and problems that you're solving for, and being out of your comfort obviously is one way to learn empathy.

**Lenny** (00:52:50):
I love that. One final question before we get to a very exciting lightning round, not to not count those questions. Are there just any frameworks or processes or methods that you found to be very valuable in your career as a product leader that you would want to share?

**Nikita Miller** (00:53:08):
The question I ask myself and I ask everyone in my life probably, whether it's on my team or when folks, friends talk to me, I always ask, "What are you optimizing for?" That's the question, it's what are you optimizing for? And it's the short, medium, lon-term in product, but it's what are you optimizing for today, this quarter, this year? Whatever time horizon. And I think that can be just a really illuminating way of thinking about obviously just how are you spending your time? And I think it works for product as well. Every time we talk about OKR or goal-setting, ultimately it is what are we optimizing for some period of time. And I think that always for me, whether personally or in product, is very illuminating.

**Lenny** (00:53:53):
I love that. I'm pretty sure I've asked that question 1,000 times myself. One thing I find though is people get annoyed with you just like, "Okay. You're such a PM."

**Nikita Miller** (00:54:02):
I know, but it works.

**Lenny** (00:54:05):
It does work. What are some instances where you deploy this question? Is it in a meeting where someone's asking a question where you're just like, "What are we optimizing for here?"

**Nikita Miller** (00:54:14):
I ask this question all the time. I ask this question to my husband. What are we optimizing for?

**Lenny** (00:54:17):
I'm sure he loves it.

**Nikita Miller** (00:54:19):
He was a PM too, so he gets it.

**Lenny** (00:54:20):
Okay, okay. That's helpful.

**Nikita Miller** (00:54:23):
I ask this to my five-year-old, honestly. We talk about it a lot. Now we're going to quarterly planning, all of us, and now we have information from Q1 so let's look at it and say, "Given what we know now, what are we optimizing for? Because it might not be the same thing we did before with new information or it may be," and that's usually just then helping us get better at figuring out obviously how we're doing trade-offs-

**Lenny** (00:54:55):
That's awesome.

**Nikita Miller** (00:54:56):
... because if the first point isn't clear, then the trade-offs aren't going to be clear.

**Lenny** (00:54:59):
Yep. The other question is what problem are we trying to solve here? I feel like I need to make mugs and put these some mugs for product managers. Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Nikita Miller** (00:55:13):
Yes. I don't think I prepped this, but I'm ready. Yes.

**Lenny** (00:55:16):
Okay. Well, it'll be the most fun then. What are two or three books that you recommend most to other people?

**Nikita Miller** (00:55:23):
These are not product books. I recommend Anna Akhmatova's You Will Hear Thunder, a book of poetry that is excellent. I recommend almost anything by James Baldwin, The Fire Next Time I most recently reread, and back to software, High Output Management.

**Lenny** (00:55:43):
What are some favorite movies or TV shows they've recently watched that you really enjoyed?

**Nikita Miller** (00:55:49):
I am really into K dramas right now, and actually-

**Lenny** (00:55:52):
Is that Korean?

**Nikita Miller** (00:55:53):
... Korean dramas right now. Crash Landing on You, it's great. It's a love story.

**Lenny** (00:56:01):
That's wonderful. Very out of the box. I love it. What's a favorite interview question that you like to ask?

**Nikita Miller** (00:56:08):
For product managers, we think about product in the context of artist, scientist, general manager. Where do you spike?

**Lenny** (00:56:15):
Artist, scientist, general manager. Interesting. And is there one you ideally look for the answer or it depends on the role you're hiring for?

**Nikita Miller** (00:56:23):
It totally depends on the composition of my team.

**Lenny** (00:56:26):
Interesting. Cool. I like that. And a different triad. What's a favorite product you've recently discovered that you love?

**Nikita Miller** (00:56:33):
Arc by The Browser Company. I think they're a product that's clearly having a lot of fun and you can feel that in the product. When I first opened it, they have an unveiling experience, which isn't something you'd expect of a browser, and there was something really delightful about it.

**Lenny** (00:56:51):
Yeah. I imagine you've heard the interview with Josh. 

**Nikita Miller** (00:56:55):
I did.

**Lenny** (00:56:55):
What a guy. What a cool product. I love it. We have a whole hour and a half on it, so check that out if anyone wants to learn more about Arc. What is something relatively minor you've changed in your product development process that has had a tremendous impact in your team's ability to execute?

**Nikita Miller** (00:57:11):
Helping product teams try and use product, design, engineering and data to understand their shared roles and responsibilities.

**Lenny** (00:57:19):
Awesome. Call back to our previous discussion. And final question. What's a pro tip for someone trying to use The Knot and or one of the other properties?

**Nikita Miller** (00:57:29):
Ooh, good question. Two things, but the big one is probably checking out The Knot Worldwide marketplace. It is the most comprehensive two-sided marketplace to find your wedding vendors to create your wedding team, and you'll find that they're really cool small businesses on there.

**Lenny** (00:57:47):
Awesome. I'm going to go check that out. Nikita, thank you so much for being here. I'm going to go and ask my wife what she's optimizing for and read some stuff on the phone.

**Nikita Miller** (00:57:56):
Good luck.

**Lenny** (00:57:57):
Wish me luck.

**Nikita Miller** (00:57:58):
You said she's pregnant, right? She's optimizing for creating a human probably.

**Lenny** (00:58:02):
Yeah. That seems right. Okay. I'm not going to ask. Two final questions. Where can folks find you if they want to reach out and learn more about what you're up to and how can listeners be useful to you?

**Nikita Miller** (00:58:13):
You? I'm on Twitter and LinkedIn, easy enough to find me. I am very responsive actually, or at least I try to be when folks reach out on anything product related. And ask me questions. I think that's always helpful. If you have other ways of doing things, I'd love to hear about it.

**Lenny** (00:58:29):
You mentioned also that you're doing some angel investing. Is there anything you're looking for specifically that you'd want people to ping you about?

**Nikita Miller** (00:58:35):
I am doing some angel investing, maybe a little bit less so recently, but I'm starting to ramp that up again. So if there are any early stage seed or pre-seed companies out there, you can ping me.

**Lenny** (00:58:47):
Amazing. Nikita, thank you again so much for being here.

**Nikita Miller** (00:58:50):
All right. Thanks a lot, Lenny.

**Lenny** (00:58:52):
Bye, everybody.

**Nikita Miller** (00:58:52):
Bye.

**Lenny** (00:58:55):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [3/19] Product lessons from Waymo | Shweta Shrivastava (Waymo, Amazon, Cisco)

**Shweta Shrivastava** (00:00:00):
Are you proactively trying to challenge your own assumptions is extremely important, right? As a big enough product manager as well as a seasoned product leader, if you're not doing enough of that, then I think you might not be listening. If there's no conflict, if there's no contention, then something is missing.
**Lenny** (00:00:20):
Welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today, my guest is Shweta Shrivastava. Shweta is senior director of product management at Waymo, which if you're not familiar with Waymo, they're building self-driving cars that already live on the streets in San Francisco, LA and Phoenix. I actually got to take a ride in one ahead of this chat and you'll hear all about that in this episode.
**Lenny** (00:00:48):
Before joining Waymo, was chief product officer at Nauto and AI started focusing on driver automation safety. Before that, she was head of product management at Amazon Web Services for their database and analytics services, and before that she was at Cisco. In our conversation, we delve into what it's like to work as a PM at Waymo and how it's both different and similar to software only products.
**Lenny** (00:01:09):
We talk about their KPIs and goals at Waymo, including how they track progress towards a future of self-driving cars, how they build subtle cues and behaviors into the cars to create trust for the rider and also for other cars on the road. Plus Shweta's biggest lessons about building products and teams across the many companies she's worked at. I can't wait for the future of every car being self-driving, and it was super fun to learn about what goes into making this all happen. With that, I bring you Shweta Shrivastava after a short word from our sponsors.
**Lenny** (00:01:40):
This episode is brought to you by Vanta, helping you streamline your security compliance to accelerate your growth. Thousands of fast-growing companies like Gusto, Com, Quora and Modern Treasury Trust Vanta to help build, scale, manage and demonstrate their security and compliance programs and get ready for audits in weeks, not months. By offering the most in-demand security and privacy frameworks such as SOC 2, ISO 27001, GDPR, HIPAA, and many more.
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**Lenny** (00:02:38):
This episode is brought to you by public.com. We want to tell you about their new treasury accounts, which earn a 4.8% yield on your cash. That is higher than a high yield savings account while still being backed by the full faith and credit of the US government. Treasury yields are at a 15-year-high, but buying US Treasuries is super complicated. If you go to a bank or navigate an ancient government website, or at least that was the case. Now you can move your cash into US Treasuries with the flexibility of a bank account.
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**Lenny** (00:03:47):
Shweta, welcome to the podcast.
**Shweta Shrivastava** (00:03:49):
Thank you. Great to be here.
**Lenny** (00:03:52):
It's great to have you. I thought we'd start with just a little bit about what it is you do at Waymo today. What are you and your team's responsible for at Waymo?
**Shweta Shrivastava** (00:04:02):
Yes, my team's responsible for three key areas, I would say. One is building a big part of the software that actually runs on board the fully autonomous vehicle and that determines the actual behavior and trajectory of the vehicle. Secondly, building the simulation tools and technologies that are required to validate the performance of the system. And then, a third one of the teams focused on commercially scaling our ride-hailing business, which is one of our key go-to market applications for the technology we're building.
**Lenny** (00:04:34):
So as you know, I arranged a ride for me in a Waymo in San Francisco. It was actually a really rainy day and it was quite mind blowing. I've never been in a self-driving car that had no driver sitting in the front. I have a Tesla and I turn on self-driving sometimes, but I've never experienced just sitting in the back and this thing just raises you around. Also, just like a memory hat is the app to call the Waymo, it feels like Google Maps except instead of just telling you how to get to a place like a car shows up and just takes you there and then you could change course as you're driving and it's crazy how quickly it became normal.
**Lenny** (00:05:08):
I'm just like, all right, we're just riding around San Francisco in this self-driving car and just sitting in the back and telling you where to go. And so anyway, I'm going to ask you a bunch of questions around this, but I guess thank you for arranging that ride. It was quite special.
**Shweta Shrivastava** (00:05:21):
No, I'm glad that you were able to do that on a rainy day. So that's a special bonus because, again, the technology has been performing very well, which has been very heartening for us to see.
**Lenny** (00:05:30):
A few questions along these lines, one thing that I noticed that was really cool is we're trying to turn into a lane and there's cars coming in that lane just continuing to move and the car just kind of subtly was inching its way out, communicating through this interesting body language thing of just like, can someone let me in? And it's interesting, there's no eye contact involved and it's just like this, I don't know, gesture that you all have to develop.
**Lenny** (00:05:54):
And so, I guess, the question here is just like what have you all learned? And I don't know if you even work on that piece of it, but just, I'm curious how you think about creating this body language of the car communication system to help people understand what it's trying to do.
**Shweta Shrivastava** (00:06:07):
We're using a lot of human driving data to train our deep models. So it's important to make sure that the behavior of the car doesn't seem robotic, it can feel quite unnatural. And from the get-go, we focused on building a fully autonomous system. So it's important to have that familiarity, that trust, building with the riders where they're not daunted by technology, they don't feel like they're sitting in our walk. It has to feel very human-like, but in a good way. Making it safer than human driving, but then not making it feel unnatural.
**Shweta Shrivastava** (00:06:40):
And so we have deep learned models that can understand what the other road users' intent is. So, stuff like which way the pedestrian is looking or what is their body orientation because that could tell you which way they're headed. The road signs or the gestures, somebody is trying to stop the vehicle. The system can understand all those signals.
**Shweta Shrivastava** (00:07:04):
So because we're using deep learn models trained on human driving, but again sort of in a good way. We discard the bad human driving data. We can mimic human driving behavior in a good way and that's why you saw the behavior that you saw yesterday. Now, one thing to note is we can't also just completely rely on explicit gestures and signs because a lot of driving has also social norms. If you're in a pretty clear section in San Francisco, maybe it's okay for pedestrians to cross even when they don't have a walk sign.
**Shweta Shrivastava** (00:07:43):
Another city, another intersection might have a different social norm when it comes to pedestrians crossing the four-way stop sign or the crosswalk or what have you. And so, the car also has to learn about those social norms and be able to react to it. So, like I said, we don't realize how sophisticated, how interactive and how social driving really is. And with our artificial intelligence capabilities, we have been able to incorporate a lot of that into our system behavior.
**Lenny** (00:08:14):
So before Waymo, you worked at non self-driving software companies, you worked at Amazon, Cisco, a few other companies. I'm curious what you've found to be the biggest difference working in a company like Waymo versus a traditional software company.
**Shweta Shrivastava** (00:08:29):
As I said earlier, it's a highly complex, technically complex, system that we have built and we're improving. And if I may say, it's the most game changing product that anybody would ever work on.
**Lenny** (00:08:43):
I don't know, Amazon's pretty cool, but I totally get you.
**Shweta Shrivastava** (00:08:46):
I worked at Amazon, I'm a fan. And they have been pretty transformational with AWS and on the eCommerce side. But a fully autonomous driving system, it's also a very, very hard problem. So it's transformational from that perspective too. I would say that the PMC has to be able to go technically indeed, compared to what they would do in other software products. They have to be able to get into the details as much as needed. They have to be okay with uncertainty and ambiguity.
**Shweta Shrivastava** (00:09:24):
Again, I think, that is part and parcel of any product management role, but it's even more so here. This is a long game and so you have to have the tenacity to play the long game and be continuously improving the product and make this thing a broad reality and future. So, those are some of the attributes. I would also say that there is some level of self selection here. You have to be driven by the mission to make the roads safer. We have about 1.35 million debts that happen every year across the world from traffic accidents and most of that is attributable to driving errors and driver distraction.
**Shweta Shrivastava** (00:10:04):
I've been guilty of checking my text messages while driving. I've seen other drivers do that. But a fully autonomous technology, you don't have that risk. That's the risk we're trying to minimize. So they have to be driven by that mission. One other thing is that the concept of MVP, which is so widely popular in the SaaS product management world or product management world, in general, has a whole new meaning here at Waymo when you work in a product like this because safety is on top of mind for all of us and can't really cut corners on safety.
**Shweta Shrivastava** (00:10:42):
The MVP bar itself for safety is extremely high for us. So, the core product management philosophy also, getting an MVP out there and then iterating with the real world deployment. It applies, but it's just a different bar on that MVP.
**Lenny** (00:11:03):
Touching again on safety and human behavior, I was thinking a little bit as we're chatting about, say of Tesla, which has self-driving car, self-driving capabilities and intellectually I know it's probably going to drive a lot better than I am, but I still feel like I need to disengage it occasionally when I'm on a curvy road. I'm just like, I don't know about this, I don't want to leave room for error if there's something that weird that happens.
**Lenny** (00:11:30):
And I imagine someone designing product for that weird behavior where I should probably trust it because it's probably a lot better driver than I am, but I don't know, I feel like I can do a better job. Is there anything you've learned about, I don't know, human behavior or how to design software for these sorts of experiences that maybe surprised you or thought was really interesting or that was really important?
**Shweta Shrivastava** (00:11:51):
Since you mentioned Tesla, I just want to clarify that it's a different system that we are building, which is for Waymo, we started by solving the problem of fully autonomous driving without a human driver at the wheel from the get-go. It's not a driver assist or aid system which relies on the human driver taking over when there's a complex situation. So I think that expectation is built into that kind of a product and so the human folks who are using that product will also have that mindset that, hey, I should be ready to take over when the situation demands because we've built the system from the get-go to work in a fully autonomous mode without a human driver intervention at the wheel.
**Shweta Shrivastava** (00:12:38):
We had to integrate this into our design philosophy from the very beginning that this has to feel credible, predictable and the writers have to be able to trust the system. So that has been sort of the core of the design philosophy. And so, what happens is, and I heard this from you as well, which resonated with me and I've heard this from a lot of our writers, that for the first five minutes of the ride it's, wow, is this thing really happening.
**Shweta Shrivastava** (00:13:10):
But then it starts to feel very natural and as if this is how it was always meant to be. After the first five minutes, this is like uneventful. That's exactly how it's supposed to feel, but it's not a happenstance that it feels that way. The naturalness, the smoothness and still adhering to safety at all times are things that are designed into the system. And then we make sure that the rider has visibility into what's happening. If they're not wearing the seatbelt, the rider support would call them. So then they know, okay, there's a human that they can reach out to if they have an issue. They can look at the monitor in the car to understand what the car is seeing. So I think all these little things help develop that trust in the system.
**Lenny** (00:13:57):
On that same note, what's one thing that your teams have built that creates a lot of trust or maybe it was a surprisingly important element in creating trust in the experience in terms of the product, especially in, I don't know, either the app or in car experience.
**Shweta Shrivastava** (00:14:14):
I don't know if I can point to one thing. Again, this is such a holistic experience that I think it has to be a bunch of small things to make it feel natural, transparent and trustworthy to the writers. And I can give you one example that I don't think I've mentioned in the discussion so far. So, again, because the system is designed to be cautious and defensive but still making adequate progress in the absence of traffic, it will never go above the speed limit. It doesn't go above the speed limit. It sticks or adheres to the speed limit or something that a lot of our riders actually appreciate about the system.
**Shweta Shrivastava** (00:14:55):
Now, it turns out that adhering to the speed limit even without traffic sometimes is not the best thing. You have to go below the speed limit and we realize that for driving in the slopes or the gradients, in clients in San Francisco, there are many of those. The human brain is trained to, or the human drivers are sort of in subconsciously, they slow down when they go downhill in those slopes. The autonomous vehicle doesn't necessarily have to do that if it's safe and if it's staying below the speed limit.
**Shweta Shrivastava** (00:15:31):
But we learned that this is a more natural driving experience and this is what our riders would also expect in terms of the experience. So that's something that we then modify the behavior on.
**Lenny** (00:15:45):
That makes sense. I would want it to slow down. On the other hand, if I feel like I could trust that, I wish there was a button to just crazy mode, just go for it. Kind of digging a little bit into the product team's way of working, what are KPIs that you all use to track progress? I don't know, either amongst some of the teams you lead or also just broadly progress on self-driving technology. How do you know you're making progress? Is it just miles driven as something else?
**Shweta Shrivastava** (00:16:12):
There are tons of these metrics that we analyze on a daily basis, weekly basis depending upon what the metric is. But if I were to categorize them in two broad categories, that'd be the commercial and operational metrics and the system behavior metrics. So, one important thing to note here is that we're in a proof of concept or a pilot phase anymore. This is the service that we are offering to riders. Paid service in Phoenix and also it's open to public in San Francisco, so it's an actual service.
**Shweta Shrivastava** (00:16:46):
And so, we're tracking the commercial metrics in terms of the trips per week, the daily or weekly active users and all the funnel metrics that you can think of. Also, the operational metrics, the cost, right? Well, how much is the thing costing us to operate? So that's, I would say, all the stuff on the commercial scaling side. And then on the driver performance, the vehicle driver as the technology name as I alluded to earlier, the driver performance metrics, they span across safety, the compliance to the road rules, our ability to make adequate progress as in not get unduly stopped or stranded in dense traffic situations as an example.
**Lenny** (00:17:32):
What are just specific metrics there? Anything you could share just like what is the actual goal in one of those teams?
**Shweta Shrivastava** (00:17:38):
The goal here is to be able to drive safer than humans. Now, we don't really have one standard human driving benchmark, safety benchmark, that everybody uses, but we do gather enough of that data. We have access to enough of that data to form an opinion on or a metric on or benchmark on what does human driving look like, how many collisions, as an example, a human driver would have every a hundred thousand mile. And then we want to make sure that our performance is better than that.
**Shweta Shrivastava** (00:18:19):
So that's simplifying, right? And several things go into both calculating the benchmark as well as our performance against that benchmark. But that at the core of it, that's what we're trying to do. So that's on the safety side and then I would say on the stops and strands, which is trying to, which goes in the different direction. Hey, you can be very safe if you're not moving at all. That's not what we're building. We need to make sure that the riders get to their destination on time. So it has to be appropriately assertive and be making the right progress.
**Shweta Shrivastava** (00:18:53):
And, so again, how much did the vehicle slow down unduly, right? Or, in how many instances in a given week did it have to rely on a rescue help? Those are the situations that we want to avoid. And then, how much did we slow down the traffic for other users? So we again do extensive benchmarking and look at the priors, et cetera, and really understand would an adequate performance be there and measure our own against that.
**Lenny** (00:19:28):
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**Lenny** (00:20:27):
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**Lenny** (00:20:38):
I'm guessing you're not going to have an answer to when do we think we'll have fully self-driving level five autonomy. So let me ask you a different approach to that question of just what's most in the way of us getting to full self-driving where we don't have to do anything ever? Is it like miles driven? Is it like tech breakthroughs that still have to happen? Is it regulation and just cities being like, okay, it's fine. What's the biggest blocker at this point or bottleneck?
**Shweta Shrivastava** (00:21:01):
So let me share my opinion on the L5.
**Lenny** (00:21:01):
Cool.
**Shweta Shrivastava** (00:21:06):
So L for those who might not be very familiar with this term, L2, L3 is still very much driver assist. It gets to some level of autonomy but then it relies on the human driver at the wheel to be able to take over complex situations. L4 fully autonomous without a human driver at the wheel and no expectation of a human driver at the wheel. That's what we've been focusing on. L5 would be in any kind of road completely unstructured, off-roading in that kind of an environment, be able to drive without any map, without any priors, what have you.
**Shweta Shrivastava** (00:21:44):
And we believe that by offering the kind of service that we are offering in Phoenix and in San Francisco through the rest of this year and other cities in future is it helps realize that the dream of the fully autonomous driving, in a big way, without having to go to L5. So I think that the technology is already there. L5, I'm not sure, maybe that becomes more niche, et cetera. It solves very specific use cases.
**Shweta Shrivastava** (00:22:16):
In terms of the blocker, I would say, the technology is there, but it still needs improvements. Especially we were not able to drive in snow yet. Something that we have to tackle in future.
**Lenny** (00:22:25):
I could barely drive in slow.
**Shweta Shrivastava** (00:22:28):
Yeah. And I don't like to drive in snow. Even I, I avoid snowy days. But that is something that we still have to build as a capability in driving fully in snow now. So that's great.
**Lenny** (00:22:39):
Makes sense. Clearly, there's a lot of little things, a lot of big things and it's a really interesting point about we don't need L5, L4 is great for most people. Maybe a last question along this track and then I want to pivot to a different area. So Waymo's been this long-term investment for Alphabet and many PMs often try to create buy-in and keep buy-in for large investment and large project. I know this is a different scale of investment than what most PMs work through. But is there anything you've learned about keeping leaders bought in and excited and continuing to invest in a project for years and years? Specifically just like tactics that keep people excited and bought into a long-term investment?
**Shweta Shrivastava** (00:23:21):
Yeah. So first of all, we are fortunate that we have the backing from Alphabet and other investors. And the autonomous vehicle industry is interesting and I think the last year has been interesting with more consolidation happening. So I think the name of the game here is to show progress, show meaningful progress and meaningful progress, not just in terms of technology but in terms of commercial deployments. That is the rubber meets the road, if you will, phase off of the product.
**Shweta Shrivastava** (00:23:54):
And the results have to speak for themselves, for our investors to have the confidence in us. So notwithstanding what's happening to other AB companies in the industry, it's about what we are doing. And then look at the progress that we've been making and where we are headed. And the fact that we've been accelerating our milestones and going through our own expectations, I think, these are very positive signals to our investors as well.
**Shweta Shrivastava** (00:24:23):
Another startup as well, t's not about you have to do what's the right thing for the business. Your focus is on creating value for the customers, creating value for the riders. You have to build a business that makes sense and the investors see that too. Or we're not going to do something unnatural or something that doesn't align with the business goals in order to gain any short term brownie points with investors. I think it doesn't work that way and the investors will see through that too.
**Shweta Shrivastava** (00:24:52):
Definitely Alphabet has been our backer for forever. So, it's really about focusing on building the right business and doing the right thing for the users.
**Lenny** (00:25:03):
I think that's a great takeaway that if you're finding that there's a buy-in and continued support for what you're building, focus on momentum and showing success. It's pretty simple if you think about it. And it's hard to cut something that's just showing success. And so, even at the scale of Waymo, it's a great lesson. So that makes sense.
**Shweta Shrivastava** (00:25:03):
Absolutely.
**Lenny** (00:25:24):
We talked a bit about other companies you've worked at and so I want to kind of zoom out a little bit. And I just want to ask, you worked at Amazon, Cisco, Waymo now, startup you mentioned. What are just some of the biggest lessons you've learned about building successful teams and successful products?
**Shweta Shrivastava** (00:25:40):
In terms of the product, whether you're working for a big company or a startup, the core product management tenant is still the same, which is, you have to work backwards from the customer problem or the user problem. Building a technology for the sake of it doesn't really go that far, so you really have to focus on the, what are you building, who are you building it for and what problem are you solving?
**Shweta Shrivastava** (00:26:05):
And this applies in any context. And Amazon has this great process where the PMs have to write a press release for the finished product even before they start building the product. That's the first thing that they have to do is to write that press release like the product is about to launch today. What are you telling the users about that product? Really forces them to think about the value proposition more thoroughly.
**Shweta Shrivastava** (00:26:33):
And I know many other companies are starting to look at that practice as well, but I find it very effective.
**Lenny** (00:26:39):
Do you do that at Waymo or do you folks do that? Is there kind of a system there or?
**Shweta Shrivastava** (00:26:43):
The explicit PR FAQ process that Amazon follows is, I think, Waymo has its own version of it. But it is about sort of focusing on the customer problem. Now, Waymo is also a very different kind of product. It's highly integrated. And different types of product management flavors, if you will. Some are more technically focused and technically deep, some are more commercially focused. So they all adapt. They have their versions of working backwards from the customer problem. But that still remains the core tenant in my mind.
**Shweta Shrivastava** (00:27:13):
The other big lesson, at least working in some of the large companies that I have had is it's also very important to know what you're not building. And this one is not only in big companies, I would say even in startups, it's extremely important to know what you're not building because you could very easily get swayed by customer X telling you to do this, customer y telling you to do that. And a product that tries to be all things to all people usually doesn't end up going anywhere.
**Shweta Shrivastava** (00:27:42):
So that focus, that prioritization and being crisp about what you're building and what you're not building is very important. And then, in the context of the large companies, what I was going to say was, I think, is the classic innovator's dilemma. The large companies tend to be the market share leaders in their focus areas. And so, the product team and the product leaders can get very incremental in their product strategy and then lo and behold, you see an upstart that comes and disrupts them.
**Shweta Shrivastava** (00:28:16):
And so, I have definitely learned the lesson that you need to disrupt yourself before somebody else does because it's going to happen. It's inevitable. And large companies that are constantly challenging themselves and disrupting their own models or their own product capabilities to bring those, even something more transformational for the customers, are the ones that really succeed. And I think this is where the product leaders have to bring in that mindset of, hey, are we getting too complacent or it's time to just.
**Lenny** (00:28:46):
That's such a good reminder. Is there an example of you doing that or something you worked on where you got the company to commit to something that maybe could have been a threat from a disruptor or maybe even just seen that happening at a company? Just like is there a specific project or investment that comes to mind?
**Shweta Shrivastava** (00:29:02):
[NEW_PARAGRAPH]At Amazon, I was the first PM and then I drove the team around it for a no-code application development platform called Honey Code. So that was a brand new service. Amazon had never delved in that space before. It was more infrastructure focused and this was first of its kind service that the team worked on. And this has played out many times in my career, and so I am a big believer in disrupting yourself before somebody else does it.
**Lenny** (00:29:33):
What do you think is the most underrated PM skill that you suggest people, maybe especially early in their career, that they should focus on maybe that they're probably not thinking about?
**Shweta Shrivastava** (00:29:42):
I think the listening and empathy are the top ones. These are very important because I think when folks think about product management, they think about the influencing without authority and prioritization and being able to write with PR, et cetera, all those things are sort of more top of mind. The listening and empathy, I wouldn't say that they are underrated, I think is there's now a lot more recognition that these are sort of core skills if you want to be able to influence a lot without authority.
But I think it's easier said than done. You really have to come in with that growth mindset, with that beginner's mindset, be able to absorb and just learn and listen and don't jump in with ideas necessarily, right? Take the time to formulate that opinion to really learn and understand the customer and the market and really be true to that tenant of working backwards from the customer problem, not just say because it's become such a platitude now in the product world.
**Lenny** (00:30:42):
Yeah, there's a book. There's a whole book called Working Backwards now.
**Shweta Shrivastava** (00:30:46):
Yes. That is the one thing that I would say that somebody who's starting out as a product manager really try to follow that principle. And then listening and empathy is going to go a long way in terms of being able to do that.
**Lenny** (00:31:00):
On listening and empathy, what do you think helped you most develop those two skills?
**Shweta Shrivastava** (00:31:06):
So I think for me, part of it was just doing this over and over again in different environments, in different product launches that I have led in different types of companies that I've worked with. In startup as well as big company, the dynamic is different. And, again, the team that you're working with in different companies have a different culture. So, when you're working with let's say an engineering leader, being able to understand what are his or her constraints? Where is he or she coming from? What does impact look like to that person? And then understanding where you're aligned, where you're not aligned are things that you have to develop and start paying a lot more attention to as you rise in your career or go up the ladder.
[NEW_PARAGRAPH]And I think a lot of that for me came by just being in different kind of situations and different kind of environments.
**Lenny** (00:32:08):
Yeah. That's what I often say also, a lot of this just comes from doing it again and again and again. There's not going to take a course and then just I'm a great listener, I'm done.
**Shweta Shrivastava** (00:32:18):
Yeah, no, it doesn't.
**Lenny (32**:
19)
Yeah, which is not easy to ... It'd be nice if there's a book you read and then you become a great listener and a great empathizer.
**Shweta Shrivastava** (00:32:24):
Well, I think one take or one that I could share is just challenging your own assumptions. So, I think listening with an open mind but then are you proactively trying to challenge your own assumptions is extremely important. As a big enough product manager as well as a seasoned product leader, if you're not doing enough of that, then I think you might not be listening well, right? Or you might not be picking on the cues. If there's no conflict, if there's no contention, then something is missing.
**Lenny** (00:33:03):
It's not often you're going to be always right.
**Shweta Shrivastava** (00:33:04):
Yeah.
**Lenny** (00:33:05):
Maybe one more question along these lines. You've been promoted many times, now you're in a place where you promote people and I'm curious for someone that maybe wants to get promoted or struggling to get promoted, what would you say are probably the reasons they aren't? Or what do you think people should focus on if they want to just get a promotion and many promotions in their career?
**Shweta Shrivastava** (00:33:28):
I'm going to say something that might sound a little cheeky, but I think the way to get promoted is to not want it too badly. It is about you have to focus on the impact. It's about having an impact and then doing what is right for the business. So not sort of optimizing things for your promotion, which look, we are all ambitious human beings. And there's nothing wrong with wanting a promotion, just to be clear, and there's nothing wrong with being ambitious, but then focus on the impact.
**Shweta Shrivastava** (00:34:03):
Are you working on the right things that will have the right outcome for the business? Because if you are and if you are giving it to your 100%, that will be visible. And making your ambitions known to your manager, to your leader, is a good thing that you should. And so, when the right opportunity comes, at least your leader or manager is aware that, hey, this person wanted to work on something more challenging, so maybe I put her on that project.

But you have to be focused on really creating the right impact for the company and not optimizing for yourself to get promoted. If you try to maneuver that too much, it becomes visible and it's not a positive signal to the organization when they can see that that's what you're trying to do. And it also distracts you from the things that you need to be focusing on. So, I would say, improve your skillset as a product manager. Make sure that you're made your vision known that you want to work on challenging high visibility projects or products that really test or stretch your skills and then be really dedicated to that cause and work on what has the business impact for the company, do the right things.
**Lenny** (00:35:15):
I really like that advice. I 100% agree with all of that. I have a couple final Waymo questions and then we're going to get to our very exciting lightning round. Just for folks that maybe want to try out Waymo, so maybe just like where's it live now? When do you think it'll roll out to new cities? And then, how do people try it and use it if they live in one of those cities? If that's possible.
**Shweta Shrivastava** (00:35:37):
We are already in the Phoenix metro area and in San Francisco. So in those cities you can just go and download the app and you can use the service. We have done initial fully autonomous testing in LA. And we're going to be expanding in LA through the rest of the year, so stay tuned for more development on that front. And then, we do have a list of cities that we're going to be rolling out in the coming years, but unfortunately, I can't share that list just as yet.
**Lenny** (00:36:04):
And if someone lives in one of those cities, is there a way they could try to get on a wait list or try to use this stuff or is it closed doors right now?
**Shweta Shrivastava** (00:36:11):
So it is open doors in San Francisco and Phoenix.
**Lenny** (00:36:15):
Got it. So you just sign up and you get on the waitlist and then you might get off?
**Shweta Shrivastava** (00:36:17):
In Phoenix, I don't even think that there is a wait list.
**Lenny** (00:36:20):
Oh wow.
**Shweta Shrivastava** (00:36:21):
On the waitlist.
**Lenny** (00:36:22):
I got to move to Phoenix. That's cool.
**Shweta Shrivastava** (00:36:24):
Or just wait, just yeah, a little while in San Francisco. But yeah, Phoenix is great. So, if you want to move there, that's totally fine.
**Lenny** (00:36:33):
No, I'm going to start packing tonight. Just joking. Anything else you want to touch on before we get to our very exciting lightning round?
**Shweta Shrivastava** (00:36:40):
No, I think we talked about a bunch of things. It's been a great conversation so far.
**Lenny** (00:36:45):
It's not over yet. We've reached our very exciting lightning round. I have six questions for you. Are you ready?
**Shweta Shrivastava** (00:36:51):
Bring it on.
**Lenny** (00:36:52):
Okay, here we go. What are two or three books that you've recommended most to other people?
**Shweta Shrivastava** (00:36:58):
Crossing The Chasm by Geoffrey Moore and Clayton Christensen's Innovator's Dilemma are still sort of the two classics in product management that I have quoted a lot and I have recommended to many folks.
**Lenny** (00:37:12):
Awesome. I've got both in my little bookshelf behind me.
**Shweta Shrivastava** (00:37:14):
Yeah, me too.
**Lenny** (00:37:15):
What's a favorite recent movie or TV show that you've really enjoyed?
**Shweta Shrivastava** (00:37:19):
I have an eight-year-old daughter, so my viewing choices are very much influenced by what she watches. But let's see, I did enjoy the Top Gun, the new Top Gun movie, Top Gun Maverick quite a bit. We watched it in the theater and visuals were just fantastic. I think it was also inspiring to see what Tom Cruise was able to do and it's quite a feat that he pulled off at this age. It was very inspirational.
**Lenny** (00:37:49):
Fully agree. Favorite interview question that you like to ask people?
**Shweta Shrivastava** (00:37:53):
Especially at the senior levels, I always ask them, when was one time that you failed and what did you learn from it? I've seen that folks who has either say that they've never failed or they're trying a success story as a failure story are usually, they're disingenuous or have not had the depth of experience. So I ask that question and I'm looking for some real solid examples there.
**Lenny** (00:38:21):
Awesome. What's a favorite recent product that you've discovered that you love?
**Shweta Shrivastava** (00:38:27):
I wouldn't say that I recently discovered it. It's on my wishlist to buy very soon. I'm all for sustainable mobility, so I am shopping for a foldable ebike so I can do more mountain biking without doing mountain biking. That's the sustainable part for me, I guess.
**Lenny** (00:38:47):
Is there a specific model or brand that you are most excited about?
**Shweta Shrivastava** (00:38:50):
I would take recommendations from you, but I'm still shopping. I think electric, there are a couple.
**Lenny** (00:38:57):
All right. Folks who have recommendations, leave suggestions in the comments.
**Shweta Shrivastava** (00:39:01):
Please do.
**Lenny** (00:39:01):
And what's something relatively minor you've changed in your team's product development process that you've found has had a tremendous impact?
**Shweta Shrivastava** (00:39:09):
I wouldn't say that this is a product development process, although, in different parts of phase of my career, I have definitely instituted different types of processes and tools that have helped improve the product development. But I would give you an interesting one that I use a lot in my prior company and then I use a different form of it here in Waymo is what I used to call as the rule of seven. If there have been seven emails in an email thread and you still haven't resolved the issue, just call the person or get in a room huddle, resolve it live.
**Shweta Shrivastava** (00:39:43):
But the long email exchanges that don't converge and go anywhere I feel are a waste of time for many people. So I'm like, you've got to a limit. Waymo is a bigger company, so the limit's more like 10, but if you haven't resolved something within an X number of emails, please just get on a call, get in a room and get it resolved.
**Lenny** (00:40:04):
I love that. And the idea is it's seven if it's like you and that person going back and forth seven times?
**Shweta Shrivastava** (00:40:09):
Yeah. Or all of people are just going back and forth. And then adding more people and then everybody chime in, but where is this thing really headed?
**Lenny** (00:40:21):
I love that. Final question. If anyone gets to ride in a Waymo, what's a pro tip for them to have an awesome experience?
**Shweta Shrivastava** (00:40:29):
Bring your favorite playlist, sit back and enjoy the ride.
**Lenny** (00:40:33):
Great. When I was on my right, I turned on some jazz and it was raining outside. It was real cozy.
**Shweta Shrivastava** (00:40:39):
But did you actually do it on the ... So, so there's a feature, if you have a Google, you have to download the Google Assistant, but you can actually play your playlist list in the car.
**Lenny** (00:40:49):
That's cool. No, I chose a station that was in there just like jazz music.
**Shweta Shrivastava** (00:40:52):
Okay. Yeah.
**Lenny** (00:40:39):
Yeah. Okay. This is great. All right. Hopefully I get another ride someday.
**Shweta Shrivastava** (00:40:56):
Yes, you should.
**Lenny** (00:40:57):
Shweta, this was amazing. I am going to start packing my bags for Phoenix. I'm going to sell my car. Everything's going to change
**Shweta Shrivastava** (00:41:04):
Exactly what we wish for.
**Lenny** (00:41:07):
There's your KPI. Thank you again for being here. Two final questions, where can folks find you online if they want to learn more, reach out, ask you maybe some questions, maybe apply to join Waymo if you're hiring, and how can listeners be useful to you?
**Shweta Shrivastava** (00:41:20):
You can find me on LinkedIn. And then if you are interested in opportunities at Waymo, go to Waymo career web page. You should see all the open positions. It's okay for you to reach out to me on LinkedIn as well for product management roles. How can listeners be useful to me? I would say, hey, sign up for the ride in Phoenix or San Francisco and LA when we open up, give us feedback.
**Lenny** (00:41:43):
Awesome. Shweta, thank you again for being here.
**Shweta Shrivastava** (00:41:47):
Thank you. It was great to have this conversation.
**Lenny** (00:41:50):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [4/19] How to build a cult-like brand | Laura Modi (Bobbie)

**Laura Modi** (00:00:00):
So our head of growth, who... I mean, this girl is just fabulous. She was watching our inventory levels very carefully and also watching how quickly we were growing. And I'll never forget that moment. I can visualize it, sitting in a meeting, and she pulls up her screen. She goes, "Here's the dilemma. We are depleting inventory far quicker than our ability to replenish and the customers keep coming." You sit there and your first reaction is "This is great. We're growing." And she's like, "It's not that great, actually, because here's what's going to happen. We are going to run out of product for the babies that are on Bobbie today. We have about six days before we get to a place where we won't be able to serve those who've already made a commitment to Bobbie." She's like, "So we need to turn off our site and stop growing the business."
**Lenny** (00:00:56):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today my guest is Laura Modi. Laura and I actually worked together at Airbnb for many years where she was director of hospitality, leading all of the work around strengthening the host community and also improving marketplace quality. After leaving Airbnb, she went on to found a company called Bobbie, the only female-founded and mom-led organic infant formula company in the US which basically every mom I know uses.
**Laura Modi** (00:04:22):
Hi, I'm so happy to be here. It's a Friday, Lenny, this is amazing.
**Lenny** (00:04:26):
Oh, my God, already starting strong. I was looking forward to this chat for a few weeks already. I knew that we booked it a couple of weeks ago. Just as context, we worked together at Airbnb for a while and, not something I expected, but you went on to now become a magnate in the baby formula industry, which I'm excited to dig into. And so thank you again for being here.
**Laura Modi** (00:04:45):
Thank you. This is going to be exciting. Hope you don't mind. I am going to have a little bit of wine as we go through this.
**Lenny** (00:04:50):
It's highly encouraged. Maybe I need to start drinking more on the show. That might help.
**Laura Modi** (00:04:54):
Highly approved.
**Lenny** (00:04:56):
We'll see. We'll see how it ends up. It'll be a good retrospective.
**Laura Modi** (00:05:00):
Merlot's so good.
**Lenny** (00:05:00):
So I thought it'd be fun to start with just your time at Airbnb where we got to work together. You spent five and a half years there. Everyone that spends that amount of time at Airbnb, and let me know if you agree, always ends up being in this transformative time in their life and their career. Yeah, okay, you're nodding.
**Laura Modi** (00:05:15):
I can't imagine a world where I would be without Airbnb.
**Lenny** (00:05:21):
Yeah, I feel the same way. And so I want to spend a little time on what you learned from that experience and what you took away there. But just to start, can you just share briefly what you worked on while you were at Airbnb?
**Laura Modi** (00:05:28):
I mean, what didn't we work on? Just, I reflect back and it's one of those experiences where it probably was transformative because you do get an opportunity to work on so many different things. So I remember joining and I was just put in charge of leading and growing parts of customer service, vendor management. I mean, we were scaling the team so fast on that side. It quickly shifted into taking me to Europe where I led our consolidation of our European offices in Dublin. It was so funny. I remember at the time being asked to go do it and thinking, am I being asked purely because I'm just the only Irish person in the company right now? But it was one of the biggest operational changes that we went through there. And then for the last few years I was the director of hospitality leading global host community and host operations.
**Lenny** (00:06:22):
I think you're underselling that last part. Can you just share a little bit more of what that actually means?
**Laura Modi** (00:06:26):
Our product really wasn't our technology. It wasn't the technology that we were building, although for a few years we all thought it was. And then it got to a place where we realized Airbnb is nothing without its hosts, nothing. If anything, Airbnb's product was its hosts. So there was a moment, and I can't remember, it was two or three years in, where that narrative was building up more and more and we realized that there was a need to have a central team, which we called Hospitality, dedicated to equipping and recognizing and holding this product of our hosts accountable to their job.
**Lenny** (00:07:09):
Yeah, I think we could go down that. Maybe let me ask one question there because I think that's really interesting. For a company where the product, as you said, and marketplaces in general, the product you're selling is the supply, in our case Airbnb hosts. Is there something maybe you learned from that experience, I don't know, working at a software, company about how to think about the supply as the product and how that maybe informs, I don't know, what you're building today or just something in general?
**Laura Modi** (00:07:37):
I think it maybe just starts internally where you have to be able to create a culture first, to all understand that. Because otherwise you're going to be in a position where you're focused on optimizing the technology, efficiency, growth, looking at tools for tools' sake versus tools for users' sake. And I mean, I remember a very pivotal shift when we started realizing that we really needed to understand our hosts far more than we had leading up to that. And I think growth just follows. I mean, we certainly saw that at Airbnb. If we put the hosts first and we thought about building tools for them versus what do we need just to drive more bookings, users begets users, and that's exactly what we saw.
**Lenny** (00:08:29):
What are some lasting lessons from your time at Airbnb that you bring to what you're working on now?
**Laura Modi** (00:08:33):
The most obvious kind of cliched one is culture. It is bread and butter to everything you do, from the people you hire to how you build the right mindset to just keeping the energy. I mean, energy at Airbnb was the currency. It was like, unless you didn't have that energy, nothing was happening. And I think about that every day. How do you keep energy going? And my God, they did that for a decade, just keeping it going. I think the other big takeaway is if you can get people excited behind a vision and storytelling, it again kind of carries through that cross-functional work.
**Laura Modi** (00:09:16):
I now reflect back on just how powerful our storytelling was at Airbnb to get people pumped up. I mean, even for some of the smallest features that we would build, Lenny, they would kick off with the most powerful storytelling. I mean, we were changing lives. And again, it makes you wake up every day going, "Fuck, yeah, I want to work on this." And you're not just going in to fix something, you actually feel like you're having very large impact. And that has to be felt the whole way down the org.
**Lenny** (00:09:44):
I love that you're already getting into the specifics of what culture actually... how it manifests and how to build a culture. And so I want to maybe ask another question there. You talked about keeping the energy up is a big part of creating the culture. You want to create strong storytelling, either in one of those buckets or another example. What do you do at Bobbie, which we're going to talk about, to build a strong culture? What else do you do to actually do that? Because people hear about building a strong culture and they're like, "What do I do? How do I do that?" So I'd love to hear anything you've actually done there.
**Laura Modi** (00:10:11):
I think one of the biggest ones I would say is that you need to get to know people personally as much as you do professionally. And that was maybe something I also maybe took a little bit for granted at Airbnb. We had built a culture where people really personally loved each other. They loved working together. Now, fast-forward to today and you're building a company that's completely remote, how do you build a personal relationship?
**Laura Modi** (00:10:36):
For example, we make sure that we take time to have personal and professional check-ins. And cross-functional people in the org who maybe have no idea someone else as a kid or what they're doing in their lives. Because those personal connections, I mean, again, it's your second family, you're waking up every day to spend time with them. I think those personal connections are some of the biggest.
**Lenny** (00:10:56):
It's interesting because there's also this movement away from your workmates or your family. Airbnb I think is very... Everyone called themselves AirFam, but that becomes challenging when you have to let people go and there's challenging times. So is your perspective, that's where you find value, to kind of stay close to that?
**Laura Modi** (00:11:14):
I think you need a hybrid. I do. I think looking at work for transactions' sake, are your colleagues purely as the people who are just there to get the job done with you? That's not inspiring. No. Do I think that there's a balance and maybe some of the things that get introduced in a culture probably don't need to go that far? Yeah. But no matter what, I do believe building personal connections and actually caring about the people you work for is imperative for building a lasting business.
**Lenny** (00:11:45):
What's the story of going from Airbnb to building a baby formula?
**Laura Modi** (00:11:48):
Oh, my god. You mean leaving one of the fastest growing companies to start powdered milk? It was so funny. I don't know if I ever shared this with you, Lenny. I remember telling my dad and he was like, "Hold on a second, Laura. I don't understand." He's like, "You're lactose intolerant. Why are you starting a milk company?" He just couldn't fathom why I would, I mean in many ways, leave an established business that had established parental leave benefits, everything that in many ways, as you grow through your career, become more and more what you need and you need the stability.
**Laura Modi** (00:12:30):
So that shift, I suppose, just socializing it is probably one of the hardest. And it's a big thing to take a risk because you're taking 10 steps backwards in hopes of making major leaps forward. And I think that's just always kind of been a narrative mostly in my career, which is I don't believe there's such a thing as taking a big leap without first taking a major risk, and that was. I mean, it was a very big risk, obviously. But then also, keep in mind, even before I joined Airbnb, I had a good job at Google. And Airbnb at the time, I think, just had one of its most major crises back in 2011.
**Lenny** (00:13:09):
CJ or EJ?
**Laura Modi** (00:13:11):
EJ. EJ incident. It was all over the papers. It was a small company. I wasn't really given a title. And I'll never forget as well, exactly the same narrative. My parents going, "Hold on a second. You're leaving Google to go start a B&B." Like, "No, I'm not starting a B&B. I really believe this company's going somewhere." So anyway, the moral of the story is the move into starting my own business, it was a big risk and it was one that I felt so confident on that was needed, it was worth it.
**Lenny** (00:13:41):
Some people do what you did there, where you take a big risk and kind of maybe stick backwards and it doesn't work out. And in your case it's worked out many times. Is there a thread across the decisions you've made that you think people maybe should look for or you think is important in taking that big risk? Or do you think it was a lot of super luck?
**Laura Modi** (00:14:02):
Super luck. I mean, I have a folder of businesses and product ideas that, prior to Bobbie, I had dreamt of. And we can always get into that again in the future. Some of them I still dream of doing one day, but a big reason for not taking the risk is because I didn't feel the conviction. So, yes, while I think it's luck, I think I put a lot of intention into researching the marketplace, understanding the business, determining how much of a risk I'm really able to take, even financially. Sitting with my husband and determining how long I may need to be in this position before raising capital and is it possible? It certainly isn't what sometimes it can appear on the surface, which is, "Oh, she had an idea and she left." There's a lot of work that goes into determining is this actually going to be something that's viable?
**Lenny** (00:14:57):
I like that lesson. It may seem like Laura went to here, to Airbnb and was just like, "Oh, how lucky she picked Airbnb of all the companies." But what you're saying is you spent the time researching, seeing what the company started.
**Laura Modi** (00:15:09):
Yeah.
**Lenny** (00:15:10):
Yeah. Okay. So let's talk about Bobbie, just broadly. Can you just talk about what is Bobbie and then what is the scale of Bobbie these days? What stats can you share to give people a sense of how large this has gotten?
**Laura Modi** (00:15:20):
Bobbie is a powdered milk company. We are an infant formula. And prior to infant formula, the formula-gate of 2022, which everyone is now familiar with. The short of it is that this is an industry that is owned by a duopoly. It's one of the last remaining industries in the CPG space that has seen any disruption or change in probably 40 years. And my desire was to create a formula that parents could feel proud of, an infant formula that felt modern and met where science is today. Because frankly, none of the infant formulas on the market really had caught up to where science has evolved to.
**Laura Modi** (00:16:00):
Now, obviously, I only experienced this as becoming a mother myself. I knew nothing about this at all. And then I pick up a can of formula and I read the back of the can and there's ingredients in there I would never feed myself. And I think the thing that really hit me, and this was more of the business investor side of me, I just hated the product and I couldn't understand why, as something that is used by so many, 83% of parents, why is it that I'm embarrassed about it? I feel guilty feeding my child this and it's also ugly. It's sitting on my counter every day and this isn't what I want to see.
**Laura Modi** (00:16:41):
I remember saying to my husband, "I feel like we have failed to breastfeed." And the alternative is that I need to give her a medical solution to survive, which it's milk. I should feel like I'm giving her food. But for whatever reason, society has set this up to make formula feel like you have failed. I mean, that was the impetus. I know you asked me, what is Bobbie? We are a better-for-you infant formula without the guilt.
**Lenny** (00:17:12):
Ooh, I like that. That was a good summary at the end. How about about the scale of Bobbie? What kind of numbers can you share? Just to give people a sense of how large this has become.
**Laura Modi** (00:17:20):
Yeah. Oh, my god. I remember launching, it was 100% direct-to-consumer, it was at the top of 2021. And the moment you're about to launch, the first question all investors ask is what do you believe your growth is going to be? First question. It's the same question you get after you're married, when are you going to have a baby? I'm like, "I have no clue what my growth is going to be. I've been on the market for a hot minute." I remember thinking hopefully four million, five million in our first year. So the growth has been fabulous and beyond our wildest dreams in what we had expected.
**Lenny** (00:17:54):
Amazing. There's a bunch of questions I'm going to ask about how you grew Bobby, but you mentioned the COVID baby shortage crisis. And there's a couple stories I wanted to get into that was one of them. Can you just talk about what you went through in that period? Because I imagine it was both a blessing and a curse. Also, it reminds me, I have a friend who uses Bobbie and she just told me a story about how someone, she couldn't find any Bobbie during COVID, supply chain issues and all that, and an employee of Bobbie came to her house and brought her formula just to make sure she had enough. And obviously that created forever brand loyalty. And we'll talk a little bit about brand, but I'd love to hear about just that period of the journey and what you learned from it.
**Laura Modi** (00:18:34):
There is nothing like a crisis that gives you more of an appreciation for what opportunity lies ahead. And I would thank my blessings every day that the only way to look at this positively was to be in a position of gratitude that I have an opportunity that most startups would wait a lifetime for. So what happened was I woke up one day and the President of the United States was talking about there being an infant formula shortage. And again, it's just being in the right place at the right time. A topic that never has really been brought up. Unfortunately, one of the large companies, one of the duopolies, had a recall and that recall basically left the nation without product and we were not able to feed babies in the US.
**Laura Modi** (00:19:29):
Being one of the smallest companies here, we ended up seeing our customer count double the first week that that shortage happened. All of that would seem great, almost like a dream for any startup to be in, that you're going to see your product grow now because they're moving from one customer to another or from one product to another. But here's what happens. Infant formula is one of those products you can't run out of. It's not cool to be out of infant formula. It's not like a piece of furniture and you're at capacity for a certain amount of time.
**Laura Modi** (00:20:03):
So our Head of Growth who, I mean this girl is just fabulous. She was watching our inventory levels very carefully and also watching how quickly we were growing. And I'll never forget that moment. I can visualize it, sitting in a meeting. And she pulls up her screen, she goes, "Here's the dilemma. We are depleting inventory far quicker than our ability to replenish. And the customers keep coming." You sit there and your first reaction is, "I mean, this is great. We're growing." And she's like, "It's not that great, actually, because here's what's going to happen. We are going to run out a product for the babies that are on Bobbie today. That's a problem."
**Laura Modi** (00:20:48):
So in my absorption of everything that's happening, and again, being a company that had only been on the market 14 months, saying to her, "Well, Shireen, what do we do next?" And she's like, "We have about six days before we get to a place where we won't be able to serve those who've already made a commitment to Bobbie." She's like, "So we need to turn off our site and stop growing the business." That's a big decision to make when you're like, "Okay, so I'm going to turn to all of our investors and say we're turning off our site, we're closing down to ensure that we keep enough product."
**Laura Modi** (00:21:23):
But honestly, in hindsight, it was a no-brainer. We were not going to run out of product on our current subscribers and we had no idea how long the crisis was going to last. So even though we didn't know how long we'd be off, I gave the thumbs up, sally forth, turn it off, and we went into hibernation mode. And in many ways we switched immediately into our customers come first. We now have 70,000 subscribers who are in a place of panic because they hear the news every day that there's formula running out and our job is to give them confidence and clarity that we have the products for them and we're never going to run out. And we did. For six months, six months, we kept our website off and we didn't grow the business last year and we continued to serve our current subscribers and in the end we became the only formula company that was able to reliably serve its current customers and never run out.
**Lenny** (00:22:21):
That's an amazing story. I haven't heard that before. You threw out this term at some point when we were emailing earlier of slowth, you called it a slowth. Slow growth, I think.
**Laura Modi** (00:22:32):
Oh, my gosh.
**Lenny** (00:22:32):
Is that how you think about this?
**Laura Modi** (00:22:33):
That was part of also how do you change the culture internally? I had 60 people on the team who were all in a position of driving growth and many of them were probably only hired weeks before the shortage with the position of growth, email growth, paid acquisition. And all of a sudden you're telling someone who just left a cushy job to join a startup that we're no longer growing. And in fact, your job now is to completely flip what you thought you were going to do on its head. So we named the entire growth team, the slowth team.
**Lenny** (00:23:09):
That's awesome.
**Laura Modi** (00:23:09):
And I mean, they got creative. At some point we were emailing subscribers to nudge them to cancel because we were looking for a way to ensure that we could keep product, and my God, it was a mind-boggling moment.
**Lenny** (00:23:24):
What else did you learn from that period that has either stuck with you in this time and/or is there something maybe you think you would've done differently if you could go back?
**Laura Modi** (00:23:34):
Well, I have a personal belief of never looking back and regretting or changing things, but there were definitely some learnings and I would say on the positive end, some of the biggest learnings were just the power of storytelling and bringing the impact of what we were doing back into the company. I'm in a fortunate position as the CEO where, whether I'm speaking to advisors or on panels or engaging the outside world a lot more, I was able to truly feel, I mean, viscerally feel the impact that we were having by doing this.
**Laura Modi** (00:24:13):
I'll never forget, I was speaking at Davos on this topic and I had a customer. Oh my God, Lenny, this moment. I was standing outside of this events area and this woman comes running up to me and she's bawling, crying, and this is at a global leader's conference and she's crying and she just held my hands. And she's like, "Oh my God, you saved my life over the last year." She's like, "You have no idea the impact that Bobbie played in our lives by making the decision and giving me confidence that you weren't going to run out of product on us."
**Laura Modi** (00:24:53):
And that emotional connection of just, wow, yes, we may have grown the business faster, we may have gotten product back, but at the end of the day, these 70,000 voices that are out there and the stories that they have and bringing those back to the company, it's undeniable the impact, by making that decision, we've had. And I think the rest of the company feels it, too.
**Lenny** (00:25:16):
This connects with something we've brought up a couple of times now, which is just brand and brand building. Clearly, it's something that you've spent a lot of energy on and something you've done incredibly well. I think every mom I know knows of Bobbie. By the way, let me just throw this out there. I don't know if I've told you this, but I'm having a kid and we're going to get some Bobbie.
**Laura Modi** (00:25:34):
What?
**Lenny** (00:25:36):
Yep.
**Laura Modi** (00:25:37):
Oh my god, Lenny's going to be a dad. This is so exciting.
**Lenny** (00:25:42):
Oh man, this is going to be a whole new direction.
**Laura Modi** (00:25:44):
I've got your milk, if you need it, of course, if Michelle's in a position and she wants it, we're here for you.
**Lenny** (00:25:50):
Okay, I appreciate that. We're going to get a deal.
**Laura Modi** (00:25:53):
Oh, my God, I'm so excited for you.
**Lenny** (00:25:54):
Thank you. Laura, I feel like we need some formula just in case, right? Doesn't that-
**Laura Modi** (00:25:58):
You do. You do. And the rule is you have to try it, as well.
**Lenny** (00:26:02):
Oh, okay.
**Laura Modi** (00:26:03):
Yeah. If baby's going to try it, you need to give it a shot.
**Lenny** (00:26:06):
Okay. Okay, okay. Oh, I'll get ready for that. I like that rule. I like that rule. Okay. There's so many things to get used to.
**Laura Modi** (00:26:14):
We'll talk again.
**Lenny** (00:26:15):
Okay, so going back to my question about brand, basically I just want to understand what have you learned about building a brand and when do you think it is important to invest there?
**Laura Modi** (00:26:24):
I mean, it all depends on what your product is, but the first thing I've learned about it is you have to build a brand that connects with what your customers are going through, and the experience. I once had someone say to me, "Think about who your customer is and that one customer, the exact person, is going to wake up tomorrow morning and there's going to be three things that are just playing on them in the back of their mind, the things that keep them up at night. And if you are not solving for one of those, then you're going to be finding a way to build a brand and to get in the way of that, get in the way of their mindset, have them remember who you are or what you're about."
**Laura Modi** (00:27:06):
And it was very clear to us that everything, from who our brand was, what it stood for, the positioning, needed to be something that parents were really finding as a struggle in that first year in feeding. So you see it in our messaging, you see it in our creative. I have no desire to bombard people with something that isn't part of those top three things that they're experiencing. Otherwise, we will have companies out there and brands out there being loud for no reason. And I think that's continued to help us in every time we have to reframe or relaunch something, to keep remembering what do they care about, let's build a brand for them.
**Lenny** (00:27:48):
I really like that. That is such a good reminder of just, you are not going to convince someone they have a problem unless you're just spending endless money hammering into their head there's a new problem you have. If you connect to something they already know is a problem and just make it clear this is a solution to a problem, life gets a lot easier.
**Laura Modi** (00:28:06):
That's right.
**Lenny** (00:28:07):
Although I know that you also have to kind of fight this breastfeeding-is-best kind of thing. So in a sense you also have to convince people this isn't what you think it is.
**Laura Modi** (00:28:22):
Yeah. And then, what's the saying? If you're explaining, you're losing. And I think there's a part of this where there's going to be a large group of people that are always going to be in the mindset that breast is the only way to do it, and anyone who does otherwise is doing second best. And I'm not there to try and convince them. I think a part of this is amplifying those that are in need of our products, that are the 83% using formula and make sure that they feel heard. But that has been a learning. I mean, that's been a huge brand learning. How do you not lean into or amplify the voices that shouldn't be heard and in many ways just get distracted by it?
**Lenny** (00:29:03):
That's really interesting, and I don't know how much you want to talk about this, but I know initially the brand strategy was basically breast is not best. Formula is just as good. And what I'm hearing is you kind of realized you're not going to convince people of that and it's more lean into people that already understand.
**Laura Modi** (00:29:19):
Yeah. And I think another major belief I have is no brand, and I do fundamentally believe this, no brand should ever be in a position of pointing fingers to something that's better or worse. Our only job, and I wish politics would also do this, our only job is to talk about what we do and why we exist and why we believe our product is good. And I would say the flip is the same in formula. If a mother out there has access to another brand of formula that is more accessible, maybe more affordable, and it suits their baby, then good for them. And I should never be a company in a position pointing to a competitor or another way of feeding saying that it's worse off, ever.
**Lenny** (00:30:04):
**Laura Modi** (00:31:21):
Oh, my God. This is, I feel, like a secret sauce of just how to get it done half the time. And I really, really do believe the power of branding the mundane is so successful. I mean, we brand, to be fair, I actually feel like that this was a page out of the Airbnb book. Do you remember going back early days when we were doing customer service deep dives? What were the issues that customers were having? And we branded a program called Air Dives. Do you remember Air Dives?
**Lenny** (00:31:56):
Yeah.
**Laura Modi** (00:31:57):
And this program just became this thing where everyone wanted to know on a Friday what was the latest Air Dive. And really what an Air Dive was was an analysis of customer service tickets and customer service pain points. But how much better is Air Dive than a customer service analysis? So much better. So I think a lot of learnings on just the power of branding and storytelling your workflows and your frameworks and what it means to do your job, often keeps people motivated, too. And it creates memory recall a lot better, too. So now when you prefer Slack channels, they're all like, I don't even want to name them because I'm going to give you-
**Lenny** (00:32:43):
No, I was going to ask. I'd love some examples and I know they're going to sound ridiculous to an outsider, but what are some examples of things? And you can say like Bobbie Blank, or what's your naming convention?
**Laura Modi** (00:32:52):
Oh, my God. Project Shamrock. I'm not going to tell you what that's about. Project Lumberjack. Ooh, Got B 2022. I can give you so much insight into what these are and I'll give you an example of it. We have legal approvals that need to get made and these legal approvals on content claims have to happen. And I was like, okay, well how do we make sure everyone sticks to the quality SOP that legal wants set for all of the claims we have to have in place? So we created a program called the Secret Shopping Program, and our regulatory legal team go out and they do their own secret shopping once a month and then they report back on any misleading claims or ones that aren't fully understood that Bobbie needs to go back and update. But having a secret shopping meeting is very different to potentially coming in and listening to legal report out in your claims mishaps.
**Lenny** (00:33:59):
Speaking of legal mishaps and copy nuances, one of my favorite memories of you is I was in San Francisco on Divisadero outside, I think, The Mill, and you were just running by heading somewhere and we started chatting. You were heading, I believe, to the warehouse that you're manufacturing the early versions of Bobbie, and apparently the FDA showed up and shut you down because of some misleading communication in the news, as you're launching. I'd love to hear that story because I love it.
**Laura Modi** (00:34:26):
By the way, how you just transitioned from one example I just gave to that was absolutely exceptional, speaking of content mishaps.
**Lenny** (00:34:40):
I appreciate that.
**Laura Modi** (00:34:42):
This is why you're such a good podcast host, Lenny.
**Lenny** (00:34:44):
You're so kind.
**Laura Modi** (00:34:44):
You're so good.
**Lenny** (00:34:45):
Thank you, Laura.
**Laura Modi** (00:34:46):
Oh, my god, that moment. I do remember bumping into you. I was in an identity crisis. Yeah, early days. I think the one big learning I've had is that when you're in an industry where you are disrupting, I mean truly disrupting the status quo, you're going to be met with some reactions, people, or in our case government agencies who aren't happy about what you're doing. It was early days, we just launched a pilot and the FDA showed up at our warehouse and they didn't like the way that we were labeling the product. We had to pull all of our product from the market, we had to relabel everything and we had to work with the agency for another year before we could bring our products back. For startup world, that was a huge, I wouldn't even say it was a pivot, it was a patient pause, thinking sure that we could get back on track and build intentions with the FDA again.
**Lenny** (00:35:45):
Another example of slowth, maybe.
**Laura Modi** (00:35:47):
Another example of slowth, yes.
**Lenny** (00:35:49):
How did you personally stay motivated and keep morale up within the company during that period?
**Laura Modi** (00:35:55):
Well, I found out I was pregnant with my third child right after.
**Lenny** (00:35:59):
Super.
**Laura Modi** (00:36:01):
There's something about also growing your personal life while professionally it's happening. There's a little bit of give and take as well. So sometimes in moment of professional slowth, you might find that there's personal growth. That's exactly what I found. So I mean, yeah, during this journey I went on from being inspired by my first kid where I wasn't able to breastfeed and then had two more along the journey. And I don't know, I've actually never spoken about this, but I do think there's a beautiful marriage in that personal and professional growth that you can have and you kind of need to find moments where you lean into one and maybe the other. And then there's moments, like I kind of feel like I'm going through right now, where both of them are just on fire and you can't slow them down.
**Lenny** (00:36:44):
It might be a good time to chat about that. So you have this fast-growing business, you have three kids. Your partner is also a founder, also very busy. How do you manage all of these things?
**Laura Modi** (00:36:59):
That question is actually probably the most common question I get from new founders, those that are aspiring entrepreneurs, on just like how do you do it all? I mean, a lot of it's your infrastructure, it's your... Actually, hold on a second. I'm going to do something I don't think you've done on a podcast before. Hold on. This is my EA. I'm going to pull this woman in. Everyone just needs to say hi to Kendra. This woman.
**Lenny** (00:37:25):
Hi, Kendra.
**Laura Modi** (00:37:28):
I'm introducing her because the power of a support system to be able to do what you do, I mean, you are an extension, my leverage, my everything. And never leave.
**Kendra** (00:37:42):
I'm not going anywhere.
**Laura Modi** (00:37:43):
I'd be so screwed. And everyone should not only know the power and leverage of their person, but the level of appreciation and celebration you need to have for them is just huge.
**Kendra** (00:37:56):
I always feel celebrated, so thank you. I appreciate it.
**Lenny** (00:37:59):
How do people find a Kendra of their own? That's the million-dollar question.
**Laura Modi** (00:38:02):
Well, first, you don't take this one. This is a poach-free podcast.
**Lenny** (00:38:02):
Her name Lauren, not-
**Laura Modi** (00:38:10):
Yes, that's right.
**Kendra** (00:38:11):
We should have code names.
**Laura Modi** (00:38:12):
There's no last names here. How do you find your Kendra? I will say it took multiple interviews and it's all about chemistry. I think it's about chemistry and finding somebody that you genuinely care about. I genuinely care about you, your heart, your kids, your family, and I think finding that connection is really important.
**Kendra** (00:38:36):
Yeah.
**Laura Modi** (00:38:37):
Yeah. You know what's also funny, too, I think there's this feeling, and I would hear this from folks, how do you do it all? And I think we also just need to be very transparent. It takes a lot of work to do it all. I, as an operator, am very proud of the infrastructure I have built. I mean, we have calendars on our walls, we have calendars for our kids. We have back and forth birthday planning. It's additional help in the house. My nanny is the other extension in our house.
**Laura Modi** (00:39:10):
I mean, I don't know what we would do without Clifford. He is everything for us and I also have to see him as an extension to our parenting. But that is, I think, the only way to get through the chaos and the only way to embrace the all, is you actually need to put in the work to build the infrastructure, the systems, the frameworks, and then every month, or sometimes in our case on a weekly basis, me and my husband, we have a meeting every Sunday and it's walking through the agendas. Who's going to what TaeKwonDo classes this week? Or who's trading off on birthday parties or parent-teacher meetings. Because you're right, a dual CEO-founder household and three kids, it will age you fast if you don't have it.
**Lenny** (00:39:58):
It also makes me think a little bit about what you talked about earlier where, when things slow down a little bit in the business, there's an opportunity to lean into that part of life and then kind of get ahead on some stuff, in theory.
**Laura Modi** (00:40:09):
Totally, totally.
**Lenny** (00:40:11):
In terms of the business, I imagine you never started a D2C business before this. Also, you mentioned you've never formulated a baby formula prior to this. Clearly, it's working out. What's a lesson there of just doing something you've never done? Is that something you imagined is a good idea? Maybe looking back, maybe it doesn't matter. What have you learned about just this idea of doing something totally new and different?
**Laura Modi** (00:40:34):
I think one of the biggest beliefs is that an ounce of naivety will be your biggest secret to success. And I think the word even naivety sometimes gets a bad rap, but naivety is the definition of creativity and innovation and canvas and white space and opportunity. And I definitely went into starting this company with a level of naivety to how regulated it was, to the stigma associated with it, to how hard it would be. But that has allowed me to continue to look at the status quo differently.
**Laura Modi** (00:41:15):
I don't, because I don't fully understand it, and I have applied those same principles even into how I hire people because I do think... I'm now wondering who's going to watch this on my team, because obviously we have some specialists, but this is generalists who make the world go round. I think sometimes putting the most unlikely people who have an ounce of naivety to what it takes to win and succeed are the ones that are going to drive the biggest impact.
**Lenny** (00:41:45):
I love that. And it makes me think of a couple of things that I'll just share real quick. One is I was listening to an interview with Mr. Beast who is the number one YouTube creator on TikTok. I think he's got the biggest TikTok, and he talked about how he's got this business he's building, which is like a new way of creating content. And anytime he hires someone from a traditional Hollywood movie-making established kind of background, he's like, "They know what they're doing. They're going to help me legitimize this thing, make it scale." He's like, "Every time, they never work out. They just don't see what we're doing here. They don't understand how this is different and they just slow everything down." And he finds just finding really young, hungry, hardworking people that can learn and understand what he's done end up working a lot better.
**Laura Modi** (00:42:27):
Always.
**Lenny** (00:42:28):
The other interesting insight is I'm doing a series right now on B2B businesses and how the biggest B2B companies started and so far I'm finding 70% of the founders had no specific background or skill in the area. They went in to say it's security or sales or something like that. So there's a lot of examples of this.
**Laura Modi** (00:42:48):
I'll give you one example of someone who's in C who's just an absolute rockstar. Our girl who leads marketing is an Emmy Award news anchor. She's not your traditional marketer. She came in asking me to... She was like, "What does CAC mean? Do we need to look at this LTV number?" And the reason I wanted her in C was because she was the complete antithesis to what we would normally define as a good performance marketer. I wanted someone in C who got media, who got brand and storytelling, and she operates like a news anchor. And in many ways I would look to the team that she's built and think that we maybe have more of a media company than we do a marketing team. And that has been the fuel for the brand that you see today, 100%. And then you hire, unlike the people in those positions and especially senior positions, they're going to do exactly the same throughout the business as well.
**Lenny** (00:43:53):
That is really interesting. It makes me think of Airbnb a bit. Also, the browser company. We had the founder of that company on here and they have a storytelling team within their company. Their job is tell the story.
**Laura Modi** (00:44:01):
I love that.
**Lenny** (00:44:03):
So you talked about how you're hiring people that aren't necessarily deep in a specific skill that you need them to do. What is it that you look for instead that you think is important for them to figure out what they need to be doing?
**Laura Modi** (00:44:15):
Curiosity. A lot of curiosity and just openness to what's out there. I definitely look for people who have the ability to make decisions and move fast and not get worried about the outcome. That is the biggest learning in a startup. The secret is momentum and just keeping momentum. And if we try and perfect everything, you just miss the boat. And I believe that, what's the common saying, perfect is the enemy of good, or something.
**Lenny** (00:44:52):
Yeah, I think that's the one.
**Laura Modi** (00:44:54):
I mean, it really is. So I look for people who just want to do it, just get it done. Again, part of that is just rolling up your sleeves and not questioning your job. When I find in interviews and people are really questioning the lanes they're going to be in and the job they're going to do, or "I don't do that." That's saying, "I don't do that." A huge flag. You do do it. If you're joining this company, if you're within a certain work stream or a certain department and you're behind what the company's working on, in many ways we need people who do do that. So I look for just optimistic doers.
**Lenny** (00:45:32):
I love that. That's such a cool phrase of how to simplify it, what you want to hire and just optimistic doers. There's so many people that have big ideas and pontificate strategy, and you just need people doing the thing.
**Laura Modi** (00:45:44):
100%. I call it intellectual ejaculation, which, if that's not allowed of the podcast, [inaudible 00:45:52] totally wiped.
**Lenny** (00:45:52):
That's allowed. I'll allow it.
**Laura Modi** (00:45:55):
Thank you.
**Lenny** (00:45:57):
Okay, so you're talking about momentum. I want to talk about growth. A lot of this podcast is about growth strategy, how companies grow. You're building a D2C company. D2C is really hard. There's been so many attempts. Most fail, most people can't figure out how to do it scalably. So many challenges. What have you learned about growing D2C company? What's worked well for you?
**Laura Modi** (00:46:17):
This narrative of D2C isn't working, or D2C is over, D2C is dead. It kills me. Because we're being way too reductionist in that message. D2C isn't dead. Just the approach for how people did D2C is a bit dated. We should not be paying for every customer and we should be very careful that people aren't getting hooked on the drug that is paid marketing or performance marketing. And I think that drug, and then obviously as we start to see changes on the way certain performance works, it just becomes more expensive and people are resetting how they do performance marketing. The short of it is D2C is not dead. How you drive people to D2C, how you acquire customers, how you build sustainable businesses, that needs to change.
**Lenny** (00:47:14):
And what is it that you've done that allows you to do that? I imagine a lot of it is word-of-mouth, which everyone always wants. "How do we do more word-of-mouth?" So what's worked? How do you do that?
**Laura Modi** (00:47:24):
Well, I mean, the three major pieces of it is that the focus on commerce, content and community.
**Lenny** (00:47:30):
Commerce, content and community.
**Laura Modi** (00:47:33):
So commerce, content and community. But most D2C businesses have put commerce at the top of their list. We flipped it. It's now content, community and commerce, and building good content that is really smart SEO, that has the ability to drive people back to your site to be able to build you as a thought leader. That's really hard and it takes a lot of work. As an example, five years ago we started a platform called Milk Drunk, separate to Bobbie. Milk Drunk Blog. And the reason why we started it is because we realize that there was a dearth of education in the world of formula out there.
**Laura Modi** (00:48:15):
And what people were really looking for was good recommendations, usability charts, how to make formula, how long does formula last? So we wanted to become the content leaders in that, with the hypothesis, and it's holding true five years later, with the hypothesis that if we win on content and as a thought leader, that will drive back to Bobbie. And today I'm going to give you a totally random example. If you do a cursory Google search for something like "How long does formula last?" Milk Drunk is showing up between the CDC and the bum on the first page of Google? That SEO work and that content building and thought leadership and credibility does take a lot of work. And in the meantime, I've had to squat away requests to put another 100,000, another 300,000 every month into paid marketing because the moment that drug starts, it's very easy to keep it going.
**Lenny** (00:49:15):
I think Airbnb is a great example of that. During COVID, they shut down paid growth and I think they've turned it on, but it's a tiny component, which is really unusual and really rare, where you have paid growth, you're sending tons of money, Facebook, and then you stop. It's so hard to stop because growth slows and no one ever wants to do that. And it's interesting, coming back to using a crisis as an opportunity, Airbnb use that as an opportunity to get off that drug.
**Laura Modi** (00:49:40):
That's right. Yeah.
**Lenny** (00:49:42):
If you think about the pie chart of what helps Bobbie grow, how much of it would you say is just like make an awesome product that people talk about with other moms and it spreads like that, versus SEO and content and paid?
**Laura Modi** (00:49:55):
60% of it is your product and the package around the product, which is your brand. So even if you did nothing to market your brand, your product and brand is 60% of it. And then the last 40% is how do you get the word out there? How do you ensure the word-of-mouth, mom begets mom? That has to happen. That flywheel will only happen if they're able to look at a product that they fully believe in and a brand that speaks to them. And without that, you're going to be a fast-fashion company, which is also my worst nightmare, the fear that people get distracted by the 40% and the 60% actually is just mediocre.
**Lenny** (00:50:43):
Something I wasn't planning to ask, but I thought it'd be interesting and we can cut this if it's not interesting, is Emily Oster, she's one of the, I think, pioneers of breastfeeding is not as great as people say necessarily. Has that been really important to Bobbie in this industry? What do you think of Emily Oster? I'm a huge fan, so I hope you're also a big fan.
**Laura Modi** (00:51:01):
We are massive fans of Emily and Emily's a massive fan of Bobbie. She is my idol. She's the one who got me through my first year of pregnancy and then beyond. She has been a really, really important voice. And actually she has kind of set the stage for the power of data to bust myths. I mean, just like you said, she's come out and said, "There is no study, no study at all out there that you can point to that can qualify why breastfeeding is better." And to have an economist, a professor, come out and to be able to underscore that and point to where that is the case and why it is the case. I mean, it's so much better than a company. To be fair, companies are brands coming out trying to say that. So I am acutely aware that, as a business and as a brand, sometimes we need to bring in other credible voices. And my God, Emily is one of those.
**Lenny** (00:52:05):
I love it. Okay, great. I'm glad. I'm glad you love her. I've been reading all our books. I think I just read that section.
**Laura Modi** (00:52:11):
You read her books. I love it. You're not a dad yet, you'll like all of them, Family Firm.
**Lenny** (00:52:14):
Okay, the first two. The first two. Cribsheet. I'll stop there, I think. And I was actually just reading the breastfeeding section and it's funny, one of the only remaining benefits of breastfeeding is less cow farts and creating methane. Unrelated to your child, there's a cow component.
**Laura Modi** (00:52:32):
We do want to cut down on the farts.
**Lenny** (00:52:35):
We do. We do. Not what I thought of when I thought of why should I go with formula or not. Maybe just zooming out a little bit and to kind of close, are there any other lessons that you've learned along this journey about building a company, hiring, team building, anything along those lines? Creating urgency, creating momentum?
**Laura Modi** (00:52:56):
I mean, momentum. Momentum really is it. We did this a good bit at Airbnb too. I think as a founder and as a CEO or for any leader out there, your job is not just to keep people going on momentum. Your job is to make momentum. And sometimes that momentum has to be manufactured. And that has been one of my biggest lessons on just how, as leaders and people starting companies, how do you force yourself? And sometimes when it's early on, you're actually just doing it to yourself, creating manufactured deadlines and launch dates.
**Laura Modi** (00:53:36):
The amount of times people say to me, "Why are we launching this May 1st?" And I'm like, "Just because we said it. Because if we don't do it now, we may never do it." It was something we were talking about the last day on just how important it is to look at the fuel that keeps you going and how you have to kind of force those milestones to get you there. So yeah, I would say manufacture yourself some momentum.
**Lenny** (00:54:00):
I so agree with that. One of my favorite things and one of our former colleagues, Vanessa, taught me this, which is just like, "Let's all set an arbitrary deadline right now." And just make it clear, this is just arbitrary, but it's useful.
**Laura Modi** (00:54:13):
It's so true.
**Lenny** (00:54:15):
Well, with that, Laura, we've reached our very exciting lightning round.
**Laura Modi** (00:54:18):
Who?
**Lenny** (00:54:19):
I don't know if I told you this was coming, but it is. I've got six questions for you. Are you ready for exciting lightning round?
**Laura Modi** (00:54:26):
I think I am. Let's do it.
**Lenny** (00:54:27):
Okay, let's do it. What are two or three books that you've recommended most to other people?
**Laura Modi** (00:54:33):
One recently, Great by Choice, the author of From Good to Great, amazing.
**Lenny** (00:54:40):
Jim Collins?
**Laura Modi** (00:54:40):
Some really, really good frameworks. Yes, that's right. Really good frameworks in there. Metabolical, very specific into the world of health, healthcare. Actually, very specifically the takeaway of Metabolical is we don't have a healthcare crisis in this country, we have a health crisis. And it really makes you think about the source, food and how we live our lives. It's amazing. And then I think you a really good traditional one, going back to just brand and for people who are really just looking for a good foundation, I love Purple Cow.
**Lenny** (00:55:13):
I love that. I think I have it in my back around here.
**Laura Modi** (00:55:15):
You do?
**Lenny** (00:55:15):
There it is, yeah. Tiny little book. It's so cute.
**Laura Modi** (00:55:18):
That is so good.
**Lenny** (00:55:20):
Yeah. Also, we could mention Emily Oster's book, Laura, Expecting Better.
**Laura Modi** (00:55:23):
I mean, we should. Expecting Better is a good classic.
**Lenny** (00:55:27):
Your list is reminding me of a new book by Peter Attia, that I don't know if you've seen, called Outlive, I think it's called. It's about longevity and how to live longer and all the latest sciences and how to live a longer life. But anyway, that's my answer and I'm asking you questions, so let's move on to the next question. Favorite recent movie or TV show?
**Laura Modi** (00:55:44):
Bad Sisters. Do you have bad sisters?
**Lenny** (00:55:47):
No.
**Laura Modi** (00:55:48):
About a group of Irish sisters getting up to trouble. Highly recommended.
**Lenny** (00:55:53):
Amazing. What's a favorite interview question that you like to ask when you're hiring people?
**Laura Modi** (00:55:57):
Teach me something. Actually, we just talked about that today. Teach me something. Yeah. I love getting someone to, not related to work, not related to their job, something in your life, something you find interesting, just teach me about it.
**Lenny** (00:56:11):
What is it that you look for in their answer that gives you a sense that they're someone that you want to hire?
**Laura Modi** (00:56:16):
Creative, but also just their ability to explain something, and it is a huge indicator. I mean, I'll never forget one guy teaching me how to cook the perfect steak, and now every time I cook a steak, I go back to the way he described it, to someone being able to teach me the foundation of Latin. But if someone's unable to take one thing that they find is core to who they are and what they've done or what they understand and their inability to explain that to you, they may struggle.
**Lenny** (00:56:49):
I want to learn how to cook a perfect steak. I'm going to have to interview you at some point and ask you about that. What's a favorite product you've recently discovered that you love? And especially if it's a baby product, that'll be bonus.
**Laura Modi** (00:57:01):
I mean, yeah, I think Frida Baby's amazing, the nose sucker.
**Lenny** (00:57:06):
Okay, great. The nose sucker.
**Laura Modi** (00:57:08):
Actually, no. Sorry, the nose sucker. That's terrible. It's the snot sucker.
**Lenny** (00:57:13):
Okay, great.
**Laura Modi** (00:57:13):
As a new parent, you really, really need this, Lenny. Your poor little boy is going to get blocked up and you're going to want to get out that sucker and suck on it-
**Lenny** (00:57:23):
Oh, dear.
**Laura Modi** (00:57:23):
... and get it out. I can see you quickly looking for the next question. Move away from the snot sucker.
**Lenny** (00:57:30):
No, this is great.
**Laura Modi** (00:57:31):
So I'll leave you with that.
**Lenny** (00:57:33):
Perfect. We'll just call the episode The Snot Sucker. So many options. Okay, next question. What's something relatively minor that you've changed in the way that you build/ship product that was minor but had a tremendous impact on your team's ability to execute and ship?
**Laura Modi** (00:57:51):
More recently, async work. Moving away from meeting culture and being able to be in a position where we can work async, whether it's one-hour sprint over Slack, make decisions and go back and forth, 20 people, and then everyone's made a decision by the end of the hour and we're moving forward.
**Lenny** (00:58:12):
Is there a tool that helps you do that or is it just in Slack? "Here's the question we're trying to answer," and everyone-
**Laura Modi** (00:58:16):
You know what? Every so often we try and introduce tools and then it's like we've over-processed this entire thing, when what we really just need to do is all just get our head into the moment we're in and brand it and get it done. So even though I think we've introduced some tools, I know we use some video ones as well. I'm a little bit removed sometimes from everyone working through these tools, but I'm in the Slack world the most.
**Lenny** (00:58:40):
Final question, what is your best advice for a soon-to-be parent, aka, me?
**Laura Modi** (00:58:45):
Hire a sitter who you love that you want to have on board every Thursday night and keep your date night with Michelle, whatever your date night is, and just don't worry about the price because the date is worth it, but just lock it in and do it.
**Lenny** (00:59:03):
We actually have a date night currently with another couple who has two kids, and so we could just maintain that. How early do you hire a sitter to do that, in their age?
**Laura Modi** (00:59:13):
Second week.
**Lenny** (00:59:14):
Second week. Okay, great. Not first week.
**Laura Modi** (00:59:16):
Okay. Maybe second month. It totally depends on how you guys are feeling.
**Lenny** (00:59:23):
No. Okay, that early.
**Laura Modi** (00:59:24):
That depends on how she's feeling, but I would say sometimes you just need to rip the bandaid and you need to go for it, even if it means the two of you are just going out for a quick meal and you're coming back, keep your date night.
**Lenny** (00:59:33):
Laura, this was as fun and insightful as I expected. I'm going to go try some Bobbie, I'm going to go by snot suckers. Thank you so much for spending time here. Two final questions. Where can folks find you online if they want to reach out, learn more, learn more about Bobbie, potentially, and how can listeners be useful to you?
**Laura Modi** (00:59:51):
Okay. Well, the first thing I'm going to say, how listeners can be useful. I am hiring a growth product manager right now and we are really focused on optimization. So now I'm moving away from everything I just said and I want a specialist who's really good at growth optimization. And how folks can find us, our website is hibobbie, H-I bobbie, B-O-B-B-I-E.com. And if folks just want to reach out to me, I would highly recommend just sending me an email, Laura@hibobbie.com.
**Lenny** (01:00:20):
And for the hiring position, how do they go apply for that and learn more about it?
**Laura Modi** (01:00:24):
Great question. I'm assuming it's on our careers page on the website.
**Lenny** (01:00:27):
Great. We'll make sure it's there before this all goes out.
**Laura Modi** (01:00:29):
Amazing.
**Lenny** (01:00:30):
Laura, this is amazing. Thank you so much for being here.
**Laura Modi** (01:00:33):
It's such a pleasure, Lenny. This is so fun.
**Lenny** (01:00:35):
It's my pleasure. And goodbye, everyone.
**Laura Modi** (01:00:37):
Bye.
**Lenny** (01:00:41):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [5/19] How to make better decisions and build a joyful career | Ada Chen Rekhi (Notejoy, LinkedIn, SurveyMonkey)

**Ada Chen Rekhi** (00:00:00):
It's a terrible outcome to wake up one day and be late career and feel trapped because you have a certain lifestyle or a certain expectations of the people around you that you have to go work this job, but then you look at yourself in the mirror and you're not happy going in there. I think that's a terrible trap that we should all try to avoid as we navigate our career paths and find the thing that's most optimal for us. Which is usually a mix of career success, but also meaningfulness and alignment in the work that we're doing with our values.

**Lenny** (00:00:36):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard [inaudible 00:00:42] experiences building and growing today's most successful products. Today my guest is Ada Chen Rekhi. Ada is an executive coach and also the co-founder of a product called Notejoy. In her coaching practice, she focuses on helping founders scale themselves. Before starting her company, she was senior vice president of marketing at SurveyMonkey. Before that, she started a contact management startup that was acquired by LinkedIn where she ended up leading LinkedIn's marketing efforts for their growth team. Two fun facts about Ada. One, she started her current company with her husband, which we chat about whether that's a good idea or not. Also, her brother is Andrew Chen of a16z fame. In our conversation, it explains how to make better decisions with a framework she calls Curiosity Loops.

**Ada Chen Rekhi** (00:03:20):
Thanks. I'm excited to be here.

**Lenny** (00:03:22):
So I've heard such great things about you from a lot of people, including a bunch of guests that have been on the podcast. And you also have this really great event diagram of maybe an ideal guest for the podcast. You've done growth. You've done products. You've started a company. You're also an executive coach to founders. So there's a variety of topics I'm excited to begin too. So thanks again for being here.

**Ada Chen Rekhi** (00:03:22):
Yeah, I'm excited to be here.

**Lenny** (00:03:45):
An interesting thing that I'll start with is that when we were chatting about what to focus on in our conversation, where you're emailing about this, and you did something that I thought was really interesting. You ran something called a Curiosity Loop where you pinged a bunch of your friends and asked them for input in this really structured way. So I thought I'd start there. Could you just share what this process is, so that we can learn how to maybe do it ourselves, this idea of a curiosity loop?

**Ada Chen Rekhi** (00:04:08):
A curiosity loop is essentially going to a whole bunch of people. In this case, I sent out an email very quickly to about 10 or 11 people and asking them, "Hey, here are nine topics for Lenny's Podcast. What are two or three of the topics that resonate with you and why?" And I got back such an incredible amount of information for about 20 minutes of work. I don't normally do this, but I actually showed you some of the anonymized feedback from people really just talking about what resonated and what didn't. So I came out of it just so much smarter, and curiosity loops are my method of doing so.

**Lenny** (00:04:42):
Often, people ask friends for advice on just like, "Hey, what should I do here? What can I maybe talk about on this podcast?" Your approach had a lot of structure to it. So maybe two questions just like, what is the actual structure to this concept? And then two, just people... You can often ask friends for advice, but you also don't want to over bug them with questions. How do you think about just not over asking everyone questions all the time, but all decisions you want to make? So I guess the question is, when do you use this versus just not?

**Ada Chen Rekhi** (00:05:12):
I think that there are heavyweight and lightweight ways to use this. So the heavyweight way was what I just exemplified by saying, I sent an email and I made a doc. And on the other side, I had all of this really interesting and rich data. The lightweight way to do this is really just make it your ongoing theme of what you're curious about as you interact with people. So maybe it's this thing where every single day as you talk to people, if you have a social topic, you might just bring up the same question over and over again and start looking for are there any differences or surprises in what people are telling you? One of the big reasons why I think curiosity loops are really useful is that it really fights the fact that there's a lot of bad advice out there.

**Ada Chen Rekhi** (00:05:54):
And it's not bad because it's not well-intentioned, but it's bad because it's not contextual. So when someone tells you to quit your job and chase your dreams, or they tell you to sit tight and grind through and build some experience before you go off and go start the company that you've always been thinking about starting, which piece of advice do you actually take? Right? A lot of it depends on your situation, what you're considering, what skills and experience you actually have, and curiosity loops actually are this way of really thinking about how do you make your advice contextual. So I'll break it down a bit in terms of how I think about structuring it. So the first piece of a curiosity loop is really just thinking about asking a good question. In the time when I was working at SurveyMonkey in the past, I had this opportunity to spend a lot of time with the survey researchers, and we really talked a lot about what makes a question good.

**Ada Chen Rekhi** (00:06:44):
So in this case, a question's good if it's specific, if it solicits rationale, and it's not biased. You don't want to start a question with, here's what I think because people have this tendency to want to please you or to agree with you. So a good example... Well, let me start with a bad example of a question. A bad example of a question is, what should I do with my career next? It's just such a poorly formed question because it's really vague, it's not specific. It puts a lot of cognitive load on other people, and the output that you're going to get from it is probably going to be similarly bad. Garbage in, garbage out. A better example of a question might be something like, "Hey, you know me. I'm a marketer. I've been thinking about doing this webdev thing. So my plan is to quit my job, do a webdev bootcamp and then go find a job elsewhere. Do you think that's a good idea?"

**Ada Chen Rekhi** (00:07:45):
There's just so much rich data to actually explore with that. First, are you suited to being a developer? Are webdev boot camps effective? What's the state of the economy in the hiring market right now for junior web developers? And that's an example of maybe a question that's a little bit more specific and gives people something to anchor on. So that's the first piece. The next piece is really around how do you curate who you ask? I think there are two dimensions of this. The first one is the obvious one, which is a subject matter expert who really knows something about the topic at hand. So maybe a webdev themselves, for my example question. Another one, and this dimension I think is really important, is someone who knows you really well and can provide insight on how well does that work for you. And then after that, you really want to ask the question. And this touches on what you said about how do you make it really lightweight?

**Ada Chen Rekhi** (00:08:41):
Ask the question in a way that really gets you a useful constructive answer, but doesn't put too much weight on people. So what I usually like to do is just make it very lightweight. So in your case, I said, "Here are nine topics. Can you pick your top two and tell me why you like them?" Some people went above and beyond and scrolled through and gave me feedback on every single topic. Some of them just said, "Here are my top two, and here's one I think you should avoid." I wanted to design it in a way where if you're a busy founder, you're a busy product person, which is the list that I chose for this curiosity loop, you would be able to sit down on your couch at the end of the night, read this interesting email and tap out a quick reply and give me that answer. Because the risk that you're running is either you're getting poor answers or you're getting a really low response rate because you've given them way too much cognitive load in terms of answering it.

**Ada Chen Rekhi** (00:09:35):
And then finally, to close the loop, I think a big piece of it is processing that information and then thanking them for it. So a big misconception that people have when they're really getting into this work of asking for advice or input from other people in the community is often that it's really one-sided. I'm asking you for help and you're getting nothing out of it. The reminder that I would have for all of you is that it feels really good to help someone. It feels really good to be heard and give input. And a big piece of that is, if someone comes to you and they said, "You gave me this advice, it changed my life. Maybe it's not at that level, but it really affected my decision and here's how it turned out. Thank you so much." That feels so good, especially if you only spent a few minutes giving them the input that enabled them to make a better decision.

**Lenny** (00:10:21):
So to summarize, I wrote these pieces down. The concept broadly is if you want advice on a decision you're trying to make, pick some friends and this is... I guess I'll go through the four things you just mentioned. And part two is actually pick the right friends. But one is just, come up with a question that's specific. As in just like, what should I do with my life? But more, should I take the specific role at the specific company? Figure out the people that know you well and maybe have some context on this decision. How many people do you usually email for this sort of thing? What's a number?

**Ada Chen Rekhi** (00:10:55):
I would try to optimize for getting at least three or four responses. It just depends on the nature of the loop. And then you think about what is your response rate. So if you're emailing really busy people that you don't know very well, maybe you would assume that you only get half of people to respond. If you're emailing people really well and it's really lightweight like, yes or no, and here's why, then you might just send out a handful.

**Lenny** (00:11:22):
Okay, awesome. So it's five to 10 people, broadly sounds like. Oh yeah, you want to make it really quick and easy. So it's like, here's 10 things, which of these two do you think I should focus on? So it's a quick ask as something you recommend, and then just thank them for it after you finish. Is that broadly the approach?

**Ada Chen Rekhi** (00:11:39):
Yep, that's the approach. One thing I want to note is that it's actually really useful for personal things as well. So we framed it in this professional context of, I'm trying to change a job. But one example that I have is when we had our daughter who's now three years old, one of the debates that my partner and I were having was how do we actually set up our estate planning in terms of if, God forbids, something happened to both of us. How should she inherit the state? And my partner was basically saying, "18 years old, she gets everything fully unlocked." I was saying, "Oh, well maybe 25." And we're at this impasse. And we actually just started to tell each other, why don't we, in our day-to-day conversations with folks that we trust in our family, people that we think are smart, that have kids ask people what their perspective is on it.

**Ada Chen Rekhi** (00:12:28):
One thing was really telling, no one out of everyone we asked said 18. So that really dragged my partner up. And then the other thing that was really interesting was that we learned a little bit about executive function and the research around it. So executive function, which is your ability to make decisions and plans and be thoughtful peaks at the age of 30, and it's all downhill from there. So bad news for people like me that are older.

**Lenny** (00:12:54):
And then I'm getting [inaudible 00:12:54] or game over.

**Ada Chen Rekhi** (00:12:55):
Yeah, exactly.

**Lenny** (00:12:55):
Just like I'm-

**Ada Chen Rekhi** (00:12:57):
But if you're thinking about 18, you are so far from your peak. So it dragged us both up in terms of what our set point was to make a decision like that. But we wouldn't have figured that out without a curiosity loop because it's too much work to dig through papers or research or whatever else to try to come to a good decision on it.

**Lenny** (00:13:14):
So the core lesson here is just, versus just emailing a bunch of people, asking for advice, which I imagine people often do, just what should I do here? Creating a little bit of the structure and even calling it a curiosity loop, I bet, helps people feel like they want to be a part of this and participate and help.

**Ada Chen Rekhi** (00:13:31):
Yeah, definitely. One of the things that I always try to do is I try to explain to people in my ask, here's why I picked you. So for example, I picked you because I really trust you to be a sound source of truthful advice and give me some feedback. So I really value that. Do you mind spending a couple of minutes and just giving me some thoughts on this?

**Lenny** (00:13:53):
And how often are you pinging people? If you're a friend of Ada, are you getting curiosity looped every week, or how often? What's your rate limit?

**Ada Chen Rekhi** (00:14:02):
I usually reserve it for bigger things. So probably quarterly or anything where I'm having a big debate, and I'm feeling really indecisive.

**Lenny** (00:14:12):
Awesome. It also makes me think about this idea of a personal board of directors, and this feels like an asynchronous approach to that concept where instead of a call every, I don't know, quarter month with small group, it's asynchronous. Here's an ask I have-

**Ada Chen Rekhi** (00:14:24):
Totally. Yep. I think this is really based off of the marketing concept of customer advisory councils. So when I was working in marketing and product at a startup, one of the things we would always have is a group of our top customers on DM, basically. And if we had really interesting product conflicts, we would actually just go ping a couple of them and ask them, "Hey, we're debating this. Do you mind just giving us your quick thoughts and telling us why?" And then being able to as a marketer come back to the product conversation and say, here is the literal voice of the customer and four or five different verbatims on what people think about this really enabled me as a marketer to have a seat at the table. And the insight and the helpfulness of that was really something I wanted to bring to my personal life as well.

**Lenny** (00:15:07):
That's really interesting. It's basically user research for your life. User research, you're told don't do what people tell you to do. I guess it's the same thing here, where it's just like, here's advice and then you end up making the decision for your own own life.

**Ada Chen Rekhi** (00:15:19):
Right. Right. Yes. That is the big caveat. Don't do what people tell you to do. Take it as an input and look for the hard feedback. Look for things that you strongly disagree with or are surprises to you. Because to me, I think these loops are more about looking around the corner and seeing if there's anything you missed in terms of the integrity of your decision making process.

**Lenny** (00:15:43):
Sweet. You said that people told you what we should not talk about. They're like, "Don't cover this." What was in that list?

**Ada Chen Rekhi** (00:15:50):
So I think there were two topics on the list. The first one, it was just how do you onboard and hire and bring people onto the team? And the feedback I got there was like, "There's just so many people who have done this. I'm sure you have some interesting concepts, but I personally wouldn't be that interested in hearing it. And that was really useful to me. And then the other one was actually just about being a woman in Silicon Valley and the experience of that. I actually had someone write, and you probably read this, Lenny, "No. Stay far away from this. There's no winning on this topic."

**Lenny** (00:16:23):
Oh, my God. Okay, let's touch on that topic rather than, it's going to be great.

**Ada Chen Rekhi** (00:16:28):
Yeah. So let's ignore the advice?

**Lenny** (00:16:29):
Yeah, let's ignore it. Before we get to that, I wanted to first talk about you. You gave me some homework also ahead of this chat. And the homework was around helping me figure out values and personal values for myself. I did the exercise. So first of all, can you just maybe talk about what this exercise was, and what the goal of it is? And then I'll share what I come up with.

**Ada Chen Rekhi** (00:16:51):
So the homework that I gave you is similar homework that I give to everyone that I work with in coaching, and it's this values exercise. It's this 10 to 15 minute exercise where you're presented with a list of words that might encompass potential values. It's pretty lightweight. You just go down the list, and you pick out all the words that resonate with you, and then we filter them down into groups of values, and then we filter them down into a stack rank and a list. And the output on the end is basically three to five sentences that cover what are the values stack rank that are important to you right now in your personal and professional life? And what I really like is, it's this internal scorecard of what really matters to you in your decision making process as opposed to the external scorecard of status, money, wealth, how other people perceive you, that often we feel really pressured by. So it's this great way to look back and see how well do decisions, or how well do my situations in life align with my values?

**Lenny** (00:17:53):
Sweet. And what I liked about it is, if someone were to be like, "Hey, come up with your values." I'd be like, "Oh, my God. I'm just sitting here thinking about words and concepts." And it was really helpful because it was basically multiple choice. Here's all the options across tons of categories, just keep picking and then helps you whittle them down. I ended up with six. I feel like that's one too many. Actually, I added a bonus one because it's just one that I really like. But should I read through what I came up with?

**Ada Chen Rekhi** (00:18:18):
Yeah, that sounds great.

**Lenny** (00:18:19):
So here's what my values, I guess. Choose adventure, stay optimistic, treat others you want to be treated. Classic. Keep getting better, act generously. And added one that my grandma taught me back in the day that has stuck with me, that had nothing to do with this exercise, but I just wanted to have on this list, which is, first do what you need to do, and then do what you want.

**Ada Chen Rekhi** (00:18:44):
I love it. What a great list of values and what stands out to me from that list too, Lenny, is this idea of achievement or status or success. A lot of the things that we talk about publicly, what your LinkedIn feed might look like don't actually show up in your values. And it must reflect in some of the choices that you've made in your life.

**Lenny** (00:19:04):
Yes, I hope so.

**Ada Chen Rekhi** (00:19:08):
Let me ask you this. Let's try to apply some of the values in real time as an experiment.

**Lenny** (00:19:14):
Oh, boy.

**Ada Chen Rekhi** (00:19:15):
If you think about a recent decision that you've had to make or a decision that you're facing coming up, can you share what that decision might be? And then let's try to apply the values to it to think about if you were living up to these values, what choice would you make and maybe some of the pressures you might feel to choose otherwise.

**Lenny** (00:19:37):
So an ongoing decision I have is I have all these opportunities of things I can be doing. Additional things I can be doing. The podcast, this actually was a good example of I never wanted to do a podcast because I really wanted to... Life is good. I was writing this newsletters, doing great, making a living, doing one great email a week. And I was like, "Why would I do anything more? This is good." So I've constantly resisted, I resisted the podcast for two to three years, and then eventually succumbed. And it was a great decision in the end. But now, I have other things that I'm trying to not do, but they're always pushing into my mind space like, a book for example. Of course at one point, and I paused that just so I could have more time for the podcast. So I guess the decision is just like, what should I say yes to versus say no to?

**Lenny** (00:20:26):
I'm looking at my values a little bit, and one of them is choose adventure, which you would think would be just do stuff, just try stuff out. But I feel like maybe it's just a missing bullet point here of, I just want to do less. I'm trying to take on less and do less and cut out and-

**Ada Chen Rekhi** (00:20:44):
That's really interesting.

**Lenny** (00:20:44):
... simplify. Yeah. Because there's just endless things I could be doing, and I want to spend time with my wife. And now, my new child is coming in a couple of months, if all goes well. So that's where my mind goes when you ask that.

**Ada Chen Rekhi** (00:20:57):
Yeah. Yeah. And then maybe if you were to decompose adventure, what adventure actually means to you and you go into that word list, you might actually just find that some of these opportunities like writing a book, at some point, it doesn't feel like an adventure.

**Lenny** (00:21:13):
Right. That's so true. The beginning of it is an adventure. And then that's such a good point because yeah, once you start a thing... Something I always say about this content creation life is like, it's easy to start. It's hard to keep it going, and it becomes just this treadmill of just, you have to keep creating awesome stuff basically for the rest of your life. I don't know how you get off the treadmill. Not that I'm complaining, but that's just a reality of this path. So that is such a good point that it becomes not adventurous very quickly. So that's really interesting.

**Ada Chen Rekhi** (00:21:13):
I love it.

**Lenny** (00:21:42):
I guess the other thing is just, what's a cutoff? What am I... I do a bunch of angel investing and so I'm thinking about just stopping that for a while just so I get up more time with my new child and just carve out things that maybe aren't as essential.

**Ada Chen Rekhi** (00:21:55):
So on the values exercise, I think what you've done a really good job of is just really delineating, here are some examples of choices that you have to make. I think that there are some points in our lives where writing a book, it just seems really obvious. It's good for your career. It's the next level in terms of where you go from the community, the newsletter, the podcast and getting to that next level. But where I think there is value is these lists of values can help ground us from those obvious decisions. So in my life, to share a mini example of this, there have been a lot of cases where the next obvious step for me might be to go an executive at a big company and to go chase the dream and continue on the latter climb of my career.

**Ada Chen Rekhi** (00:22:40):
As I've examined my own personal values, a big piece of it has really been around prioritizing relationships and really pursuing knowledge and growth on my own terms. And things like independence and autonomy have started to creep up over time, especially once I started a family. It became very clear to me that sometimes the external scorecard of what people think you should go do is very much an opposition of what I actually want to do. Even though it might be objectively better, depending on what scorecard you actually use, I would actually be less happy with some of those outcomes. So I think values are this really nice useful tool to think about how do you make better decisions again to maximize for your own alignment with life.

**Lenny** (00:23:23):
That's such an important point. It connects back to the course that I taught and then this potential book of, it just feels like an obvious thing I should do. It was great, but it just didn't bring me joy. And other things bring me more joy. So it was a really good reminder of just like, do I really want to be doing this, or is this just a thing that feels like a smart thing to do but maybe isn't for me psychologically? So I love just the reminder of coming back to values as a lens to decide if you want to do a thing versus just, what are people telling you? Smart or... Which just feels like the natural thing to do.

**Ada Chen Rekhi** (00:24:00):
Yeah, and it's really self-aware of you too. I think too. Cut it off because you start realizing that you're doing this course, and it's not giving you energy or it's not quite the right thing. It's really hard to say no to things.

**Lenny** (00:24:12):
It is. It is.

**Ada Chen Rekhi** (00:24:12):
And I don't think we focus on that enough.

**Lenny** (00:24:14):
Yeah, I've learned how to do that better. I have all these auto templates of ways to say no in different ways. Actually, ChatGPT, somebody's tweeted this that it has all kinds of good suggestions. If you could ask it, how do I say no to my manager who wants me to prioritize a feature? And has all kinds of clever words to [inaudible 00:24:30].

**Ada Chen Rekhi** (00:24:30):
Oh. Yeah, that's a great use for it.

**Lenny** (00:24:32):
The other thing that I realized as we were going through this exercise that I imagine you find also is when you come up with an initial set of values, I was realizing I maybe another value of just keeping things simple, simplifying. And I imagine that's part of the process of narrowing in on what's important to you is you take this first pass and then you try to use it in making a decision and then you realize, oh, there's this other thing that's really important to me and that updates your values.

**Ada Chen Rekhi** (00:24:57):
Yeah, I think you could definitely use that process to force yourself to make a stack ring and to be really clear, and also change it. Change it. It's yours. So change it over time as it suits you.

**Lenny** (00:25:08):
All right. It feels like there should be a curiosity loop AI bot with your values that you email, what should I do with this decision? And then it's like, oh, you think simplicity is great? You should not do this.

**Ada Chen Rekhi** (00:25:20):
The next big idea.

**Lenny** (00:25:22):
There we go. Somebody build that. Okay, so it's funny we went into reverse interview, and then I have to asking questions again. So let's do this. You talked about your career and how you resisted these shiny object opportunities to focus on the thing that you were excited about and wanted to do. So maybe a couple questions there. One is just early career advice. You coach a lot of founders. You had a really in incredible career doing all kinds of interesting things. What have you learned about what works best for optimizing in your early career?

**Ada Chen Rekhi** (00:25:55):
My early career was pretty wild. So I had a really fast run. Over the course of seven years, I went from my first job, which was basically this entry level sales job at Microsoft, working on Microsoft adCenter to SVP of marketing at SurveyMonkey, leading a global team. And when I reflect back on what works across my early career, it really comes down in a nutshell to this career concept of explore and exploit, which actually sounds dark now that I'm saying it out loud, but-

**Lenny** (00:26:27):
Yeah, sounds great. I love it.

**Ada Chen Rekhi** (00:26:29):
Explore and exploit, if you're familiar with it from growth background, is really just around what mode you're in. You're either in a mode of explorer where you have a bunch of unknowns and you're testing to see whether or not you like it, how well it works, whether or not it fits for you. Or you're exploiting, where you actually have found something that's really rich and really deep and then you're just trying to get more. And when I think about explore and exploit for early career, it's all about exploration. You really haven't experienced that much, but you're doing it with a thesis. You're doing it with that growth mindset where you have a hypothesis. So coming out of school, my first job was at Microsoft. I was at adCenter. The big thing I learned from the 367 days that I was there was that corporate life at that point in my career was just a little bit too slow-paced for me, and I was really hungry to go do something else.

**Ada Chen Rekhi** (00:27:19):
But I also learned quite a lot about marketing and advertising. And I had the suspicion that not only did I want to try something smaller, but I also wanted to try marketing. So I moved to this series a startup where I had to sample my desk on the first day called Mochi Media. And I was in a marketing role at a startup and had this great run there over three years, where I learned all kinds of things and even tried product at some point. What I learned from that experience was then I love marketing, games was pretty fun and being in a smaller team was really dynamic. It was this choice on, do I exploit and go deeper into the industry or do I explore more? I was 23 at the time, so I decided I have so little to lose, let me continue exploring. My big thesis was, let me try being a founder. So then I founded Connected, and Connected was this personal CRM that's a little bit like Clay.

**Ada Chen Rekhi** (00:28:14):
If you've seen Clay now recently, in terms of how do you do a better job of managing and building your professional and personal network and-

**Lenny** (00:28:20):
Yeah. It's a beautiful product.

**Ada Chen Rekhi** (00:28:22):
Yeah, it's a beautiful product, much more beautiful than what we built at the time. It was such a great learning experience to discover what it was like to be a founder of a company and an entrepreneur. My personal learning out of all of those things was really just that I was continuously optimizing that I loved marketing. I loved being a founder. I really like small teams. There are pros and cons to this corporate life, where maybe things are really slow paced, but the scale is really important. So that was really what carried me through a lot of my early career. After Connected was acquired by LinkedIn, I moved into this exploit mode.

**Ada Chen Rekhi** (00:28:59):
So I was at LinkedIn for a period of time while I was investing, and I really wanted to be intentional about the time that I spent there in terms of how I wanted to exploit it. So unlike a traditional path where you're really focused on trying to get the biggest title, a big team, set yourself up to run a big org, my role at LinkedIn was really explicit. I even told my manager this when I first came in, "I'm here to learn to be a better founder." So there were a lot of things when I started connected, which I didn't know how to do very well, I didn't understand growth. I was fair to middling at pricing. I really didn't understand how to build a subscriptions business and how to price it. So if I can make my LinkedIn experiences match to that, that would be a huge win for me independent of promotion, or compensation or a whole bunch of those things because the plan afterward is actually to go off and start another company.

**Ada Chen Rekhi** (00:29:53):
So I managed to get into this great role leading gross marketing for LinkedIn, working with their growth team from a hundred million to 200 million members, read every experiment brief that I could, spent a lot of time with the team, really understanding their process, and then shifted into the subscription side where I worked on LinkedIn subscriptions and ran their sales subscriptions business at scale through the online channel. And saw how all of those pieces and worked together from a financial planning and analysis stage to all of the optimizations that they did. It was just such a rare opportunity, but I wouldn't have gotten those opportunities if I just let them promote me or I followed a strategy where I was just focused on trying to get the biggest title.

**Ada Chen Rekhi** (00:30:35):
Instead, I was focused on those learnings and those experiences. Ultimately, the fact that I was a startup founder. I had big company experience. I had growth experience, and I had subs experience. And I was a product marketer. That was actually the winning combination that caused SurveyMonkey to send me a LinkedIn InMail, start a conversation and ultimately bring me in as their head of marketing at the age of, I think I was 27 or 28 at the time. Because their rationale was, you have all these experiences that we really need and you don't have the management experience, but we have plenty of that. We're happy to teach that to you.

**Lenny** (00:31:10):
I really like this framework. I've never heard it described this way. Explore and exploit connects a lot with what I always recommend which, early on, is to optimize for a variety of experience so that you can figure out where you actually have a good time and what you're interested in versus getting stuck on the first thing something. I don't know if you'll have an immediate answer to this, but I'm curious. Many people don't know how long to stick with something that maybe doesn't feel good but may lead to something. Like, someone may be in a job right now, or just like, "I really don't like this job, but I feel like it'll lead to something great. And I don't want to give up too quickly." So I guess the question is, what are heuristics that tell you to stick it out and stick with something that you think will lead to something great versus hold the recording and get out?

**Ada Chen Rekhi** (00:32:01):
That's a great question, and it's a really tough one that is contextual on the person that you are. So one of the things that I like to share is this idea of, it's a little gory, don't be the frog. So if you are familiar with the story of the frog, it's this idea of boiling the frog. So if you take a frog, and you throw in a pot of boiling water, it'll jump out. But if you take a frog and you put in a pot and you increase the temperature degree by degree by degree, the frog doesn't notice and before it knows, it's boiled alive. And how I apply this to your question to come back and circle back to it is that, it's really easy to be a victim of inertia. It's really easy for all of us to be the frog where there are little things that make us uncomfortable, and we sit with them or we think, "Gosh, it'll get better. The next manager will get better. I'm always one conversation or one promotion away from getting to that next step."

**Ada Chen Rekhi** (00:33:02):
But you really have to be aware of your surroundings. You have to be aware of which way is the direction of the temperature of the water trending. That's what makes the advice really contextual. I really look at it from the lens of learning. What can I learn here, and how am I growing and developing? So there might be an argument for you to stay at a job for two decades. If it turns out that every single day you're being really challenged, you're learning new things, you're deriving a lot of meaningful enjoyment out of your work and you're this happy frog that's hanging out, realizing that things are good and the temperature is not rising. But there are also situations where you might encounter just some really hard walls, where you don't get along with the thesis of the company. You don't agree with the direction of the company that you're in.

**Ada Chen Rekhi** (00:33:53):
There are fundamental aspects of the role which are limiting to you or you're not learning a lot, frankly. I think that happens a lot, where you providing a lot of value and doing a good job at a company, but you might not be learning things that stretch you and grow you to achieve your ultimate goal. When you are aware of that learning, I think that's the point at which you have to say, "How do I change that? How do I be an agent in my own career and make a difference in that?" And it doesn't necessarily mean that the strategy is to quit your job and do something catastrophic, and then go do something else, take a course or sign up for something new. It might actually mean a proactive conversation with your manager or the leadership to say, "I love what I'm doing here, and I would also like to learn a little bit more. And here's what I'm interested in."

**Ada Chen Rekhi** (00:34:44):
And then try to find a way to either land the right projects. So in my case, it was really growth and subscriptions, that experience that I really wanted. Let's say, you hit a blank wall there, even take it as a gift of time, which is great. I'm not going to be able to get this from my company, but now that I have this extra time because I'm so optimized at this job, how am I going to choose to use that time? And it might be around building relationships with some of the key people at the company or learning something new on your own time that you can leverage in another way.

**Lenny** (00:35:17):
I like that. Make the most of the time, even if it's not the best opportunity for you. Also love the frog boiling metaphor.

**Ada Chen Rekhi** (00:35:23):
Little gory.

**Lenny** (00:35:24):
No, it's great. So I guess the lesson there is think about are you that frog being boiled right now and think ahead, is this going to be the end of the-

**Ada Chen Rekhi** (00:35:24):
Right. Keep an eye on your environment and which way is it trending?

**Lenny** (00:35:35):
Yeah, the temperature on the thermostat in your office. The other thing this makes me think about is, it's so easy to get caught up in making your resume look amazing and continuing to just like, "Oh, if I get this next role, my resume's going to look so great." And this other logo and this cool title and role. I find that just like, you do that long enough in your life, you end up... You retire, and then you die. Life is that resume. Right? That is your life, you're living, and there's not going to be a point at which you have to realize, okay, I've done all the things to make my resume. Also, I'm like, "What do I actually want to do? Am I enjoying this?" Because it'll never end. You're never going to end trying to make a better resume and a more awesome background for yourself. Do you experience that with yourself or other people you work with of just over optimizing to make an awesome series of roles and logos and then forgetting, do I actually enjoy any of this? What am I doing?

**Ada Chen Rekhi** (00:36:31):
I have experienced that personally a lot. I think that it may be a generational thing or it just may be my background, but having grown up with the Asian tiger parenting, it's very focused on logos or certain accomplishments or certain achievements like, going to an Ivy League school, working in a company that someone's heard of, being able to have a certain title. At a certain point, I bailed out a bit and I really started to think about who am I trying to please and optimize for? That values exercise that I had you do, Lenny, is actually a big piece of that. So I probably took it for the first time over a decade ago, at this point. I looked at those values and I said, "Well, if I draw a straight line from where I am right now and just extend it forward and play the rest of the movie as it plays out, given the current plot line, how well does that optimize for those values?"

**Ada Chen Rekhi** (00:37:27):
That's great. My parents might be happy about my resume or other people might look upon me in a certain way because I've managed these achievements, but in my day-to-day life, what really matters to me, what's really meaningful to me, only some of this stuff really matters. So getting very intentional about that and being clear about who your audience is as you navigate your career. I think it's a terrible outcome to wake up one day and be late career and feel trapped because you have a certain lifestyle or a certain expectations of the people around you that you have to go work this job, but then you look at yourself in the mirror and you're not happy going in there. I think that's a terrible trap that we should all try to avoid as we navigate our career paths and find the thing that's most optimal for us, which is usually a mix of career success, but also meaningfulness and alignment in the work that we're doing with our values.

**Lenny** (00:38:25):
**Ada Chen Rekhi** (00:39:40):
Really just a career opportunity. And it was this step where I could do something that was, at the time, really high profile and really exciting and felt great, but also involved demanding travel and grueling hours. And wasn't in a space that I was excited about, but it looked amazing on my resume. And I was talking to a friend about it, and they actually introduced me to this values exercise to say like, "Ada, go through and fill out this values exercise, and apply it to this job." What I realized at the time, after I did it, was that my top three values, the things that I cared about this job would categorically just fail at because I would be gone all the time, in pursuit of glory that I didn't really care about. Instead, my current path at the time was something that if I persisted in, it would actually be able to potentially fulfill all of those values.

**Lenny** (00:40:36):
It reminds me of a friend who has this metaphor of this ego monster sitting in the corner of the room that's always yelling at them, when they're... To do the thing that's impressive and take on the really cool role, and just get an awesome title, and do something really impressive, that's just like yelling at them from the corner. And my friend's just learned to just like, "Okay, that's the ego monster pulling at me. I don't have to listen to that. Doesn't mean I'm going to be happy if I listen to this guy." And that's been really helpful to my friend just to disassociate that part of the brain.

**Ada Chen Rekhi** (00:41:10):
Yeah. The ego monster is a great way to put it. I use something that Warren Buffet has talked about, which is inner scorecard versus outer scorecard.

**Lenny** (00:41:19):
Tell me more.

**Ada Chen Rekhi** (00:41:20):
So he talks about how there's an outer scorecard, which is how the rest of the world evaluates you, how you keep score in terms of external factors. So top 10 lists, wealth status, title, maybe things that people really care about. And then your inner scorecard is things that actually matter to you, how you spent your day, how good of a person you are. Did you have an adventure today, Lenny? Were you kind? And there are a lot of things that maybe are in opposition to each other. So really thinking about did you win at the cost of kindness? Did you succeed at the cost of losing access to the adventure that you really wanted? I think really thinking about it in that lens helps you trade off against some of that external pressure and the ego monster.

**Lenny** (00:42:11):
This might be a good segue to chat about coaching. I imagine a lot of people listening to this like, "Yes, I want to do that. I want to measure myself according to my values and check in on this. And am I doing the wrong path?" It's hard to do just on your own, I find. And I think that's one of the benefits of an executive coach. So maybe we just chat about what should people know about coaching and getting a coach, and does everyone need a coach and how to think about the idea of getting a coach at some point in their career.

**Ada Chen Rekhi** (00:42:42):
I'll have a hot take on this, and it's something that I share to people when I talk to them about coaching. But my hot take is that for the vast majority of people, they probably do not need a coach.

**Lenny** (00:42:52):
Great.

**Ada Chen Rekhi** (00:42:54):
And what I often push people on is if you're thinking about getting a coach, which is usually an indication that they have a feeling of being stuck or they have a problem that they're trying to solve, I ask them, "What are your goals when it comes to coaching? Roll it forward six months, what have you gotten done in your coaching experience. What have you accomplished, and you're just... It's like, a home run. And then look at all of the potential alternatives in terms of how you could have spent your valuable time and often pricey fees to achieve the same goal, but maybe in a better way." The thing that people don't really think about is if you're looking for a mentor, a coach is actually a terrible mentor in some ways because it's this one person's opinion. It's actually way better to run a curiosity loop, for example, and get the benefit a couple different minds on a specific topic and hit their wheelhouse of things that they know about. Than to go ask one person, what do you think I should do in this situation?

**Ada Chen Rekhi** (00:43:58):
If you're trying to learn about a topic in a really robust way, let's say you want to learn about growth, maybe you should take are Reforge course and get access to all of the resources and the insights of the EIRs and the growth advisors that Reforge and get an overview and survey of the landscape instead of one person's experience and the handful of companies that they might have worked with. Likewise, if you're just feeling like you're a little emotionally overcome, I think coaches are this great resource around that, but it's actually better to pay it forward and build a tribe and a community of people around you that you can rely on for support because that's the thing that lasts you for years and years.

**Ada Chen Rekhi** (00:44:38):
So one of the first things that I do when people talk to me about coaching is I challenge them and say, "Have you explored all of these other opportunities first, and do you really need a coach? And is a coach actually the best option for you?" Like an anti sell, just so that they know what they're getting themselves into because I don't necessarily think that it's useful for all things, even though it can be helpful.

**Lenny** (00:44:59):
And then when do you find that it's actually important and valuable and something someone should try to get?

**Ada Chen Rekhi** (00:45:06):
I wouldn't be a coach if I didn't think that it wasn't important and valuable. I think that in certain contexts it can be super helpful. So when you have situations where you're in a state of hyper growth, and you need very accelerated learning, and you need someone who can point you in the right direction, I think coaches can be really helpful. So I work with founders for example, and founders are just in this unique state where everything is chaos. They have no structure. They don't know what their jobs are. They have fully justified imposter syndrome where no one in their right mind would objectively have hired them for the position that they're in. There's really intense highs and lows. So for a founder, it might make a lot of sense to get a coach because they have to learn a lot of stuff really quickly, and time is of the essence.

**Ada Chen Rekhi** (00:45:54):
So a coach might be a really helpful shortcut for them to get there. Related to that, I think it's also really helpful on sensitive topics. So there are a lot of things that we want to be coached on where either it takes a lot of time for us to work through and progress because it's a long-term project, for example, or it's something very sensitive. People issues and interpersonal conflicts. Coaches can be especially helpful in those cases because it's this really safe space for you to work through things, but also have someone who's really rational to help guide you through them with potentially some frameworks and extra advice.

**Lenny** (00:46:30):
So I had a couple coaches in my career and what made me feel like I should pursue that is when you think about a sports athlete or, I don't know, athlete. No one does not have a coach, the best athletes have coaches and they get great because they have somebody helping them get better. It's not just like an accident. They don't just learn on their own. It just makes you realize that other people in their profession that have a coach helping them out are just going to be more successful because innately, they have someone helping them learn how to do the job better. So that made me realize, man, I should probably get a coach to help me out with stuff. Even though there wasn't anything super specific, I'm like, "Oh, I need to fix this problem." It was just like, wow, this just intellectually make sense. So it was actually really important and transformative for me.

**Ada Chen Rekhi** (00:47:21):
If you go to my site, I actually have this guide that I've written over time on both my take on how do you find a coach, and the TLDR there is actually that I strongly recommend to everyone. If you're thinking about getting a coach, talk to two or three different coaches. And really get a sense of their vibe and how well you get to know them. It's surprising because I did this piece of research, which I also wrote about, and we could link to, but I talked to over 80 people about their experiences with a coach. I talked including coaches, including founders, including executives and there's this shocking data point in there where half of people that founder their coach literally went with the first coach that they talked to. It's that your buddy said, "I work with this great coach." And then you go and you hire your buddy's coach.

**Ada Chen Rekhi** (00:48:08):
I think that's a totally fine way to go find a coach, but I would actually really just urge people to talk to a couple because what works for your friend may not work for you. And just being able to see some of the variance in terms of the style and how people get along, I think that can make a huge difference in terms of this reflection of how do you learn best? When you think about acquiring a new skill, do you love structure? Do you not like structure? Do you like it when someone really teaches you and walks you through specific examples, or do you frameworks? Coaches come in all of those different flavors. So I think it's really worth it to explore before you get into such a deep relationship with someone, just so that both people can feel really sure about it.

**Lenny** (00:48:51):
What's one thing that people may not think about or just something that you find really important that maybe is unexpected when you're looking for a coach?

**Ada Chen Rekhi** (00:49:00):
I thought that credentials and the relevant experience of the coach was a huge factor in terms of how you should go about your coach selection. But part of the interviews that I did was talking to founders that had had experiences with coaches and asking them to reflect back, and these founders and executives when they thought about it, they actually said so much more about, it was actually this amorphous sense of vibe with the person, how safe you felt with them, how deeply you would explore with them, and how well they got you, and remembered the pieces of the conversation and help you put it together. Way more than potentially some experiences that they'd had, where this person had the perfect background, but they just never really connected on that level. So it was unintuitive to me that there was such a big piece of it that was around personal connection, which is why I've now pushed people to try to talk to a couple different people.

**Ada Chen Rekhi** (00:49:55):
And then the other thing which comes back to the sports coaching analogy is that there are different coaches that are really good at different things. So just like how, if you're a star tennis player, you might actually have multiple coaches working with you, maybe an offensive coach or a defensive coach or working on a particular swing. It actually makes sense when you're really performing at a high level to consider having coaches that work with you on shorter term basis to really just work on your speaking or help you with getting into your groove on writing or help you achieve a specific goal. You shouldn't think about it as this long-term commitment to stay with one person, but instead more choosing off of a menu and thinking about what goal are you trying to achieve right now?

**Lenny** (00:50:39):
Does anyone ever get multiple executive coaches that... I like how we went from, you don't need a coach to maybe need a month [inaudible 00:50:46] hamstrings.

**Ada Chen Rekhi** (00:50:48):
Yes. I know of multiple people that I've talked to, usually CEOs, that either have had a series of coaches or have multiple coaches. It makes a lot more sense, Lenny, when you think about someone who's getting a pitch coach because they're about to get into fundraising.

**Lenny** (00:51:04):
Got it. Right. Niche skills.

**Ada Chen Rekhi** (00:51:05):
Right. For niche things because they're about to enter a process or someone who's trying to get into a writing coach-

**Lenny** (00:51:11):
Got it. Yeah.

**Ada Chen Rekhi** (00:51:13):
... in addition to some of their executive and leadership work that they might be doing.

**Lenny** (00:51:17):
Okay. That makes sense. I love it. I'm going to get four coaches. One for everything I do

**Ada Chen Rekhi** (00:51:23):
A podcast coach.

**Lenny** (00:51:23):
Podcast coach.

**Ada Chen Rekhi** (00:51:25):
A newsletter coach.

**Lenny** (00:51:26):
A writing coach, and a-

**Ada Chen Rekhi** (00:51:30):
Yes. And then a parent coach. Don't forget that.

**Lenny** (00:51:30):
Parent coach. A job board coach, and then just a life coach. Okay. I'm on it. Okay. So let's touch on the thing that your friends said we shouldn't touch on, which is being a woman in leadership in Silicon Valley. I guess I'll just frame it simply. Imagine there's many young women listening to this podcast, and many may dream of a career like yours, all the things you've shared. What advice do you have for young women just starting out in their career hoping to find a similar path?

**Ada Chen Rekhi** (00:52:03):
This is a really delicate subject, and it's interesting because when I try to decompose why people gave me the feedback they gave me on this topic, I think a big piece of it is just that you want to have respect for the inherent challenges of being a non stereotypically great fit for leadership roles or certain career success roles in Silicon Valley and acknowledge that. And also try to push for some of the agency of the things that you can do. So I'm going to start with just this quick story about someone that I worked with who's given me permission to share this, in a coaching context and then back out. So I was working with a seed stage founder, and she's so smart. She is really dynamic, very, very focused, really, really great at taking feedback and actioning it. She's one of those people that is just stellar, and I have no doubt that she's going to make a huge dent in the universe.

**Ada Chen Rekhi** (00:52:58):
We've been working together on Zoom for a couple of months, and I'd built this great respect for her competence as an operator, and the way that she thought and took apart problems and then acted on them. And then we met together for the first time in person at lunch. I feel almost nervous talking about this here. The disparity between my sense of who she was as an operator and how she came across to me initially at this lunch was really striking in that it was a weekday lunch and she was dressed as if she was hanging out on the weekend. So old T-shirt, hair back and in a claw, bra straps were showing. She was just incredibly casual in terms of her physical appearance. It took me almost like a little bit of a step back to reevaluate and think, "Oh, this is the same person, but she actually just presents so differently.

**Ada Chen Rekhi** (00:53:54):
So then I took the step after we met and I gave her that feedback in one of our next coaching sessions where we invited each other to give each other feedback. I shared a lot of my impressions with her and I told her, "I respect you so much as an operator. I want to tell you that in the physical meeting that we had together, there was this disparity on how I would've potentially perceived you when I first met you in person versus what I've come to know about you from the months that we spent together."

**Ada Chen Rekhi** (00:54:27):
Her reaction was like, "Oh my God, Ada. No one has ever connected the dots for me. Thank you so much. It has never explicitly been told to me that some of these elements which you describe, and they're very easy for me to fix and I'm motivated to fix them, are things that might actually trigger certain impressions or biases. No one's actually said it to me before, and I'm about to go into fundraising. It's actually super helpful for me to hear this, that these are controllable elements of my physical attire or my appearance that might actually just affect the way that people perceive me. And then it gives me this extra hump to get over, in terms of getting to this point of credibility for them to see me as a seasoned operator that I am." She took it so well. But what was interesting about it was actually that she'd made it all this way in her career. She'd even raised funding, and no one had ever given her this feedback.

**Ada Chen Rekhi** (00:55:21):
So this is, I think one of the big challenges of being a woman in Silicon Valley because getting to an executive role or getting to a funded founder role, it's like an Olympic level sport. You have to get all the way through the funnel and become one of the few that are really chosen to do that. But the difficulty of this game is that no one tells you the rules of the game. You actually don't really know what are the rules on how to get intros or give intros. What's the right way to follow up? What are the impressions that people have about you? It turns out that in a career context, it's so unsafe for your manager to turn to a young woman on the team and say, "Here, let me give you feedback on your physical appearance, and how it affects your competence and how you're perceived in the workforce." That the vast majority of them will just never do it because there's no winning, which is similar to the feedback that I got.

**Ada Chen Rekhi** (00:56:16):
SO where I lean in is to say, we're not powerless and there's something that all of us can do if we're in a position where we feel like not even about being female, it's about being perceived as too young or too old, too tall, too short, not the right race. Whatever reason that you feel people may be disqualifying you or not seeing you. We're not powerless, even though this game is rigged. We can study the game, we can help each other, and we can actually start to call out some of those rules and then find ways around them. In this case, for the founder in this example, she really turned to her friends and did a mini makeover and amped up her appearance.

**Ada Chen Rekhi** (00:57:03):
And she came back and she reported, "A lot of people have been giving me really positive feedback, that something about me feels more confident and more energetic, and they can't figure out why." But actually, she was getting a ton of people noticing that something was really different about her in a positive way simply because I was in this great position as her coach to give her some of these pieces of hard feedback that she had never heard before. So it's really on us to try to find those and then try to adapt ourselves to play that game if you want to play at that level.

**Lenny** (00:57:33):
How nervous were you giving her that feedback?

**Ada Chen Rekhi** (00:57:37):
I was so nervous. I actually almost didn't do it, and then took a deep breath and then decided, what the heck? I think she's great. I think she would really benefit from doing it and I gave it. Even in a position where I'm in a relationship with her where I can have that trust, it was super, super difficult. So I can only imagine how hard it is for people to give feedback like that in another context, but how else are people going to hear it?

**Lenny** (00:58:03):
I think there was a company culture where they talk about how you're being selfish, not giving someone hard feedback because you don't want to be stressed or risk causing damage to your own reputation. But you're not helping them. So it's a really interesting insight of just like, don't be selfish. Do something that's hard when you think it's going to help someone else.

**Ada Chen Rekhi** (00:58:26):
Right. But I think on the topic of being female or on the topic of physical appearance or maybe even some of the topics around being an immigrant, if you're in a position where you can give that feedback, I think the struggle is often will it be well received? And that's where the feedback comes from me from the curiosity loop for this piece, which was there's almost no winning in doing it because the upside is something great happens for them. But there's just so many downsides to giving advice or giving someone input like that the default course is just to avoid. But then that person never learns the rules of the game.

**Lenny** (00:59:05):
Yeah, absolutely. It makes me think also a little bit about Radical Candor, basically. I don't know if you read that book, but

**Ada Chen Rekhi** (00:59:14):
Yeah, Kim Malone Scott, I think.

**Lenny** (00:59:16):
Yeah. And Sheryl Sandberg had a similar story where she... I think Sheryl Sandberg gave her a really hard feedback and she didn't take it that well, actually. I think you did a better job, or your friend actually took the feedback and did something with it. I think the whole book was just like, "Hey, I actually do this where people actually listen." I think the framework is, you got to communicate that you care deeply about that person, but you want to challenge them directly also at the same time.

**Ada Chen Rekhi** (00:59:40):
Yeah, it's a great story. I think Sheryl Sandberg took her aside after one of her meetings and basically told her that, "If you say um, it makes me sound stupid." And she didn't take that well, but at the same time, later on in retrospect, she reflected that it was so brave and so helpful of someone like Sheryl to go give that feedback because there's a real cost to it. There's real risk to it.

**Lenny** (01:00:09):
Any other thoughts or advice along these lines that you want to leave people with?

**Ada Chen Rekhi** (01:00:13):
The biggest piece of advice that I have that comes to mind is really around trying to be really thoughtful on something I call eating your vegetables. So I have all these branded terms for things, but-

**Lenny** (01:00:13):
That's great.

**Ada Chen Rekhi** (01:00:30):
... eating your vegetables is really this idea around how little kids don't really develop an appreciation for vegetables until they're 10 or 12 exposures in. So the researchers say, "Expose kids to vegetables 10 or 12 times, even if they don't like it, because that's what it takes to get someone to like something." So when I think about career strategy and when I think about improving yourself and I think about how do we look for some of the hard feedback, eating your vegetables is this really important component of it because it's about how do you identify dislike for something because you're bad at it or you're new to it or you've never done it before, compared to genuine dislike where you've done it and you really don't like it. So to make it a little bit real, if we think about the world of podcasts, Lenny, I think it's something like 75 or 80% of podcasts never make it past the first podcast.

**Ada Chen Rekhi** (01:01:25):
You have to do things a number of times before you really develop an affinity for it. Because the first time you do it, you're just not going to be good. So my mini example of that was early on in my career, I was really awkward and not very good at networking. I moved to Silicon Valley and one of the things that people told me about Silicon Valley was that it's really important to grow your network. It's all about the people. Totally agree about that. However, I didn't know anyone, and I didn't really understand this networking thing. So I gave myself this rule where I had to go out once a week for a couple of months, go to an external event, and I would count out 10 business cards. And the rule was, I had to hand out all 10 of those business cards by introducing myself to people that were new, and touch the back wall of the venue of that event and then I could leave.

**Ada Chen Rekhi** (01:02:15):
I did that a couple of weeks in a row, and it was horrible. It was really awful, but it got a lot better. What I realized about that was actually two things. One that, as I started going and I saw familiar faces, it became a lot easier for me to just break in and meet people, just by seeing who people I knew already were talking to. And then second, I got a lot better at just breaking in and introducing myself and understanding how this intro and networking thing worked in terms of meeting people and moving through a crowd. Some of those relationships now from that first job and those first couple months are pretty much foundational to the network and the people that I know today. So it really paid off for me because I really focused on eating my vegetables and powering through that initial discomfort.

**Ada Chen Rekhi** (01:03:00):
So to title back when it comes to thinking about how do you progress in your career, think about the obvious things that maybe you're not very good at, and then think about what are some of the actions that you can do to be very deliberate and intentional about practicing it to get to the point where you have some faculty at it because it's just really important in some cases to be good at certain skills.

**Lenny** (01:03:24):
I really like that. I also really like the physicality of that rule of touching the back wall. It just forces you to go through a room, and I just escape really quickly. Is there any other examples of things you've seen or recommend for doing things like, eating vegetables? That was a really good example of just forcing yourself to go to a networking event, touch the back wall. Is there anything else, any other examples that come to mind that you've recommended or found useful, doing something really hard that was really impactful?

**Ada Chen Rekhi** (01:03:53):
Yeah. So there are actually a few of them. A lot of them around content creation because it's just so hard. So one of them that comes to mind is, I know a lot of people have talked about doing a LinkedIn 30. So 30 days of posting something on LinkedIn in terms of content every day for 30 days straight, and just getting past that barrier of sharing. And then looking at it over time and seeing out of the things that you posted, what really resonated. I also think it's helpful to start thinking about things like getting into DMs. Right. It takes a lot of work to think about, "Oh, this person's really smart, let me DM them. Let me try to strike up a conversation because we're well out of the world of physical business cards. I don't think anyone has those anymore.

**Lenny** (01:04:34):
No.

**Ada Chen Rekhi** (01:04:35):
But modern networking is finding people that are really interesting on the internet and then finding some way to connect with them. It takes a certain amount of extroversion in that case to start meeting up with people and having conversations with them. So forcing yourself in some way to really think about, "Well, instead of having one outreach and then failing at it and saying, 'I'm never doing that again.' How do I actually create a pattern where I can learn or a sequence of trying to do this 10 or 12 times, and see what I get out of it?" Because that's really how you learn and how you grow.

**Lenny** (01:05:07):
The LinkedIn 30 idea, I like a lot. Something that I'll share as a tip is when you hear that, I bet a lot of people are just like, "Oh, my God. Going to link post on LinkedIn. So cringey. I don't want to be this self-promotiony LinkedIn person." But what I find is if you reframe it to, "I just want to crystallize a thought that I have and just share something that is useful to me or an insight I've had, and not think of it from, I'm trying to get as many likes. I'm trying to go viral with this post, or I'm trying to just build some following." Just don't think of it that way. Think of it as just want to communicate a thought I have and use this opportunity to crystallize it in a really simple way. That helps motivate. That, at least, works for me. It also ends up being useful for me. It's not like I'm trying to grow some following as a result of that.

**Ada Chen Rekhi** (01:05:59):
I find that really helpful as well. One piece of advice that's similar to that that I've heard is, write for an audience of one. Imagine you're just talking to a friend or you're trying to talk to someone that's a trusted colleague, and just write for them. I think that's really helpful, and it helps us with the problem of getting in over your skis, really over fixating on the outcome of, I did a post and I didn't get my 5,000 followers. And instead, just thinking about I did a post because I wanted to share an interesting idea, and then how cool, some people resonated with it.

**Lenny** (01:06:31):
Yeah, I love that. You could just even say, something I found useful day one and just approach it that way. That's the stuff that end up being most interesting to people. The less it feels like you're trying to be thirsty for followers and likes and all that stuff. And the more it's just like, here's the thing I've found useful. Enjoy it, if you can.

**Ada Chen Rekhi** (01:06:49):
Yeah. Yeah. People can really tell when you're being genuine and authentic online.

**Lenny** (01:06:53):
Absolutely. More and more. Maybe a last question. You started a company with your partner. You're both co-founders, you and your husband. I'm curious, what's your take on that approach to starting company? Would you recommend for other folks or not?f

**Ada Chen Rekhi** (01:07:10):
If you had asked me when I first started the company, it would've been an enthusiastic hell yes. I totally recommend. Now, I have a couple asterisks on top of it, and-

**Lenny** (01:07:10):
Go on.

**Ada Chen Rekhi** (01:07:23):
... I think it really just goes back to what I was talking about earlier where being a founder is such a traumatic and crazy experience with all these intense highs and lows and lack of structure that when you throw romance into the mix, it's just this really volatile combination. So what I've found is that it seems like it either goes really well or it goes really badly, and there's no in between. And asterisks are there because we've actually had a couple of friends try it, and it's been such a mixed bag of results. So my personal experience is I love it. My partner Sachin, and I work really well together. And the main benefit that we have is that the active founding is such an active obsession that you spend so much of your time thinking about your business and the concepts of your business and whatever problem you happen to be facing.

**Ada Chen Rekhi** (01:08:11):
That when I had this thesis of I want to be a founder too, we played it out and said, "Well, okay, now we're going to walk around being obsessed about two completely different things. We may never see each other, and so why not try the same thing?" So our first experiment was actually trying it together, and we were nuts. I actually had a 30, 60 and 90 day plan where we would have check-ins. And some of the explicit questions in the check-in, is this affecting our relationship? Because I just wanted to make sure we were putting our relationship first. It worked well for us to the extent that we've done two companies together. And then when we were at LinkedIn, we actually moved across multiple teams in the company and continued to be counterparts and product and marketing together. So it's been phenomenal. The thing that I would say really helps us in terms of making it a successful relationship was things that I think apply to anyone that's thinking about, should you work with a person and should you be a co-founder with this person?

**Ada Chen Rekhi** (01:09:08):
We had a very, very good set of complimentary domains and skillsets, so we had really clear decision making rights. Sachin does product design and engineering. I focus on marketing, operations, finance, everything else on the business side. And because of that, it's really clear that we take input from each other, but ultimately who makes the call and who's driving and owning that project. So that was really helpful for us. And then the big part that I think is the murky Meyer for couples and maybe even for close friends working together is how do you engage in constructive conflict? How do you get to the point where you're attacking the problem and not each other? So if your partner comes to you and says that work was not good, that marketing plan or that product roadmap that you put together, not good, do you take it as the plan is not good and let's talk about what we can actually do to fix it?

**Ada Chen Rekhi** (01:10:06):
Or do you take it as, "Oh, gosh, they think I'm not good. They think I'm too lazy. I saw that look that they were giving me." And take it as this personal offense. So the ability to be really truth seeking and take the most respectful interpretation when you're giving feedback to focus on trying to get to a smart good outcome that benefits the business, I think that's actually one of the most crucial things that you have to think about. If you're going to work with anyone. Much less your partner or a close friend on starting a company and what's really worked for us,

**Lenny** (01:10:37):
I am very impressed with how you're able to execute on this. I don't think I could do this with my wife. That would not go well, I think. You should probably write-

**Ada Chen Rekhi** (01:10:37):
That's self awareness.

**Lenny** (01:10:48):
Yeah. No, we're aware. You should write a post on how to successfully build a company with your partner. That seems like you have a lot of really interesting frameworks and insights on how it's worked. The fact that-

**Ada Chen Rekhi** (01:10:57):
That's a good idea.

**Lenny** (01:10:58):
... [inaudible 01:10:58] for so long. Yeah, it could be its own little book. Is there anything else you wanted to share or touch on before we get to our very exciting lightning round?

**Ada Chen Rekhi** (01:11:06):
I think you covered most of it, Lenny.

**Lenny** (01:11:08):
With that then, we have reached our very exciting lightning round. I've got five questions for you. Are you ready?

**Ada Chen Rekhi** (01:11:15):
I am ready.

**Lenny** (01:11:17):
What are two or three books that you've recommended most to other people?

**Ada Chen Rekhi** (01:11:20):
Persuasion by Robert Cialdini. I think it's a great book, if you're a marketer. It's a great book, if you're a founder or product person. But it really is a breakdown of what are the different strategies to get people to say yes and help persuade them toward things. I think it really helps in terms of thinking through that and designing a product or a business around it.

**Lenny** (01:11:40):
I've got that in my bookshelf behind me.

**Ada Chen Rekhi** (01:11:43):
Oh, yeah. It's a great book. Yeah. The next book that I also recommend is a book called Designing Your Life, and it's out of the Stanford Design School. And it's by, let me look, Bill Burnett and Dave Evans. They're two Stanford D School professors, and what they're doing is they're applying design principles to life design. So how do you actually map that next level career that's both meaningful and fulfilling and also achieves maybe some of the success factors that you really care about, and brainstorm and be really creative about it. So when people are stuck or thinking about career strategy, that's actually one of the books that I always point out for them.

**Lenny** (01:12:23):
What's a favorite recent movie or TV show?

**Ada Chen Rekhi** (01:12:25):
So Ted Lasso is back, so I'm watching that, the newest season. I am also a Star Trek nerd, so I'm watching Star Trek: Strange New Worlds.

**Lenny** (01:12:25):
I didn't know there's a new Star Trek. That's good to know.

**Ada Chen Rekhi** (01:12:41):
Oh, It's so good. I think the thing I love about Star Trek is just that, unlike some of the classic storylines that you see right now on TV coming out now, sometimes the episodes are just happy. They explore a planet. Nothing bad happens. They see something really wondrous. They all leave happy, and they pat themselves on the back for having explored something. It's something that's missing in the genre of TV that they still have, this happiness factor where sometimes life is good and sometimes life is bad.

**Lenny** (01:13:09):
I like the sound of that. Although, I've learned about storytelling for a story to be interesting. There needs to be some conflict or problem. So I imagine there's something going wrong somewhere in the middle.

**Ada Chen Rekhi** (01:13:20):
But it's not wrong. It's something interesting happens.

**Lenny** (01:13:23):
Oh.

**Ada Chen Rekhi** (01:13:23):
And then it's resolved, and it's happy. Right. But it just doesn't always need to be, something tries to kill you.

**Lenny** (01:13:28):
I got to watch that. That sounds great. I was a huge Star Trek fan back in the day. Didn't know they were still making new ones. What's a favorite interview question you like to ask when you're interviewing people?

**Ada Chen Rekhi** (01:13:37):
What's a common misconception people have about you? I usually like to throw that in toward the end of the interview, and the reason why I think it's really useful is it's a way for me to reset my bias. I may have had a certain impression about them, and this is their opportunity to speak up and say, "Hey, a lot of people think this about me, but it's not true." It's also this reflection of their self-awareness.

**Lenny** (01:14:01):
Great. What are some products that you've recently discovered or use regularly, SaaS products or even consumer fun random products that you want to share?

**Ada Chen Rekhi** (01:14:14):
Yeah. I can't go through this podcast without giving a shout-out to Notejoy. So Notejoy is a fast and focused notes app for individuals and teams. So that's the company that I work on. So I use it for everything from Noora product roadmaps to my coaching notes, to even prepping for something like this podcast. I use Notejoy all the time. Another one that I really use a lot is Captio. It's been around for a while, but it's a little iOS app. I don't know if it's on Android, but basically it's a blank notepad. You can dump your brain into it, and there's one button, and it emails it to you. So when I find that I'm really distracted, or I just want to remember something, I use Captio all the time just to quickly capture my ideas. And then I process it later in my inbox.

**Ada Chen Rekhi** (01:14:53):
And then something that I just downloaded this week is Arc, the new browser. I'm actually really excited about its vision. I'm not sure if I'm going to work it into my workflow yet or how it fits in, but it's really beautiful and it's really cool to see someone iterating on the cluster that is browser tabs.

**Lenny** (01:15:11):
Yep. Love Arc. Went deep on Arc in the previous episode and I used Captio, however you call it. And I found another app, actually, the similar thing that I found even more simple. It's called Note to Self, just sits on my doc. Anytime I want to email myself a thought, I open it up and this type of thing. Somehow, it ends up being even easier. So that's another one to check out, Note to Self. Final question. You're really big on productivity. What's one tip that you found that has been really helpful for you in your day-to-day life, being more productive?

**Ada Chen Rekhi** (01:15:43):
Figure out, maybe the night before, the one thing that you want to get done in your day, and then at the earliest opportunity, just try to give yourself five minutes on it. Just five minutes. And the reason why I say five minutes is that there is this challenge that I experience and maybe other people experience as well, which is really just productive procrastination. Even though I know something is really important that needs to get done, I will often do other things that are useful and need to get done simply because I'm avoiding that one thing. And then before you know it's the end of the day and I'm like, "I still have to go do that thing." By really focusing on what's the number one thing and then just getting started on it a little bit. It just makes it really lightweight. And usually, what I find is that five minutes turns into a solid hour just knocking that thing out early in my day, and I feel really accomplished. But it's a mental hurdle that I really struggle with.

**Lenny** (01:16:37):
I really like the approach of the five minutes because that's such a trick to get you to like, "All right, I'll just do five minutes. I got to get this done."

**Ada Chen Rekhi** (01:16:44):
Right. It's quick.

**Lenny** (01:16:44):
I need to bring it. Yeah. There's a book that many people on this podcast have recommended called Make Time, and there's a framework within that called The Highlight, where you pick the highlight of your day, and that's the thing you got to do first and make... That's like, if you do nothing else, do your highlight and-

**Ada Chen Rekhi** (01:16:59):
Yeah, really similar then.

**Lenny** (01:17:01):
Yeah, and they don't do the five-minute thing, so I think that's a clever element of it. Ada, this was amazing. This chat was full of feelings, and frogs, and vegetables, and frameworks and insights. Thank you again so much for being here. Two final questions. Where can folks find you online if they want to learn more, reach out and how can listeners be useful to you?

**Ada Chen Rekhi** (01:17:21):
You can find me online. On Twitter and LinkedIn, I'm Ada Chen, A-D-A-C-H-E-N. I have a website, adachen.com, and you can always just shoot me an email, adachen@gmail.com. In terms of how listeners can be useful to me, any feedback and riffs on some of the ideas and topics that we've shared. I'm always eager to learn from other people. So feel free to drop a note and say hello. And if you're a founder and you're interested in learning more about coaching, I'm always happy to talk.

**Lenny** (01:17:51):
Awesome. And then Notejoy, how do they check that out?

**Ada Chen Rekhi** (01:17:54):
Notejoy.com.

**Lenny** (01:17:56):
So easy. Great domain. Ada, thank you again.

**Ada Chen Rekhi** (01:18:00):
Thank you.

**Lenny** (01:18:01):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

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## [6/19] An inside look at how Miro builds product: Lessons on outmaneuvering competitors, team structure, product quality, and moving fast | Varun Parmar (CPO of Miro)

**Varun Parmar** (00:00:00):
Every single day, every single time somebody is pushing your code to production and you're releasing a feature or an enhancement, you are making the product better or you're making the product worse, but the products never remain same. So with every release that your competitor is making and every release that you're making, you are either making chess points, moves against them, positive points, or you're going negative. I think that framework, it actually drives an insane amount of clarity in terms of what you're doing and what the impact is going to be.

**Lenny** (00:00:33):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today my guest is Varun Parmar. Varun is chief product Officer at Miro, and prior to Miro, he was senior vice president and chief product officer at Box. As I share with Varun at the start of our chat, I've always been really curious about the product culture at Miro, partly because everyone I've ever met from Miro has been super interesting and super smart, and partly because they've been able to grow as a business and a product in an incredibly competitive market.

**Varun Parmar** (00:04:10):
Thank you, Lenny. So excited to be here. Thanks for having me.

**Lenny** (00:04:13):
I'm really excited to have you here. I've been looking forward to having a chance to dig into Miro's product culture and the way Miro works for a while. We've actually had a few guests, ex-Miro... Mironeers, is that what you call yourselves?

**Varun Parmar** (00:04:25):
Yes, Mironeers.

**Lenny** (00:04:27):
Okay. Mironeers. So we had Elena Verna on the podcast, who's amazing, and Barbara who I think worked in marketing and everyone I've always met from Miro has been just really smart and really interesting and it just feels like you guys have a really interesting product culture that I haven't felt like has been shared a lot, and so I have a bunch of stuff I want to dig into there. One question I have at the bat, you guys have a really interesting history and specifically the way your company's structured, which is that you're collocated in Amsterdam and San Francisco. First of all, is that correct?

**Varun Parmar** (00:05:00):
The company is a global company, so we've got 12 different hubs. We have multiple offices in US, four different offices, and then multiple hubs in Europe as well, and presence in AsiaPac as well. I think by now we have a global footprint, yeah.

**Lenny** (00:05:17):
Got it. A question I wanted to ask off the bat is just how has that cross-cultural approach to product teams impacted the way that you guys built product and the way the company operates?

**Varun Parmar** (00:05:30):
The one thing that's really interesting, Lenny, around the way Miro is set up is that our product organization is actually based in Europe and our go-to-market organization is worldwide. Our product management team, our designers, our engineers are located across three different hubs in Europe. What that sort of leads to is a couple of practices that we have as part of our culture. The first one is practicing empathy to gain insights. It's not just practicing empathy in terms of customers and figuring out what customer pain points and problems we can solve, but given our distributed nature in terms of having a global footprint and a lot of our go to market teams, folks in sales and marketing and customer success are in different continents or geographies, we have to make sure that we actually practice that internally. When we are interacting with folks, let's say in San Francisco, and those folks are out there meeting some of our large customers and stuff, how do we, in the product organization, understand their perspective, and bring that perspective into how we design, prioritize and build products? I think that's one thing that's unique.

**Varun Parmar** (00:06:43):
I would say the other thing that's less to do with the location, but I think is sort of the core cultural value or philosophy that Andre, who's the founder and CEO has instilled in all of us, is practicing teamwork, how do we actually come together as a team, and bring down the silos that might exist across functions? I'll talk a little bit around how we are structured in the product organization so that it's a cross-functional perspective we bring to everything that we're doing because we believe the best work happens when we bring different diverse perspectives to the problem and then co-create the outcome that the customer is looking for.

**Lenny** (00:07:20):
I want to pull on these threads actually real quick. You talked about this value of empathy and the importance of having empathy across... because you guys are located in different locations and have different cultures, and also this idea of teamwork. What's something that you've done that helps you do that, either build empathy and maintain empathy across teams or make sure that people work in teams and not like, "Hey, there's this other team over there doing something else"?

**Varun Parmar** (00:07:45):
One of the most powerful things that I've seen work is the questions that you ask, the questions that you ask when you're going through product review or you are going to sit down and talk to someone and trying to understand why did they prioritize something over the other and was it something that was done through interactions they've had with folks internally or externally? I think it's the set of questions to ask in terms of how did they get to where they are today and was it informed by understanding of the insights that collectively the organization has? Was it informed by their understanding of where the market is evolving, where the competition is going.

**Varun Parmar** (00:08:31):
Was it informed through the series of insights they have, either through inbound feedback that's coming through our different channels where customers are giving feedback or some outbound interactions that they've had? I think just trying to double click and getting to the details in terms of what insight led them to recommend certain things or make a left turn or a right turn is where I think is the most powerful way to make sure that those things are informed through practicing empathy internally and externally.

**Lenny** (00:08:59):
Got it. There's this kind of cultural value of just assuming good intention and asking questions to understand where someone came from. I don't know if you'll have something off the top of your head, but is there a story or an example of that comes to mind where that was done well or not done well, I don't know, in something you recently were building?

**Varun Parmar** (00:09:16):
Maybe there are certain things, for example, anytime we're trying to build a new experience, one of the approach we want to take is very quickly validate that our original hypothesis, is that sound or not. We are big fans of the Design Sprint framework, what Jake Knapp has done I think is really amazing. In a short five-day window, you can get a small set of people to quickly mock up a concept, convert it into some sort of a prototype and then go out there and get some sort of a validation. Oftentimes when we are working on some of these new things, we have our product teams that are focused on zero to one initiatives, run this five-day initiative, and at the end of it we say, "Oh, this is great. Who did you get insight from?" There's a capability that we recently released, it's called Miro Talktrack, which essentially allows you to asynchronously do asynchronous collaboration by recording audio video on top of a Miro board.

**Varun Parmar** (00:10:16):
We had two fundamental choices we could make. One, we could go down the path of what everyone's doing where you could do a screen recording and then spit out a series of videos, like pixels being captured. Or what we did was we actually went down a different path and the path that we went down was we basically synchronized the movement of the board. Let's say Lenny's presenting a board, some template he's created in terms of best practices for PMs, but he wants to have some sort of a talk track on top of it, an audio video feed. What we are doing is we're actually capturing the movement of the board that Lenny's going through along with the video talk track that's on top. The reason why we did that was because we had an insight that came through some of our interviews.

**Varun Parmar** (00:10:56):
What our users want to do is they want to use Miro for collaboration. While communication is an important aspect of how teams come together, where we believe our sweet spot is that we want people to use Miro for collaboration. By making sure that they could actually use a video recording and while the video recording is playing, they could add in a sticky note, they could add in a comment, they could actually give a reaction. We were able to develop this insight by practicing empathy as part of the Design Sprint framework when we went and started to show our original concept and we walled and built on top of that.

**Lenny** (00:11:31):
That is a really cool story. That came out of this Sprint framework, these five-day sprint approach.

**Varun Parmar** (00:11:36):
Yes, that's right. Yeah.

**Lenny** (00:11:37):
That is cool. I got to have that guy on this podcast. Jake Knapp, you said, right?

**Varun Parmar** (00:11:41):
Yes, yes, yes. I can text him right now and I can make the introductions, yes.

**Lenny** (00:11:45):
Let's pull him right into this podcast live, tell us how the Sprint process works. That is awesome. This connects a little bit to another question I wanted to ask around the top is, you guys are in a really competitive space and it feels like Miro was very early in online collaborative whiteboarding space and then I think during COVID it just became huge, with the remote work exploding. Like, "Holy shit, everyone needs this immediately." Over the years, many companies have come into the space that you are all in and it feels like Miro continues to do extremely well. I remember when Figma launched FigJam, there was a lot of just like, "Miro's dead. Figma's getting into the space, they're juggernaut, game over." Clearly that's not been the case and it just feels like, I don't know what it is internally that you all do that continues to allow you to compete and continue to innovate in the space. I'm curious just like is there something to how Miro approaches competition and also just, I don't know, the way they approach these sorts of challenges that is unique or interesting that you can share?

**Varun Parmar** (00:12:45):
If you look at the mission for Miro, we empower teams to create the next big thing and our focus is to enable teams that are innovating, and generally innovation happens at the intersection of a bunch of cross-functional folks coming together. Like we discussed, folks in product management or design or engineering or analytics or product marketing or research. What we find, Lenny, is that there are a lot of tools out there and those tools are generally sort of focused on a particular persona and maybe they're trying to solve the needs of a designer and a designer has a workflow that they're trying to do and they're using a specific tool and they sit at the adjacency of extending that core use case. The fundamental value that Miro provides is that we enable teams. I think what's unique about our product, and we can talk about the capabilities and roadmaps and use cases that we are investing in and we already have as part of the product, is that we take a team-centric lens.

**Varun Parmar** (00:13:50):
So we're not saying, "Hey, we're building a tool that just works for designers," or "Hey, we're building a tool that just works for engineers." Because we fundamentally believe that innovation happens when cross-functional teams come together. When you look at the problem through that lens, you realize that you have to actually architect your solution. You have to think about the use cases and you have to go and prioritize certain experiences that are different and our customers see value in that, right? I think that's probably one sort of big macro aspect of how we think about our capabilities and products and why our customers think of us differently. I'd say that's say one point.

**Varun Parmar** (00:14:27):
I think the second thing is Miro is actually used obviously by teams that are creating these innovative products and we actually have broad applicability across industries and verticals. While some tools might be hyper-focused on digital experiences and Miro's has great offerings there in terms of core capabilities, what we find is that Miro is used equally by companies in manufacturing, by companies in healthcare, by companies in architecture and engineering and construction functions, by companies that are in aerospace, governmental agencies and medical agencies and so on and so forth. I think the platform is actually much more agnostic in terms of its capabilities and what we offer that actually makes it more accessible and appealing to organizations that want to go beyond just digital experiences.

**Varun Parmar** (00:15:26):
Then I would say finally there are capabilities that are available very, very uniquely to Miro that are valued by our users. That again is a big reason people come to Miro. For example, if Lenny's trying to conduct a big workshop with a bunch of product folks and he wants to facilitate that workshop and wants to have certain folks focus on one part of the board and while others focus on the other part, then there are some advanced capabilities that enable certain use cases like workshops. Or if you want to use Miro for some team rituals or from some agile practices, there are core set of capabilities that you could use the product for that are missing in some of the other capabilities. I would say a combination of all of those three things continue to drive differentiation. I would say on top of that, we are a big fan of our community and we believe that community love is what drives us. That's the fuel that keeps us going every single day.

**Lenny** (00:16:31):
Awesome. Just to summarize and I was taking notes as you're chatting, just thinking about what allows you all to continue to do well in the market, considering all the competition constantly coming at you. One, as you mentioned, just there's kind of like a innate multi-functional architecture which is hard for someone to copy if they weren't built from that without the start. Two, it sounds like you are focusing on a wide spectrum of personas and it's not just tech employees basically. Also, just there's specific features that end up being really important that maybe people have a hard time building and then this last piece of the community. Awesome.

**Varun Parmar** (00:17:08):
Yep.

**Lenny** (00:17:09):
Let's dig into the product team a little bit and understand how you all build product and structure product team. How many PMs are there at Miro? Then just broadly, how many employees, just to give people a set of, little bit of context?

**Varun Parmar** (00:17:20):
Give or take about 1,800 employees at Miro globally across all of the 12 hubs, and specifically in terms of the number of product managers, there are over 450 PMs in the team.

**Lenny** (00:17:34):
Then how's the product team structured? Is it like outcome oriented? Is it product area oriented? Is it user persona oriented? Is it something else? How do you think about the structure of the product team?

**Varun Parmar** (00:17:46):
Yeah, so I would say it's maybe a hybrid structure that we have, but the foundation of the team setup is around persona. We have what we refer to as streams, some companies refer to as domains, but essentially it's a set of individuals that are focused on solving the problems for a key persona. Just to give you an example, we have a stream that's focused on enterprise, and in enterprise we are looking at the IT admin persona, we're looking at the security persona or the compliance persona. There are a set of folks who are creating a roadmap and innovating for that audience. There's another stream which is called platform where we are going after the developer install base, folks that want to use Miro as a platform and build apps that they can actually make available either on the marketplace for everyone to use or they could be developers that are inside of a large organization and they're trying to integrate Miro with their specific use cases and workflows and business systems. That's another sort of stream that's focused on that, and there are a couple of other streams like that.

**Varun Parmar** (00:18:53):
Then finally there are some just horizontal sort of streams, if you will. We have a big focus given that we are a PLG-led company around growth and self-serve business. We've got a stream that's actually focused on our core internal infrastructure. We've got a stream that's actually focused on data science that's doing all of the magic that we started to release in terms of Miro AI, et cetera, et cetera. I would say it's a combination of those. At the heart of it is we are focused on personas and we are sort of aligning people around solving problems and creating value for that persona.

**Lenny** (00:19:24):
That is really interesting. One of the downsides of a persona-based approach I imagine is that features keep getting added that solve that user's pain points. What have you learned about keeping the product consistent and having a holistic perspective on the experience? How do you address Those challenges?

**Varun Parmar** (00:19:43):
Architecturally, there are two sort of things that we have done that allow us to not pigeonhole ourselves into that specific way of working. I completely agree with you, you could lead to that. The first one is actually when we think about the product org, we call our org, it's called AMPED, A-M-P-E-D. This is actually going back to our earlier point, Lenny, we had around what's unique about the product culture, what's unique about Miro, and we talked about teams coming together, removing barriers or silos cross-functionally. AMPED stands for analytics, marketing, product, engineering and design. And everything that we do in the product org, when we say the product org, we actually don't meet product managers. We actually don't mean product managers, designers and engineers. What we mean by product org in Miro is this AMPED function. By having this cross-functional representation where product marketing team is deeply, deeply embedded inside of each of these streams, what we do is that we have different perspectives that come in where they say, "Oh, wait a second, did you think about the end user experience?"

**Varun Parmar** (00:20:49):
If you think about the end user experience, you know have someone on the team that says, "Wait a second, did you actually think about the enterprise requirements or what's needed in the largest corporation?" I think the unique setup of bringing these cross-functional folks allows us to sort of course correct. The second thing is the ways of working that we have. We have these product reviews that happen. We generally classify anything that we are doing in terms of its complexity around a small, medium or high complexity, and anything that's being worked on is actually being shared with the entire organization. If it's something that's small to medium, it's actually shared with the entire product org. In fact, if you are non-product, you can actually subscribe to that Slack channel as well. Everybody sees what the product org is working on, everybody sees what the core hypothesis is, "What is the solution for that, what is the proposed design for it, how are we thinking about the capabilities?"

**Varun Parmar** (00:21:49):
Then anything that's big actually goes through a formal process like a product review where there's a meeting and a bunch of us are in there and it's up to us, including the product leaders, to basically make sure that we are connecting the dots in terms of having a much more holistic perspective. I would say lastly, as Miro has sort of scaled the spectrum of companies all the way from a team that might have two or three people and might be taking out their credit card and using Miro for their own team all the way to a large corporation that might have 50,000, 80,000 employees, all of them are using Miro. We've come to realize that at some point the deep enterprise requirements need to be encapsulated in a set of requirements or best practices and we need to make sure that those get democratized across all of the feature teams.

**Varun Parmar** (00:22:36):
When I'm thinking about building a new feature, I have a checklist in front of me where I can say, "Here are the 10 things that I need to think of that I need to incorporate early on in my thinking in the architecture, in the definition of the process, so that it doesn't come downstream." I would say that's an area where we're still working on and more recently we put more focus and energy and there's a product manager who's now leading that particular charter.

**Lenny** (00:22:57):
I love all these details. This AMPED structure, I love that. There's analytics, you said product marketing, analyst marketing and then product engineering design. It's rare that you see marketing as a part of teams, as a leadership, kind of part of the leadership group. Do you have a sense of what impact adding that had on the team or where that came from? Or is that just historically been something Miro has prioritized, marketing and product marketing?

**Varun Parmar** (00:23:25):
This was done before I got here and I wish I could take credit for it, but I can't. I think this was the result of an observation, which is quite similar to what you're saying, which is while we might be developing a lot of the features and PMs or thinking bottoms-up in terms of what we are building, we might find that what we have built might not be able to capture the imagination of what we originally thought it would. A big part of that is how are you going to think about positioning, how are you going to think about competitive differentiation? How are you going to package it up so that the sellers that are out there are able to position it in a way that the customer, in this case the buyer, might be an IT professional, might a line business leader, can basically see the full vision of where we are going? I think by having product marketing as part of AMPED, we now bring that unique perspective that may be missing in certain teams.

**Varun Parmar** (00:24:24):
PMs are more acting as product owners or more focused on core problem and solution but not thinking about positioning, because that's so important, especially when you're thinking about a market that we are increasingly in that there is competition there. That's one of the first things we started off with and that's top of mind for you as well, is that everything that we are doing has to be looked through that lens. One of the core philosophies that I have, Lenny, is that the success of a company is a direct relation of what the competition allows you to do. I feel like not many people talk about that, but in many cases in my professional career, and I've been at it for close to 24, 25 years, is that every single instance when I looked at a company accelerated their growth or there was a deceleration of growth, it was a direct relation to what the competition allowed you to do. Obviously, you have to do everything that you should be doing, but competition is the biggest variable that allows you to figure that out.

**Lenny** (00:25:24):
I want to hear more about your core product philosophies, but let me dig into the one you just shared. What you find is that the way you grow or stop growing is often a direct result of your competition. Is there an example of that that comes to mind? I'm guessing maybe Box versus Dropbox is an experience you had there, or if not, what's an example of that that you've experienced, to make it a little more concrete even?

**Varun Parmar** (00:25:50):
For those of us who've been in the collaboration space, and I've been doing collaboration and productivity apps for over 20 years, over two decades, at some point, you have companies like Microsoft that get really attracted to a space and you can see the trajectory of a business that's growing at a certain clip and then all of a sudden there's a competitive product that enters that has the might of distribution and the might of pricing, and that's just a direct example. I think I've seen that multiple times, first at Adobe where I was part of the document cloud business, clearly saw that at Box as well.

**Varun Parmar** (00:26:27):
I think you can, in general, sort of look at every single category and you can say that there was a category leader and they were growing at a certain clip or a certain pace and all of a sudden there were a bunch of entrants that get in and what happens to your growth rate? It's all dependent on how strong is the competitor in terms of providing a good enough solution? That's one. The second is how strong is the competition in terms of their distribution outreach? Then the third thing is how strong is the competition in terms of the pricing and packaging?

**Lenny** (00:26:55):
I really like this discussion, especially because often the advice is, "Don't worry about the competition, just focus on the customer, it's going to be fine." Which what you're saying is that's not right, and I agree. What do you do with that in mind? How does that impact the way you build product or strategy? Is there some you could share that maybe tactically someone could leverage to how they're approaching their product strategy?

**Varun Parmar** (00:27:18):
It depends on who the competition is and what is their unfair advantage here. We talked about one specific competitor and I have a lot of respect for them, by the way, and I learn a lot from them every single day in terms of how they make bets and how they enter markets and stuff. At some point I'm going to write a book on them, I feel.

**Lenny** (00:27:35):
Ooh. We'll have to come back to talk about that.

**Varun Parmar** (00:27:38):
That's right, yeah. I think it sort of comes down to how do you think about your unique place relative to all of these players, and in your customer's mind are they able to clearly understand what is the unique value that you deliver relative to everything else? Part of that is the unique capabilities you provide. Part of that is how you're packaging those unique capabilities to them, and making sure that they in their mind can see how you coexist in this overall sort of tech ecosystem that they might be investing in, to enable their employees or to enable them to operate. So I think it's sort of looking at that from that lens, yeah.

**Lenny** (00:28:26):
Got it. So what I'm hearing is be very clear about your differentiator and continue to invest there and then make sure your positioning is clear around why you're... just identifying, "Here's why we're different and we're not just a better or worse version of this thing" or "Here's why we're different" and making sure that's really clear.

**Varun Parmar** (00:28:43):
Exactly. I think the other thing I would say, there's another core philosophy I have, which is products either get better over a period of time or they get worse. Products never remain the same. I think you can take that philosophy to a bunch of things in life, but I'm going to take the lens of products, which is my core philosophy is every single day, every single time somebody is pushing your code to production and you're releasing a feature or an enhancement, you are making the product better or you're making the product worse, but the products never remain same. The lens for this, Lenny, is actually from a customer's perspective, from the end user perspective. The thing is that if you are a player where there's no one else in the market, that's one thing, so that's great. Kudos to you for actually identifying a blue ocean strategy and sort of executing to that. But most markets, most products, actually have either direct or indirect competitors that are available.

**Varun Parmar** (00:29:40):
From the customer's mind, you're doing something, the competitor is doing something, so in their mind they're looking at these products and they're looking at these companies and they're saying, "Which is better versus not?" So with every release that your competitor is making and every release that you're making, you're either making chess points, moves against them, positive points, or you're going negative. I think that framework, if you have in mind, it actually drives an insane amount of clarity in terms of what you're doing and what the impact is going to be. Because every single move that you're making, the customer has that sort of in their mind, if not explicitly, implicitly that they're actually comparing these things. I think it brings a level of focus in terms of where you need to invest and why you need to invest and why this is going to make those decisions.

**Varun Parmar** (00:30:28):
I think it allows at least for product leaders to make some high quality decisions around the bets that they're making and how they're going to play out in terms of eventual once the dust settles and the market at large is going to say, "I'm going to standardize on something and now I feel I need to go get it for everyone." Or "This is the tool that I want to use for this particular use case." That all of these decisions that you are making ladder up to that final sort of play that you have to do in terms of the market consolidation that eventually happens.

**Lenny** (00:30:59):
This is so interesting. Essentially what you're saying is that you find that being very close to and understanding the competition really well is really essential, versus this kind of the other end of the spectrum almost from just like, "Don't worry about the competition, don't pay attention." I like this point, metaphor of just like, "Are we moving ahead or further behind?" Is that where you operationalize that to track that? Then also just how do you not over-obsess with, "Let's just catch up, get more features," that kind of thing? How do you find that balance?

**Varun Parmar** (00:31:28):
I'll be honest, I don't think we've figured it out. We haven't cracked the nut in terms of how to operationalize this, but I know you are way smarter than me on some of these things, so maybe we can-

**Lenny** (00:31:39):
Unlikely.

**Varun Parmar** (00:31:39):
... partner on this and come up with something.

**Lenny** (00:31:43):
All right, that'll be something we work on. Any other product philosophies that you want to share? That was awesome.

**Varun Parmar** (00:31:52):
This is all sort of related to it. It's like a string of pearls. I think there's maybe one more pearl we can actually thread into the needle right here.

**Lenny** (00:31:59):
Let's do it.

**Varun Parmar** (00:32:00):
Which is we talked about how do you ladder this up and stuff, and then the question is, okay, how do you know that everything that you're doing, is that in the right direction or not? Should you move slow and be much more mindful about the things that you're doing or should you move fast and make certain bets and then decide certain things and stuff? I think there are two views that are out there. My personal perspective on this is that what you want to do is that you want to be the first one to hit the brick wall. This is particularly true when you are in a market that is competitive. The reason for that is that if you consider yourself as an innovation-centric company and you believe that you are building experiences that fundamentally don't exist anywhere else and you're sort of paving the way for the rest of the folks to basically get inspired with how you are building these experiences, speed is the single biggest determinant, in my experience, in terms of who ends up being more successful versus not.

**Varun Parmar** (00:33:14):
I don't know, maybe this is a little bit controversial where people say, Go slow to actually go fast." I think I have a lot of respect for that and there's certain areas you should do that, but when you are trying to figure out new experiences and stuff and you don't know if it's going to resonate or not, speed is something that you should accelerate for the organization. I think Frank Slootman talks about this a lot in his book and how can you accelerate? I think for me from a product perspective, the fundamental concept is can you be the first one to hit the brick wall where you have the learning faster than anyone else in the market so that you can decide, "Oh my god, the path that I was going was not the right path. I need to do 10 degrees west or I need to do 30 degrees east." I think as long as you're one or two or three steps ahead of everyone else in terms of uncovering or discovering those insights, then I think you can continue to be ahead of the pack in terms of building your product in business.

**Lenny** (00:34:21):
You're talking about urgency. I've never met a founder or a product leader who doesn't want their team to move faster. They're always encouraging their team, "How do we move faster?" I'm curious if there's something you've learned tactically about helping your team move more quickly. You mentioned Frank Slootman's book. Amp It Up is what it's called, by the way, in case folks want to check it out and he's big on just like creating a sense of urgency, constant urgency, and we'll link to that and share notes. But yeah, what have you found helps create urgency and generally helps your teams move faster other than just like, "Move faster, everyone"?

**Varun Parmar** (00:34:52):
My fundamental belief here, Lenny, is that every product manager... I can talk to product managers because there is reason certain ones, someone wants to be a product manager, because in my view it's one of the most thankless jobs, like you get to do a lot of [inaudible 00:35:10] and it's like, "Why you have to do this?" But it attracts a certain personality and that personality is driven by challenge and that personality wants to prove that they can solve this challenge and do something amazing. I think fundamentally the product persona actually wants to move fast. I think the reason why in some cases we are not able to move fast is because of roadblocks that we run into and those roadblocks can manifest themselves into technical challenges, they can manifest them in cells of organizational challenges, they could be priority challenges and so on and so forth.

**Varun Parmar** (00:35:52):
My fundamental approach to solving that is to ensure that the product leads who are working on these capabilities can instantly raise their hand and call out that there are challenges that they are running into. Then the job of the leadership team, the product management team, is to essentially go and quickly resolve those issues. I think if you are able to resolve those issues, then what it does is it actually starts a virtuous cycle where you can actually start to see those wins. Once you see those wins, you actually create that courage to do more things. Maybe because you've seen how that specific roadblock was solved and you have a pattern matching that you've developed now, you can solve a lot of those things on your own and it's the next level of challenge that you now going to raise your hand.

**Varun Parmar** (00:36:41):
What that does is it starts to build this organizational competency in terms of how you can figure out what to build. We all find these people in our organizations where there's someone somehow is able to do certain things in one-tenth the time that it would take a normal person. It's not that they are 10 times faster, it's just that in my observation that they've figured out which part of the core base they should build in versus not, who should be part of their team and who should not be, how they need to define that from a scope perspective, what does success look like, and it's the architecture of bringing all of these things together that actually brings that magic formula line in terms of "Hey, we are able to deliver faster."

**Lenny** (00:37:19):
I really like this topic. What I'm hearing is one of the biggest roots of slowdown in a company and product development is blockers not being unblocked, and I always feel the same thing. I feel like a PM's number one job is to unblock their team because their job is basically make the most out of their team that they're marshaling towards some outcome. The way you do that is just figure out what's slowing them down. You just talked about this idea of a PM raises their hand to leadership, "Hey, we're blocked by this thing." Is there a process you've come up with there that helps you do that, it's connected to-

**Varun Parmar** (00:37:51):
Yeah, I would say we are trying to sort of systematically ingrain this in the culture of the organization. We have a motto in the product org, it's very simple, single sentence, deliver customer value faster with high quality. That's it. Everything that we do, and when I say everything, everything, Lenny, from performance and reward system and measurements, everything is based on this one single statement and it has three attributes. The first one is deliver customer value, and we believe customer value is only delivered when customers use it. Anytime as a PM at Miro, when you ship something, we are looking at, "Well, what was the metric you were going to move and how much did it move?" We have some original targets that we can go back to. That's the first aspect of what we're doing, deliver customer value.

**Varun Parmar** (00:38:35):
The second one is move faster, and there are certain cycle times that we are measuring across the organization. From the time you came up with the idea to the time that you actually pitched a solution to the time you actually shipped it, to the time we actually moved the metric, it's information that has been collected and is being made available to the organization. You can say, "Hey, if it was a small, medium or large, what's the average? What's the medium, what's the variance?" And you can say, "Hey, looking at this data, what can be improved?" That's on the faster aspect of it. Then the last one is around high quality, which is we want to build best in class collaboration experiences, so we are always getting inspired by what we find in applications and experiences that we see around us and we are saying, "Hey, when it comes to designing, sharing flows, we believe that these are the three apps that have best in class sharing flows when it comes to designing some synchronous capabilities like this. These are the best in class apps that we should look at."

**Varun Parmar** (00:39:31):
We are always trying to make sure that we are benchmarking ourselves against that and we have our design team. On a regular basis, like when we ship stuff on a monthly basis, our design leadership team does a triage of everything that got shipped into high quality or not high quality. It's just like a binary function, and we're doing that and we're saying, "Hey, the reason why we believe it's not high quality is because A, B, C, D, E and we're making it available to other designers so they can actually start to build that telemetry in terms of some things are more subjective." But you can start to see some patent matching and say like, "Hey, this is what great looks like."

**Lenny** (00:40:06):
**Varun Parmar** (00:41:24):
Yes.

**Lenny** (00:41:24):
Wow, that is so cool. Then, one, what do they do with that? Do they send it out to the product team? Then two, is this just like FYI or is it like, "We need to fix all these low quality things going back"? Or is it more just like, "For the future, please be aware these are not high quality"?

**Varun Parmar** (00:41:39):
Yeah, so it's actually both. Generally what happens is that the design leadership team is doing this and there's one particular design leader who's the designated person to make sure that this is happening on a regular basis. Right now the way we're using it is that we are actually using it to calibrate and align around the design leadership around what we mean by high quality. Because it's one of those things, it's like if you've never seen colors and I ask you, "Lenny, describe pink and compare that to red," and if you haven't seen colors, how do you describe colors? You can't. But if I show you and I say, "Lenny, these are three examples of what pink is and these are three examples of red is," then you're like, "Oh, I get pink and I get red." There are certain things that you just like when you write it's very, very hard to describe it, but if you show specific examples, it's very clear, "Oh, I get it. I get how pink is different than red." But if I try to describe it, it's going to be very hard.

So we got into these endless conversations at some point about a year ago where we were saying, "We need high quality, we need high quality." And people are like, "Let's just go and define this thing." We had a bunch of our leaders go and write documents, really long documents in terms of what are the attributes and how do we define those attributes and how do we measure those attributes and how do we enable people to do that? It felt like it's a good thing because we are trying to codify it, but it also felt like it was a very heavy way of solving that problem. Then we just came up with this approach, which is like, "What's great versus not great" and just start classifying it. As you know, it's like modern AI systems are classification systems and we [inaudible 00:43:12]-

**Lenny** (00:43:12):
Yeah, I was going to say, sounds like reinforcement learning approach here.

**Varun Parmar** (00:43:14):
Exactly.

**Lenny** (00:43:14):
Defining cost.

**Varun Parmar** (00:43:15):
That's right. That's right. I think it's worked decently well. I would say with most things we need to operationalize it and we need to make sure that now we are democratizing it and everybody has access to it and so on and so forth. But I think it's been a good start and now we are sharing this more openly with others in the org.

**Lenny** (00:43:37):
When I said that, I imagined you... From the outside, you have a very unique culture and approach your product. That's a great example of that. I've never heard of a process like this. What I'm hearing is essentially you're trying to build the muscle within the organization of what is quality. It's like this continued heuristic of, "Okay, I get it." So PMs on the team start to understand in their head what that means.

**Varun Parmar** (00:43:56):
Right.

**Lenny** (00:43:57):
Super cool. You also talked about, in the middle part of that sentence, of moving faster and that you track and measure that somehow. Can you talk more about that? Because that's something every product team is always trying to understand. "How do we know if we're going faster, if we're going as fast as we could?" How do you actually do that? How do you measure these things?

**Varun Parmar** (00:44:13):
The core philosophy there is velocity is more like the game of golf where you're just playing against yourself. It's not like if Lenny and Varun are out at the golf course, it doesn't matter. I'm not competing against you, I'm just competing against myself because that's the only... I'm going to just hit the ball, so it's like how much better can we get? I think our core philosophies around that and what we're trying to do is that on all the product teams, the feature teams that we have, we're just collecting all the information and we are making it available to everyone so that they can actually see what the cycle times are. What we are interested in is from the time that you have an insight, from the time you believe "I can do something unique for my user, for my persona," how long does it take for you to actually deliver that value?

**Varun Parmar** (00:45:04):
We have a product process that we follow, which starts with a P-strat, which is a strategy, and then we go into P0, which is definition of the problem, then we go into P1, which is definition of the solution, and then we go into P2, which is once the solution is shipped, are we hitting the metrics that we originally had defined upfront before we decided to work on this. You have all of these stage gates and then we basically classify everything that we are doing in small, medium, large. You can go in and you can say, "Hey, I thought this was a small thing," and small thing is something you can get it done in less than a month, and so on and so forth. There are 50 other product teams that are shipping these features, and what's the average, what's the variance, what's the median?

**Varun Parmar** (00:45:48):
"Oh, wait a second, actually it seems like I took way more time in the problem definition stage. Let me actually try to go talk to this other product team that actually did it much faster," or "Oh, I actually did it really, really fast, and the reason why I did it fast was because of this. Let me go share this out with the broader team." Usually the product ops function, we call it product excellence internal, sort of product excellence function, is recording some of these things. I would say getting reliable data, and then because we have some things that are going through meetings and there are some things that are going through Slack, we could do better on some of those dimensions, but all of this data is available and we provided it openly and folks can benchmark themselves against that.

**Lenny** (00:46:34):
So cool. Okay, so you have this P-strat, you called it, document which is kind an initial concept and then it's interesting you use the P0, P1, which is often for bugs, but it's cool that you use it for defining your products. So P-strat is just an idea pitch. P0 is a spec, basically, like a one-pager for the product, and then P1 and P2 are basically getting to "Here's the actual product we're building." And you basically track time per step and map it to, "Here's how large this project should be." Over time you track per person, it sounds like, just like are you matching the benchmarks of how long a small project should take across each step?

**Varun Parmar** (00:47:13):
Yeah, exactly.

**Lenny** (00:47:14):
Wow, that is extremely cool. Whatever templates you can share, these things that we can include in the show notes would be awesome.

**Varun Parmar** (00:47:21):
Yes.

**Lenny** (00:47:22):
Because people are always looking for just like, "Ah, I want do some of this stuff." If they can just plug and play, the more, the merrier.

**Varun Parmar** (00:47:28):
Yes.

**Lenny** (00:47:29):
Shifting a little bit, it sounds like you guys are doing Scrum in some form. Can you just talk about just broadly the product development process? How long you or your sprints, how long do you plan for in the future, in detail specifically just like high level, how does the product development process work?

**Varun Parmar** (00:47:43):
There are certain things that I learned at Box and that inspired some things that we do at Miro, and there are certain things that we've evolved. One of the things that we've instituted is our roadmap process, so that's sort of the first thing around how the different teams are looking at the things that they're going to work on. We have a rolling six month roadmap, it seems large, but we've got, like I mentioned, a number of enterprise customers. If I've learned one thing that large enterprises is asking for a roadmap review. That tends to be my favorite meeting of sitting down with the enterprise leaders and walking through what we are working on. What we've done is we've tried to architect something which actually allows our customers to get what they're looking for, but at the same time does not remove the agility that is so important for us to deliver value faster.

**Varun Parmar** (00:48:41):
What we do is we have a rolling six month roadmap that gets updated every three months and the first three months of that roadmap, we have a 80% position level, which means that 80% of the things that we claim to be on the roadmap will get done. That's the target. For the next three months, because it's six months, so the first three months is 80%, the next three months is 50%, so we have a much lower level of resolution in the next three months after that. What that allows the product teams to do is actually have flexibility, which is based on what the customers are asking for and based on what the competitive moves are, based on some technology breakthroughs that happen around large language models, they can pivot and they can pivot and move towards that and they won't get penalized either by the customer or internally in terms of doing that. That's what we do and that's all at on the backdrop of an annual strategy that we publish.

**Varun Parmar** (00:49:34):
Every year we publish a strategy white paper that it gets published internally available to every single Mironeer across all functions that clearly articulates the key bets that we want to make. Why do we want to make those bets? What is the expected outcome and how does that ladder up into the overall business outcomes that we are trying to drive from an OKR perspective as well as the overall business strategy that we have. So people take that product strategy, white paper or artifact, and then against that they're building their roadmaps which get updated every three months. Then inside of the teams, we enable teams to be quite autonomous in terms of some of the rituals that they're doing. We want them to obviously embrace best practices. We've got a team of agile coaches that share best practices or are available to help if there's certain specific needs that teams have.

Then I think on top of that, there are certain key, I would say, rituals that we do that maybe are unique. For example, we have something called as Miro Connect, which happens every other Friday. Every other Friday, for example, in our Amsterdam office, you can go in there and at 4:00 in the afternoon, 4:00 to 7:00 or 8:00, and sometimes it goes really late, you've got a bunch of product teams sitting around tables and it feels like, "Oh, it's like a pitch or something." And people are coming in, they're having a good time, you've got a drink in your hand, there's maybe some light music playing in the background and you're going from table to table and you have teams that are actually showing all the amazing work that... If done right, it happens once in a while, but if done right, it's magical in terms of the outcomes that you can get.

**Varun Parmar** (00:51:20):
I'll tell you, there was a team that actually was presenting at our Berlin hub and they were saying, "We're working on this feature, and there's an engineer who walks over to that desk and says, 'What are you working on?'" The team describes it, "Oh, we are trying to do something like this." And this engineer had actually worked on that particular problem in their prior life, literally they had implemented this. So he says, "So how are you going to implement this?" And the team, the engineer that's sitting there, says, "This is the approach I'm going to take and it's going to take me three months." He's like, "Oh, would you mind if I go and help you with this?" They're like, "Sure, more the merrier. Go ahead." So this person puts down their beer and says, "Okay, I'm having a good time. Let me just head back to my home." And in the next three or four hours goes and codes the entire thing, makes a poll request.

**Varun Parmar** (00:52:10):
Next day in the morning one of the engineers from this core team that was exhibiting at Miro Connect looks at the poll request, reviews the code and says, "Yes, something that would have taken three months for this core team because they didn't have the expertise literally got done in three hours because there was another engineer that ran into them and said, "I know how this is done. I can actually help you here," and went ahead and did the right thing. We are trying to create these magic moments. It happens once in a while, but we have one success story and I like to tell that in every opportunity that I get. But that's another sort of unique thing that we've done in terms of book-ending things around how we operate here.

**Lenny** (00:52:50):
That story is like a dream for any PM. Just imagine saving months of work with one conversation. I imagine people were like, "How do we replicate this often?" I love that. With these meetings, just to understand, if their team is in Berlin, let's say, there's a screen there in front of a table and they're talking through a screen, like a video conference?

**Varun Parmar** (00:53:12):
Yeah. I mean, right now what we've figured out is that it is really hard to do these events over audio-video conferencing and stuff. So generally what happens is that you have an audio-video bridge that's playing, but mostly it's people walking up to the respective teams and then having a live conversation. That's usually how these things are operated. Yeah.

**Lenny** (00:53:34):
Got it. Okay, so you have six month rolling roadmaps. You have a yearly vision strategy for the company, two week sprints. Is there also a quarterly OKR sort of process or is it-

**Varun Parmar** (00:53:34):
Yeah.

**Lenny** (00:53:48):
... those or not? There is, okay.

**Varun Parmar** (00:53:48):
There is, yeah.

**Lenny** (00:53:49):
Can you just talk a little bit about how that works?

**Varun Parmar** (00:53:51):
Yes, yes, yes. At Miro, we practice OKRs and it starts off at the company level, and then those company level OKRs are taken by the AMPED organization. Like we describe, it's the AMPED organization, and then we break it up and I would say we have refined it over the period of time, the two years that I've been at Miro. Early on we were doing OKRs on a quarterly basis, and I would say more recently we've actually evolved to six month KRs. What we found was that six month was the right cadence in terms of giving enough time for teams to basically push forward in executing these KRS and minimizing the "overhead" of doing replan every single quarter. We found that it was much more effective and efficient for the entire organization to do it on a six-month basis. However, we are doing traction on a monthly basis. So every four weeks, as AMPED, we are looking at our KRS for the AMPED organization on a monthly basis doing traction. However, the planning, the targets, are done on a six-month basis.

**Lenny** (00:55:06):
I love how OKRs could just be anything, could be every six months, could have objectives, could have key results. It's just such a term that just applies to anything that people do with goals, basically.

**Varun Parmar** (00:55:17):
That's true.

**Lenny** (00:55:18):
And it works. It's great.

**Varun Parmar** (00:55:19):
That is so true.

**Lenny** (00:55:21):
Again, if there's any templates that your team could share of the way you do that stuff, that would be amazing, and we'll include that in the show notes.

**Varun Parmar** (00:55:27):
Yeah, absolutely. Because I think, as you would expect, we run Miro on Miro, so there's a lot of things that we could share as templates in terms of how we are running things on Miro, not just as OKRs, but in terms of product reviews. We have ways of how we are doing asynchronous reviews combined with synchronous reviews and there's this blended experiences that we have, and so we can definitely share out with the community how we do some of these things.

**Lenny** (00:55:55):
Awesome. That's a great segue to another question I was going to ask is just what other tools, what's in the stack of the product team's workflow? So Miro, obviously. Maybe talk about what use Miro for, but then what else is in there? What do you use for task management, bug tracking, things like that? Design?

**Varun Parmar** (00:56:12):
Starting from the bottom-up infrastructure view, so all of our tickets are handled in Jira and we are using some of the newer capabilities in Jira in terms of coming up with roadmaps and coming up with the priorities and stuff. On top of that, all of the specs generally get recorded in Confluence. Having said that, we're actually a big fan of tools like Google Docs as well as Coda that allows us to track our KRs in a pretty effective way. On top of that, obviously we use Miro a lot, I would say for a lot of our things, especially on the product and design side of the team. Generally all of our insights get captured inside of Miro board, so when we are going and conducting user experience interviews and stuff, we will record those and then those recordings get added to a Miro board, so Miro access the content hub or a team hub for a particular project.

**Varun Parmar** (00:57:20):
Once you capture all of those insights, then generally all of the brainstorming and team ideation happens on the Miro board as well, so Miro's actually also used as a tool to facilitate meetings and workshops. Once all of that is synthesized into a set of recommendations and outcomes, so when we go into these product reviews that we were talking about, Lenny, the same Miro board then gets manifested into a set of presentations, so we use Miro for presentations. We've actually made some really amazing updates in terms of our capabilities there and if folks haven't checked them out, I would strongly encourage them. There's a capability called Showtime that basically abstracts out the UI and lets people focus on the content, but do it in a way that it's interactive so everyone that's on the call can have reactions, can share their comments and leave comments while the presentation is happening without actually disrupting any of the flow for the user, so we use that a lot for presentations as well.

**Varun Parmar** (00:58:15):
I would say more recently what we've started to do is that we've started to move some of our synchronous meetings into asynchro view. I talked about this Talktrack feature that we have, and a lot of teams, what they would do is that they would actually send you five minute, 10 minute Talktrack in advance and it's just a link to a Miro board, you click on it and then you just sit back and relax. Then you have this magical experience where you're sitting back and the Miro board is automatically moving because Lenny was recording it like that. Then you have the video play and then you can pause it anytime, you can add in your comments and stuff so that the next time when you meet, instead of actually providing context to everyone, those synchronous sessions are lot more deliberate and focused on driving outcomes or achieving consensus, so people are just focusing on the comments that were added as part of a async product review so that when they meet synchronously they can use that. Miro boards are used for that as well.

**Varun Parmar** (00:59:06):
I would say now a lot of our dashboarding shows up in Miro boards now. We recently released data visualization capabilities around most popular VI tools. At Miro we use Google Looker a lot, so a lot of our dashboards are in Looker, and what you would typically find is that our analyst team and product teams will just grab a link to a Looker dashboard, put it on a Miro board, and it unfolds into a full visualization. Unlike a screen grab, you never have to go update it because right there on the Miro board, it's always updated and you can refresh that, so you basically have this experience where Miro acts as that single source of truth for a lot of the teams across the entire journey of product development where a single Miro board is meeting the needs of multiple use cases there.

**Lenny** (00:59:51):
Then for the road-mapping, is that in Miro, each team's roadmap, or do you use something like Jira?

**Varun Parmar** (00:59:57):
Yeah, so I think we've got a couple of tools for road-mapping, and our observation is that while those tools are great for the unique needs that they're solving, we haven't found a universal solution for road-mapping. So there are some teams that use Miro for road-mapping and they would use the Kanban widget in Miro for that. What are they working on? What's coming next? What's in the backlog? But I would say it is a problem that is not completely solved in terms of how do we actually bring these artifacts together at scale.

**Varun Parmar** (01:00:27):
What we are starting to see, and this is actually a unique use case of Miro, is that we actually enable our entire field organization using Talktracks. What happens is that we have our entire roadmap published out as a Miro board for enablement purposes, so that that's a artifact that is approved to be shown to a customer. What you will see is that you'll see five or six recordings in there, and the leader for enterprise has done a five-minute recording on everything they're working on. The leader for platform has done that. The leader for end user experience has done that. The person who's driving some of our AI experience has done that. So you can go in and you can just click on that video and you can meet your needs by using Miro and this capability that we have.

**Lenny** (01:01:09):
That's awesome. It sounds like each team can basically choose the tools they want to use. There's no standardized, everyone needs to use Jira or Miro for their roadmap. I like that. I like how teams do that often. Maybe one last question around the product org, and then I want to shift a little bit to growth and how Miro grows and things you have learned about growing. Question I always try to get to is how do you think about balancing new bets and innovation with maintenance and just general incremental work? Do you have some sort of philosophy as a product leader broadly, and then maybe at Miro specifically, of just how to balance investments in these two buckets and maybe three buckets, bugs, incremental work, and then just big bet? How do you think about that?

**Varun Parmar** (01:01:55):
We have some rule of thumbs in terms of how we want to allocate our investments across these buckets. I would say a lot of it, Lenny, actually depends on the state of the team. There are certain teams that have more tech debt than others. There are certain teams that are actually working on some really big zero to one features than other teams, and so I think there is a variance. The standard deviation actually is dependent on which part of the spectrum that you're in, which is are you a team that we believe needs to create the next generation experience on the platform and hence we have to prioritize innovative work or are you the team that's actually so critical to actually meeting our objective around better board performance or any of the other things that we believe are important and hence we need to invest in those critical areas?

**Varun Parmar** (01:02:41):
But I would say in general innovation versus not, varies on a spectrum of anywhere from 60 to 80%. I would say about 20 to 40% of the available capacity at any given time is either getting allocated to architectural initiatives. There's a technology roadmap that our CTO is driving that we believe is extremely important as the platform scales, and now as we have over 50 million people on the platform, so we continuously have to invest in making sure that the platform can scale. There are certain teams that probably have 40 to 50% of their allocation towards that because they're a critical part of the component. There are other teams that are maybe more end user focused and are more UI focused where that allocation is lower. But I think general rule of thumb is 20% is always a given, but it can go as high as 40 to 50%.

**Lenny** (01:03:30):
On bigger bets and longer-term thinking?

**Varun Parmar** (01:03:33):
Yeah, 20 to 40% goes on the technology-related initiatives and maintenance and stuff.

**Lenny** (01:03:38):
Oh, got it. Infrastructure, maintenance, making sure everything's there. Got it.

**Varun Parmar** (01:03:44):
[inaudible 01:03:44] Exactly, yeah.

**Lenny** (01:03:44):
Then what about just big, long-term bets that you're not expecting to pay off anytime soon? Do you have a heuristic of just what percentage of, say, total resources you put there?

**Varun Parmar** (01:03:53):
You've probably seen this, the framework of three horizon, it's quite popular in McKinsey and Harvard [inaudible 01:04:01] school and so on and so forth, is horizon one business, which is the thing that's delivering food on the table. Generally there's about a 70% allocation of resources that we have, give or take. Then there is horizon two, which is an adjacent thing. With the next 12 to 36 months we believe it's material. Usually that tends to be around 20% of the allocation. Then there's horizon three, which is three years out, three to five years, next generation things, and that's about 10% of the ratio. So it's like 70/20/10 across horizon one, two, and three.

**Lenny** (01:04:30):
Awesome. Any other thoughts along the lines of just how you think about product before we shift? I only have a few questions around the growth story of Miro and what you've learned about growing.

**Varun Parmar** (01:04:41):
In terms of product leadership and what we believe is the way we want product leaders to be developed and I think it's more of a people philosophy. We have our product leadership which constitutes of all of the folks who are running all of these streams, and I always tell them that you have two personas that you have to think about. Everyone who's on the product leadership team is a product leadership team member. The fundamental thing that you have to do is drive accountability. The number one thing that a product leader on the product leadership team needs to do is drive accountability with others in the product leadership team. The other persona that they have is that they are a stream leader. They're actually responsible for delivering value for the respective persona and respective customers and stuff. So when you put on the persona hat of a stream leader, which is different than the persona or of a product leader, your number one metric, the number one goal that you have, is drive improvement.

When you go back and you work with your team, always have the lens are you improving things and whatever you want to improve, but you always have to ask yourself, "Today compared to yesterday, tomorrow compared to today, have I improved things? That's the yardstick you should think about. When you go sit in the product leadership team every Monday afternoon at 1:00 in the afternoon when we meet together, your number one goal is actually to drive accountability around this and are you making sure that we as leaders in the organization are doing the right thing for the company?" I think that's a philosophical construct that I always remind people in terms of what they should be doing. As an example, tomorrow we have calibrations, we have our annual review cycle happening in the company.

**Lenny** (01:05:42):
Good times. Always a blast.

**Varun Parmar** (01:06:23):
Yes, exactly, always fun and so critical as a leader, because it sets the tone for everything that you're going to do. In my opening remarks, the only thing I'm going to remind everyone in the room is that "Your number one goal here is to be a product leader and accountability is what you have to write. That's it. Just hold each other as accountable, including myself in terms of making sure that as we go in, that's the key thing." I think once people understand the duality of how they need to operate across those two specific goals, it actually leads to really high-performing teams and teams that actually are able to create somewhat of a magic if they are open and there is trust that has been built in the team.

**Lenny** (01:07:07):
When you say accountability, what does that look like? Is it pointing out, "Hey, you didn't achieve this thing we were trying to achieve" or "You didn't do a great job leading this meeting"? Is it just direct feedback often or is there some other way you see that manifested, and what do you like to see?

**Varun Parmar** (01:07:24):
Yeah, I think it's basically practicing feedback in a very open and constructive way and focusing on what is important for the business and not shying away from having some of those observations and conversations, not shying away from them. But it's all in the lens of what is the right thing to do for the business, and if you feel that that one or more members of the leadership team are not living up to what needs to be done, then just voicing it. It's not like you're complaining or anything, it's just like, "I have this perspective. Is this the right perspective or not?" Because actually it ties very well with the overall cultural values that we have.

**Varun Parmar** (01:08:02):
If you do things with the lens that you are being empathetic, then you pose it as a question as opposed to a statement. I think that's one of the things that we practice a lot at Miro is that I believe that I am seeing there are certain things that are happening that it could be just me that I'm not seeing the other things. "But what is it? Can you help me understand? Can you help me figure out that why certain things are happening? Because I might just be missing the perspective." But because you bring it up, and that's part of practicing accountability in an empathetic way, it actually gets the entire team in the right mindset in terms of how they operate.

**Lenny** (01:08:39):
Has anyone given you some sort of direct feedback recently or pointed out something you didn't do well that held you accountable that you can share?

**Varun Parmar** (01:08:47):
All the time. Yeah, all the time. When we do our offsites, this is actually a fun thing, is that every offsite that I do with my leadership team, usually there is a one to two hour session where it is feedback to Varun, and I actually do it openly. I will have about eight to 10 people in the room and I will force people to be very honest and I want to show my vulnerabilities to everyone, that I am not perfect and I have lots of areas to improve. Every time people do it, it's interesting that they open up in very amazing ways and I think I love it because it helps me become better. It helps me identify my blind spots. But what it does is, because I do it in an open way, it brings a lot of trust. It brings trust that I do it openly and I'm an open book and they can share whatever they want, not just with me but openly in front of everyone.

**Lenny** (01:09:43):
Are you willing to share one thing they suggested that they pointed out that they wish you did differently or better?

**Varun Parmar** (01:09:48):
Yeah, I think in general, finding time with me tends to be a bit of a hard thing, and generally there's always this feedback, which is need more time, maybe more responsiveness over email or Slack or something like that. That's an area that I'm constantly working on and improving, so yeah.

**Lenny** (01:10:11):
That feels like a cop out. That doesn't feel too painful to hear. I'm like, "Yeah, yeah, I know. I don't have a lot of time. I'm sorry." But I get it, and that comes back to your point about blockers and how important it's to unblock teams because that leads to a lot faster progress.

**Varun Parmar** (01:10:26):
That's true, that's true.

**Lenny** (01:10:28):
Okay, so let me shift a little bit to Miro's growth and I only have a few questions here. I know it's getting late on your side so I don't want to keep you too long.

**Varun Parmar** (01:10:34):
Sure.

**Lenny** (01:10:35):
The first is something I'm on this constant quest to understand how companies got their first users, and I haven't actually heard the story of how Miro got its first thousand users or customers. I know you weren't there in the early days, but you happen to know how Miro initially grew and got their first thousand users and customers?

**Varun Parmar** (01:10:53):
I think the fundamental thing there is that we always had user first approach and reaching out to certain communities that were relevant to what was a key part of lighting the fire, if you will, the proverbial way people start to talk about the product. Given the collaborative nature of the product, some of the early adopters invited people who were also early adopters and the flywheel started to work. I've heard that we did a fair amount of content marketing and listing the product on sites like Capterra sort of helped. There was some early investments in terms of SEO and organic growth, so there was a focus there, which was the main source of driving traffic. The top of the funnel came through that.

**Varun Parmar** (01:11:43):
The product teams were very intensely focused on building vital loops as a key mechanism of driving growth, once the traffic came in. Every interaction that actually introduced barrier, they looked at it and they looked at the data and they said, "Let's reduce this barrier. Let's remove this thing so that the product could be effectively embraced." It was an evolution over a period of time. There was also the fact that early on in the journey, some of the features were presented on a trial basis and then later on the model was evolved from a trial basis, time limited to a premium model that further accelerated the growth for the business. I would say those were some of the approaches that were taken to get to the first thousand users or so.

**Lenny** (01:12:34):
You talked about how Miro grows, where it has this magical loop of "I use Miro to for myself, then I share it with my team in whatever way I'm using it." They're like, "Oh, Miro, this is cool." Then they start using it and then they share it with people that they want to work with, and it creates this loop of growth." I imagine that's how Miro mostly grew initially and continues to grow. Is there anything surprising or unintuitive about how Miro grows that is beyond that? I imagine sales is a part of it and we can talk about that, but is there anything else that is interesting that is worth mentioning?

**Varun Parmar** (01:13:07):
No, I think that's the key of the growth. I think there are specific use cases where they are uniquely sort of geared towards inviting a lot of new people. For example, Miro is loved as a workshopping tool, and so generally one person is using Miro, but they invite 10, 15, 20, 50, 200, 300 people to that workshop. There are specific use cases where people get introduced to the product and then go and sign up for it and then start to use it for that use case or other use cases. I think the other accelerant in all of this is the templates that we have, in particular the role that Miroverse plays in all of this.

**Varun Parmar** (01:13:49):
Just to give you an example here, there was a template which was created around FIFA World Cup, so there was a FIFA World Cup diagram. Cornelius, he's the founder and managing director of a Canadian strategic service design consultancy firm. He created this Miroverse template and it had over 100,000 views and about 15,000 copies were made of the single template. Given the popularity of all of this, it actually got indexed by Google. When you went in the search, you actually saw the Miroverse FIFA template show up when you were trying to search for FIFA World Cup, and that was another sort of acquisition channel top of funnel that actually drew a lot of users to it. So I think I would say the Miroverse is also a key accelerant to this.

**Lenny** (01:14:45):
If you had to think about the pie chart of how Miro grows, what percentage roughly would you say is word of mouth, organic, versus what you just described, which is essentially a CO versus sales, outbound sales? How do you think about that? Is there a way to model that simply?

**Varun Parmar** (01:15:02):
Without getting into specific numbers and stuff, I would say fundamentally Miro is a product-led growth company and product channels are one of the highest contributors for growth of users. As the business has evolved to serve the needs of some of the largest corporations in the world, the enterprise segment and the enterprise persona when they're trying to provision Miro for tens of thousands of users who then go conduct hundreds of thousands of workshops on Miro that invite millions of users on the platform, is a key part of the flywheel that we are seeing. I would say product channels are probably very strong and increasingly enterprise is a key part of that acceleration.

**Lenny** (01:15:53):
A great segue to our final question, which is the idea that you started a product growth, sounds like clearly it's a big part of growth today, but as every product growth company does eventually you have a large sales team, I imagine, what have you learned as a product leader working with sales, especially at a product growth company about how to make that relationship work and have a product work effectively with a sales org?

**Varun Parmar** (01:16:15):
There are a few learnings and I would say maybe this is one area where we are working on how we could be doing better in terms of bringing ourselves closer to our high-touch and bringing high-touch closer to self-serve, in terms of how we operate overall. It's a lot of hard work, I would say first of all, basically, to bring both of these organizations together and you have to be very deliberate around the points of intersection and you have to make sure that these organizations don't consider themselves as competition. It's one product, one company, just two channels of how we are serving our customers. There's some things that we've done which is have the product marketing team that basically works across both of these functions and make sure that they are bridging what we are hearing from the sales organization in terms of what directly customers need on the enterprise side, and then what do we need on the self-serve side.

**Varun Parmar** (01:17:23):
There's a full process in terms of how the handoff happens across the maturity of the account. It can start as a self-serve, it drives adoption, and once there's adoption, there's a hand raiser that happens and then there's a sales rep that gets engaged and you go through the qualification process and then you have an opportunity to expand the account. We've over the years sort of architected and built the entire funnel and what the process is, and that's also sort of a key part of how all of this operates. But like I said, I think there are a few areas where we could further streamline how we operate and think of it as one single unit.

**Lenny** (01:18:05):
I imagine that is true for every company out there.

**Varun Parmar** (01:18:07):
Yes.

**Lenny** (01:18:09):
One maybe final question before we get to our very exciting lightning round. What are some features that people could look forward to that are coming with Miro?

**Varun Parmar** (01:18:19):
We recently, about a month ago, announced Miro AI, the backdrop of all the amazing work that's happening around generative AI and large language models and stuff. I think it was really, really exciting to see all of the community enthusiasm around the use cases that we launch. So we're going to be taking it across the finish line and doing a general availability in the coming weeks and months. I think that's one big thing and we'll be adding more capabilities there. Just today we actually announced a bunch of really deep enhancements and updates around how Miro can be used for team rituals and agile practices. Now you can actually do retrospectives in Miro where you can have a private mode where while Lenny's typing his feedback during retrospective, nobody else can see it and then one click you can reveal it. I just saw some of the results of the feedback and it was rated as the number one feature people saw.

**Varun Parmar** (01:19:14):
There's also some deeper integrations in terms of bringing an entire program board from Jira to start to do dependency mapping inside of Miro in a fun and collaborative way, to use this dependency mapping along with program board to start to do program increment planning, which is essentially scrum of scrums or big room planning that's happening. There's some really amazing capabilities that we've added there, which is on the backdrop of some of the updates we've made in terms of estimation of sprint story points and so on and so forth. Now there's a whole plethora of capabilities and apps that are available as part of the platform that allow you to have your entire team conduct your team rituals in Miro and you can automate certain things, you can streamline things, you can do certain things in async and then do the rest in synchronous ways, so I think that's been a big update as well.

**Lenny** (01:20:12):
Amazing. With that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Varun Parmar** (01:20:19):
Yes.

**Lenny** (01:20:20):
All right, let's do it. What are two or three books that you have recommended most to other people?

**Varun Parmar** (01:20:26):
One is, I love this, When Breath Becomes Air by Paul Kalanithi. It's one of those really emotional books that at the end of it, you might have tears in your eyes, but really, really amazing. We talked about Frank Slootman's Amp It Up, and then Satya Nadella's Hit Refresh. I think philosophically some of the things that we talked about today are inspirations that I found in some of these books.

**Lenny** (01:20:49):
What's a recent favorite movie or TV show?

**Varun Parmar** (01:20:52):
Ted Lasso. I don't know if it's a recent one or not, but something-

**Lenny** (01:20:55):
It's a new season.

**Varun Parmar** (01:20:57):
Yeah, I've enjoyed a lot. I think it's a very positive and uplifting message. I think the performance is huge. It's humorous, the characters are well-developed, so I think overall it's a treat, at least for, me to watch.

**Lenny** (01:21:13):
What's a favorite interview question you like to ask?

**Varun Parmar** (01:21:16):
I actually ask a math problem. For those of you who interviewed with me, I have this math problem, which is based on how Adobe created its first Creative Suite bundle. I was actually part of the team that came up with the pricing and packaging for the first Creative Suite post-acquisition of Macromedia. It's a math problem that allows you very quickly to figure out people in terms of their problem-solving skills. Usually I give that problem to people. I've given it to, I don't know, 700, 800 people, so I now have a very, very well established standard distribution of how long it takes for people, where do they get stuck and where they've gotten stuck, for those people I've hired, what evidence do I have in terms of using that as a framework in terms of them being able to solve things? So that's my favorite question.

**Lenny** (01:22:08):
So you're saying you've mapped back people that have done a certain way on the problem with their success and you've kind of found that it's a good signal of their performance?

**Varun Parmar** (01:22:17):
Yes. Not directly, but yes, correlation and stuff.

**Lenny** (01:22:21):
That's amazing. That's one of the biggest problems with interviewing. You think you're asking all these amazing questions and it's such a good signal, you have no idea. No one goes back and is like, "Oh, this person sucked. This person didn't... " That's really cool to get that much data on that one question. Two more questions for you. What's something relatively minor that you've changed in how you do product development that has had a tremendous impact on your team's ability to execute?

**Varun Parmar** (01:22:44):
We talked about some of that, sort of removing the roadblocks. I think having this motto of great customer value faster with high quality, just the simplicity of that and it's actually part of our evaluation rubric, it's part of how we measure ourselves and stuff. So I think just coming up with these simple concepts that you can rally the organization around, and I think it's still a work in progress, but something that I believe is leading to positive outcomes.

**Lenny** (01:23:07):
Final question. What's your favorite Miro template?

**Varun Parmar** (01:23:10):
It's the FIFA World Cup actually. I am so fascinated with what was done. Yeah, it's the latest one, but I think there's a bunch of them in terms of retros as well, and I think... like your template as well.

**Lenny** (01:23:21):
Amazing. We will link to all of those. Varun, this was amazing. Everything I expected and more, your team is as interesting and unique as I thought, and I am excited for people to learn from you and we're going to share a lot of links alongside this episode in the show notes. Two final questions, where can folks find you online if they want to reach out and learn more, and how can listeners be useful to you?

**Varun Parmar** (01:23:43):
Thank you, Lenny. It was a lot of fun. I enjoyed our interaction. You folks can find me online on LinkedIn. I think that's probably the best way to connect with me. I think in terms of one or two things I can ask everyone is that, one is if you are an existing Miro user and you use the product for something interesting, I highly encourage you to contribute it as a template as part of Miroverse. There's a lot of folks who use that and we would love for you to contribute there. The second thing is, I know a lot of product development teams, PMs and designers are big fans of you, Lenny, so those are also the users that use Miro. If there's anything we could do to make the product better, if there's things that you feel like we can expand the platform into, we would love to hear from you and just reach out to me directly over LinkedIn, direct message or connect with me there and yeah, and let us know. We're here to serve.

**Lenny** (01:24:40):
Amazing. Varun, thank you again for being here.

**Varun Parmar** (01:24:43):
Thanks, Lenny. Awesome.

**Lenny** (01:24:45):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [7/19] How to achieve hypergrowth in your business and career | Carilu Dietrich (Atlassian, Miro, Segment, 1Password)

**Carilu Dietrich** (00:00:00):
In order to get hypergrowth, you have to have organic, inbound, and viral word of mouth. You can't pay enough to grow at those rates and have a viable company. The biggest thing is an amazing product that people love to use, right? I mean ChatGPT is the most hypergrowth product that we've seen in history potentially, because people are so excited to use it and it's working in interesting ways. 

**Carilu Dietrich** (00:00:22):
And then I think the third thing is really riding the lightning, I would call it. Hypergrowth companies go through the stages of growth that would take other companies five years or 10 years, right? They're going from 10 to 50, they're going from 50 to 100, they're going from 100 to 200. They're jumping. And so they really need to keep hiring 2X and 3X leaders who have seen the next stage of growth, because it's going to be here before you know it.

**Lenny** (00:00:55):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard work, experiences building and growing today's most successful products. 

**Lenny** (00:01:04):
Today my guest is Carilu Dietrich. Carilu is a former CMO and has advised the CEOs and CMOs of hypergrowth B2B companies like Segment, Miro, 1Password, Bill.com, Productboard, Sprout Social, Weights & Biases, and most notably was head of marketing at Atlassian through their IPO. 

**Carilu Dietrich** (00:04:33):
Thanks, Lenny. Happy to be here.

**Lenny** (00:04:35):
You've had this incredible career. You worked at all these incredible companies. I'd love to just dissect what you have found to be most important and effective in building a career long term, just broadly. And then specifically if you're trying to get to an executive role someday, what have you found to be some more important habits, behaviors, tactics, lessons?

**Carilu Dietrich** (00:04:55):
I'll start by saying that everyone has their own calculus about the trade-offs they want to make on pursuing their career and the sacrifices they might need to make versus the other things in their life, their family, their hobbies, their passions. And so I think the executive track isn't for everyone because there are a lot of trade-offs.

**Carilu Dietrich** (00:05:14):
Because I think that some of the most important aspects of getting to the executive suite are working harder, learning more, pushing yourself, taking on more responsibilities and opportunities, maybe even in the white space, that aren't your job or aren't in your regular time. 

**Carilu Dietrich** (00:05:34):
When I was young in my career, I decided I wanted to be a CMO. And at the job where I had decided I wanted to be the CMO, I worked two hours later than everyone else on the team. And I had this thought in my brain that two hours every day for five years would get me how many more years of experience than someone else? And I could do that when I was young, and I didn't have kids, and I was willing to make those sacrifices. 

**Carilu Dietrich** (00:05:59):
But you look at a lot of the top CMOs and they have sacrificed a lot of things to read all of the books. And again, if I go back to that first job, I was a PR manager, and we went through a tough phase and we lost a ahead of product right before the major launch of a major product. So I volunteered to moonlight in the product department and run the beta, and do release engineering. And taking on other responsibilities gave me insights into other departments that made me more successful, early in my career and later on.

**Carilu Dietrich** (00:06:33):
And the same thing happens as you're growing, right? If a department head leaves and you can spend extra time doing your own job and being the interim for this other function, you can really show the top executives that you have the appetite and the skill to take on more responsibility.

**Carilu Dietrich** (00:06:50):
So I think learning as much as you can about your expertise, working really hard, and taking on more responsibilities, and having a great attitude and a strategic mind are probably what I think helps people get to the C-suite on the personal level. And then I have another set of five things that are what specific ways do you need to train your mind?

**Lenny** (00:07:15):
I know there's this backlash against working really hard that happened for a while, but I'm on the same boat as you have of success will come from working really hard. And sometimes that sucks, but that's usually how it goes.

**Carilu Dietrich** (00:07:27):
I think there's ebbs and flows in your life. You're going to have a baby here soon, congratulations. Thank you. And so maybe you take your foot off the gas for a little bit. But really, there's no shortcuts. There's no shortcuts to knowing a lot.

One of the people I admire most is Tomasz Tunguz, who was with Redpoint and now started his own VC firm. And I was talking to him about his blog and he was like, "I'd just wake up 5:00 or 6:00 AM every morning and write three to four blogs a week for 10 years." Damn. That is self-discipline and insight and drive. So yeah, no shortcuts. I think. You look at Denise Persson at Snowflake, and she's worked really hard to get there. 

**Carilu Dietrich** (00:08:12):
So the five things I think you need to do to get to the C-suite that are not personal side are you need to think about how your responsibilities tie to revenue. You need to think and talk in the terms of the CEO and the board. And that can be tricky when you're junior because you don't have exposure to it. But getting a strong handle on finance, and how the finances of the business work, and how the revenue of the business works.

**Carilu Dietrich** (00:08:38):
I went on a tour of the Tesla factory with my daughter's field trip a couple weeks ago. And the guy who was giving us the tour was like, "So I delivered and stocked all these different parts at the plant and then I would take a list. And after work every night, I'd go to each part of the plant and try to figure out what they were working on and what the challenges and opportunities were. And that's how I moved up."

**Carilu Dietrich** (00:09:00):
So it's just understanding how the whole thing works together. Because if you want to be in the C-suite, it's a job about how the system works. So I really encourage tours of duty between different departments. I told you about my tour of duty and product. I thought CMOs had to do every function, so I took a tour of duty in every function in marketing, but really getting a sense for other departments.

**Carilu Dietrich** (00:09:23):
The next thing is the relationships. So building really strong relationships with people by doing good work and helping them. And then the last thing I think is the quality of the companies you work for. So your career and your ability to transcend, which is really moving faster than other people to get bigger jobs, is fairly dependent on the momentum of your company. 

**Carilu Dietrich** (00:09:49):
So I was a leader at Oracle for five years, and my team grew from five to seven over five years. And I was a leader at Atlassian for four years, and my team grew from 15 to 100. And so if you pick the right company with the right momentum, you have a better chance of getting higher level experiences and accelerated career growth.

**Carilu Dietrich** (00:10:14):
And then I guess one little footnote. If you pick great companies, great people work for those companies, and go out and work at other companies and also give you opportunities. So I ended up at Atlassian kind of in a stroke of good luck because I had worked for Jay Simons, the president, at two companies before. So the quality of the first company, Plumtree, really helped propel my whole career.

**Lenny** (00:10:40):
There's so many things I want to double click on there. The last piece, it's the advice I always give people when they're early in their career is to go find a company that's going to do super well. That one experience is going to transform your entire career. Having the logo on your resume, the people you meet, the experience you get financially. But that begs the question, how do you find that? How do you pick a company? I think in your advising today, you join later where it's a little more obvious. "Okay, they're doing great." Do you have any advice or lessons about how to identify earlier where to go work and how to be lucky in that pick?

**Carilu Dietrich** (00:11:16):
Isn't that the billion-dollar question? So I worked for-

**Lenny** (00:11:20):
For investing too.

**Carilu Dietrich** (00:11:20):
Yeah. I worked at Atlassian, which was phenomenal. Then I worked for Classy, which was a company that helped nonprofits raise money. 

**Lenny** (00:11:29):
I've used that product.

**Carilu Dietrich** (00:11:31):
Thank you. And we were acquired by GoFundMe. And it was fine, but it was no Atlassian. And then I spent the next five years trying to figure out, how do you pick your next Atlassian? So my advice would be for people earlier in their careers, it's easy to pick the winners if you go work for a big company that's a winner. I would love to work for Tesla, or AWS. Or right this second, I would die kill for a job at OpenAI. You know some of the big companies that are successful... Salesforce has totally been a career maker to so many top executives.

**Carilu Dietrich** (00:12:04):
So early in your career, working for big name high momentum companies. I think you can't wimp out. You've got to want it and go for it. And maybe you apply year after year, and you meet people, and you try for it early in your company.

**Carilu Dietrich** (00:12:19):
Later in your career, I think what you just said, picking later stage versus earlier stage gives you a better view of their momentum. I actually have a Post-it note, got it here, about what I look for. 10 parts of what would evaluate to see-

**Lenny** (00:12:35):
You just have that Post-it note around?

**Carilu Dietrich** (00:12:37):
I do. It's one of five Post-it notes on my board.

**Lenny** (00:12:37):
I want to hear what the rest are too. But keep going.

**Carilu Dietrich** (00:12:44):
I have to look at it for advisory. I only take eight to 10 clients. I'm always full. And so it has to be a phenomenal company. So how do I know if it's a phenomenal company? Here's my list. Rule of 40, which is your profitability and your costs together. The quality of the investors. Are they really top tier investors? Are they mid tier or some you've never heard of? Investors do a lot of due diligence, but you also want to look at their most recent rounds, because they could have phenomenal early stage and have slowed down. I think the later the size, the more reliable, because they've just made it farther. 

**Carilu Dietrich** (00:13:23):
Their Net Promoter Score or their customer satisfaction. Do people really rapidly love this product or is it like meh? Their net dollar retention, which is, how fast is their revenue growing? And I should have it on my Post-it note, but Snowflake was the benchmark. I think they were growing at 142%.

**Lenny** (00:13:44):
I think at one point it was 180, whatever.

**Carilu Dietrich** (00:13:46):
Yeah. That sounds right. 180, 165. Net dollar retention, if you have a customer and they just renew at the same dollar rate, it would be 100. So 180 is almost doubling just their customers. So they didn't even need new customers, almost doubled their business. A phenomenal net dollar retention means it's a really strong healthy business. 

**Carilu Dietrich** (00:14:09):
I looked at their growth rate last year, their burn rate, are they going to run out of money? And then ideally, are they number one in their market? Do they have a Forrester or a Gartner Magic Quadrant? People tell you if they're number one. 

**Carilu Dietrich** (00:14:22):
And then the last thing is I look at their Glassdoor. Is it just a bad place to work and where people unhappy? Because they don't actually survive as long as companies where people are happier.

**Lenny** (00:14:34):
I love this list. You should turn it into a blog post, and there's another idea for you. Can you share what the other Post-its are around you? Even broadly.

**Carilu Dietrich** (00:14:41):
I can. One says, "More Yoda, less Wonder Woman," which basically is ask better questions. The second one was-

**Lenny** (00:14:51):
Ask them backwards too.

**Carilu Dietrich** (00:14:52):
Yeah, right? Ask them backwards. Which is funny, because the other Yoda thing I have up Is... Here wait. "Do or do not. There is no try." Backwards. I have another one that says, "Hell yes or no." When opportunities come to you and you're like, "Should I do this or should I not do this?" You only have so much time in your life. And so if it's not something that really excites you and gives you energy, it's tough to be the best at it. And so hell yes or no.

**Carilu Dietrich** (00:15:26):
And then the last one is, "Worrying is wasted energy," because I think we live in this economic pressure cooker, and there's a lot of fear and uncertainty. But we just need to take that fear and uncertainty and thank it for giving us urgency. And then make the list of what can we control now and what should we do next.

**Lenny** (00:15:50):
That's actually a perfect segue to my next question. And by the way, that was amazing. I'm glad that I asked about your Post-its. That's a whole life philosophy right there in Post-its.

**Carilu Dietrich** (00:15:59):
Yeah, I should do a BeReal. This is what is looks like at this side. These are all the Post-its.

**Lenny** (00:16:05):
Okay. So the question is around, I don't know if we're technically in a recession, but maybe we're on the verge of recession. The market's not great. And a lot of people are being laid off, or have been laid off, or are worried about being laid off, or just graduating college and looking for jobs. And I'm curious if you have advice for people trying to find a job in this market or just generally trying to accelerate their career. What is your advice for just how to deal with this environment while also trying to advance your career?

**Carilu Dietrich** (00:16:32):
I'd like to take in two parts. One is if you're unemployed and one is you're in a job. So if you're unemployed, it's tough. It's a tough time. There's a lot of supply. And so I think you just really need endurance and grit. And the sticker worrying is wasted energy, because you will get another job. It's just going to be a little bit more of a bumpy ride than some other years.

**Carilu Dietrich** (00:16:55):
And the best executives I know have had down periods in their careers, where they were out of work for a while, where they were fired by a CEO, who this or that. And what they have in common is endurance. They're just back in the ring. So I think it's important to not lose endurance. 

**Carilu Dietrich** (00:17:15):
It's also important not to settle on a crappy job or a crappy company. Each job you have prepares you for the next job, and each logo you have prepares you for the next job.

**Carilu Dietrich** (00:17:27):
So I'd spent a lot of my career trying to also chase waves. My first job in college, I was in nonprofit, and then I wrote a book on the giving programs of the top 50 tech companies. And I realized that tech companies had a bunch of money in 1999, and were giving it away to charities. And I wanted to go into tech, because that's where the growth and money was. And I thought I could give it back to the world and good, but I could be inside the bubble. 

**Carilu Dietrich** (00:17:55):
And then within tech, I moved my way to B2B. And within B2B, I moved my way to SaaS. And within SaaS, I've moved my way into dev tools, and collaboration, and now AI. 

**Carilu Dietrich** (00:18:05):
There's this book called The Millionaire Next Door, which talks about how the very best antique store makes one or 2% profit. And the very worst oil and gas company makes 35% profit. And we know that some of the worst software companies make 65% profit. 

**Carilu Dietrich** (00:18:25):
So picking your industry will propel your career, and picking the right company will propel your career, and then doing a good job will propel your career. So I think that there's no magic bullet to getting a job. But working your network, sticking with it, and continuing to grow your skills are the three most important things.

**Lenny** (00:18:43):
Big part of this conclusion is don't feel like your career needs to slow down in this period.

**Carilu Dietrich** (00:18:49):
And I think if you're in a job, some of my greatest career growth came in the economic downturns. In the 2000s, in the 2008. Because other people take their foot off the gas, and you can put your foot down. If you're willing to learn more, hit yourself into new roles or new responsibilities that no one's covering at your company. When they don't hire tons of people for everything, there's lots of open projects where you can raise your hand and grow. You just can't be as focused on title and salary right now. You're kind of building up value that you'll be able to monetize on the other end of this recession or downturn.

**Lenny** (00:19:26):
Let's segue to chatting about growth. And I thought it'd be fun to start with your story of running some very expensive ad campaigns. I know the founders are always kind of flirting with this idea of buying a bunch of billboards, running TV ads, maybe subway ads and bus ads. And you've done a lot of that and you've spent a lot of money doing that, and particularly non-digital advertising. And so I'm curious what you've learned from your experience and approach to this sort of marketing spend.

**Carilu Dietrich** (00:19:53):
Yes. I've spent hundreds of millions of dollars on it actually. I ran global awareness advertising for Oracle, and did all of the airports, and the front page of the Wall Street Journal, on the back page of The Economist, and take over in the middle of Salesforce in downtown San Francisco. And we did the Ironman movie sponsorships, and the sports teams and arena sponsorships.

**Lenny** (00:20:16):
That sounds very expensive.

**Carilu Dietrich** (00:20:17):
Super expensive. And then Atlassian to a lesser degree, we spent several million dollars on different awareness campaigns to get chat noticed, or to associate Jira with the Atlassian brand. Advertising is sexy and super expensive for the benefits. It's a multi-year benefit of awareness. People have to see things many times, and it has to really resonate with them. 

**Carilu Dietrich** (00:20:45):
So my advice to founders is that the most important thing is the quality of your product. Oracle spent a ton of money, and people still didn't like us in a lot of ways because they had poor experiences with the salespeople, or they didn't like Larry, or the product had kind of languished since it had been acquired by the company. So your product has to really be fantastic. And then also to do good brand advertising, it has to be sustained over a long period of time.

**Carilu Dietrich** (00:21:14):
So Oracle had the front page of the Wall Street Journal, back page of The Economist, this boring advertising template with the red bar, but it made it memorable. We would do market tests, and two or three or 10 times more people would recognize the Oracle brand without the logo, because of the consistency versus SAP or or IBM. 

**Carilu Dietrich** (00:21:35):
So you really need to be thoughtful about spending consistently over a longer period of time, and a smaller amount on a fewer number of things can be really effective. So Snowflake, for instance, has always gotten credit for doing a billboard on 101, and people think they do lots of advertising. But for many years, it was only the billboard on 101. It was just sustained and strategic.

**Lenny** (00:21:59):
So I guess two things that I take away from that is one, you can spend a lot of money, and if your product's not actually incredible, it's not really going to do much. And correct me if I'm wrong. And then two is sometimes, just one very targeted spend is worth a lot more than just blanketing a bunch of ads.

**Carilu Dietrich** (00:22:16):
Absolutely. I was telling you a story that at Atlassian, we did a big advertising campaign on our HipChat product, which was head-to-head with Slack, and it was an Office Space spoof with Bill Lumbergh. But the product had some uptime issues, and some feature issues, and Slack pulled ahead, and the advertising wasn't what would've made it or broken the product. It's really the product experience, and the advertising just amplifies.

**Lenny** (00:22:42):
I think you also shared with me this HipChat ad, that's maybe my favorite billboard ever. And I don't even know why looking back, but it made me laugh so hard. Back in the day, it was this meme of some early meme stick figure guy saying, "Why you no use HipChat?" Looking back I'm like, "Okay. I don't know how funny." But I think in the moment that was a really popular meme, and it really stuck with me.

**Carilu Dietrich** (00:23:04):
Well if you think about the best advertising, it's something that has a little twist of humor, or personality, or truth that sticks in your brain. So yes, that was a successful advertising. And kudos to my team, because of course I don't write it myself as the head of marketing. But yeah.

**Carilu Dietrich** (00:23:22):
And some of my other favorite ads are also others that highlight the customer. So New Relic did an advertising campaign around data nerds. When data nerds were not really popular, they were still nerds. And they had these tattoos that said nerd life, and they featured customers on billboards talking about cool data nerds. And some of those campaigns that really stand out have something that's funny, unexpected, and then true to the product.

**Lenny** (00:23:54):
I remember those, one of the ads featured, our CTO at Airbnb, Mike Curtis, and everyone was very excited to see his face on the Billboards.

**Carilu Dietrich** (00:24:02):
Yeah, Salesforce has done a great job with those over the years too, really highlighting the customers.

**Lenny** (00:24:06):
So zooming out a little bit, you specialize working with companies that are going through hypergrowth. And you've worked with companies like Miro, Segment, Bill.com, which I don't know if people know is just a massive, massive business. And also 1Password. 

**Lenny** (00:24:21):
And on the topic of 1Password, interestingly I didn't realize how big and how fast 1Password has been growing. And just last week I saw this report from Okta where they have all this interesting data about which products people are using, and they put out this report showing which products you're getting the most new customers. And then on a different axis, which companies are getting the most users per new customer. 

**Lenny** (00:24:46):
And there's this six companies in this quadrant. Figma, Miro, Snowflake, Sentry, HubSpot, and 1Password, which blew my mind. And interestingly, you work with two of them. And so all that to say, what have you noticed about what is most in common with companies that are going through hypergrowth? What is most in common in terms of what has contributed to them being that successful?

**Carilu Dietrich** (00:25:08):
The biggest thing is an amazing product that people love to use. I mean ChatGPT is the most hypergrowth product that we've seen in history potentially, because people are so excited to use it and it's working in interesting ways. So Miro, whiteboards were the number one most uploaded asset in Jira forever. Because people all get together and they write their ideas on a whiteboard, and then they need to remember it and iterate on it. And that bringing that concept to life just hit a cord that people wanted to use. And when one person uses it, another person uses it.

**Carilu Dietrich** (00:25:42):
1Password similarly, I've been a 1Password user for more than 10 years. We used it at Atlassian, as a corporate. And then they have the family plan. So I used it at home and then my dad got elderly, so I had a family that I was the administrator for, and then I go into different companies and you bring it with you.

**Carilu Dietrich** (00:26:02):
And one of the other companies I advise is Productboard. And I became an advisor of Productboard because 1Password's CPO had it in another company, brought it into 1Password, rolled it out company-wide to get alignment and visibility on the product roadmap. 

**Carilu Dietrich** (00:26:18):
So in order to get hypergrowth, you have to have organic, inbound, and viral word of mouth. You can't pay enough to grow at those rates and have a viable company, especially in this economic efficiency market. So has to be an amazing product, has to have some viral activity. So we just talked about Miro or Atlassian. You could have an individual person use it and then they say, "Hey, I'm going to present at this meeting with Miro, come join me on my board. I've got these confluence pages we'd set up as a wiki about these engineering topics, and I want your team to collaborate on them." So those natural points where your users are selling to other people is way more efficient than having sales people that have to sell to other people. 

**Carilu Dietrich** (00:27:12):
And then I think the third thing is really riding the lightning, I would call it. So hypergrowth companies go through the stages of growth that would take other companies five years or 10 years. They're going from 10 to 50, they're going from 50 to 100, they're going from 100 to 200, they're jumping. And so they really need to keep hiring 2X and 3X leaders who have seen the next stage of growth. And then the people inside can be homegrown talent, but it's tricky to keep up. 

**Carilu Dietrich** (00:27:46):
So my whole business is based on people who are trying to be homegrown leaders, but don't know what the next stage of growth looked like. And so a lot of hypergrowth companies hire ahead, hire advisors. Leaders need to really think about mentors and friendships of people who know what great looks like at the next scale, because it's going to be here before you know it. And so I would say those things. Amazing product, viral movement, and company that can ride the lightning.

**Lenny** (00:28:15):
I imagine founders listening to this that don't have insane virality or huge word of mouth are like, "Is there no path to being a really successful company?" And then I think about companies that did succeed with other channels, like say paid or SEO. And so I guess the question for you is, do you need to grow in this environment, I guess, primarily through word of mouth, organic reality, growth engines? Or do you still see opportunity for companies to grow other ways, say paid, or SEO, or sales eventually?

**Carilu Dietrich** (00:28:51):
For sure. All of the things are important. I think what I wanted to say first as you were talking was that it's easy to look at a company after they've been viral and be like, "That's amazing." I would like to start a newsletter. I have. It's carilu.com. Lenny has a newsletter. How can I ever grow like Lenny's virality? But Lenny started with one blog, and then another, and the consistency.

**Carilu Dietrich** (00:29:14):
And when I look back at Atlassian, people would be like, "It must have been so easy to go from 100 to 500 million." And it never felt easy. It was a slog to do exactly what you're talking about. New features, listen to customers, strong SEO. Actually SEO was the number one marketing motion that we used, and SEM. We spent probably between 15 and 25% of our leads from paid search marketing at the time. Now I have a ton of customers that are pretty deep into account-based marketing.

**Carilu Dietrich** (00:29:49):
Getting to virality and getting the hypergrowth is not a magic bullet. It's consistency, customer obsession, incremental improvements across all parts of the business. So I think founders just need to double down on having a product that's differentiated and does something that their customers really love. And each incremental step is a step forward.

**Lenny** (00:30:16):
**Carilu Dietrich** (00:31:49):
I think there's two or three things. One is really empowering the people in your company to be thought leaders. So early days, Atlassian's founders were on all the developer boards. And in fact, I remember, we were maybe 150 million or 200 million, and Scott Farquhar the CEO was still participating and going back and forth in different dev forums when I was like, "I don't know, should we elevate your status? Should we have evangelists and engineers that do this?"

**Carilu Dietrich** (00:32:18):
And we did, right? And look, one of my clients now is Weights & Biases, the ML ops company helping lots of different AI companies with their ML models. And they have really thoughtful technical people who know more and write more on the blog and engage with their community. And that creates a word of mouth, because they're providing both a product and concepts and learning. That's one of the HubSpot secrets was all of their really thoughtful, helpful content, certifications for marketers.

**Carilu Dietrich** (00:32:52):
So I think going back to summarize, word of mouth can be driven by thought leadership, which is hiring the right people to really be deeply engaged as super experts. Having a really strong content strategy that's either in communities that already exist, online communities, open source communities.

**Carilu Dietrich** (00:33:13):
And then third I would say building your own community. So no one sells your product better than your own happy customers. And if I go way back to the very beginning of my career, I worked on a marketing team where I owned demand gen just for net new prospects, and a peer owned demand gen just for existing customer upsell. And we would have different field events.

**Carilu Dietrich** (00:33:34):
And the existing customer ones were smaller than if we'd invited the prospects and had more buzz. And the prospect ones were very salesy. Whereas if we brought them together and you had customers talking to each other and prospects listening, everyone had a better time.

**Carilu Dietrich** (00:33:48):
So Atlassian, one of our secrets was this amazing user group community where we just paid for beer and a pizza, and we'd facilitate local in-city leaders, and people would meet up and talk about our products, and talk about development generally, and grow their careers and grow their network. So I think those are the three. The right people, the right content, and the right communities.

**Lenny** (00:34:11):
As you were talking, I was reminded, I was just chatting with the founder of Gusto about their journey early on. And he said that for the first 200 customers, he sat there with them running payroll, watching how they react every step of the payroll process and how they feel at every moment. And that was a big part of what helped them build the product that people actually continue using, and love, and stick with. And if it wasn't in person, it was on a phone call. And it's like the epitome of doing things don't scale, just like for hundreds of new customers watching them use your product. Pretty wild.

**Carilu Dietrich** (00:34:44):
I mean that's the secret. That's the secret sauce. And I've heard some early stage startup advisors say that you should build processes that don't scale first. Because when you're in the super early stage seed A under 10 million, you've really got to go deep at that stage. 

**Carilu Dietrich** (00:35:04):
And in fact, I see that that's one of the problems that companies experience as they get much bigger, when product managers can't meet with customers, or they get limited customers, or maybe they can only meet with a junior user, only the administrator, and not lots of the users. So that insight into the daily struggles and experience of your customers, it's harder to get as you get bigger I think.

**Lenny** (00:35:28):
I want to drill into Atlassian. You've brought them up a couple times. You were at Atlassian for a long time. You were there from early days of growth to IPO. And one of the most interesting elements of Atlassian and something that comes up a lot on this podcast is product led growth.

**Lenny** (00:35:44):
And Atlassian I think is one of the most classic examples of a product led growth company. And from what I understand, y'all waited a long time to hire your first salesperson. So my question is what did you learn from that experience about when is the right time to start leaning into sales and hiring sales, and what are the trade-offs of waiting longer or doing it earlier?

**Carilu Dietrich** (00:36:04):
Atlassian was a super unique company at a super unique point in time, because the founders never took outside money except for one late stage financing to buy out some early employees, to give some liquidity. So we never had VCs or private equity that had a voting share that was significant, that could overrule the founders.

**Carilu Dietrich** (00:36:28):
So the founders were going through this experiment that turned out to be really successful, where they took all the money they would've spent on a sales org and plowed it into engineering and product. I'm going to pull up a slide here that tells the Atlassian story about the ratio of the sales and marketing to the product and engineering.

**Lenny** (00:36:46):
Amazing. And by the way, check this out on YouTube if you're listening to this and check out this slide.

**Carilu Dietrich** (00:36:53):
So this is a representative sample of what we did in Atlassian's history, and what ratios still exist today, even several years later. Where we spend way less on sales and marketing. Marketing spent less than other marketers. And also we had almost no sales org, or a sales org that was really focused on renewals, or now an assisting sales org that's focused more on enterprise. But relative to other companies, a much smaller, much more efficient sales org. And we took all that money and put it into product. So here we're spending two times, three times as many dollars in R&D as many other companies that we'd benchmark against to make a product that really sold itself.

**Lenny** (00:37:37):
It's interesting. So I'm looking at the slide. And again if you're listening, check this on YouTube because it's pretty crazy. This slide of bar chart of spend in sales and marketing and R&D, and Atlassian is the very lowest amount of spend in sales and marketing, and the highest spend in product. And it's interesting that it's from 2020, so it's not even in the early days. It's like still today basically.

**Carilu Dietrich** (00:37:59):
Right. I'm going to close this down and keep telling you a little bit more about it. There's some unique things that people can take now and incorporate. So the real strategy in sales, sales is the most expensive vehicle, right? Expensive people that spend a lot of time. So the Atlassian model was to sell only to people who were already customers really. If several people or a couple groups had purchased, we'd help them with their renewals. And now in the later incarnations of our sales orgs at Atlassian, it helps a lot more with larger enterprise companies who need enterprise deals, or does more cross-sell and upsell, but doesn't really do prospecting. Net new prospecting is a really expensive way to get new customers.

**Carilu Dietrich** (00:38:51):
So we see different trends coming now with companies, because almost no one can do pure product led growth. Because your investors want to see accelerated growth, and most people believe that adding an SDR or adding an AE will add a predictable amount of revenue. And so it's difficult because product led growth and sales have to coexist.

**Carilu Dietrich** (00:39:16):
But the whole transition in marketing that's happening to account-based marketing and intent-based signals is trying to do some of what we were doing at Atlassian, only to engage salespeople with customers that are actually likely to buy. And if you look at other hyper-growth companies, Airtable, Miro, both of those I know from the inside have had strategies where the salespeople really only engage after some threshold has been hit of number of users that have already been paying for the product on their credit card. But sometimes it's a high number of 20, 40 people at an account have to be engaged before a salesperson engages.

**Lenny** (00:39:54):
Based on that, what is it you recommend to founders these days that maybe are product led and just self-service [inaudible 00:40:00] oriented. Do you kind of take this experience and wait as long as you can to hire your first salesperson? I know it's very specific to the situation, but what kind of advice do you generally give?

**Carilu Dietrich** (00:40:12):
You and I are both like [inaudible 00:40:14] who was just on your podcast earlier this month. Product led growth depends so much on your product and your buying market. There's some buying markets that are less likely to use salespeople, and you need to go in from the beginning. HR might be one, right? Whereas a lot of the hyper-growth companies in the dev tool space can use product led growth because developers both hate failed people, and really love to research themselves. So you see [inaudible 00:40:47] taking off because people engage and kind of self sell.

**Carilu Dietrich** (00:40:52):
So I would recommend, get closer to their customers and read the signals. If your product is good enough, the people can get time to value in a couple of days instead of weeks or months. You can have a product led growth motion. If your product needs to be put in context, and customized, and assisted, sales teams sometimes are expensive services arms to cover over product issues and help customers buy it until it's fixed. Or if you're in a market where your buyer just really doesn't buy online with research and a demo, then you need to have salespeople. But I would say try not to hire too fast and too far ahead in sales and inside sales, because it seems like it's going to add revenue, but it actually is a huge cost and a huge drain on the business if the product isn't getting that kind of resonance.

**Lenny** (00:41:47):
I just had a conversation with the founder of Retool for this series that I'm working on, and he basically found the same thing you found where they thought it could be a product led experience where you're building internal tools using their product, but it turned out nobody really understood how to do it themselves and it took a lot of handholding to make it work. So they became sales led from the beginning, even though it feels like a tool that has a lot of potential to be product led and self-service.

**Carilu Dietrich** (00:42:11):
I think the other hybrid I'm starting to see is people who turn their SDR, sales development reps, into sales engineers, researchers. So instead of having a salesperson who's like, "Would you like to have a meeting with another salesperson?" The first touch for customers that are maybe kicking the tires or trying a product led growth is a person who can help guide them on the path. And I like this hybrid nature because basically it extends product led growth, but helps people in this case where you're talking, where the product itself isn't so intuitive that you can get all the way to the buy itself.

**Lenny** (00:42:51):
It also sounds more fun to talk to a sales engineer than a salesperson.

**Carilu Dietrich** (00:42:56):
I know. I always wanted to be a sales engineer. I was a salesperson, and I crushed on the sales. Engineering team who knew everything and could draw all the architectures.

**Lenny** (00:43:03):
Oh wow, I didn't know that. A couple more questions around this stuff. So you've worked with a lot of different companies. And you kind of come in and help them figure out ways to grow faster, unlock growth opportunities. What do you find often gets most in the way of making big changes to the way they approach growth and approach different growth channels? And maybe on the flip side, what do you find is most essential to making big changes at a company around how they think about growth?

**Carilu Dietrich** (00:43:30):
The big growth levers are pretty consistent across companies. You start with one product, and you have a couple choices on how the go-to-market works. Product leg growth or sales assisted. You get a little bit bigger and you add an incremental product, or you start to add new segments. You're going to focus on a vertical like finance, or you're going to go global, or you're going to add new sales channels like a partner channel. 

**Carilu Dietrich** (00:43:56):
And what I've seen with the big growth levers is that it can't ever be an individual department's goal without being a cross company strategy goal, if it's really going to make a difference. 

**Carilu Dietrich** (00:44:07):
So you've talked about it in your newsletter and on your podcast, but growth isn't just like a person in the engineering team that hacks by themselves. It really has to be funded and thoughtfully constructed so that there's the right content and experience, and product features, and virality features a customer to continue to drive growth.

**Carilu Dietrich** (00:44:29):
And similarly, lots of companies right now are trying to move upmarket because the economy has created so much pressure in S&B that they're going to try to move to enterprise, or they've trying not to sell as much just to tech companies because tech companies are under pressure and so they want to move to different parts.

**Carilu Dietrich** (00:44:51):
Sometimes the marketers get blamed or sales gets blamed, we don't have enough leads. But really it's a company strategy problem where the company hasn't decided, "Hey, we're going to all move in this direction and if we're going to sell the enterprise, marketing's going to bring in leads, products going to have a roadmap, and some meaningful features to enterprise. The customer research is going to start thinking about them. We're going to hire some customer support people who know how enterprises work. We're going to hire some salespeople who sell differently to enterprises than S&B." The big growth levers are strategy problems, not individual departmental problems.

**Lenny** (00:45:26):
And what do you find needs to happen for that to change? Is that like CEO needs to be like, "Here's what we're doing, everyone get on board," or something else?

**Carilu Dietrich** (00:45:35):
I think it can come either way in the C-suite, right? So my job, I advise hypergrowth CEOs and CMOs of companies, 30 million to 500 million. Often if I'm advising a 30 to 100 million company, the more junior marketer with a CEO who's often a first time founder, who doesn't necessarily know if the marketer's good or not. Hasn't done run marketing before, doesn't know if they should trust what the marketers saying.

**Carilu Dietrich** (00:46:04):
So often the marketer is saying," Hey, we're having problems because the company's not delivering on this promise you want us to sell." And sometimes the CEO doesn't know if they can trust it, a judgment. And so in that case, someone like me who's an advisor comes in and is like, "That's right, it's not a marketing problem, it's company strategy problem. Let's have an offsite and build some OKRs where we all go after enterprise and we win it together."

**Carilu Dietrich** (00:46:30):
You'll see at bigger companies or when a new CMO comes in with more senior or seasoned, they'll have the social capital to push back into the executive suite. Or a new head of engineering who will say, "Look, I know you want to move ahead faster, but we actually have to catch up on this technical debt." And they'll push back and get that strategic space that they need. So it can either come from the CEO or it can come from the C-suite really coming together to solve those problems, instead of pushing them under the rug.

**Lenny** (00:47:01):
You touched on this nuance that a lot of times, there's not a lot of trust between the marketing head and the CEO. And I'm curious what you find helps build that trust.

**Carilu Dietrich** (00:47:13):
There's a couple things that are really critical for senior marketers, and I actually have a blog coming up based on a podcast I've recorded about why CMOs mostly get fired. And the issues are generally one, that the CMO isn't focused enough on the revenue. So some CMOs get focused more on the pipeline or the awareness, and the CEO doesn't feel like they really have a partner in driving the revenue. Or they don't feel like the CMO really has a handle on what will drive the revenue.

**Carilu Dietrich** (00:47:46):
So marketing's tough because it's a big spend category, and lots of the spend doesn't convert in quarter. Some of it doesn't convert in year. Advertising campaigns, some take multiple quarters.

**Carilu Dietrich** (00:47:57):
So it's really important for CMOs to have a handle on the metrics, a solid prediction of what growth levers they can use, and to be able to talk in the terms of the CEO and the board.

**Carilu Dietrich** (00:48:11):
And I think that that's the biggest gap that I generally see. And then of course, there's a whole bunch of table stake stuff. They have to be running their business well. They have to be a good leader that people want to work for. They have to hire a great team that elevates them and the company, they have to be thoughtful and strategic about the market space that the company's in. They're not just working the levers in the factory. They're thinking, "What new markets should we enter? What new growth areas should we employ?" Like we just talked about. "What new companies should we acquire?" They also need to be thinking ahead. And I think being good on metrics, good on strategy, and good on market helps CMOs spar with CEOs in a way that builds trust.

**Lenny** (00:49:00):
It's interesting that you say, that blog post you titled Why Most CMOs Get Fired, and it connects with something. Casey Winters noted, that most CPOs also get fired chief product officers. I forget the quote, but it's something like, "The most you can help for is a couple swings at the bat before you get fired as a CPO." Why do you think this is so common for these chief C-suite roles to startups to not work out?

**Carilu Dietrich** (00:49:26):
They're incredibly hard jobs. The chief product officer and the chief marketing officer are both strategy jobs with difficult to measure results because some of them are direct and some of them are indirect. And I think both of them get swept up when a company's not performing well too. If company's not performing well, you can kind of swap out the head of product, and the next one will be more strategic and deliver faster.

**Carilu Dietrich** (00:49:55):
And in fact, I've worked in one of the roles, the CFO was really after my chief product officer, and ultimately got him fired because he wanted to move everything offshore, and develop faster, and he didn't want to re-platform, and he didn't want to deal with the technical debt. And the CFO was sure that it was the CPO's fault, and then they got rid of the CPO, and the CFO tried his plan and it didn't work. And then you bring someone in who's like, "No, that guy had the right plane."

**Carilu Dietrich** (00:50:21):
So both of them are tough jobs. And they require a high bar of excellence, a high connection of trust, and then I think just endurance to keep going and find the next role where you're really a fit and the company really has momentum.

**Lenny** (00:50:36):
It also reminds me, I was just talking to, I think it was Canva. Where their first engineering hire is now their CTO still, and their first marketing hire is their CMO still. So it does work out on occasion.

**Carilu Dietrich** (00:50:48):
It works out on occasion. And in fact, I've been playing around with a 10 part series about those CMOs in the CMO world, because there's about 10 to 15 CMOs who have started when it's really small and grown all the way. And they're the ones we really want to learn from. And I know a lot of them and really admire their work, and have learned so much.

**Lenny** (00:51:09):
You should absolutely do that. That sounds very cool. You talked about how you work with companies from 30 million to 500 million. What is it about that stage that's unique, and what happens after 500 million, and what's the difference before say 30 million? I know it's not an exact number, but how do you think about that range?

**Carilu Dietrich** (00:51:24):
No, it's not an exact number. My bottom number is because there's this early stage of product market fit where the founder and the company are trying to figure out who their real ideal customer profile is, and can they sell to them consistently?

**Carilu Dietrich** (00:51:39):
So I've worked for some early stage startups where we've tried lots of different things, but they're not repeatable. You can't scale it. "This product works for this. This product works for this too and it works for this," but those are all kind of unique cases studies. And so my skill is in helping people scale. 

**Carilu Dietrich** (00:52:00):
And so if they've already found product market fit and they've gotten some funding or they're bootstrapped, but have enough funding to really be trying to build out marketing in a marketing team, that's when I know what each stage looks like. So I know what $30 million great teams look like, and 50 million, and 100, and 150 million, 200 million. My ride at Atlassian was from about 100 to 500.

**Carilu Dietrich** (00:52:26):
And then over 500, the act of going public, being an early stage public company, I know what that all looks like. And then beyond that, there's public company consultants I think more, that do more specific things. I more help the CMO and CEO structure for the next stage of growth, because they're going through it so fast, they haven't hired someone yet who's already seen.

**Lenny** (00:52:51):
Got it. One very nuanced question I want to ask you is about bundling. So there's HipChat and Slack kind of ate their lunch, not necessarily through bundling, but there's Slack. And then Slack, I don't know if it's true, but it feels like Microsoft Teams is eating their lunch with bundling. And I'm curious, what do you think of bundling as a strategy to win long-term? And also, how do you compete against say, a Microsoft that may one day bundle your product for free, and you might be in big trouble?

**Carilu Dietrich** (00:53:22):
I think it's two separate questions, so let me take them separately. The first is, what do I think about bundling? So small and medium-sized companies will go from being a single product company to a multi-product company in order to progress. Because you need a diversified financial model, because you need to be able to sell new products into your customer base who should already be friendly to you if they like your products. And because you need to really expand your total addressable market to get to be $1 billion or $2 billion company. But I believe in bundling is a growth strategy.

**Carilu Dietrich** (00:53:57):
Specifically for product led growth companies, bundling is not a great land strategy. So at Atlassian, we had a number of products and experimented with different bundled lands. And it really slowed down the product led growth motion. So we ended up going back to land with a single product, high velocity, single person uses it quickly starts to get value, and then come in with other things.

**Carilu Dietrich** (00:54:22):
So from that perspective, product led growth bundling is not very effective. Bundling for a sales led motion is pretty effective when you're at the right stage of growth. 

**Carilu Dietrich** (00:54:33):
And then as far as the question of competing against Microsoft, there's these two parts of the philosophies. A best of breed and an all in one. An Oracle was an all in one, and Microsoft is an all in one. You can buy all the things and your CFO can get a discount by spending a whole bunch of money on a bunch of things. But in the all-in one, some of the pieces aren't as good as the best of breed.

**Carilu Dietrich** (00:54:57):
And so Slack for a long time was the best of breed. People were willing to pay more because they thought it was markedly better than the other instant messaging options. 

**Carilu Dietrich** (00:55:07):
But there's shifts between best of breed and all in one in economic wins. So right now, CFOs are putting the squeeze. Is Slack really that much better than Microsoft if the Microsoft one is free with all of our other purchases? It's tough. It's tough to go head-to-head with a powerful, big investing, all-in-one competitor. The only way to win is to be the best and have a product that's so much better, that it's worth the extra money.

**Lenny** (00:55:37):
Interesting. So essentially in a tough environment, bundling is most effective almost. And then this other interesting point about [inaudible 00:55:47], you want to stay focused on one specific pain point. What is it that Atlassian tried to do that they tried to pitch all your planning products in one suite? Is that kind of what we-

**Carilu Dietrich** (00:55:59):
Well, Jira was the issue tracking. And then we also had Confluence, which was the Wiki page. So let's say there was a business bundle that could have been HipChat, Confluence and Jira. Or there were developer combinations that could have been Jira, Bitbucket, and maybe Confluence too for an engineering team.

**Carilu Dietrich** (00:56:19):
Basically, if you have to evaluate multiple products to purchase something, it's not a fast and easy online self-service buy. Because you're like, "Do I need all three products? Can I break them apart? Do they all work? Are each of them best of breed?" Whereas if you're like, "I need issue tracking, I'm going to buy Jira, this looks good. I've tried it out, I'm ready to go." That can happen in seven days. Whereas if you add in multiple products, it takes more days and just leads to fewer conversions.

**Lenny** (00:56:52):
That makes absolute sense. I can see someone thinking the complete opposite and then now realizing how we see. I see why this isn't working.

**Carilu Dietrich** (00:56:58):
You should always test it. Right? I mean, the secret to product led growth is can you test it? And so we tested everything. We tried bundles. We didn't try bundles. We tried different things in the bundles. We tried different days. Data led insights are better than anything any pundits would say on a podcast.

**Lenny** (00:57:17):
Amazing. Well with that, we've reached our very exciting lightning round. Are you ready? 

**Carilu Dietrich** (00:57:22):
I'm ready.

**Lenny** (00:57:23):
Okay. What are two or three books that you recommended most to other people?

**Carilu Dietrich** (00:57:28):
The number one book is a life book called Tao Te Ching, the Stephen Mitchell translation. And the Tao Te Ching is a philosophy about the flow of life. And I love it. I've carried the Pocket Guide with me for 25 years. 

**Carilu Dietrich** (00:57:40):
The second one is business focused. Never Split the Difference, which is a great book about negotiating written by a former CIA hostage negotiator, which also helps me with negotiations at work and with my children. So that's a great book.

**Lenny** (00:57:58):
Actually, I've been trying to read that book on audio. What's something you've taken away from me? Because the stories are so interesting and I'm always like, "What should I actually do in my day-to-day life?" What stuck with you?

**Carilu Dietrich** (00:58:08):
It's kind of the obvious thing that I wasn't good at. It's that you just really want to put yourself so deeply in the shoes of the other person, that you can figure out what make the win for both of you, right? Basically he says, "You can't win the negotiation by strong arming what you want. You really get to get to a win-win," which is probably every negotiation book ever. But he texturizes it so much. So I just felt like I was really able to... In my last office, we moved last year. I actually had the CliffNotes of his book printed out and posted on my wall because he had a series of questions to help you get deeper and deeper into the mindset behind people. 

**Carilu Dietrich** (00:58:49):
And connected, but not connected the book How To Win Friends and Influence People, that's the 1932 bestseller, is basically that. People don't want to hear about you. They want you to be thinking about them. And then you can make friends with them, or you can negotiate with them, or you can get your hostage back.

**Lenny** (00:59:08):
I read How to Win Friends and Influence People when I was very young. And specifically, the chapters about there's no better sound in the world to someone than their name. Carilu.

**Carilu Dietrich** (00:59:19):
It's true. Thank you. You said it correctly.

**Lenny** (00:59:22):
Okay, moving on. Favorite recent movie or TV show?

**Carilu Dietrich** (00:59:26):
My favorite movie is Everything Everywhere All at Once. It's basically a sci-fi about all the different ways your life could turn out if you made different choices. And it was really a mind bender that made me think about all the different ways tiny decisions have changed my life, but then also an appreciation for the life that you have. At the end, it doesn't ruin the story, but she has this love of what she has, even though it's not as good or as different as some of the other options.

**Lenny** (00:59:26):
I love it.

**Carilu Dietrich** (00:59:58):
So I bought this poster. I don't think you can see it on the bath, but it says, "Gratitude turns what we have into enough."

**Lenny** (01:00:07):
Very Buddhist. 

**Carilu Dietrich** (01:00:08):
I like it. Read the Tao Te Ching.

**Lenny** (01:00:10):
Not a Post-it, but art. Another teaching from Carilu. I think this needs to be a second newsletter of yours. Life advice.

**Carilu Dietrich** (01:00:20):
Which is funny. I've been thinking about that one. It would be called The Tao of Hypergrowth.

**Lenny** (01:00:25):
Oh my God. I love that.

**Carilu Dietrich** (01:00:26):
And actually, I was thinking about doing it and taking actual clips from the Tao Te Ching, and doing textural analysis about how it applies to our. I've been thinking about this actual podcast for a while because I used to want to do the... I mean blog, the Tao of Parenthood. Because basically parenting, you try to control and fix all the things you didn't do right in your life. But actually, it's the act of providing freedom that lets them go out and explore and then come back to your way of being. So, I don't know. The Tao Te Ching, I love it.

**Lenny** (01:00:58):
I see so many opportunities. You got to stop what you're doing. Just write all these things.

**Carilu Dietrich** (01:01:02):
I know. But I love the hypergrowth customers, clients.

**Lenny** (01:01:06):
All right. Next question. What is a favorite interview question that you like to ask?

**Carilu Dietrich** (01:01:11):
So this is a little heavy, but it actually is my favorite. It's, "How many people have you fired? And tell me about each of the experiences." So the reason I ask this question is because generally, I'm managing teams of managers. And generally, I need people who have managed many people for a longer period of time. Or even if they're junior managers, how long and how many people they've managed is indicated by how many people they've fired. Because if you've never fired anyone, then you haven't managed very many people for very long, unfortunately.

**Carilu Dietrich** (01:01:39):
And firing people is the hardest part of a leader's career. So how they talk about it, their compassion, and their need to drive the business, and the circumstances, "Was it layoffs? How did that work? Did you have to performance manage someone out? How did it work? Did you just have to restructure the team because of business goals? How did it work?" Gives you a lot of insight into their experience and their humanity in a way that they're not prepared for. So you really get the real story, and get a sense for what they would be like as a leader under a lot of pressure and difficult situations.

**Lenny** (01:02:17):
I've never heard that one before and I love it. Reminds me of a episode with Matt Mochary where we talk about how to lay people off really successfully and elegantly.

**Carilu Dietrich** (01:02:26):
It's a hard.

**Lenny** (01:02:27):
Yeah. Next question. What's a favorite product that you've recently discovered that you love?

**Carilu Dietrich** (01:02:34):
So I follow my favorite products to the companies that I advise. I love 1Password. I've got my 85-year-old grandfather and all of my family and friends set up on it. I love the cross-platform nature.

**Carilu Dietrich** (01:02:45):
I love Miro and whiteboards. I joined Productboard because of this cross-company alignment and views into what's coming up on the roadmap, which is really the most important thing for the company. Momentum, as we talked about, having a great product and a great product strategy. 

**Carilu Dietrich** (01:03:02):
And then I'm dabbling in all the AI things. I want to be excellent in AI visualization and art. I'm experimenting with Midjourney, but still kind of flailing. I've hired my 13-year old as my strategic advisor. And yeah, I'd love to work for OpenAI and ChatGPT. It's really interesting.

**Lenny** (01:03:23):
What's something relatively minor that you've changed in the way a product is built or just the company operates, that has led to tremendous impact on their ability to execute?

**Carilu Dietrich** (01:03:33):
On the product side, one of the concepts that I really like is the Amazon concept around writing the press release at the beginning of a product ideation. So one of the issues between marketing and product is the product will work so hard on something, and there'll be lots of different features, that it won't really be a theme that the marketing team can talk about. And then someone hands it to marketing and says, "Make this marketable." One of my mentors had this comment, "It's a bag of doorknobs." What do I do with this bag of doorknobs? Who wants to buy a bag of doorknobs? They want to buy the door and the concept.

**Carilu Dietrich** (01:04:13):
So I like this idea of writing a press release. Start with the end in mind, and then negotiate. Is this good enough? Will this really resonate? Or is this really what we're trying to build? Or is this really the outcome we're trying to get with the product? So I've heard about Amazon do it. We experimented with it at Classy. I haven't done it at mass scale, but I love the concept.

**Lenny** (01:04:31):
Final question. I know you're a meditator. We've talked a little bit about your Buddhist nature. What's one tip for people that have been trying to meditate and just can't make it happen? What's your one tip for helping people meditate more often?

**Carilu Dietrich** (01:04:44):
So I'm a cheater because I was groomed to meditate. I don't remember how early, but I remember that the first meditations my mom had me listen to was a rainbow butterfly as I fell asleep when I was in kindergarten.

**Carilu Dietrich** (01:04:55):
So I've been meditating my whole life, with mixed success. And the real secret is just that there's no right way, that there's no wrong way. That it's just making the time to be present, and breathe, and sense, and be here now. 

**Carilu Dietrich** (01:05:13):
And so I use guided meditations mostly, because I'm not the best at quieting my own mind. I'm thrifty. So I use some free meditations. I use Tara Brach, who's a great meditator, who has short and long concept meditations. 

**Carilu Dietrich** (01:05:30):
And I like this old one called Meditation Oasis, which actually isn't in publishing anymore, but it's still a podcast. And I re-listen to all theirs over and over. So stick with it is the secret to meditation, and any benefits you get from being present in meditation, hopefully carry over to be being present in life.

**Lenny** (01:05:51):
My whole body just relaxed as you were talking through all that. So you have a skill. Carilu, this was amazing. We learned how to grow products, how to live better lives, how to become more mindful. Two final questions. Where can folks find you online if they want to learn more, reach out? And/or how can listeners be useful to you?

**Carilu Dietrich** (01:06:09):
Follow me on LinkedIn, or I have a new blog carilu.com on Substack. Thanks to Lenny for the inspiration. And I still have one more advisory slot open, and I'd love to work with more AI companies. I just joined Weights & Biases in the ML op space. But if you know of other great scale up AI companies, I'd love to help junior marketing executives or first time founders see what the next stage of growth looks like and get there.

**Lenny** (01:06:39):
Amazing. And again, if they are interested in that, how do they reach out to you?

**Carilu Dietrich** (01:06:43):
On LinkedIn or through carilu.com.

**Lenny** (01:06:47):
Amazing. Carilu, thank you again so much for making time and for being here. 

**Carilu Dietrich** (01:06:50):
Thanks for having me, Lenny.

**Lenny** (01:06:51):
Bye everyone.

**Carilu Dietrich** (01:06:51):
Bye.

**Lenny** (01:06:55):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [8/19] Building a culture of excellence | David Singleton (CTO of Stripe)

**David Singleton** (00:00:00):
The way we think about product development at Stripe, it really is to find the correct set of early users to kind of co-create the product with. Maybe the best example of that is Stripe billing. When we got to starting the Stripe billing product, we realized that there were a number of our existing users, these were companies like Figma and Slack, were already using Stripe for payments, but had these subscriptions business models. And we figured that there were going to be many more of these kind of companies into the future. And we could see that they were really kind of pushing the boundaries of what was possible here.

**David Singleton** (00:00:32):
So we decided to co-create the product with them. So we had shared Slack channels, we'd actually show them product on a very regular basis, get their feedback on it. And only when that original kind of Alpha group was super, super happy with the product did we then think it might be ready to go to a broader audience. So that is just how we build product at Stripe. And that means that every engineer building product at Stripe really has many of the kind of attributes and will exercise many of the attributes that'll you often find in PMs in other companies.

**Lenny** (00:01:04):
Welcome to Lenny's podcast where I interview world-class product leaders and growth experts to learn from their hard experiences building and growing today's most successful product. Today my guest is David Singleton. David is chief technology officer at Stripe where he's responsible for guiding its engineering and design teams, a role he's had for over five years. Prior to Stripe, David was VP of engineering at Google where he spent over a decade. And in hearing from David, you'll quickly be able to tell how passionate he is about the craft of building great products and building great teams. We dig into Stripe's unique approach to hiring, how they built a very product oriented engineering team, which allowed them to hold off on hiring their first product manager for many, many years, how they operationalize their operating principle of be meticulous in your craft, including a number of fascinating internal processes like engineer occasions, walking the store and something called friction logging.

**David Singleton** (00:04:25):
Thanks for having me, Lenny. It's great to be here.

**Lenny** (00:04:27):
I know Stripes Sessions is coming around the corner in later next week and I imagine it's a pretty hectic time for you. And so I just want to extra appreciate you making time for this in the middle of all that.

**David Singleton** (00:04:38):
Thank you. Well, it's a pleasure. It's a lot of fun. Stripe Sessions is our annual user conference, so we get together a bunch of folks from businesses building on Stripe and it's a great opportunity both to share what we've been up to over the last year, but also just learned a lot from them about what they would like to see us doing. And so I find it very energizing. It is of course a lot of work to put it together. In particular, I'm spending a bunch of time getting some demos together today, which I love building demos so, but it's a real pleasure to join you today.

**Lenny** (00:05:05):
So as I was preparing for this conversation, I kind of realized that the Stripe alumni are just killing it on this podcast, both in terms of the number of people that have come from Stripe and also just in terms of the quality and the popularity of some of the episodes. So folks like Claire Hughes Johnson, and Shreyas Doshi and Eeke. And my first question essentially, what is it that you all do that allows you to attract hire, close, keep people of that caliber? And I'm not going to accept just we keep a high bar or we just spend a lot of time on hiring. I'm curious just like what is it that you all do that other companies don't do that's maybe unique to the way Stripe finds and hires?

**David Singleton** (00:05:44):
Well, yeah, I'd love to tell you more about how we find and hire people. I think it makes sense to kind of zoom out for a second because it's material here. So think about what Stripe is doing. Our core thesis is that the internet economy is going to be much bigger and more important in the future than it is today. And that's certainly played out over the last 10 years. And so we are really a business full of product minded builders who are seeking to make it easier for businesses to get started and to operate against that backdrop. And so we got started building a credit card payments API. Before Stripe came along, accepting credit card payments online was way too hard. You had to go talk to your bank, you had to maybe sign a contract with Visa, MasterCard. You then had to kind of string together all this very complicated infrastructure and it then put a bunch of kind of restrictions and requirements on the business.

**David Singleton** (00:06:37):
And John and Patrick are our co-founders at a previous business and they tell this funny story actually, which is while they were building that company, they assumed, it was an internet company, they assumed the hardest thing was going to be putting together hardware in a data center. But it turned out because there were services like AWS around by then, that that was actually quite easy. However, when it came to accepting payments in that business, it was just as hard as they had expected building hardware to be. They had to actually deploy some physical hardware, they had to do a whole bunch of these partnerships and it was very difficult, especially as an upstart, folks that didn't have any reputation yet to kind of be taken seriously and be able to correct into that. And so that's kind of the inspiration behind Stripe. So we started out solving a really kind of important and profound problem for these businesses getting started and scaling and obviously taking a very developer-centric approach to that in the early days.

**David Singleton** (00:07:24):
I think what's exciting to know about and important to know about next is as we've scaled, we really kind of figure out what to do based on paying really close attention to our users. Those are the businesses building on Stripe. What are they getting out of the products as they are today and what are the problems adjacent to the ones that we're already solving that they have to put a lot of their own energy into but really feel like they shouldn't and they'd like us to help. And when we find that confluence of kind of need and then adjacency to what we're already doing, that's usually our invitation to go and build the next layer of our economic infrastructure. So we think about what we do today is building economic infrastructure for the internet and beyond.

**David Singleton** (00:08:03):
So to bring this back to how do we attract the right talent and why does this matter? First of all, a lot of people, most people I think come to Stripe because they see that there is this great opportunity to help businesses at scale. So it really is about taking part in a mission that matters and are really motivated by that idea that we spend a lot of time with our users, the folks that actually need our help and are guided by them. And that mindset I think attracts a certain kind of person who wants to take a lot of agency, wants to understand the problems deeply and come up with their own ideas about how to solve for them. Because we're building infrastructure, it's also our approach that we really do think that we can do the best work kind of behind the scenes. We don't have to be out having the splashy launch, but hopefully all of our users can and we are quietly working behind the scenes to make their businesses better and more effective over time.

**David Singleton** (00:09:02):
And I think that attracts folks with a certain kind of mindset, which is the interest and kind of tenacity to dig into difficult problems that may not be obvious and obviously kind of attractive to everyone in the world then really plug away at them until we've made a tremendous amount of progress. And so it attracts folks that are long-term thinkers, that care about building and also actually want to work very collaboratively together. So when I think about what makes Stripe different to other companies, it really is this singularity of purpose. Our mission is increasing the GDP of the internet and building this financial infrastructure to do that and a tremendous amount of teamwork and collaboration to get that done. And so that attracts a certain kind of person. When we think about finding those people, we don't hide any of that. You have to care about that in order to, I think be excited about working at Stripe.

**David Singleton** (00:09:55):
And so we work very hard to make it very clearer as we're bringing people in that that's what this is about. And to that end, we're often very patient when we're hiring. So especially for critical roles, leadership hiring in particular, we're happy to take our time and meet tens or hundreds of people. And then in particular, sometimes we'll meet someone that we think is a really good fit for a given role, but they're not available right now. And then we'll be patient. We'll keep building the personal relationship with them and oftentimes the moment in time comes when it makes sense for them to join. And in order to pull that off, it's also the case that hiring at Stripe is a very personal activity. So look, there are lots of other companies where recruiting is kind of like this machine. And by the way, we have an awesome recruiting team, but folks across the rest of the company partner very closely with our recruiting team.

**David Singleton** (00:10:47):
So it's not like it's a machine that delivers new hires, then you're like, oh, well maybe this person is here and I can put them to use on that thing. Our managers spend a lot of time identifying exactly what they need for the various roles that we have and then getting to know the potential candidates, the people out there in the world that could do these jobs actually really go quite deep with them on why it might make sense for them to feel like number one, they can feel very personally fulfilled against that mission here. And then also why it represents a bigger opportunity for them than maybe anything else they can spend their time and attention on. And to that end, another thing that I think Stripe has definitely delivered for many, many people who join here is just, and I care about preserving this in the culture, is just tremendous learning opportunities.

**David Singleton** (00:11:35):
Very, very many people at Stripe today are doing a quite different job to the one that they join for. In order to do that they've often had to learn a lot and stretch themselves into new areas. It's also the case that when you think about that financial infrastructure we're building, the space really rewards people who want to go and learn a ton of detail in how these systems that are not that popular or well understood in the broader world, how they actually work and assimilate just a lot of context. And then in particular, you can build better stuff. Right. You're sharing that context with each other and helping other people learn. And so I think that all ladders up to this kind of group of folks that you mentioned. And all the folks you mentioned are wonderful Stripes or former Stripes that come together in service of our users.

**Lenny** (00:12:22):
I always love to hear what people call their people internally. So Stripes. Good to know.

**David Singleton** (00:12:26):
That's right.

**Lenny** (00:12:28):
So just to summarize what you shared, which I was just writing as you were talking about the things that essentially help Stripe build this incredible team. A strong mission and a mission that draws people in that are incredible and people may be hearing that and be like, yeah, yo, sure. But in my experience, having invested in a bunch of companies and working with a lot of founders, there's such a dichotomy between how hard it is for companies to hire when they don't have a mission people really care about versus a mission that's really meaningful. So there's something so powerful there and so it's 100%, I could see how that works so well. And then the other things you mentioned, patients, personal connections between the hiring manager and the people they're hiring. And I see that on Twitter, a lot of PMs are just doing things, like basically it's like they're writing on a little startup on Twitter like Jeff Weinstein,

**David Singleton** (00:13:12):
Yeah, so,

**Lenny** (00:13:12):
Atlas.

**David Singleton** (00:13:13):
Jeff is the PM for our Atlas product, and he's a great example of someone who cares a lot about learning exactly how the world works. So I mean for instance, one of the things that that team and Jeff really has driven this himself have done recently is recognizing that when you're starting a new business in the US, one of the most frustrating steps is that you have to apply for this Employer Identification Number from the IRS. And it used to have an extremely long backlog and it's really hard. You can't start running your business until you have it.

**David Singleton** (00:13:42):
And Jeff dug into the details, the team dug into the details and we're just like kept asking, does it have to be this way? Does it have to be this way? And eventually we work with the IRS to make it possible for us to issue those numbers much, much more quickly, like instantly as you sign up. And I think that's exactly a great example of how being curious, having this relentless passion to solve problems for users and then just keep plugging away at a problem delivers this great result and in a environment where you can learn a lot from each other.

**Lenny** (00:14:11):
I hope he got a big promotion for getting the IRS to do something that he needed. That's incredible. I'm going to ask, try to go one layer deeper on the hiring piece and then move on to a different topic, but,

**David Singleton** (00:14:11):
Sure.

**Lenny** (00:14:22):
What is just the interview process like? I don't know how involved you are with the product management hiring process, but just I'm curious what that is like, high level and engineering hiring process, however you can share.

**David Singleton** (00:14:32):
Yeah, there are a couple things that are very common across hiring for all roles at Stripe and in particular engineers and PMs. One of the things is we do have structured hiring loops. So we put everyone through a very consistent process, so very personal as we help folks figure out why they might want to be here. But then we have a consistent way of evaluating talent. And I think that's important because it means that you can, as an interviewer, as a hiring manager, you can actually really start to understand what is the broad spectrum of responses you might get here and what do I actually learn about individual candidates when I'm asking similar questions. The other thing that these loops have in common is nothing is a trick question. We try to put people into an environment which is as close to doing the actual work together as we possibly can.

**David Singleton** (00:15:18):
So I mean for engineers for instance, we've got several different coding exercises that they do. They share their screen with the interviewer. It's actually kind of pair programming welcome to use Google to search for Stack Overflow to search for answers. We don't care. We just want to see the outcome. We're happy for you to ask your interviewer questions as you go along. And we've created these exercises that is close to real problems as we need to solve at Stripe as possible. The same is true on the PM side. One of the things, for instance we do with PMs is we have a written exercise, we've got obviously a variety of different problems and we find that very valuable for actually just seeing how does someone attack a real problem that they would be solving at work and will they want to do that in a way that is curious, digging into the details, collaborative with their interviewer and so forth. So that's the point. Structured loops that are consistent. And then questions that are as close to the real job as we possibly can.

**Lenny** (00:16:13):
And for the questions on the PM side, do you have them do it at home or do them do it in the office?

**David Singleton** (00:16:18):
It's a variety. Right now at Stripe, we're very much in a hybrid mode, so a lot of our interviews are still happening over Zoom, although we have plenty of great activity going on in our offices as well. The written exercises tend to be something that you do in your own time. We suggest a time bind so it's not an unreasonable demand in the rest of your life. And then the other exercises are with an interviewer on Zoom.

**Lenny** (00:16:40):
Okay. So speaking of product managers at Stripe, Stripe is kind of famous slash infamous for waiting a long time to hire your first product manager. From what I understand, it was like around the 200th employee and maybe five years in, which to me tells me that you're really good at building product minded engineers and or hiring and building a product minded engineering culture. How do you do that? How do you go about doing that? And then I'm also just curious what PMs ended up bringing to the table and how they kind of collaborate now.

**David Singleton** (00:17:06):
Yeah, so I mean at Stripe today, we have lots of product managers, lots of engineers, product management's an extremely valuable and important job family. I'll talk more about what folks do today. It is true that our original team, and I think we hire our first PM a little bit earlier than you said, but our original team was really an engineering team. However, they were extremely product minded. And I would honestly say that of all of the very early team that I've worked closely with and know well over time, every single one of them could also have been and essentially also was acting as a PM. If you think about the nature of the first Stripe product, and again today we solve problems for businesses from the very small to the very large across a whole range of financial infrastructure. But the initial product was very developer focused and we still have a developer focused at the core of many things that we do.

**David Singleton** (00:17:56):
The best PMs for developer focused products I think are usually very technical. They're mostly former engineers themselves or maybe kind of current engineers still tinkering on the side, but bringing a lot of user insight and strategy to the problem. And every single early member of the team at Stripe had to act like that in order to work the way that we do and that we want to. So remember, again, that is to get to know our users very well and then bring those kind of personal insights into our product development loop. So I mean, in fact, the way we think about product development at Stripe, it really is to find the correct set of early users to kind of co-create the product with. So maybe the best example of that, or at least an example of that is Stripe billing. So it's our solution for subscriptions and invoicing.

**David Singleton** (00:18:43):
And when we got to starting the Stripe billing product, we realized that there were a number of our existing users. These were companies like Figma and Slack. We were already using Stripe for payments, but had these subscriptions, business models, and we figured that there were going to be many more of these kind of companies into the future, and we could see that they were really kind of pushing the boundaries of what was possible here. So we decided to co-create the product with them. The early team working on billing got a bunch of those companies included Slack and Figma, but a bunch more as well, got to know them. But the individuals who were operating those systems at those companies personally understood exactly what their challenges and hopes and dreams for the future were, and then brought them into a kind of shared product development loop.

**David Singleton** (00:19:28):
So we had shared Slack channels, we'd actually show them product on a very regular basis, get their feedback on it. And only when that original kind of Alpha group was super, super happy with the product did we then think it might be ready to go to a broader audience. So that is just how we build product at Stripe. And that means that every engineer building product at Stripe really has many of the kind of attributes and will exercise many of the attributes that you'll often find in PMs in other companies.

**David Singleton** (00:19:57):
Now, that doesn't mean that there isn't a really important job for PMs to do here as well. So something else that I think is worth knowing about Stripe and is somewhat unique is building products is also a much more kind of team sport at Stripe across functions. So there are the obvious functions that most companies have, engineers, engineering managers, product managers, designers, and those folks all get involved throughout the entire lifecycle of product development at Stripe. But also, if you think about the nature of our products, it turns out that a lot of our products are about abstracting over what the financial system does at large.

**David Singleton** (00:20:31):
So sometimes there's a capability in a certain country and there's a different one in another country, and we want to make it all work consistently. So our financial partnerships matter. So sometimes folks from our partnerships team are part of the kind of early development phase of a product. Similarly, when you think about product legal and many of the other functions around risk and compliance and so forth, we actually need their creative thinking in order to build the right stuff for our users. So the point is it's a way more cross-functionally collaborative process than I've seen in a lot of other companies. And PMs play just this absolute linchpin role across a lot of that. So PMs are very frequently the ones that are providing the kind of look motion to bring all of that partnership together. They're very frequently the folks that are synthesizing what we're learning from our users.

**David Singleton** (00:21:19):
Not everyone is talking to users across all those job families, but the PM is probably the person talking to folks the very most and probably the one who's synthesizing the very best. They often and usually also bring a lot of the product strategy, okay, this is what we're doing today, but what does it ladder up to and therefore how do we make the right choices to make sure that we're taking the right longer term path. And so it's a super important and valuable role. And I mean, you've mentioned a couple of great ones on the call here already, but I think that the PMs at Stripe embodying a lot of the culture I talked about in our operating principles just contributed a tremendous amount to what we get done.

**Lenny** (00:21:56):
Perfect segue to where I was going to go with the next question, which is, one of your operating principles is to be meticulous with your craft. And I know this is something that you focus on a lot. What I'm curious about is that sounds great. Everyone would love for that to be a focus of theirs and a core value in the way they operate. But there's always this trade off of we just got to ship stuff. How do we wait until it's perfect? So what I want to ask is just how do you operationalize this principle, first of all? And then I'm going to have a few follow up questions.

**David Singleton** (00:22:25):
Yeah, great question. Before I talk about this one operating principle, let me just set a little bit of context of,

**Lenny** (00:22:30):
Yeah.

**David Singleton** (00:22:30):
What are our operating principles at all. So at Stripe we have operating principles and they're kind of like corporate values, but they're not just values, they're much less abstract than that. So actually, we were just talking about the early Stripe team. I think one of the best things that they did, I mean they did a bunch of great stuff, finding early product market fit, but one of the most foresighted things that they did was to kind of take a little detour and think about what is it about how we've been working so far that we think has made us successful and is going to be important as we continue to scale. And we capture those as a set of operating principles so...

**David Singleton** (00:23:00):
Continue to scale and we capture those as a set of operating principles. So their behavior is distilled from the most effective Stripes and we really care about them. So we talk about our operating principles a lot internally. I'll often see individual Stripes kind of celebrating each other's work in terms of which operating principle is kind of best represented. We frame a lot of our feedback processes and so forth around them, although not exclusively. The very first operating principle we have by the way, is users first. So we've already on this call, touched a bunch on how we put our users at the center of understanding what we should be doing at all. And that idea that we've formed these deep personal relationships with our users to guide everything really comes from and is captured by that operating principle. We also have operating principles. They're kind of segmented into how we work, who we are, and then a bunch that leaders must execute.

**David Singleton** (00:23:52):
So I mean another example of one of how we work ones is move with urgency and focus. We really believe that even though we're building infrastructure that will persist for decades, it is important that we solve the needs our users just have right now, relatively rapidly so that it actually makes sense, is delivering value for them. So anyway, there there's a range of them. You asked about being meticulous in our craft. So this is another highway work principle and it is very important at Stripe and you also call it Lenny, a challenge of being meticulous, which is, well, there's so much to get done. So where can I be meticulous? Because well, if you do it across everything, maybe a lot of progress would grind to a halt. Well first of all, let me tell a couple of stories.

**David Singleton** (00:24:37):
So before I joined Stripe, I spent some time and it's a big part of deciding to join, playing with the product. And something that really delighted me was that when I started integrating the product, there were parts of the experience where I was stuck. So I made a mistake with how it integrated API. I was getting an error message back, but I wasn't stuck for very long because something that the team at Stripe had done was we made the error messages coming out of our API link to the piece of the docs that told you how to solve the problem.

**Lenny** (00:25:12):
Genius.

**David Singleton** (00:25:12):
And that is a really good example of being meticulous in the craft. So it's pretty uncommon, it's certainly very uncommon back then for companies to do this, like your error messages or your API, who's ever going to look at them? Well, turns out developers while they're building and if they're running into problems, they will look at them. It's actually a really high stakes moment because it's a time that matters. So that is an example of where we've been meticulous in the product.

**David Singleton** (00:25:37):
And the way that we kind of figure out where to be meticulous, where to really sweat the details and go above and beyond is again, we try to be as user first as we possibly can. So we have a process that is widely used across product teams that even like folks building stuff internally for Stripes to use, which we call friction logging. The way this works is you need to put yourself in a particular user's shoes. It's actually important to have a very clear idea of who is the person I am kind of modeling the friction for right now.

**David Singleton** (00:26:09):
So for instance, I might be integrating the Stripe billing API and I might put myself in the shoes of an engineer at, I don't know, let's say Atlassian, which is one of the world's largest SaaS platforms and using actively Stripe billing for automating all the revenue today, I might put myself in the mindset of that person. I might have met them recently and kind of understood a little bit better than otherwise doing this particular thing.

**David Singleton** (00:26:35):
And then I will go through the process of actually using the product, starting off in the dashboard, hopping over to the particular page in the docs that I need to follow, starting to write code and so forth in order to do my integration and make really careful and meticulous notes of what the experience is. So stream of consciousness notes, but paying particular attention to the places where I ran into friction that I think that particular user mental modeling would find difficult. And then those are the places where we will tend to go and invest a tremendous amount in really thinking how could we solve this problem? And then putting a lot of attention into detail into making it right.

**David Singleton** (00:27:16):
And by the way, the example I gave you on the error message is there's actually more code in the jobs that serve the Stripe API to handle those edge cases than in the actual main flow. And I think that's quite remarkable. Most people wouldn't do that, but it turns out not only was it something I was impressed with, but when I talk to Stripe users, this is very frequently something they tell me and delights them about the product. It's a reason that they can adopt it more quickly and it's a reason that they keep adopting other Stripe products because they know that it's going to be easier than doing anything else. So it really matters. So the point is like we are intentional about where the places where being particularly meticulous matters and then when we are, try to do it in quite a systematic way. It's great business as well.

**David Singleton** (00:27:57):
So for instance, we actually just earlier today put a blog post up that explains we've been tuning both what we call our payment element, which is our kind of morph kind of batteries included UI for putting payment integrations directly on your website. You can style it to fit with the rest of your page, but it has a lot of powerful features. And we also have a set of hosted services called Stripe Checkout. And the point here is we've gone and scarred a whole bunch of checkout flows on the internet over the course of many years and we look out for all of the little broken edges and we've been working hard on these products to tune those and then not, we don't just stop there. We've also been really obsessing about what are the things that we can do in the flows that we've already built that will remove latency or remove a click or whatever.

**David Singleton** (00:28:48):
And what we found, we've recently measured the difference between, so with a bunch of actual users who've migrated from a fairly vanilla integration where they built their own checkout flow to one of these surfaces to our payment element or to Stripe Checkout, it turns out that it increases the average user's revenue by 10.5%. And that's huge. So this is an industry where little changes that you might go about making or even big changes that you pour blood, sweat, and tears into will typically deliver uplifts in that you measure in basis points that's hundreds of a percentage point and this set of small changes compounding over time ladders up to 10.5%, it's huge. And the point is you only get there by knowing that this is a thing that might ultimately matter and being meticulous in every single step along the way and that it compounds to a dramatic impact in the end. So I think that that particular set of experiences is one where this operating principle has really mattered.

**David Singleton** (00:29:49):
Thinking about those kind of flows is what led us to build Link, which is our product for making one click checkout available. And that has had a tremendous impact both on convenience for customers of our users and also on their conversion rate and so forth. So it really matters.

**David Singleton** (00:30:07):
And then one final other area, if I may, I think Stripe is relatively well known for putting a lot of care and attention into our website, a lot of our marketing or product explanation pages. And I think for a business like ours, it's not immediately obvious that it makes a tremendous amount of sense to be super meticulous in building those experiences. But we are, and again, I think it really matters for us and for our users. So the way that we got into this mode was we recognized that we are building a lot of infrastructure.

**David Singleton** (00:30:42):
So we build what we call our global payments and treasury network. It is literally our product infrastructure for moving money into Stripe, holding balances on behalf of our users, moving money out, all of the automation between moving money between different businesses and all of the kind of regulatory stuff we have to handle, all handle in this big payment engine. But as a user, it's very hard for you to come in and inspect that and say, well, is it good? I mean hopefully you can go and talk to a bunch of other Stripe users, but it's very hard to know from the outside. So if we put a lot of care for detail and attention into the experiences that we use to explain the value and the power of that, it actually helps our users understand exactly how it is that we are trying to operate for them.

**David Singleton** (00:31:24):
And that's where all the meticulousness that we put into our site have come from. There are lots of features like we have a spinning globe on our page that shows you what payment methods you can use in different countries and we have this kind of big animated wave on our homepage. And in general, Stripe is kind of known for these great internet moments when we launched products. And so we did it because we wanted our users to be able to see the care and attention that we were taking. It's turned like to have this wonderful kind of side benefit to some extent because those experiences tend to get shared a lot on Twitter and LinkedIn and elsewhere because they're worth looking at just because they're beautiful and they often push the web platform forward. And that then means that folks are likely, folks who themselves want to push internet business forward, are likely to know about Stripe and know about our capabilities.

**David Singleton** (00:32:11):
So meticulousness plays out with impact in so many different ways at Stripe and I enjoy working that way in many different areas.

**Lenny** (00:32:22):
I have a few follow up questions along those lines, but before we do that I want to double click on this friction logging process.

**David Singleton** (00:32:28):
Sure.

**Lenny** (00:32:28):
Just understand how you actually do that. So maybe two questions there. Is this a regular task people have on their plate say or is executives or just PMs in general? And is there a template that you share just like you talked about who we are, what company are you working for, what problem are you trying to solve? How do you actually kind of tactically operationalize that?

**David Singleton** (00:32:50):
Yeah, great question. So it's a practice that is quite valuable generically. There are many places where you can apply friction logging in order to really shine a light on what is the most effective place to invest time and effort.

So we use the practice across lots of different functions and in lots of different ways at Stripe, but it is the case that almost every product team has someone, it's often the PM, sometimes it's the engineering manager who has a regular repeating loop of going through the end-to-end flow of the product and writing a friction log. For years and years, I have gone through the process of onboarding [inaudible 00:33:28] user to Stripe once a month, writing a friction log and then tagging in the right people across the company that might need to take action on some of the things that we're observing.

**David Singleton** (00:33:37):
And one of the reasons that that kind of process of taking a big step back is useful is at this stage we have many people, we have thousands of engineers who are working in parallel. And while everyone cares a lot about being meticulous, paying attention to detail, getting the details can have to end up with experiences that diverge and going through this process of looking at it all together on a regular rhythm with friction logging really helps us maintain a cohesive whole while we all operate in parallel. And so therefore senior leaders, executives, I guess of our larger areas will often do this as a practice themselves in order to make sure that everything that they're responsible for is coming together well. So it happens kind of recursively at different layers.

**David Singleton** (00:34:20):
To your question about is there a template, so relatively simple process. So yes, there is a template and in fact there's a Stripe talk dev article that maybe we can put into the show notes that has the template, but it literally is say what you want to do, be very explicit about the user that you are trying to have a mental model for because that helps you make the right choices as you go through the flow. And then really just keep a very clear stream of consciousness log of what you're finding as you build.

**David Singleton** (00:34:46):
By the way, also really important, praise the stuff that's good. So I'll often send these docs around to a lot of folks inside of the company. It's a great opportunity to recognize great work done. So if I ran into that error message that links to the documentation, that's a great example where I'd be like, this is awesome. Nice work.

**Lenny** (00:35:02):
Being a PM that has received emails from the CEOs of companies with all the problems they ran into and they're trying to book, it's often like, oh God, I have so many goals I got to hit and I have this timeline, I have these things I'm working on. What is the culture like slash how do you give teams space to do these things that are just like, we're just going to make the experience better? How do you actually do that so that PMs aren't stressed out when they get these things?

**David Singleton** (00:35:26):
It starts with our operating principles. So because we have operating principles of users first and being meticulous in our craft, we actually tend, all of our ways of building plans tend to be wired quite well around this idea that we're going to reserve enough time to really make the experience good. Maybe the most pronounced version of that is not even the issues we identify in friction logs. Maybe in a bit we can talk about how we invest in reliability and so forth, but things go wrong.

**David Singleton** (00:35:54):
And one of the things that's very important to me is that we are a learning organization. We need to understand why they went wrong and then take action to stop the same thing going wrong in future. And so that means that we identify instant remediations, that's what we call those and we prioritize those carefully and most of them, the ones that matter actually get prioritized before other work on the roadmap, which means that as a PM when you're building your roadmap and your plans, you do have to think about, well approximately how much bandwidth do I need to reserve in this area in order to address and polish stuff that might come up through friction logging and also to take care of those kind of operational things as well?

**David Singleton** (00:36:30):
It varies by team and varies by stage of product. So there is no Stripe kind of like we will reserve 50% of our time to do this stuff. That wouldn't make any sense. But we do encourage and ask every team to think hard about how much should they be setting aside for those kind of activities. Does that make sense?

**Lenny** (00:36:47):
Absolutely. I was going to ask you if there's a percentage and basically you trust the teams to set aside the right amount of time.

**David Singleton** (00:36:52):
That's right.

**Lenny** (00:36:53):
Awesome. Okay, so along the same lines, I actually asked Shreyas Doshi what I should ask you.

**David Singleton** (00:37:00):
Oh cool.

**Lenny** (00:37:01):
You had no idea I was going to do this. And what he said is I should ask you how you did UX reviews pre shipping right after you joined Stripe and you just said you were very good at this. And so what is that like and how should people learn from your experience?

**David Singleton** (00:37:20):
The way that I did UX reviews very early on in my time at Stripe and the way that every group at Stripe does these reviews is employing some of the techniques we talked about already. So that act of friction logging, it's very often done asynchronously. So someone will sit down and reserve an afternoon and go through the product and make meticulous notes and that's super useful.

**David Singleton** (00:37:40):
We also find it very valuable to go through that process together. So we will bring together both the team that built the product that we're looking at, but also a lot of their cross-functional partners. So things like the support folks that are going to be handling or are building the process to handle questions from users about it. Executives in the org that they're a part of to do these walkthroughs where we're taking exactly the same approach as I described with friction logging so imagining we're a particular user and experiencing the product together. And then just discussing very openly actually the way that we do this today is we have a log of issues that we want to talk about that anyone can type into while the PM usually is walking us through the flow. And then we'll get together at the end and actually talk about each issue and does this need to be addressed? What do we really think about it? So that that's the approach both that I took early on and that we take in at general at scale today.

**David Singleton** (00:38:36):
There's a lot of benefit to doing this together. So someone once described this to me as if you were a chef, you're going to taste the soup and you're going to talk to your kitchen staff about what went into the soup when it was good and wasn't so good. If you run a movie studio, you're going to sit down and watch a lot of movies together. And so actually kind of looking at product together I find extremely energizing and also really valuable in actually teaching some of the kind of bar for craft and values around how we want the product to interoperate for our users at scale across the company.

**David Singleton** (00:39:10):
And building on that, there's something that we do occasionally and I've done occasionally a Stripe called Walk the Store where we'll actually do that process of looking at the product together with the whole company. So we have a weekly meeting called Friday Fireside where you don't have to attend, but the majority of the company does attend and we've done a few series where we'll actually go through some really, really interesting critical product flows together and talk about how this is reflecting various priorities that we have and shifts that we're trying to make, but in particular with the user experience and a particular user at the core. And that turns out to have a tremendous amount of benefit and value in helping just everyone have a shared language, we're talking about things and get on the same page about everything.

**David Singleton** (00:39:58):
So yeah, those are some of the techniques that Shreyas might have been thinking of.

**Lenny** (00:40:02):
It's amazing how many directions you all come at to create this high quality end product walking the store, friction logging these entire company meetings, looking at the product, UX reviews, this is how it's possible to build something so high quality. It's not just we have this value and we're going to be building great stuff. It's like you have to come at it from so many places.

**David Singleton** (00:40:24):
Yeah, that's an interesting observation. I think almost anything that you talk about is a value. I mean, being a value matters, but you need to have a practice behind that. That means that the value becomes real for everyone. So we very frequently find that for any product development team, so long as they identify the right metrics that actually represent the experience that they want to deliver for their users and then get together frequently like predictably to look at how the team is doing against those metrics. But then everything else just happens naturally because you understand what you're trying to move and every little micro decision you're making within your own time prioritization and then in terms of the actual work you're doing will ladder up to that. And so why do I say that? It is like you have to have the predictable and regular thing that ladders up to the value you're trying to deliver in order to make it happen.

**Lenny** (00:41:17):
Coming back to the UX review, just a question there. Presenting to the CTOs often very stressful in a review like that. What advice would you give PMs and designers and just leads of a team for how to prepare for a meeting like that, whether it's Stripe or anywhere?

**David Singleton** (00:41:33):
I personally try to be as friendly and unscary as possible, but I know that no matter how much I do that, these can't be high stakes meetings. At Stripe, and I think it's probably goes for most companies, but at Stripe, the main answer here is put your user's hat on and if you understand your user well and what they're seeking to get out of the experience and anchor any questions you get asked or wobbles you may feel of like, oh, that was an out of the blue question back to well here's, remember what we're trying to do for our users, that usually makes any meeting like that go really well. And so that would be my main piece of advice.

**David Singleton** (00:42:12):
So I mean a risk that exists in any company as you get to run a bigger team or whatever is that individual contributors, individuals will have a very small amount of time with you in general. So there's always a risk that you might make a kind of fairly unimportant remark and it will be taken out of context to be something very important. So I personally also try very hard to anchor feedback I'm giving in what's the user experience we're trying to deliver? Does this actually matter? Recognizing that that is a risk and yeah, it definitely takes constant practice.

**Lenny** (00:42:51):
You've touched on a couple of these things, but just if someone's trying to get better at building product, either a PM, designer, engineer, what kind of advice do you often give for helping people just build better product?

**David Singleton** (00:43:03):
Almost always goes back to things we've already talked about here. So remember at the very top I talked about iterating very closely with users? If you have a mechanism to listen to users, get something in their hands quite quickly and then get their feedback on it to run it back through a feedback loop, you're very unlikely to go wrong. Especially if you put a lot of thought into these being the right users whose needs you want to focus on because they ladder up to your strategy. It's actually very hard to go wrong if you have that feedback loop working really well.

**David Singleton** (00:43:34):
So if you don't have that feedback loop, and actually it's remarkable as I talk to folks across the industry and so forth, it's remarkable how frequently that feedback loop doesn't exist in product development cycles. So if you don't have that, go figure out how to create it and if you do have it, but you can't get something into user's hands very rapidly from you having the idea that this might matter to getting their feedback on it, figure out how to make that go faster as well. And at Stripe, we focus a lot on all of our developer tooling and infrastructure on making it possible for changes to get delivered continuously to production so we can get them in front of users very rapidly and that's really important.

**Lenny** (00:44:10):
**David Singleton** (00:45:44):
First of all, in terms of how much getting in the weeds matters. At Stripe, we find that it's very important for engineering managers in particular, but really all managers to really have a very detailed understanding of whether their teams are kind of on the right track and where they're getting stuck in order to make sure that we make the most progress in unit time for our.

**David Singleton** (00:46:00):
We're getting stuck in order to make sure that we make the most progress in unit time for our users. So we find that, again, the nature of the problems we're solving, really reward domain expertise, like assimilating a deep understanding. And we ask all of our managers to be kind of the editors in chief of their teams plans. And I think the only way to do that is to get the right loop for yourself to understand what is actually going on the ground. Now, it would be really damaging if I was only doing work at the IC engineering level every day. That doesn't ladder up to someone who's able to help guide the team or whatever. So it's important to just judiciously but done on the right cadence. I think it's very, very valuable. So engineer occasion is something that I personally do. So it's obviously a port man of engineer and vacation, but it's not a vacation.

**David Singleton** (00:46:47):
The way we get to the name of the tower, at least the way I think about it is what you do on engineer occasion is I'll clear, other people track do this as well. I'll clear several days in a road, three or four days actually join a team, pick up a small task, hopefully a small feature that we can get all the way from start to finish in production and do that going through the exact experience the team has. So you get to understand the developer tools, the build infrastructure, how you get stuff reviewed, how good is the documentation, how long did I have to wait in order to actually see my thing live in order to start that feedback loop that I talked about with users. So you're actually going and joining a team and doing some work.

**David Singleton** (00:47:26):
While one does that, it's really valuable and important to keep a friction log because then what you want to do is write up the experience both as an aid memoir for yourself because it then helps you go and for all of the next year's worth of conversations I might be involved in around making trade offs and helping set priorities, that context really helps. So I actually reread these reports periodically and it's also really valuable to actually share them work with the team, which then demonstrates, well I understand what it's actually like and here's how we're going to make sure that we're carrying that information through prioritization. So that's what you do. The name is, it's the often the hardest thing about these is finding the time to clear your calendar for that many days. So the reason I think about it is a vacation is of course people go on vacation.

**David Singleton** (00:48:12):
By the way, I work very hard to use all my vacation days every year. I think that taking a break and recharging your creative juices is valuable. So the point is when you're on vacation, the world goes on and it's all fine. So I treat it like I'll decline every meeting in order to clear my schedule and have a maker schedule in order to do that. And so I've done this many times at Stripe. I advise engineering managers at Stripe that they should do an engineer occasion sometime in their first quarter to six months at the company. It gives you a tremendous amount of context for what your teams are actually experiencing and then for folks who do it once a year on an ongoing basis and it provides a tremendous amount of context.

**Lenny** (00:48:50):
That is insane. I've never heard of that process. How do you stay knowledgeable and up to date on the infrastructure and the code that you have to code and all of a sudden things move so fast?

**David Singleton** (00:49:00):
The process is literally to help you do that. I guess maybe something I left out in explaining it is we'll often identify a buddy on the team who's going to help you through. So for what it's worth at Stripe, we write a lot of code in Ruby, we write a lot of code in other just Java type script as well. But our kind of core infrastructure is mostly implemented, core product infrastructure mostly implemented in Ruby. When I started I had never written a line of Ruby in my life and I knew I wanted to do this thing and actually done something like it before joining and I was really scared. How much credibility might I lose if I show up and I can't write a line of Ruby. But my first buddy was a guy called Ajhja who's still at Stripe doing great stuff and he helped me learn Ruby during these three days and they [inaudible 00:49:48] me a little bit, but ultimately everyone really appreciated that I've done it.

**Lenny** (00:49:52):
Imagine being the engineer has to review your PR.

**David Singleton** (00:49:55):
I tell them this is an important part of the process. Please don't treat me any different to anyone else. And obviously to make this work well you have to set the expectation that you're not going to take me action if something isn't exactly the way you want it to be. It is a moral kind of longitudinal process.

**Lenny** (00:50:11):
Is there something that you found in this process that comes to mind that was really surprising or interesting or just kind of lasting in the past set of couple years?

**David Singleton** (00:50:19):
One of the most interesting things that I think I've run into is there are a lot of places that as we scale, we know that it makes a lot of sense to invest in automation and there were a bunch of places in our development process where while we've done that, we were working hard to help each other out and actually saying, hey, please come talk to this other team if you want to use this thing. And if you're working for instance, a different time zone from someone else, it's often the case that actually it would be much better just to document it well and automate it and then maybe make the consultation available. And so running into those kind of pieces of friction and then having a good conversation about it has really helped. But one good thing about Stripe I think is that kind of change doesn't depend on me doing anything.

**David Singleton** (00:51:02):
So we really care about making Stripe a place where engineers can do some of the best work of their careers and that means being enabled with good tools and good developer productivity. So we invest a lot in developer productivity. We have a team who work on our dev tools and they actually run exactly the same product development process that I just described for our external users internally. So understand your users really well. Talk to them a lot, as so for instance, we do a monthly survey. We operate in enough scale where we can ping enough people once a month that we get a statistically significant sample of the entire organization without having to get everyone to respond. Every individual respond once every six months. And we ask very directly, what's the experience you're having? And then we use that to prioritize the roadmap of our developer productivity team. We also measure everything so we know where people are getting stuck and when we compare both the kind of free responses and the data, it helps us invest in the best places to make everyone else more productive.

**Lenny** (00:52:03):
Okay, that's exactly where I was hoping to go next. And let me set this question up. So I saw a tweet of yours recently where I have some notes here I'm going to read that you deploy changes to your core, API 16.4 times a day on average. Your uptime has been 99.999% and one in 10 people in the world have transacted with a business powered by Stripe at this point. And so my question is just what does it take to achieve something like this, especially in terms of tooling and culture and everything else you're just talking about?

**David Singleton** (00:52:33):
Well I think it's worth saying at Stripe we are trying to do something I think relatively unique, which is what we power for the businesses to build on Stripe our users, it's really business critical to them. We're literally talking about money coming into your business to help you run your operations or make it even possible for you to run your operations and maybe pay your employees and so forth. All the revenue automation that we do around billing subscriptions, our financial automation products, helping you close your books, this stuff matters. You cannot get it wrong. And we also operate, Stripe today, we move as much money as all of e-commerce was when Stripe got started. So we operate very significant scale and so business critical significant scale, we just have a tremendous duty to our users to get this right and be extremely reliable and available for them.

**David Singleton** (00:53:23):
So we do think about that a lot. Now there's one way to be very reliable, which is to try to change things as infrequently as possible. Never change anything than you have many fewer opportunities for things to break. But we don't take that approach. The needs of our users are evolving so rapidly, the number of ways that we want to serve them and can serve them is evolving rapidly enough that it matters a lot that we can operate in a kind of constantly changing environment. Hopefully I've explained why that matters like that type feedback because it's only possible if you can actually get something in their hands. So we choose to design the way we work to hold those two things true at the same time and it does take a lot of care and attention and it takes a lot of systems. So maybe just kind of build this up.

**David Singleton** (00:54:12):
First of all, there's a lot in our development process and the ways that we take changes into our product that makes this possible. One of those is we really care a lot about having really good test suites. So we believe in automated testing. We don't have manual testers because manual testers couldn't possibly cover the vast array of API endpoint and configurations that we offer but automated test can. So we work hard to have a lot of automated test coverage and then every single change that an engineer produces gets run through this battery of tests before it can even possibly go towards production. And then we work very hard as changes end up in production to put them through increasingly realistic and then more broadly exposed environments. So we have a bunch of staging environments where we'll send a battery of more realistic end-to-end tests. Then finally when something actually goes to production, it starts at very small percentage of the traffic and then wraps up to the hole.

So we can detect problems before they become huge problems. There's a number of things that we had to do to make that all possible. So for instance, every change that Strip engineer submits [inaudible 00:55:23] test, it actually ends up in production automatically over the course of the next 45 minutes or so. And I don't think there are a lot of financial services companies, at least not until maybe the last few years that have operated that way. And so that takes a certain mind shift. You actually have to assume that that's going to happen and put the right systems and processes in place. And then the other thing that's important is to recognize that we have to obsess about getting very systematically good at addressing anything that can go wrong. So I mentioned earlier it's really important to me that we are a continuously learning organization.

**David Singleton** (00:55:59):
And I mean something else that matters of course is things will go wrong. Sometimes there is a downstream partner where something breaks, other times there is a particular kind of network outage side of our control or whatever. So things will go wrong. So it's important that we have the right systems in place that minimize the damage that any individual thing going wrong can cause. And we work hard on that. We have redundant systems in a bunch of places. We think hard about how something that breaks for one user wouldn't kind of carry over into other users and then we actually very actively work hard to put things right when they are wrong. So that's called instant response at most companies including Stripe. I actually think Stripe is very, very good at instant response. We've got very good tools for both declaring incidents and then pulling the right people together to put them right.

**David Singleton** (00:56:45):
But we don't stop there. We really obsess about reviewing them carefully and identifying not only what would've stopped this thing happening, but how could we prevent this whole class of issues in the future. And as I said earlier, we prioritize working on that stuff ahead of anything else on the roadmap that's because of remember what it is we're trying to do, how important it is and how if we don't do that well, we can't move quickly for our users. So that's how we do it.

**David Singleton** (00:57:09):
By the way, I don't want to come across here and sound like we've got it all figured out. Of course all of this is always entirely influx. We're always anxious to figure out how we can make it go better. For instance, in recent years we realize that we could get a lot of benefit from what we call chaos testing. That's like injecting errors and making sure that the systems respond in such a way that it doesn't cause any impact on users. So it's constantly evolving and we really enjoy learning from other companies and learning from our users as well. But it's something we care about and think very rigorously and systematically alone.

**Lenny** (00:57:40):
Did you say that it takes only 45 minutes from pushing code to it going into production?

**David Singleton** (00:57:45):
Typically yes. So that battery of tests that I described, that gets run on every change, that gets run in parallel to when you send it for review by another human. So it's run once, typically takes about 15 minutes and then once the changes merged into our code base, we run that same test suite one more time. So another 15 minutes then typically takes about 30 minutes for the systems to automatically deployed in production. That's how we run and think about establishing that tight feedback loop with users, that means you can get feedback from a user in the morning, you can figure out how to address it and you can actually put something back in their hands by the end of the day. And that loop running inside of 24 hours I think is pretty important.

**Lenny** (00:58:26):
That's incredible. I remember times that Airbnb where took hours for tests to finish because there's a lot of them and they fix that over time. But I'm used to more on that scale.

**David Singleton** (00:58:37):
It takes constant effort to hold. Those numbers by the way are important. Those are about the right numbers I think for a company operating our kind of scale. Of course as you add more stuff, you add more tests. So we've had to work on, we had to invent mechanisms to make it run more in parallel, we now have a thing called selective test execution where we figure out for not the battery that runs before it goes into production that we run everything and just run it in more machines to make it parallelize. But for the changes or the tests that we run for individual changes, we actually have systems that figure out, well which tests are the ones that might be material for this particular thing? And that's been a real source of innovation. In fact, our distributed change and test environment at Stripe is the biggest distributed system that we actually run. And so running that requires just as much energy and effort and rigor and craft as everything else.

**Lenny** (00:59:29):
What are some of the things you've done that have had the most impact on developer productivity?

**David Singleton** (00:59:34):
We've touched on a couple of these already. That auto deploy mechanism definitely had a very significant individual impact. So before we introduced that, sometime within the last five years each deployed to production required an engineer to actually babysit it, to watch it as it, make sure all the charts look good. And it was a bit of kind of game of roulette because you always wish that your change would get bundled in with someone else's so that they were paying attention to it for you. So literally being able to be fingers on keyboard on something else while your change is going live and it's going to automatically monitored, that was a big improvement in our productivity. Also, very small things. This is just like optimizing checkout, very small changes really compounded in a big way. So for instance, by eight months ago we made it possible, we use a tool for code review.

**David Singleton** (01:00:24):
It's quite popular, it's GitHub enterprise, but we've built a bunch of our own experiences and controls around that and we have a little tick box that you can tick on your pool request. That's what you call an individual change that an engineer produces that is auto merge, which means once the reviewer says this is good, I don't need to come back and look at it again, the system should just take over and that just cuts out one whole kind of human distraction step and that laddered up to a big change in productivity as well. So these very small changes can if you're deliberate with them, ladder up to a big impact.

**Lenny** (01:00:55):
I'm going to go in a different direction now. AI very hot right now. Has AI impacted the way you all build product yet? And if not, where do you think it starts to go in the next few years?

**David Singleton** (01:01:06):
Yeah, we're very excited about AI. Now to just take one step back, Stripe has been using machine learning and advanced machine learning techniques at the heart of our products since the very early days. Radar is our solutions for payment fraud and it has used, I mean this is the very core of our products and has used machine learning since we introduced it. We also, if you think about the nature of Stripe, we operate in an environment where we have to do a lot of work to kind of catch bad actors in the system, fraudsters or fraudulent businesses. So we've been employing a lot of machine learning techniques there again for years and we couldn't operate the company without them. So the difference between ML and AI, I think when we think about AI today we're mostly talking about the applications of large language models, but those are really based on this new technology called Transformers.

**David Singleton** (01:01:55):
It was a paper that came out of Google a while back about four years ago, five years ago. And we put transformer technology into those systems at some point more than a year ago. And it's proved to have a very profound impact on our ability to solve those problems for our users, which is great. But we are also excited about the applications of large language models. I mean there's really two dimensions to this. Number one, we feel privileged to be able to help serve and power a lot of businesses getting started in this space. One big difference between AI startups and others is it's actually quite expensive to operate an AI startup in terms of the compute resources. Like running this stuff in these GPU machines is quite expensive. So typically these companies need to have a monetization model from day one. And I'm really excited to say most of the AI on these is running on Stripe and we're working very hard to make sure we serve all their needs.

**David Singleton** (01:02:51):
Open AI, for instance, using us for monetizing chat GPT plus and all their other products. But they don't just stop there. We're actually helping power all of their subscriptions and revenue tracking and financial operations around the business. And the point about that is we've been putting very large engineering teams on this stuff for years and that means anyone who wants to build a reconciliation product and a subscriptions business model, if you want to do that yourself, you have to put big engineering teams on them. But if you can use Stripe instead, you can actually focus those really precious engineering resources on keeping up with the rate of breakneck innovation in this space. So we're excited about that, but we're also really excited about the applications of these AI techniques on our own ability to serve our users better. And so for instance, at sessions we'll be talking about a few of these.

**David Singleton** (01:03:44):
We started working with OpenAI when they had the beta. It was a kind of private beta of GPT four available at the beginning of this year. The first thing we thought of was we've got a lot of documentation on Stripe and we put a lot of care attention into making it good. But if you want to achieve something with your Stripe integration, you're typically going to spend quite a lot of time reading docs and kind of synthesizing them as an end user. We realized we can have GPT four read all of our docs, store them as embeddings and then answer questions for developers. And so we now have that available in kind of early stage release inside of our documentation. It's turning out to be pretty valuable. We've also been able to apply these techniques to other areas of our products. So something that we're going to show an early version of IT sessions is we have a really powerful product as part of our revenue and financial automation suite, which we call Sigma.

**David Singleton** (01:04:36):
It allows you to write sequel queries across all of your Stripe data so you can interrogate your Stripe data to understand your business and really fine grain detail. Which country has the fastest growing sales, which segment in which country has particular attributes to it? Very powerful product, but it's one that is potentially challenging for non-developers to adopt. You do have to know how to write sequel queries unless you just use the ones in the menu in order to get the full value out of the product. Well it turns out with large language models, we can apply this technology where you can ask questions in natural language and our engine will actually write the sequel query for you. And we've had to do a lot of work to kind of tune that to make sure that it's reliable and understandable and it's going really well. And we also see great applications in actually applying these technologies to make us more efficient internally, answer users questions faster, help each other out more quickly. And so we're doing those things as well. One concrete thing that we did, which I'm pretty excited about is not long after we saw chat GPT come out, we realized it would be really awesome if we could apply that to many use cases inside of Stripe. But as you can imagine, a lot of the data that we are dealing with on a daily basis is very sensitive to our business, to our users and we care a lot and we have a lot of governance around this, but we wanted to make that technology bill. We couldn't say, Hey Stripes, go and use chat GPT. So we stood up an integration to GPT four and an internal UI to use models like that. But here's the thing that I want to kind of relate to all of your viewers. We find that we built presets into that.

**David Singleton** (01:06:12):
So when you work with large language models, you want to write a prompt that then helps get the model into a state where it's going to be able to solve the particular problem at hand. And we find that writing prompts is something that's accessible to folks across lots of different job families, not just engineers. Folks in our marketing team, folks in our user support team have been able to use this as well. But you can put a lot of care and attention to getting a prompt that works really well and we not make it possible for those to be shared across the company. So I can grab the preset to help me write a blog post with the right kind of tone and I find it extremely valuable in helping me and many other people across the company. So I think there's a lot of innovation in high companies serve their users and operate is possible right now and we are working hard to employ all of that on behalf of our users.

**Lenny** (01:07:03):
What about as engineers? Are pro co-pilot, is there some along those lines that you find useful weary of? How do you think about that?

**David Singleton** (01:07:12):
We're excited about co-pilot. We've made co-pilot available to our engineers internally. We ran a fairly rigorous trial to make sure that we felt good about its actual impact on our ability to write code and the code it was actually generating and find that it was very effective for us. Both in productivity but also just in helping our engineers feel like they could direct their energy towards some of the bigger problems. How should this stuff fit together rather than some of the micro problems. So because we had such great feedback on that, we've made it available very broadly internally and we'll be very excited to see where that space develops over time.

**Lenny** (01:07:56):
Do you have a sense of the productivity gain that say imagine you have a lot of 10X engineers, the gains that an amazing engineer gets out of a co-pilot versus a newer engineer?

**David Singleton** (01:08:07):
It's honestly too early to tell because we've only recently made it available at scale. What we're typically seeing is that the kind of tasks that it accelerates are, remember I mentioned how much energy we put into having comprehensive test suites. It's actually using co-pilot to generate your test cases, turns out to be extremely valuable. There's a reasonable amount of boiler plate that is kind of like repeated code and concepts that goes into writing good tests. But you also have to reason very carefully about is this actually testing is exactly what I want? So co-pilot takes a lot of that boiler plate generation out of the way. So you're actually thinking about the stuff that really matters. And I think that is going to have a profound impact on quality of code that we write as well. But it's a little too early to say, because we literally just folded out what kind of actual measurable impact is having.

**Lenny** (01:08:54):
I was talking to an engineer and he's just like, I like the active writing code and it makes me sad that this is doing this for me. So he turns it off.

**Lenny** (01:09:00):
This is doing this for me, so he turns it off. I think over time people will be like, "Eh, that's true. I never really enjoyed this part of it."

**David Singleton** (01:09:07):
Yeah, I'll speak from personal experience. I love writing code. I really love writing code. It's pretty much what I do for fun. I also love writing code with Copilot, because as I said, it means that I can focus on the parts that really matter. I think that's been a fairly consistent experience across Stripe as well.

**Lenny** (01:09:24):
Awesome. You run a massive engineering team. I don't know if you shared the numbers of engineers, but I know there are many. What are, and this is a broad question, just what are some lessons you've learned about managing people and/or managing engineers, whichever direction you want to go?

**David Singleton** (01:09:41):
Wow, big question. There are so many different directions we could take that. I'll share a few observations. They don't necessarily all have a particular theme to them. I think as I've been responsible for bigger and bigger teams over time, one of the things that just I repeatedly learn is I personally will not be involved in really any of the decisions that matter and happen. There are thousands of decisions that an organization of any skill is making every single day, every individual engineer or PM is making hundreds of small decisions and some big ones every day that affect the kind of general trajectory.

**David Singleton** (01:10:17):
The most important thing is to really focus on hiring the right people, and that means hiring people that you can trust with a tremendous amount of autonomy. If I try to get involved in lots of decisions, everything will grind to a halt. How do you do that? It is important, obviously, to be rigorous. We've described already what our hiring process is. I really lean into getting to know folks in very, very well as we're hiring them. By the way, something I didn't mention earlier that is I think important here is we pay a lot of attention at Stripe during the hiring process to references.

**David Singleton** (01:10:49):
This is typically later in the process, but if you put someone through an interview process, you've probably spent what, eight hours total with them? If you talk to people that actually have worked with them before, you're probably benefiting from thousands of hours of direct experience. We take this very seriously, and we try to ask smart questions that will help get real signal out of that. I certainly find when it comes to hiring folks that have then gone on to really make a transformative impact, that references are often the time that you get the best conviction on the hire or not.

**David Singleton** (01:11:22):
Hire the right people, and then you have to trust them. Now, trust is interesting. Is actually quite challenging to trust people that you've just hired, right? Well, you've got no stake really on you yet. What I find is you do actually just have to be generous in giving trust and assuming trust by default at the beginning. Then you do need to hold people accountable enough that they are proving that they can handle that trust. Sometimes, that means hiring someone who you think quite plausibly can end up in a very big role into a smaller role to begin with. Other times, you just have the big role that you need to fill, in which case, it's important to be quite conscious about really trusting and delegating to them with a lot of support.

**David Singleton** (01:12:02):
I'm always working hard to delegate sometimes a little bit more than I'm comfortable with, because that's the only way to really operate at significant scale. I think something else, and sorry, this is really a smorgasboard is what a lot of differences.

**Lenny** (01:12:17):
Perfect.

**David Singleton** (01:12:18):
Something else I've realized as the organizations I work with and been responsible for have grown is that you have to be extremely conscious about managing your own time. There are hundreds or thousands of people who, quite legitimately, might want to get some time with you. If you just let the places that you spend your time and energy be controlled by the stuff that comes into your inbox, or the stuff that gets put on your calendar, that's going to be random. It's quite likely that that's not laddering up to the biggest impact. I personally have been running a loop for, I don't know, maybe 10 years, where on Sunday evenings, and usually, well, it usually starts on Sunday afternoons, I read a lot of what happened last week.

**David Singleton** (01:12:59):
Then on Sunday evenings, I actually write a list for myself of, you asked me a question at this podcast, which is like, what would be great success for this podcast from your perspective?

**David Singleton** (01:13:08):
I basically think about that for my week every Sunday night. I make a list of if we got these things done this week, that is a good week, but obviously, we need to be dynamic. Things will surprise you through the week. Honestly, then, that drives a lot of just where I decide to spend my time. I try to encourage everyone to think that way throughout the organization. I think it does ladder up to more impact over time. I think the final thing I'll say here is I mentioned how important operating principles are to the culture. I think for any manager and any leaders, that includes ICPMs as well, but for any manager, any leader, how you show up really does set the culture that is around you.

**David Singleton** (01:13:50):
I try very hard to show up very consistently every day, even though there will very frequently be things that are going wrong and are bad and are hard. It's actually very important to show up quite consistently. Certainly, in line with all the values that we have and the culture that we want to set, in order to really kind of model that at scale. Different days, that can be easier and harder. The final thing is, I think it's quite important to manage your own energy.

**David Singleton** (01:14:17):
There are some tasks that I do that are maybe not the most important thing, but I know that I get a lot of joy and energy from them, and then that carries over into the other stuff that also needs to get done.

**Lenny** (01:14:30):
Just two more questions before we get to our very exciting lightning round. One is just I feel like Stripe is incredibly good at planning and organizing, prioritizing. I know every inside, it's always not as beautiful as it may seem on the outside, but what have you learned? What has Stripe learned about planning and prioritizing that you think other companies might be missing?

**David Singleton** (01:14:50):
Yeah. Well it's funny you say that. I would say planning inside of Stripe does not get the highest net promoter score that you might imagine. I do think it is actually quite effective. By the way, the reason I think that planning, the way we do planning at Stripe doesn't always get the best internal rep is we have grown very rapidly. That means that almost every time we come back around to planning, we actually, and this is kind of a theme at Stripe, we think about a lot of the ways that we work internally from First principles.

**David Singleton** (01:15:19):
We will tend not to by default just pick a system off of the shelf that some other company has run or that we've used before. We'll think hard, considering what we are doing for our users. How should we do this? When we're thinking even first principles, we'll often go out and talk to a lot of other companies, and try to learn from their experience. It's actually something I've really appreciated and enjoyed at Stripe. A lot of the learning I've done here has come not only from folks that are at the company, but also talking to a bunch of folks that we have the privilege to work closely with because their business is building on Stripe, or they're a similar stage of scale to us.

**David Singleton** (01:15:56):
A good example of this is Amazon. Amazon is a Stripe user. Because we work with them, in my first couple of weeks at Stripe, I was actually able to meet with Charlie Bell, who then ran operations at Stripe. A lot of the things that, sorry, who then ran operations at Amazon. A lot of the things that we actually now do at Stripe have come from learning from that experience. It wasn't just, oh yeah, we'll take this thing cause Amazon did it, talk to him. Lots of other companies hard to learn. The point is we care about learning from others and then we apply it.

**David Singleton** (01:16:21):
Bringing this back to planning, because we tend to think a lot from first principles and we've been growing rapidly. The right planning process for us as a company has actually changed quite dramatically and quite significantly over the years. We do planning in a relatively deep way once a year, and then in a slightly lighter way halfway through the year. If you imagine doing someone once a year and you're growing rapidly, you're going to want to revisit exactly how you do it. I think for anyone who has the privilege of running the same planning process again and again, you can really iterate it and tune it. We've had to make more deliberate and more sweeping changes as we've gone along. There are a couple things at the core of how we do this. One is it's really important to focus on who are the users that we are seeking to serve for any given product area that we're working in? Kind of holding their needs front and center in your plans is important. Again, at Stripe, we do something that is, it's not unconventional, but it's not the most common practice in the industry, which is we work very hard to serve companies from the very, very small. The folks that are literally just starting their company on Stripe, with Stripe Atlas, all the way up to multinational, 10 Fortune five companies, fortune one companies, I guess.

**David Singleton** (01:17:39):
There's a very different set of user needs across those businesses. For any given area, it's very important for each team to be clear about who are they serving. Then we run a kind of inverted W process. We typically have teams surface what their immediate thoughts are on the most important things to do. We'll then have a group of product leaders get together and try to synthesize the most important parts of that into a kind of draft overall company strategy, and then take that back down to teams to figure out, "Well, if that's where we're making a big push, should that tweak my plans at all?"

**David Singleton** (01:18:13):
We bring it back up for synthesis, and then back down for everyone to really distribute with a lot of context within their orgs. We find that at our current scale, very, very effective.

**Lenny** (01:18:24):
I haven't mentioned this yet, but I actually, Stripe for my newsletter, I check the app many times a day, so I'm probably in the Fortune 1 million, somewhere in that.

**David Singleton** (01:18:32):
Do you have any feedback? Genuinely, I'd love to hear your Stripe feedback.

**Lenny** (01:18:36):
It's great. The app tells me that I'm ...

**David Singleton** (01:18:36):
No, no, don't tell us it's great. What bugs you?

**Lenny** (01:18:40):
Well, it's interesting for churn, for cohort retention, which I care a lot about for the newsletter, I actually use a different tool that feels like gives me better, a table of per cohort, how many people are still around? There's an opportunity to have better cohort retention metrics.

**David Singleton** (01:18:57):
Cool. Okay. Well, maybe we can email about that. Quite genuinely at Stripe, anytime we talk to a Stripe user, we are always looking for feedback that goes for any occasion. We often bring users into the beginning of our Friday fireside I already mentioned, and we're always asking them for their feedback and we really, really want to act on it.

**Lenny** (01:19:15):
Well, I wish I had more. It's works great. Final question, Stripe Session's coming up, it's going to happen before this comes out. What should folks be watching for? What's next for Stripe?

**David Singleton** (01:19:26):
We've touched on a few of the things that we're sharing broadly for the first time at Stripe Sessions on this call already. Per our development process, these have been in the hands of some Stripe users for a significant amount of time and we've really kind of crafted them with them. I'm super excited about a number of the things that we're going to be talking about next week. One is I've mentioned our revenue and financial automation suite.

**David Singleton** (01:19:48):
We've really been crafting the features there for some time, and really nice example actually of how building closely with users really, really helps build things at scale. We've a set of features that we work with companies like Atlassian and CloudFlare to enable their businesses on Stripe Billing. They have relatively complex models. For instance, you might sign a deal where it has a discount in the first year, and then there's another product that's being used in the second year, and then something else happens in the third year. You can now model all of that in Stripe Billing, and we're going to be showing how you can do that in the dashboard at Stripe Sessions next week.

**David Singleton** (01:20:23):
It's now going into general availability for all Stripe users. It's giving all of our users from the very small to the very large, the same power that the world's best SAS platform might have. Excited about that. It's also the case that we didn't talk about it in this call, Stripe Connect is our product for platforms of marketplaces. If I may actually just take one second, it's a really good example of how focusing on the needs of our users in one area took us into a really valuable space to solve for many users in other areas.

**David Singleton** (01:20:55):
The ideas behind Stripe Connect came from working with companies like Lyft and Shopify. In the very early days, they were using Stripe for pay-ins, but we realized, "Oh, these companies are operating these multi-sided marketplaces, and there's a ton of heavy lifting you have to do to make that work really well." We have to have a bunch of regulatory licenses in place, but also there's a lot that you need to do to actually make the money move and kind of account for it in the right way. Connect is our product for platforms and marketplaces.

**David Singleton** (01:21:18):
One of the things that we've done over the course of the last year or so is actually taken a lot of the features that we've built in the Stripe Dashboard to help folks manage things like gathering the right documents from their users, or handling refunds and so forth. We've actually made them available as embed-able UI components that are also completely customizable, which these platforms can take and put inside their own dashboards so they can present a lot of the power that Stripe is enabling to their customers, without having to do a ton of engineering work themselves.

**David Singleton** (01:21:53):
Look, generating engineering leverage for our customers is just very frequently the main thing that we can do to help their businesses. We're going to show a bunch of that stuff next week, which I'm excited about. Then finally, we touched on it already, but it'll be great to show some of the innovation we've had around AI and large language models. Again, I think it's going to make a big impact over the coming years.

**Lenny** (01:22:10):
Well, with that, we've reached our very exciting lightning round. First question, what are two or three books that you've recommended most to other people?

**David Singleton** (01:22:17):
Most means that you have to integrate under the curve, so I'd say High Output Management by Andy Grove is definitely the book that I've recommended the most. It was a book that really opened my eyes to how to get the most out of teams over the whole course of my career. Definitely check that out if you haven't read it already. Recently, we talked about being meticulous in our craft. I've really enjoyed Build by Tony Fidel. Tony worked on the iPod, and then the iPhone, and then was the founder of Nest.

**David Singleton** (01:22:47):
He puts a tremendous amount of thought into his users and how to build really great crafted experiences. I had the privilege of working with him very briefly at Google, but I thought the book was excellent in terms of helping provide some practical pointers there. Then I would be remiss if I did not mention Claire Hughes Johnson's book, Skilling People. Even though it only just came out, I've recommended it a lot. There's actually some stuff in here where I'm sharing some techniques that we've used at Stripe, so you might enjoy that. Then if I may share one ...

**Lenny** (01:22:47):
Here's my copy.

**David Singleton** (01:23:17):
You've got it too.

**Lenny** (01:23:17):
... it supports ...

**David Singleton** (01:23:18):
Amazing.

**Lenny** (01:23:18):
... Supports my laptop on here, and ...

**David Singleton** (01:23:21):
I hope you've read it.

**Lenny** (01:23:22):
I've had her on the podcast. I've read, I've skimmed it as much as I can.

**David Singleton** (01:23:22):
Yeah.

**Lenny** (01:23:26):
I'm not building a business right now. She was in the top 10 bestseller list on the Wall Street Journal, I saw.

**David Singleton** (01:23:31):
That's right, that's right. It has a ton of very practical advice, so I recommend that one a lot.

**Lenny** (01:23:36):
What's a ,favorite recent movie or TV show?

**David Singleton** (01:23:39):
Okay, I'm going to cheat here because I'm going to interpret that as what's the best video content you've seen recently?

**Lenny** (01:23:44):
Sure.

**David Singleton** (01:23:45):
I have fallen in love with YouTube for learning about the really fast moving AI space. It has been remarkably valuable, and Andre Carpassi has a bunch of really good seminars, but not just that. Across the whole spectrum, I think there's just so much gold on YouTube if you want to learn a new skill these days.

**Lenny** (01:24:06):
Is that the channel you recommend, Andre Carpassi's channel?

**David Singleton** (01:24:09):
His channel is awesome if you want to learn about AI.

**Lenny** (01:24:12):
He's the ex-Tesla AI?

**David Singleton** (01:24:15):
That's right. I believe recently, gone to OpenAI, but was doing this kind of on his own for a few months and has produced a bunch of great YouTube content.

**Lenny** (01:24:23):
Great pick. Most people pick White Lotus or something like that and you go with a AI YouTube channel. I love it. What's a favorite interview question you like to ask?

**David Singleton** (01:24:32):
Okay, well, actually, you will find some recommended interview questions from me in this book. One I really like actually, because it sounds like a softball and then it's not, is I often ask people, especially for leadership hiring, which leader that they've worked with they admire most and why. It sounds like a softball, but it actually tells you a lot about what this person really cares about in leadership.

**David Singleton** (01:24:55):
Sometimes, I'll follow up and ask, "How does that manifest in your own leadership style?" Then, and this I think is really quite telling, I always ask folks, I'm going to spoil my interview question, I'm revealing it in your podcast, but I always ask folks, "Okay, so imagine you were their manager. Tell me the performance review or the development feedback you'd give them to help them be more effective." I think everyone always has things that they could improve, certainly myself included.

**David Singleton** (01:25:22):
Folks' ability to think critically about someone that they kind of admire or lionize, and how they could actually be more effective, I find quite telling.

**Lenny** (01:25:30):
What are some favorite products you've recently discovered that you love?

**David Singleton** (01:25:33):
The products that I have recently discovered and definitely love is Mid-Journey, also building the business side of their business on Stripe. For folks who don't know, Mid-Journey is an AI tool for generating images using stable diffusion, but it's really pretty awesome. I've been using it a lot with my daughter. We'll come up with stories and we'll generate beautiful looking images with Mid-Journey, and then she'll drop them into books and she'll write the pros. The reason I think it's pretty cool is I was very surprised and skeptical at its UI to begin with, because its UI is Discord.

**David Singleton** (01:26:07):
They drop you into Discord and you are in a channel where you have to prompt the artificial intelligence. I find it very confusing at the beginning. It's like, this is not the right interface for this tool, but actually, it's very smart because you learn from other people on Discord, how they're prompting the AI in order to get the kind of results that they're looking for. I find that made it possible for me to get a lot more power and value out of the tool. I definitely subscribe to Mid-Journey and have had a lot of fun playing with it.

**Lenny** (01:26:36):
What's your favorite image that you've created, if there's one that comes to mind?

**David Singleton** (01:26:39):
We made a cover for a book that my daughter is writing. My daughter is nine years old by the way, so we're talking here, good children's stories. She made an image of a wolf wearing a purple velvet cloak, sitting in front of a campfire with a shack in a forest and a nebula behind. It's beautiful. We actually built that with by combining two images, the wolf and the shack. Actually getting the wolf out of one image and putting it onto the other, we used the new Apple image segmentation copy and paste thing, which worked great. It's also fun combining these AI tools, but that one has been pretty good.

**Lenny** (01:27:17):
What a world. Two final questions. What's something relatively minor you've changed in your product development process that has had a tremendous impact on your ability to execute as a team?

**David Singleton** (01:27:27):
We talked a bit or about this already, auto deploys and that auto merge feature, but probably the most profound thing is we put a little button in every single developer tool at Stripe. It is an emoji of an octopus that is crying. If you click it, it makes it possible to just type in what's gone wrong. Then we have our developer productivity team read all of those and use them to prioritize what they're up to. Just like frictionless problem recording turned out to be really valuable. We call those paper cuts.

**Lenny** (01:27:56):
Crying octopus. I love that.

**David Singleton** (01:27:58):
Yeah.

**Lenny** (01:27:59):
Who else from Stripe or Former Stripe should I have on the podcast is my final lightning round question?

**David Singleton** (01:28:05):
I see how this works.

**Lenny** (01:28:08):
This isn't how this works.

**David Singleton** (01:28:09):
Two Stripes I think you should have on. Emily Sands is our chief economist and leads our information org. I think includes data science, but also the teams that build all of our, a lot of our internal tools. I think Emily just has great frameworks for thinking about how to translate what's really going on for users into great sets of metrics that you can then use to get the right action happening. As I described before, that's super important.

**David Singleton** (01:28:31):
The second person would be Michelle Boo. Michelle joins Stripe as an engineer in the very, very early days, and has been with us for obviously a long time. She's really our principal product design architect in terms of the actual abstractions that we use to model our users' businesses on Stripe. I think she has very deep insight into how to think about getting those things right. I think you would enjoy talking.

**Lenny** (01:28:55):
David, I so appreciate you making time for this, especially during this hectic period ahead of sessions. Two final questions. Where can folks find me online if they want to reach out, maybe learn more about what you're up to you, and then how can listeners be useful to you?

**David Singleton** (01:29:08):
Cool. Okay. Well, I am @DPS on Twitter. That is definitely the best place to get hold of me, but you can also check right my personal blog at blog.singleton.io. Useful, honestly, please send me Stripe feedback. You can do that on Twitter. You can discover my email address on my blog as well. I would love to hear how we could serve you better.

**Lenny** (01:29:28):
David, thank you again for being here.

**David Singleton** (01:29:31):
Thank you. It was a lot of fun, Lenny.

**Lenny** (01:29:33):
Same. Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at LennysPodcast.com. See you in the next episode.

---

## [9/19] Mastering paid growth | Jonathan Becker (Thrive Digital)

**Jonathan Becker** (00:00:00):
There's a lot of different ways that we are beginning to use AI to do more with less, basically. The effect ultimately that we've seen from a human capital point of view is displacement. We have more people now than we've ever had, but the nature of the work that they do is more strategic. It's more about modeling, validation, asking the right questions, being focused around creative levers. And less so the like trench work of implementation and bid modifiers at the keyword level on Google search, and some of the really hardcore manual analysis we had to do.

**Jonathan Becker** (00:00:35):
On our creative group, we can come up with mockups, in literally, 1% of the time that it took. And so you still have to understand what questions to ask of the AI and be capable of iterating, but these rough drafts that you might show the artwork of to a client to say, "Do we like this more or do we like this more?" That's AI generated. It's really interesting.

**Lenny** (00:01:01):
**Jonathan Becker** (00:04:48):
Thank you. It's a pleasure to be here.

**Lenny** (00:04:50):
It's my pleasure. What we're going to be doing with this episode, is we're going to be digging real deep into all things paid growth, which we've never done on this podcast yet. And normally I actually skip this part, but I thought it'd be actually helpful for you to spend a little bit of time to give us a little bit of background on your experience in the space of performance marketing, AKA paid growth, AKA paid ads. You tell us what the right term is for this genre. But yeah, just tell us what you've been up to in this area over the past decade and a half, I think.

**Jonathan Becker** (00:05:20):
Sure. No, that's a great way to kick things off. And again, thank you for having me here. If I think about it, my experience goes back about 15 years into this space. I started off as a web developer. And as I built and structured websites for people, I became pretty obsessed and fascinated with the fact that you could build landing pages or homepages, or whatever it was. Basically the content on a website, and structure it in a manner where you had the chance to surface in organic, so SEO results more prominently. And as I became a practitioner of SEO, SEO really being my first love of marketing, I started attracting attention and people wanted to hire me on as a freelancer. And what I noticed is that as people started asking me questions like, what was the ROI of our SEO campaign? Or, how do I scale this, or whatnot? The answers to their questions ended up being a lot more aligned with what then was the biggest driver in the paid acquisition world, which was paid search.

**Jonathan Becker** (00:06:25):
And so I started experimenting with paid search. And what I found was that it was a tangible format and lever through which we could basically give people the types of results they were expecting from SEO, but that were obfuscated in terms of Google's analysis algorithm from an organic point of view being somewhat intangible. And Google slowly removing a lot of the data early on that allowed you to guess and test more easily. 10 plus years later, what started off as this freelancer consultancy that I started running in a walk-in closet in my old apartment, became 130 people. And we manage about $500 million a year in ad spend for small and large companies, including Uber, Asana, Tempur-Pedic. We've worked with Lululemon. Very exciting companies, mostly from the United States, even though we randomly happen to be based in Vancouver, Canada.

**Lenny** (00:07:26):
There's a number of threads I'm going to pull on there over the course of our chat. But you mentioned Uber and you told me that you had a crazy story about how you actually landed Uber as a customer. Could you share that?

**Jonathan Becker** (00:07:35):
I had been running Thrive for a couple years, and it was a very excellent regional agency in Canada with really cool local clients. In 2013, I got invited to go down to the TED conference, which was in Long Beach, California. And my friend Andrew Wilkinson asked me to join him at a dinner that night. I didn't know anybody from the TED community at the time. So we have dinner, and then afterwards as it goes at conferences, there's an after party. And so essentially I hop into a taxi, everybody else sped off in their cars, or however which way they were getting there. And as we're talking to the driver saying, "Hey, we're going to this place, can you take us?" There's a knock on the window and the person outside says, "Hey, I think I'm heading to the same destination. Do you mind if I hop in this car with you?"

**Jonathan Becker** (00:08:25):
And so we're like, of course. And I turn to him and I'm like, "I'm Jonathan. I run a 10 person agency out of Vancouver." And he says, "Hey, I'm Garrett Camp. I started a company called Uber." And so ironically, I meet the founder of Uber, the company that is in the process of disrupting the entire taxi industry worldwide in the back of a taxi cab. And what happened next basically changed my career forever. We end up at this party. At the time I was spamming Uber's referral program. Kind of a long story, but essentially I was using paid search to camp out on their branded keywords. And as people would sign up with my confusingly similar snippet to Uber's organic snippet, I was essentially siphoning off referral credits. So I would get $20 every single time someone signed up.

And I ended up making tens of thousands of dollars doing this. And so fast-forward, I'm getting a drink at the bar next to Garrett, and in my head I'm like, should I tell him about this? Maybe I can land them as a client. This would be really interesting. And essentially I tell him, I'm like, "Hey, I'm doing this. I'm adding zero value, but this is a loophole in your marketing system, and someone should close it." He essentially is like, "I need to report this to the board, but here's my card, write me what you're doing and we'll contact you." And so I get contacted by a bunch of his lieutenants. If you've read the book, Super Pumped. All the people that we dealt with at the time are in the book, and [inaudible 00:09:58]-

**Lenny** (00:09:58):
I watched the show.

**Jonathan Becker** (00:10:00):
Yeah, exactly. And they were like, "Hey, this is bad, you have to stop doing this. But can we hire you to solve the problem?" And so what started off as me running projects for local bars in Vancouver, or clothing stores, or whatever it was. Turned into me landing early stage Uber as a client, and really graduating us from competent professionals to leaders in our sector. And so it was a fascinating project, and we worked with Uber for 10 years.

**Lenny** (00:10:32):
That is an incredible story. I love the arbitrage game you're running there. It's basically siphoning VC money out of Uber. And I guess the lesson there a little bit is just sometimes it's this interesting combination of hustle in terms of just make some money, and also taking advantage of this opportunity you were plopped into.

**Jonathan Becker** (00:10:53):
Yeah. I think people often talk about entrepreneurs who have been successful and they comment that they're lucky. Whereas, I actually look at that situation and I think that you have to make your own luck. I could have been like, oh, cool, I met this guy in the back of a taxi and that was it. But I decided to take a risk, being that I could get embarrassed or nothing could happen, or they could shut down this referral gimmicky thing that I was doing. I had very little to lose, I guess, ultimately. But a lot of people just don't make these moves in life because they're nervous, or they're worried too much about what the downside might be. And so I very much was like, I'm going to shoot my shot here. And you put yourself in situations where everybody has luck, but you have to capitalize on it basically. And so that was an example of being willing to take a risk, and it paying off pretty big time I think.

**Lenny** (00:11:46):
Also, being at Ted, that seems like a good move. Networking, paying off. Love that he was in a taxi, that's hilarious. I was going to ask you about that. And clearly, he's doing some research [inaudible 00:11:55].

**Jonathan Becker** (00:11:54):
Yeah.

**Lenny** (00:11:58):
Let's start diving into the world of paid growth. And if you think about just paid growth.. And again, actually, what do you refer to this area as? Paid growth, performance marketing, paid ads?

**Jonathan Becker** (00:12:08):
There's a lot of interchangeable terms. Performance marketing is a common term. Paid acquisition is a common term. Some people think of those two things as growth marketing, whereas I see growth marketing as a bigger practice area within which paid acquisition sits. And then of course there's subsets, there's social ads, there's paid search, there's programmatic. And so there's a lot of different ways of saying the same thing.

**Lenny** (00:12:31):
I'm going to use performance marketing. I like that term because it really describes what it is. It's like marketing with you can measure performance. Let's see how that goes. As a channel, it's such an interesting mix of, on the one hand it's this incredible growth lever that allows basically any company to spend money and understand the ROI and acquiring the users. This thing that never existed before. Essentially Facebook and Google created these platforms. On the other hand, there's this sense that it's this drug that you start and then you get hooked on and you can never leave. And there's a lot of advice of just, avoid paid growth. That's just not a good healthy way of growing, especially as a startup. And so my question to you is just, how do you think about that element of it? And then even more specifically, what products do you find paid growth as a channel is right for and not right for?

**Jonathan Becker** (00:13:24):
Yeah, it's a really great question. And so, I think there's a couple different things that need to be unpacked here. Paid acquisition or performance marketing-

**Lenny** (00:13:33):
Performance marketing. [inaudible 00:13:35]-

**Jonathan Becker** (00:13:34):
... you can call it, can be seen as a drug, I suppose, when you are entirely reliant on it to fuel the revenue of your business. The analogy that I try and use here is that it would be very dangerous if I was advising you with your life savings and I told you to put it all in a single stock in the stock market. Stocks can be volatile. And as a result of that, your net worth would fluctuate quite a bit in the short-term and the long-term based on a lot of things that you don't control, like the external markets, or things that are happening within the performance of that particular company that you invested in. When I think about all of the marketing mix, so email, direct mail, linear television, performance, marketing, whatever it is, I think about it as investing capital with the expectation of a return. And in the same manner that I would not take all of your life savings and dump it into a single stock, I don't recommend putting all of your money into a single performance marketing channel, and then somewhat exposing you to the volatility of fluctuating CPCs or changing market conditions. I would agree with you that it is a drug, in a sense, if you have all of your eggs in one basket, and that basket takes you on a very intense rollercoaster in terms of performance. But when I think about the fact that Thrive manages $500 million a year, I think of myself to a extent as a fund manager, we are managing people's money with the expectation of a return. And part of the strategy is to diversify across channels. And so we decrease the reliance of any individual project on a singular channel and its performance.

**Jonathan Becker** (00:15:26):
And similarly, I always say to people that the first rule of performance marketing is not to forget about offline marketing and the classic marketing that works for organizations. In other words, direct mail can really work, email marketing works beautifully, SEO can really work. There's all of these wonderful things at your disposal. The real crash and burn scenarios that I've seen are these, not fly by night brands, but brands that figured out... Just like with Uber, I figured out this weird tie-in where I could make free money from their referral system. Sometimes people find shortcuts, hacks if you will, to scale rapidly because of one specific nuance of the Facebook ad platform, or something like that. And what they fail to see is that those loopholes come and go.

**Jonathan Becker** (00:16:19):
And so if they scale massively and their entire business is predicated on the performance of this one loophole that they found, or investing everything in a single channel, and then the conditions change, they're not going to be very happy and the business will suffer dramatically. And so when I think about this, it's a responsible channel mix, diversity, and understanding that you can't be overly reliant on performance marketing for the success or failure of your business.

**Lenny** (00:16:48):
What about the second part of that question of when you think about when companies come to you. What do you look for to help you understand this is going to be a really good fit for performance marketing and this is going to give them a lot of opportunity to growth, versus maybe not, maybe it'll be a small sliver but it's not going to be a massive success for them?

**Jonathan Becker** (00:17:06):
Yeah. I would say that the answer to that question is different at different stages of a company's life cycle. Early stage, look at what the company is doing, look at your own company. Have you established product market fit? Is this an idea that has yet to be tested, and are they entirely looking to performance marketing to scale everything? Are they at risk of it becoming an over-reliance on performance marketing? At a later stage we look at certain criteria that they might or might not possess. Typically, that will come down to resourcing.

**Jonathan Becker** (00:17:43):
The question at a later stage is not, does it work? But, to what scale can it work? And so we are looking at things like, do they have adequate creative resources and buy-in? Does creative resourcing tie into performance, and can we create a feedback loop there around testing? I'll talk to you about that in a bit. Do they have professional marketers on staff? Are there people who have experience doing what we do, that speak our language so to speak? Or is part of this an organizational educational, and creating buy-in through stakeholders process that needs to take place? Do they have technical resources? If we say, "Hey, tracking and attribution is broken, here's how to solve that." Can you implement it? And so on and so forth.

**Jonathan Becker** (00:18:27):
There's no one magic formula for what works or what type of company will be successful on performance marketing channels. Just as evidence of this, Google, which I think had a down quarter reported sales this week, and it was $70 billion in three months. And Facebook similarly just recorded yesterday evening, and it was $32 billion. That's $100 billion on just Google and Facebook in three months, and the majority of that revenue is from ads. This works really well for lots of different companies, it's just a question of at what scale.

**Lenny** (00:19:06):
Just to pull an thread a little bit more. Something I've heard from other guests is that paid ads are best for products where you get basically payback really quickly, basically to feed the flywheel of spend so that you're not sitting around waiting for someone to buy something in the future, or it's a small trickle of pay. How important is that, I guess? Do you find that you could just do paid growth for any company, it doesn't matter their business model? Or is there something you're like, okay, this needs to exist for you to invest serious resources? And even hire that team that you just talked about.

**Jonathan Becker** (00:19:37):
It's always nice when there's a quick turnaround on investment and return. And that's wonderful for like D2C or e-commerce style businesses where they're essentially taking the revenue to fuel additional inventory and operating costs. However, not all businesses work that way. And so, in a B2C or B2B lead generation scenario, we have to undertake pretty sophisticated modeling around these abstract concepts, like lifetime value. Which is difficult, because most businesses are relatively new that we work with, and so the idea of lifetime value is a misnomer. They don't know what that is yet.

**Jonathan Becker** (00:20:15):
But we have to model things like LTV to CAC, so cost per acquisition costs versus lifetime value and the period within which the payback occurs. You end up getting to a pretty sophisticated place where you can build out things like a lead scoring model, which predictively can determine in a statistically significant way the likelihood that one lead will convert to revenue over another. And so there are ways around the slower payback period that still end up being pretty accurate based on what you're bidding on today versus the latent revenue that will be accrued to those campaigns through attribution.

**Lenny** (00:20:58):
Do you have any just rules of thumb for someone listening and trying to decide, is paid a real model for us, either on LTV or CAC, or payback period? Or something just like, here's what you probably should have, especially early stage for you to feel like paid growth is going to be a great lever for you to use, and maybe a primary lever.

**Jonathan Becker** (00:21:18):
Product market fit. If you know that your business sells into audiences. Let's say you are a social media influencer or you had a really strong email marketing game, or organically your content surfaces within Google search results. Or, you did a lot of direct mail and linear television and billboard advertising and that worked. If other things work, it is highly likely that paid acquisition will work. The issue for most companies is in this incorrect assumption that the data that is provided through paid channels allows you to have full end-to-end understanding of attribution. Which is wrong, it's never been that way. And the other aspect of this is the patience to understand that every business is unique, and these metrics that we know are important are different for every business. Lifetime value, like propensity to repurchase, ROAS, which is return on amount spent, CPA, CAC, all of these different things are different for every business.

**Jonathan Becker** (00:22:24):
Even if I worked with two hotels in the same city, they would have different results based on the nuances of their budget, their brand, the market that they sit within, the services that they offer, and so on and so forth. I think that everything else, the main problem here is that nobody should expect an overnight turnaround with performance marketing. It is a very difficult channel to manage, and that's why people hire experts like us to help them with it because it's a never ending problem with constantly changing issues. It's always been like that, that's not a new thing since pandemic, or whatever. And it will take some time to work out what works.

**Lenny** (00:23:07):
I have this framework of there's these four growth channels, basically growth engines is what I call them. There's paid/performance marketing. There's SEO, there's virality in their sales. And essentially there's some companies whose growth is almost primarily paid. A few that come to mind are booking.com, which we know well at Airbnb, which is almost all paid growth driven. Credit Karma comes to mind as a classic paid performance marketing. I keep coming to paid growth as my term, so I'm just going to stick with that. TikTok initially was very performance marketing, paid growth oriented. Wish was another one I think about.

**Lenny** (00:23:42):
And I want to talk about how much things are changing within this realm. But before we get there, do you think there's still an opportunity for startups to emerge where they get to scale almost exclusively through performance marketing? And this question actually came from Twitter, someone tweeted this randomly the other day. And I was like, oh, that's a great question for Jonathan. And by the way, her name is Liz.

**Lenny** (00:24:00):
And I was like, oh, that's a great question for Jonathan, and by the way, her name is Liz Georgie asked this question, so there you go.

**Jonathan Becker** (00:24:06):
I'll put it this way. Every unicorn from the 2010s era that scale did performance marketing, but not everyone during that time who did performance marketing scaled. So I want to remove the bias here that just because all the successful organizations did this didn't mean that it was a magical channel for everyone. We had plenty of projects that we worked on that flatlined during that period. And so the sense that there was a period of time where this was easy or it worked on any project is not correct in my opinion. With that said, we see companies that are spending millions of dollars a month on performance marketing channels like Google and Meta still, despite all the ups and downs that they have faced and they do so profitably.

**Jonathan Becker** (00:24:55):
And I think there's some really great examples of companies that have scaled in relatively recent times, almost exclusively through paid. Grammarly is a really good example of this. They have been good at solving for this problem that exists around understanding the cost per acquisition versus lifetime value, how sticky customers are, predicting how much revenue can come from a customer and backing out into therefore how much we can pay per click and per lead and so on and so forth. Athletic Greens is another good example. So Athletic Greens is actually a pretty old company. I think they've been around for 10 years. I think they have retail distribution. I think they have done a lot of the more classic marketing things that are important in terms of developing that channel mix. But I think the amplification of that brand really, really gained traction quite recently where now everybody knows what Athletic Greens is, and that's because they're buying loads of ads on TikTok. They're buying loads of ads on other social channels like Facebook. They're investing in podcasting partnerships. But this is all digital paid acquisition.

**Jonathan Becker** (00:26:07):
And so it had a wonderful effect on this really interesting business that they had already built. So yes, it's still doable. We still see people doing it, and I think that there's been a bit of a reckoning in the performance marketing industry pertaining to things like privacy and the changes that Apple made and people being very creeped out at how their data is being used rightfully so. And then obviously the economy in 2022, we had a terrible macroeconomic shift where interest rates rise and inflation's out of control. And so of course the first thing that people cut are typically marketing budgets and we see Facebook and Google and other ad channels directly suffering from that. So all of that said, these storms pass. And so when the economy improves, generally speaking, I imagine people will go back to trying to find as much inventory from a pay per click point of view that they can purchase as possible and figuring out the economics of how to do that.

**Lenny** (00:27:08):
I was definitely going to ask about that, and I love that you touched on it, just clearly a lot is changing in paid growth/performance marketing recently. You talked about the privacy stuff, you talked about COVID kind of shifted the way people spend and kind of dropped and then came back. So my question is who are you finding has the most success these days in performance marketing? And I will plant one seed, which from the examples you just shared, it feels like it's mostly companies that are very efficient. I think Grammarly, they're just super efficient as a business. And then I think Analytic Greens, they're a sponsor and their negotiations for sponsoring is just like, okay, here's the number that makes sense for them financially, and they're not going to go anywhere above that.

**Jonathan Becker** (00:27:49):
Yeah. Because they know, they understand how many impressions they'll get and on average what the quality of impression is and how many dollars they can put behind that before it has a cliff in terms of ROI.

**Lenny** (00:28:05):
Exactly. So broadly, who do you think is having the most success now with the changes and then generally, what should people know about what has changed in the past say year in the space of performance marketing?

**Jonathan Becker** (00:28:18):
I'm not going to really be able to point to this company is really getting it right and I think that you can do that, but it's like saying, a friend of mine who recently on Twitter tweeted this funny thing where he was like, this is the number that I used to win the lottery said every successful founder ever trying to give advice to other founders. And so in other words, just because they won the lottery doesn't mean you're going to be successful picking the same number.

**Jonathan Becker** (00:28:43):
To that extent, there is a bit of a playbook around modern day performance marketing, and that includes everything from really stringent and rigorous creative testing and thinking about that correctly to understanding the subjectivity of attribution and its strengths and weaknesses, doing a lot of work around validity of these campaigns. So really just the measurement and whatnot. Companies that can do those things and then understand their own marketing economics, in other words, quite basically how much can we afford to spend in acquiring a customer on any channel before that acquisition is no longer profitable. So really focusing on the profitability of the bottom line and not just break net growth, for instance. Companies that have those capabilities and see the world that way tend to be successful in performance marketing.

**Lenny** (00:29:39):
When you were giving your intro, you talked about how you initially started doing SEO, that's where you started, and then you moved to paid growth. Well, how do you think about those two investments as a founder trying to decide which direction to go? What would your advice be of spend your time here versus there if X, Y, Z?

**Jonathan Becker** (00:29:56):
When I'm asked a question of should we put money into organic search or paid search? My response is often that they're actually not mutually exclusive to one another. So it's a great idea to do both, and that backs into my strategy of diversification of channels. So don't build up exclusively in one area and create volatility within your marketing mix essentially. SEO is a wonderful marketing capability when it's built out correctly. I think the issues that you run into are cause and effect related. So one of the things that people really like about performance marketing theoretically is that we can spend a certain amount and then if we're modeling things correctly, we can essentially determine how much revenue is generated from the actions that we took. Finance teams love that, C-suite teams love that, they can build projections, they can budget around it. There's some degree of predictability around it if it's done properly.

**Jonathan Becker** (00:30:52):
Search engine optimization is different in that the attribution can be tough. It's difficult to determine whether ultimately the actions that you took contributed to a rise in organic traffic. You have to essentially correlate that. And the reason is because when you build clusters of content and it's grouped thematically and you're targeting buckets of keywords, whether they're long tail or head keywords, whatever it may be, you can publish all of that on your website. Google still has to crawl it. They run it through their analysis algorithm, which is comprised of 200 different signals, of which maybe 20 to 30 have been publicly disclosed. So it's a bit of a black box.

**Jonathan Becker** (00:31:37):
We don't really know ultimately what ROI comes off of that unless you're very sophisticated, like probably one of your other guests, Ethan, in terms of measurement. Whereas paid, the ROI is still a difficult problem to solve, but there was a lot more of a linear relationship as it relates to attribution. And so paid being tangible was the reason why I leaned heavily into paid and ultimately away from SEO. But I do think that if you do SEO properly, the payoffs are indisputable and it is certainly an important part of a modern media mix.

**Lenny** (00:32:18):
You mentioned this earlier, I've heard this more and more recently that one of the biggest levers these days in paid growth is around creatives. It's not tooling or smarter data, or you tell me if I'm wrong, but it's just getting better creatives. And so I'll let you actually explain, what are creatives? There's a term creatives that people outside the industry don't really necessarily get. And then broadly, what should people be doing to optimize the way they approach creatives?

**Jonathan Becker** (00:32:46):
Certainly. So when we say creative, we're referring to the assets that power typically visual programmatic or pay per click campaigns on social channels or display networks. And so literally the motion graphics ad that you see on Facebook, the user generated content that you see on TikTok or a static ad that you might see that has a pretty picture in it or whatever. And so I think that when we talk about creative as a big lever around efficiency and optimization, the underlying conversation there is that over time our industry has been heavily automated. So a lot of the levers so to speak around performance have been automated by Google and Facebook over the last seven to 10 years. That's because originally when you ran these campaigns, you needed to have a rocket scientist in front of them. It was so complicated and there were so many different things that you could get wrong, and their solution, the channels like the big tech company solution to this is figuring it out for you. So eventually Google wants you to say, hey, I'm Google, give me your credit card and I'll take care of everything else. Facebook-

**Lenny** (00:33:57):
And the URL to point people to, and then we'll do the rest.

**Jonathan Becker** (00:34:00):
Yeah. I don't know if that's a great idea for consumers, by the way. But in the meantime, there's certain things that have just been fully automated. In the context of creative, it's still one of these things that for now is not auto-generated in the world of AI and all the changes that we're seeing. Maybe that's something that will change. But for now, essentially creative directors and their teams are concepting and producing different types of assets. And so there's a bunch of problems that we typically see when people come to us. So number one, performance marketing and brand marketing in a lot of organizations are two different things. And the designers that occupy brand teams bandwidth and whatnot often don't have a sense of how paid acquisition works.

**Jonathan Becker** (00:34:48):
And so one of the pitfalls of working with certain companies or the mistake that they make is the design team will hand off a file full of random assets for paid acquisition without any sense of how the channel works. And what I mean by that is these days we're using the analogy, the classic analogy of the funnel to organize our thinking around creative assets. So you can think about this as generating intent at the top of funnel and capturing intent at the bottom of the funnel. When I think about an experience that I want a consumer to have on Facebook, audience targeting and creative, I think about us beginning a conversation at the top of funnel creatively with an audience, having that conversation change as we say different things, and the audience that we're targeting ultimately graduates through different behaviors on our website from one to another, and then ultimately it resulting in an end to the conversation where they take an action hopefully that the brand that we're working with is looking for.

**Jonathan Becker** (00:35:56):
And so there's a clear beginning, middle and end to that. And one of the major pitfalls that we see is that certain brands just dump one homogenous message into all of their targeting. You see the same ad over and over again. It creates banner blindness and it's a total lack of efficiency. The antidote to that is to have resources dedicated to paid and essentially iterate upon the creative assets themselves based on the data that we see coming from ad sets and campaigns in various channels. And so what that means is that you have to experiment. You have to take a bit of a scientific approach, although it's a bit of an art and a bit of a science. You have to try and isolate variables, maintain similar conditions across targeting, and then determine which style and feature of an ad performs best at which stage of the funnel versus which audience. And the results that we see are dramatically different from brand to brand. But if you are not undertaking rigorous testing in conjunction with how you are driving the iteration and design of your ads, then you will not make progress essentially.

**Lenny** (00:37:11):
Is there a specific example that comes to mind here as something we did that just dramatically changed the impact of a change to a creative? Or if you can't think of one, are there just specific tactics that you can suggest for people to improve the way they approach creatives?

**Jonathan Becker** (00:37:28):
Yeah. So I think from a testing point of view, let's say I was running ads on Meta, beneath the campaign level when I create a campaign, the structure that my testing might take would be that I would have an audience, a single audience at the ad set level, and then I would have two nearly identical creatives within that ad set. The only thing being different across those two creative assets is a single variable. So it might be the copy, it might be an image or whatnot. That allows us to isolate a lot of variables and really test into one singular change across two creative assets. There's a lot of nuance to this. So sometimes the ad-serving algorithms, even when we set up a test structurally in that way, we'll serve one ad a different number of impressions than the other ad, in which case we then have to say, what is a leveling factor that allows us to look at these two ads equally, even though one received dramatically more impressions than the other?

**Jonathan Becker** (00:38:31):
This becomes where it becomes subjective in terms of how you want to determine success. But a good example is looking at the click-through rate, which is essentially a ratio or a metric like impressions until conversion, which is a leveling metric that allows us to determine, even though in a scenario where two ads facing the same audience within the same campaign received different numbers of impressions, we can still measure the efficiency or effectiveness of one ad over the other using metrics like that. And so from a testing point of view, I think that this is one way that we might look at trying to assess ad performance so that we can gather learnings, send that back to a creative team and say, hey, it turns out that when this copy is used at this stage of the funnel, it converts 50% more frequently than this other copy.

**Jonathan Becker** (00:39:26):
So let's now take that copy, use it as our base copy and challenge it with a different type of copy and see if we can continually iterate and refine. So that's a very practical example of how ad creative testing might work on a channel like Meta. You asked for specific examples where we've seen an unlock. There's two that come to mind. Several years ago we realized that highly produced ads from brand teams, and there's nothing wrong with brand teams, we work with them all the time. They do amazing work. I think we're just trying to work as a singular unit as opposed to being fragmented. But a lot of the brand guidelines of different companies would end up yielding these highly polished assets. And when you launch those on Instagram back in the day or something like that, what we found is that they would always underperform next to user generated assets.

**Jonathan Becker** (00:40:23):
So a brand that essentially has an influencer in front of it that says, I tried this product, I love it, I'm filming this ad from my iPhone. Look, check it out. Here's the product, here's me, I'm better off for it. Whatever it is that they're talking about. The unpolished iPhone, mobile phone creative, suddenly we realized massively outperformed these other channels because there was an authenticity to it. And rather than the brands themselves saying, hey, trust us, our product is great, here's a third party essentially validating what is so great about these brands, basically. So I can't speak to specific clients because I'm not allowed to talk about the work that we've done in large part, but that would be one example. And another example is we worked with a furniture company several years ago, which scaled dramatically, but they were having difficulty early on thinking through how to scale social ads.

**Jonathan Becker** (00:41:21):
And so paid search worked really well for them. Social ads, again, they had these highly produced styled rooms and one of the owners had their dog in the office all the time, and so they have these models sitting on furniture or whatever it was, and they would take these beautiful styled shots of their furniture in a room and one of the art directors was like, put the dog on the couch and let's take some photos of dogs on furniture, which made it more playful and approachable. That one change resulted in a total unlock of their performance on paid social channels. It would double or triple the ROAS that we were seeing type thing. So it's these minute differences that you can test into that ultimately can drive performance.

**Lenny** (00:42:04):
That reminds me of Airbnb. The photography team found, and actually the photography team was initially including people in the photos of listings, and that was the [inaudible 00:42:16] images of listing photos. And it turns out when there's no people in the listing photo, much higher conversion. And the theory basically people don't want to see other random strangers in a place they're going to sleep, and that was not expected.

**Jonathan Becker** (00:42:29):
That's a really great example. And so the question becomes, as a company and as a brand, do you arrive at those learnings anecdotally by accident? Is it the brilliance of one person on the team that the whole brand is predicated upon in terms of performance? Or do you put a very rigorous structure around testing and the iteration of assets and how to determine whether something works over another thing that is a process that yields the outcomes that you're looking for? And so a lot of times with agencies, people talk to us about the obvious hard skills that we have, but the soft skills are around process that can be deployed, that can actually be the difference between being highly sophisticated or unsophisticated. Internal teams do this too, but that Airbnb example is a great illustration of how if you put the right testing in place, you can yield an outcome that becomes an unlock for performance.

**Lenny** (00:43:28):
Getting even more tactical with that idea of testing a bunch of creatives makes me think about a story from chatting with a guy from Wish who's had a growth at Wish about how they uploaded hundreds of variations. And I think Wish is the epitome of the opposite of brand highly polished ads or it's just the most ridiculous looking product with just banners and numbers and prices and crossouts and all kinds of stuff, just anything that would take to get people to click. Is there a tool or process that you can point people to to help them do this testing on creatives or is it mostly built into the existing tools now and there's nothing really fancy about it?

**Jonathan Becker** (00:44:04):
We get asked this a lot and I think there are tools for different types of functions that we undertake in the process of running paid acquisition for different brands, but these days most of the testing that we do is within the channels themselves. So Meta ads, Google Ads, I keep touching on those two specifically because they're the most advanced in my opinion. They're really powerful. The good news here is that you don't necessarily need some exotic tool to do sophisticated creative testing. You can do it in platform and you can use the structure that I just kind of outlined as a starting point.

**Lenny** (00:44:43):
You mentioned Google and Facebook. What is your take on TikTok and YouTube and maybe Snap? Do you recommend people go there and there's a big opportunity? Do you think it's overblown? Do you think people should just take Google and Facebook basically at this point? What's your general advice?

**Jonathan Becker** (00:44:59):
So when I say Google and I say Facebook, I'm talking about the Google ecosystem of channels inclusive of YouTube. And when I talk about Facebook, I'm talking about Facebook, Instagram, and probably eventually WhatsApp, which I think will probably launch ads later this year. With all that said, some interesting opportunities these days really exist on channels like Amazon and TikTok as well as a number of other challenger channels I think. Snap I'll talk a little bit less about because I think really there's just fewer and fewer people potentially using Snap. There's no knock on Snap. I use Snap, I like it a lot, but at the same time, most individuals or organizations tend to want to place ads where there's a lot of views and engagement and the king of this right now is definitely TikTok. And so TikTok faces its own set of challenges and arguably there is as much an opportunity there as a barrier at the moment.

**Jonathan Becker** (00:45:58):
I love TikTok. I'm a consumer of content on TikTok, not a producer of content on TikTok. Their ads platform kind of reminds me of where Facebook ads was like six, seven years ago. It's not super sophisticated and attribution is not great yet, but you can get cheap CPCs because there's just fewer organizations advertising there. Fewer companies have figured out how to make that work. And same thing with Amazon. Amazon is a bit of a bespoke channel. It doesn't work for a B2B SaaS company. It's more specific to D2C I would say. But essentially those channels are wonderful. They're not at the point yet where they're kind of ubiquitous. Every single advertiser that has ever worked with us I think in the last 10 years is for sure on Google. Everybody does that. And then the question is, what else can I invest money in with the expectation of profitability?

**Jonathan Becker** (00:46:53):
And so TikTok and Amazon, and even if I want to break out YouTube, they tend to be a little bit more specific and they definitely work, but not for everybody yet. And so the question becomes, will TikTok become as prominent as a social ads platform like Meta Ads? And we just don't know yet. What we see working very nicely on TikTok, by the way, are these founder led brands where the founder is the ambassador and they're doing those handheld videos with their iPhone. They're talking about the merits of the products that they make. They're talking about the problems that they solve. They are great at cultivating a following. Their content is highly engaging. Those types of organizations crush it. Also, companies that got really good at partnering with influencers. So we haven't talked about partner marketing that much, but affiliate marketing companies got into this early, and then influencer marketing networks are all over this. But essentially having these third parties be an ambassador for your brand in an authentic way, partnering with them, having them generate the content. And that's the nature of the partnership. Stuff like that seems...

**Jonathan Becker** (00:48:00):
... And that's the nature of the partnership. Stuff like that seems to work quite well.

**Lenny** (00:48:05):
Awesome, I love those bullet points of just what is likely to work on TikTok.

**Jonathan Becker** (00:48:05):
Yeah.

**Lenny** (00:48:09):
Just broadly, would you say TikTok advertising today is underrated, overrated, or just right?

**Jonathan Becker** (00:48:16):
If you are e-comm based, if you're wholesale, retail based, anything direct to consumer, you have to investigate TikTok and try and figure out whether there's a way of promoting your products there, basically. It's a massive, highly engaged audience with somewhat specific demographics. It's a very exciting opportunity. Other brands need to pay attention to this and figure out what their entry point is going to be. And just because the innovation hasn't happened for B2B SaaS yet on TikTok doesn't mean it won't. TikTok wants that to happen, and so the question becomes how. And so someone will unlock that, and they'll make a billion dollars because of it.

**Jonathan Becker** (00:48:59):
But I wouldn't recommend that channel to everybody yet, and at Thrive for instance, we don't have a huge amount of people coming to us yet saying, "Hey, I'm spending $750,000 a month on TikTok, can you help me?" Type thing. The other problem with TikTok is that it's extraordinarily creative, asset dependent, and heavy. And so you are launching net new assets several times per week, it is hard for creative teams and brands to produce that much content. It takes a machine, and that's expensive, and so that all factors into the cost of not only just the ad dollars, but the creative resourcing and investment that's required to power that. So it can be done in a more nimble manner if you're spending less, but you can't really get to a million dollars a month on TikTok without having a huge amount of creative being pushed to that channel.

**Lenny** (00:49:56):
Awesome, that's really good advice. I want to chat out about AI soon, just because I imagine that could help with some of these things. But you mentioned B2B SaaS, and I wanted to ask, I imagine Google is the primary channel for B2B SaaS, and if not, or if it is, where else do you find there's value in spending money to drive growth through B2B SaaS, which channels and ad networks?

**Jonathan Becker** (00:50:20):
So I'm agnostic here in terms of where people should be spending money. I see this world in terms of impressions and clicks, and does that conform to the marketing economics of a project that needs to be achieved in order for it to grow. It's less about where to place your money and how to think about the placement of those funds. And so the common mistake that we see as people build out a funnel, so to speak, for B2B lead gen projects, or B2C lead gen projects, is they'll be overly reliant on the first of a sequence of metrics that ultimately yields a sale.

**Jonathan Becker** (00:50:57):
So typically it's something like cost per lead, marketing qualified lead, sales accepted lead, there might be a couple more metrics there, and then eventually a sale occurs. And so that the thinking is that, okay, for sales to occur, I need more leads at the top of the funnel. The more leads I have, the more marketing qualified leads I'll get, the more sales accepted leads get, and ultimately the more opportunities there will be and the more revenue will generate.

**Jonathan Becker** (00:51:24):
And so if I think about this world of lead generation on performance marketing platforms as a function of cost per lead in that sense that I just described, then the tendency is always to want to drive down the cost per lead, thinking that that's the efficiency, I can get more cheaper leads and that will yield more revenue. When in fact it turns out that if you flip that conversation on its head and say, not all opportunities and sales are equal, and instead of focusing upfront on a cost per lead, I now want to focus on what is a high value customer, so the cost per lead is actually higher, but the ROI of targeting those people is also higher. And so to get the higher quality leads, it's not a function of CPL.

**Jonathan Becker** (00:52:15):
And so that is a very common pitfall that we see when people come to us. The antidote to this, it's interesting, so Thrive developed an ETL tool, an extract transfer load tool called Thrive Stack. It's not commercially available, but if you wanted a commercially available version of this, you can use something called Supermetrics. Basically Supermetrics is a data connector. There's a world of different data connectors out there, but it allows you to pipe, via an API, revenue data from your CRM into a third party database that can then be joined with data from the channel itself. You can build tables within a database and normalize them together in a manner where you can start to determine the relationship between, again, the audience that a particular cohort of opportunities came from and whether a sufficient degree of revenue is derived from those opportunities.

**Jonathan Becker** (00:53:08):
And then you can build upon that what is known as a lead scoring model, which allows you to bid in real time on the audiences that have a higher likelihood to convert to high revenue generating customers. And so the magic there, we talked a little bit about rates of return and instant gratification in the performance marketing world, lead generation inherently is a slow gratification process. And so the problem is that if my pipeline is full of opportunities that yield revenue in two months, six months, sometimes 12 months, how do I determine how heavily to bid on different leads today in order to predictively have an outcome where I'm maximizing revenue? And a lead scoring model basically solves for that.

**Lenny** (00:53:59):
**Jonathan Becker** (00:55:57):
Yeah, it's a really, really great and pertinent question in the industry, and it has a lot of focus on it now, but attribution has always been a conversation that's been very important. So just to kick things off, attribution essentially is how we determine the relationship between what we did and what happened. In the context of performance marketing this means what ads did we serve, what campaigns did we launch, and generally what was the revenue ultimately that was derived from these campaigns? And so there's a funny quote that I love, someone named John Wanamaker in 1919 said, "I know-"

**Lenny** (00:56:33):
I bet I'm going to guess what it is.

**Jonathan Becker** (00:56:34):
Do you want to guess?

**Lenny** (00:56:35):
It's, "Half my marketing dollars are wasted, I just don't know which half."

**Jonathan Becker** (00:56:41):
Exactly, I love that you knew that. He said this in 1919. The world was a very different place there, but oddly enough we still have these types of problems today and it's because the world of what I did and what happened because of what I did is very complicated. There's so many variables, some of which we know, and then some of which we don't know that we don't know, type thing. And so attribution, as it stands in our industry, is still an incredibly subjective art and somewhat of a science. It doesn't mean that it's impossible, and it doesn't mean that there aren't varying degrees of sophistication as it relates to attribution, but we're still in a place where we have to understand the business and its goals, and then start to work on an attribution model.

**Jonathan Becker** (00:57:32):
An attribution model is probably something that is never solved, but I'll give you a couple of examples. So number one around attribution, it's important to determine whether an organization, a company, a client, is focused on profitability or growth. Whether I use one attribution lens or another will drive those outcomes. And so these days, for a number of different reasons, you mentioned iOS 14.5, in addition to third party cookie deprecation, and whatnot.

**Jonathan Becker** (00:58:02):
There's no one way necessarily of approaching attribution. The most classic and commonly held version of attribution used to be a cookie-based form of attribution called last click attribution, meaning that the last click in the sequence of clicks that yielded a conversion would be attributed with all the revenue from that conversion. Other models in a cookie-based world involved first touch attribution, so it's actually the first click. So I launch an ad, it's in an audience that doesn't know about my service or my brand, and so the first click that I get should be given all the credit for that sale. And then there's multi-touch attribution, which can take several different forms, but essentially is saying it's not one way or the other of the two first versus last click options, it's somewhere in between. So I'm going to create a weighted attribution model where the first touch gets so much of the credit and the last touch gets so much of the credit.

**Jonathan Becker** (00:58:59):
This is very subjective, as you can see. I am essentially looking at my business model, determining what my goals are, and then I'm backing out into an attribution methodology that I think adheres to both the economics of my business and the capabilities of these platforms. And again, we live in a world where a single brand might do television advertising, they might buy media in magazines, they might buy billboards, they might get impressions from Facebook, they might do paid search, so there's a big argument over how to ultimately model this.

**Jonathan Becker** (00:59:34):
So there was something called an IDFA that Apple allowed advertisers to use, and essentially what that was, it literally means ID for advertisers, and it allowed Facebook, Google, and other advertisers, Snap, TikTok, whoever was essentially selling ads that were predicated on being displayed on a Apple mobile device or a desktop device, it allowed the advertiser to provide attribution metrics and certain types of customer match metric metrics in their own platforms. And so when Apple ultimately launches its privacy changes, I believe in mid-2021, overnight it allows users to say, "Well, I don't want to share that information, I'm not going to share my IDFA anymore." Or, "Yes, I do want to share my IDFA." And so what you see as a result of that is less of the core data that Facebook in particular would've required to make attribution more airtight and ultimately validate its advertising.

**Jonathan Becker** (01:00:43):
So because we can no longer validate attribution on Facebook as seamlessly, we are in a situation where we're not sure any longer which audiences to target, and we're not sure how to run all of our creative testing, and ultimately we can't even determine the degree of revenue that's coming from particular campaigns that we've launched, and whatnot. And so it created quite a stir in the world of attribution, which is obviously this core discussion to is it working or not? People want to answer John Wanamaker's question, but the modern methodology now is through a number of different approaches to validation.

**Jonathan Becker** (01:01:25):
So the cookie based attribution, which had been probably the most popular version of attribution in the 2010s, really up to this point, is now one of the ways that we would look at this, but we would also include things like various forms of statistical modeling, customer surveys, population surveys, there's a number of different ways to the same place here. Statistical modeling, by the way, one thing that's very popular these days, which I think was originally created in the 1950s, is a form of statistical modeling called media mix modeling. It's essentially regression analysis, and it is trying to determine the causal relationship between, again, what you did and what the effect was on revenue. That's very topical in the industry these days. If you're looking for a tool off the shelf that can help with this, Recast is something that I see people using. But a lot of organizations build these highly customized bespoke models that ultimately feed the algorithm inside of an MMM model in a customized manner.

**Lenny** (01:02:27):
What is it, or is there a recommendation of just like, hey, if you're trying to do attribution today, here's what you should do. Is there a clear, do this, piece of advice, or is it super personalized depending on what you're trying to do?

**Jonathan Becker** (01:02:42):
The advice is that there's no single source of truth. Anyone who claims that they are a single source of truth, whether it's an individual, a model that they've created, or a tool that they've created, is not being accurate. I believe that the approach that works to attribution is that it's an ongoing investigation and it never stops, and essentially what you're doing is looking for evidence that validates the outcome of your performance marketing campaigns one way or the other.

**Jonathan Becker** (01:03:12):
There have been plenty of incredibly sophisticated attribution models that we've helped build and invalidated with MMM or other types of tools that have indicated that the campaigns do not work. So I will repeat that, we, a very sophisticated organization, have stood up campaigns that we measure and ultimately determine do not work, and that is an important finding in terms of an organization's determination of whether they want to continually invest, take budget out of these channels, or invest into other areas.

**Lenny** (01:03:49):
Awesome. You mentioned a company called Recast. I don't think you knew this, but I'm actually an investor, and so obviously a big fan, so check it out. I don't know what the site is, recast.com maybe. I think if you Google Recast attribution, we'll also have a link in the show notes.

**Jonathan Becker** (01:04:02):
Cool. Yeah, they're working with a couple of our clients right now and it's interesting, I like their approach.

**Lenny** (01:04:06):
Yeah, they're basically, they're building the model as a SaaS tool to do attribution in a really clever way. Amazing. Okay, just a couple more questions, one is around AI, one is around agencies, and just how to start down this road. How has AI in any way impacted the work you're doing today, or the work of paid growth, performance marketing, and then where do you think this will go in the next few years?

**Jonathan Becker** (01:04:29):
Interestingly, and I think I alluded to this earlier, but our industry has been influenced by AI for over a decade. So Google, Facebook, even Microsoft, these are some of the organizations that historically have been at the bleeding edge of artificial intelligence, and their goal was always to automate as much as possible within these platforms. And so the effect ultimately that we've seen from a human capital point of view is displacement. So we're actually, we have more people now than we've ever had, but the nature of the work that they do is more strategic, it's more about modeling, validation, asking the right questions, being focused around creative levers, like some of the things that we've talked about, and less so the trench work of implementation and bid modifiers at the keyword level on Google search, and some of the really hardcore manual analysis we had to do.

**Jonathan Becker** (01:05:19):
So I think if we are the canary in the coal mine for other industries, what will be interesting is I assume that if you work in an architecture office that you'll be doing less of the drafting, and it's already been a change that's occurred in those offices, but you'll be doing less of the drafting and more of this strategic problem solving around what kind of building is necessary for the client in this scenario, type thing.

**Jonathan Becker** (01:05:42):
And so on a practical level, though, some of these conversational AI models are very interesting for us in that when I think about creative testing, for instance, we can have ChatGPT come up with all kinds of variants of copy that we would not have necessarily thought of. It can do a lot of drafting of things like RFP responses, so we can feed ChatGPT 100 previous RFP responses that we've done and have it spit out net new responses to net new questions in a net new RFP, and it's like 80% good and still requires 10 hours of work to massage to the point where we can send it off to a client, but that replaces a week of work with five or six people that it would've previously taken.

**Lenny** (01:06:33):
And that's already happening today, you're saying?

**Jonathan Becker** (01:06:35):
That's happening now, literally right now, type thing, all of what I just said. And there's a lot of different ways that we are beginning to use AI to do more with less, basically. So that's how I see it influencing not just our industry, but other people's businesses as well.

**Lenny** (01:06:55):
That's amazing. So just to repeat what you said, your team now, because of ChatGPT is able to spend more time higher level, and leverage specifically ChatGPT to do this kind of, and RFPs are basically proposals, people are asking you to pitch to work with them, is that?

**Jonathan Becker** (01:06:55):
Yeah.

**Lenny** (01:07:12):
Okay, yeah.

**Jonathan Becker** (01:07:13):
Some of these AI-driven organizations that allow you to type in a prompt and it spits out an image, on our creative group we can come up with mockups in literally 1% of the time that it took. So you no longer have to draw the initial mockups for art. Suddenly what might have taken one person a week of work on a campaign takes an afternoon, type thing. You still have to understand what questions to ask of the AI and be capable of iterating, but these rough drafts that you might show the artwork of to a client to say, "Do we like this more or do we like this more?" That's AI generated. It's really interesting.

**Lenny** (01:07:55):
What's the tool your team uses for that, is it MidJourney or Dall-E or something else?

**Jonathan Becker** (01:08:00):
It's Dall-E and it's MidJourney, so you got it.

**Lenny** (01:08:03):
Got it. And so what you use it for is you're thinking about a concept and you just come up with a mock, coming up with a prompt to pitch what this could be.

**Jonathan Becker** (01:08:11):
Yeah, the interesting thing there is that these concepts often live inside of someone's head, and we do this thing as humans where we verbally discuss it, and I try and put the image in my mind's eye, in your mind's eye, which is an inherently inefficient process and actually hurts our ability to be creative leaders. Someone might just see it slightly differently than you do. Now that person theoretically can use Dall-E to output what is inside their head, and they can refine that easily through subsequent prompts in Dall-E or MidJourney, or whatever it may be, and then just say, "Do you like this? This is my idea." And so in a way it's helped humans connect more easily in that context than we were capable of doing before, and then in the context of pitching a client on ideas, we are capable of generating more ideas faster and iterating upon them live. So I can have a Zoom call with you, I can present my screen, and if you don't like the output of Dall-E that I just prompted, I can re-prompt based on your feedback in real time.

**Lenny** (01:09:16):
There's this sentiment that AIs going to take away the fun stuff of jobs, like maybe being creative and coming up with a new concept and photography, setting up a whole photo shoot, whatever.

**Jonathan Becker** (01:09:30):
Yeah.

**Lenny** (01:09:30):
Do you find that your team is excited about uploading this to Dall-E, or are they just like, goddammit, this is what I loved, and now I'm just sitting around in docs writing prompts.

**Jonathan Becker** (01:09:40):
I am not an incredible artist, but now I can take those thoughts in my mind and output them just as well as someone who's pretty skilled in artwork. So in a sense, I'm excited because this technology democratizes the ability to do this across everyone. Anyone who can think a thought can generate an image on an AI image generator. How many scribes do you know?

**Lenny** (01:10:04):
Zero, I believe zero.

**Jonathan Becker** (01:10:06):
Because we invented something called the printing press, and the printing press took over what was a cottage industry for very specific individuals that allowed them to control the flow of information. Yet today it's not like we have fewer writers or creative thinkers, they're just using different tools to arrive at the same place. You could say the same thing of the loom. There used to be people who would stitch your T-shirt together, or your sweater together, and none of those people have work anymore. There's still people who knit, I suppose. But your clothes are made in factories with machines, and the quality of the clothing is arguably a lot better than it was, maybe I'm wrong about that point, but you can make more of it and more sophisticated clothing.

**Jonathan Becker** (01:10:46):
There's no question that AI is going to displace and replace certain industries of people, certain roles. I'm not going to pretend like I know whether that's a good or bad thing, and I'm also not a poster child for AI, I am really just using the technology that's available to us to run our business the best way we can. We haven't let anybody go yet because of these efficiencies. The people who used to do the artwork are the ones using these tools, and I think they're excited that they're more productive. Is there going to be nuance around that? Of course. Are some people going to be sad about the changes? Yes. I think human nature is that people generally don't like change, but I think over time we've seen change has been a productive and positive thing for society, not a negative thing.

**Lenny** (01:11:35):
Awesome. Yeah, so it sounds like the team is excited, generally, and that's a good sign, and that's what I find generally. I think some people will be really upset, but most people will be like, amazing, and they never wanted to do this part.

**Jonathan Becker** (01:11:47):
This generation of people will be upset, and then there will be a subsequent generation that never knew anything different. So the way that I think about this is the people growing up these days have always had the internet, whereas you and I probably remember a time before the internet existed. AI-

**Jonathan Becker** (01:12:00):
You and I probably remember a time before the internet existed. AI is a platform like the internet and just as when the internet was launched, you couldn't conceive of amazon.com or all of these wonderful or social networks or whatever it was. The permutations of what AI will become, even in the current GPT 4 context or Dolly context or whatever it may be. We don't know what people are going to create with this and so it's difficult for the generation that knew what life was like beforehand, before iPhone, before internet, before AI, but there will be people who know nothing but this eventually, and to them it'll just be normal.

**Lenny** (01:12:42):
Until we're all just replaced by AI and then it's AI writing ads to get other AI tools to buy products from each other.

**Jonathan Becker** (01:12:42):
Yeah.

**Lenny** (01:12:49):
And then we're just sitting around watching Netflix and that'll be great. There's always this question when you're starting to invest in paid growth, performance marketing of should we work at an agency? Should we work? Should we hire someone junior to figure it out? Should we hire someone senior?

**Jonathan Becker** (01:13:03):
Yeah.

**Lenny** (01:13:03):
What's your general advice for, say, an early stage startup when it makes sense to work with an agency versus bringing someone in-house?

**Jonathan Becker** (01:13:12):
Mm-hmm. We need people in-house to do our jobs properly. Agencies are not mutually exclusive to personnel in-house. If we don't have a point of contact, for instance, at an earlier stage company and we're supposed to report to the CEO, CEOs tend to be very busy people and we often just can't get the information and approvals that we need to be successful. If you think that growth marketing is an opportunity and that performance marketing is a subset of growth marketing that you want some focus on, the reality is you're going to need expertise and you probably should start in-house and then hire an agency.

**Jonathan Becker** (01:13:49):
Again, there's different stages of companies and different examples of what makes sense at different stages and the nature of the work that we do at different stages changes. Very, very late stage, we're kind of doing a lot of this sophisticated production work. We're implementing sophisticated testing, we're working on attribution, we're building beautiful reporting, but in a sense, we're maintaining this machine that already exists. Earlier stage, we're doing a lot more of net new experimentation, trying to discover what is working and what sequence of audience targeting versus creative asset display will work, what channel mix works, and all of that. A lot of times the body of work that's required to nail that and the inputs to literally out front what questions to be asking isn't something that a small in-house team possesses and so they will work with an agency to scale faster, to get where they're going quicker, to bring in more resources quickly, basically. Then later stage, sometimes it's a permutation of the same thing or we're really just managing a whole bunch of different capabilities that they have because it's very complicated and difficult to staff.

**Lenny** (01:15:05):
That is really interesting. So it's not like agency versus in-house full-time person. It's you need both is what you're finding.

**Jonathan Becker** (01:15:11):
I don't think we have any projects that we're working on where there's not a professional marketing person as our POC and generally the people that we report to have a background in what we do, whether they ended up doing something different and now they're a VP or a director level and not directly managing channels themselves is one thing or another. But yeah, we work with people that have in-house expertise all day long.

**Lenny** (01:15:35):
I see. Sometimes it could just be a generalist marketing person that becomes your point of contact.

**Jonathan Becker** (01:15:35):
Yeah.

**Lenny** (01:15:39):
They don't have to be experienced in paper.

**Jonathan Becker** (01:15:41):
There's one more thing. As agencies, we're constantly solving people's problems in the market and as a result of that, I have a fairly large team of 130 people that think about performance marketing all day long. It's the first thing we think about when we have our morning coffee and it's the last thing we think about as we're leaving the office kind of thing. We have very sophisticated and built out capabilities as well as all kinds of software and processes and capabilities, I guess, that we've created that most in-house teams just don't have because they're smaller or newer or someone might be really sophisticated but they don't have the resources to implement it and stuff. In the same way that a really sophisticated organization might go to Boston Consulting Group or McKenzie to say, "Hey, we did this, but you do more of this all day long and we need advice on how to be more efficient," people come to Thrive saying, "Hey, we're top of our game. We have really strong people. They absolutely know what they're doing," which is always the case by the way, "But we're looking for extra sophistication and additional capabilities that are very difficult to create in an in-house organization." It's why we worked with Uber for 10 years. It was tough to replace us.

**Lenny** (01:16:59):
Yeah, that's quite the retention. 10 years, 10 years going, I imagine our net dollar retention has gone up too.

**Jonathan Becker** (01:17:08):
Yeah.

**Lenny** (01:17:09):
When you're looking to hire someone full-time to drive the paid growth channel and/or work with an agency, what do you recommend people look for specifically, especially things maybe they're not likely to think about when they're hiring someone that people often miss?

**Jonathan Becker** (01:17:26):
There's a couple of competencies that I think are very important. I found that, so I was a nerd as a child, if you can't tell, I don't know.

**Lenny** (01:17:35):
Nope.

**Jonathan Becker** (01:17:35):
Super nerdy, geeky kid. I would take apart-

**Lenny** (01:17:38):
[inaudible 01:17:38].

**Jonathan Becker** (01:17:39):
I would take apart my parents' computers, I'd try and rebuild them. I was fooling around with bulletin boards before websites existed, stuff like that. Then I became a web developer and as I transitioned into a performance marketing role, I realized that being technical and having technical aptitudes was extraordinarily helpful in terms of being on the front line of what we were doing and solving problems. If you're making your first hire, you probably want them to have the ingenuity and capability to solve a lot of the problems that you're going to run into within the context of tracking, attribution, data visualization, and then campaign management. Number one, do they have a technical background? That can be multidisciplinary.

**Jonathan Becker** (01:18:22):
At Thrive, we have someone who is a nuclear physicist that left discipline and became a performance marketer. We have people who have left mathematics and become performance marketers, people who left finance, full stack engineering, all kinds of stuff. Those are technical fields where people tend to be good at math and good at problem solving, and so that's a strong piece of evidence that they might have a strong aptitude for performance marketing and managing this.

**Jonathan Becker** (01:18:52):
Another thing is just literally do they have experience in this discipline? Have they managed on any level Meta ads, Google ads, TikTok, Amazon, some of the things we talked about? Do they have an appreciation for some of the inputs that we just discussed today that ultimately create the conditions for success within a performance marketing environment? Do they understand the role of creative? Do they understand the role of proper attribution and are they capable of understanding the mechanics of your business and so on and so forth?

**Jonathan Becker** (01:19:29):
I would say just fundamentally, those are some of the areas that when we are interviewing we're looking for. As an agency too, we are looking for the ability to work with people and be excellent at client services. One of the questions we might ask, I actually borrowed a Jeff Bezos question from early stage Amazon where I asked people without much warning in an interview, I'll ask them whether it's okay to do a bit of a thought experiment together and whether they are comfortable responding to a logic question. I'll ask the question of, "How many windows are there in New York City?" There's two things that I look for in this scenario. One is can they think on their feet? I'm not actually looking for the correct answer. It's a pretty difficult question to solve. But number one, do you realize that windows are not just building windows and windows are also in cars and trucks and stuff like that, so there's more than one type of window. Then can you just do the arithmetic of saying there's so many buildings per hectare or square mile or whatever it is and it's division multiplication type stuff.

**Jonathan Becker** (01:20:33):
But also from a client services point of view, I'm trying to see whether in a scenario where I've asked them something that they obviously probably weren't prepared for, that is a strange thing to ask and probably makes them feel a little bit uncomfortable, how they react in that situation. Do they remain composed or do they lose their composure and get frustrated or even angry that I asked them something that's pretty weird to ask? Their reaction there is often a good leading indicator of whether or not in a client scenario working with our clients, they can compose themselves in a difficult situation.

**Lenny** (01:21:10):
Very tactically, what level of experience do you recommend people look for in their first performance marketing hire year or two, four or five years, longer?

**Jonathan Becker** (01:21:23):
I've seen people who have 10 years of experience in the industry not be that great and then I've seen people who have one year of experience be absolutely phenomenal. I would say that again, the years of service under their belt is one clue or piece of evidence to their potential aptitude. But really, you want someone who can clearly demonstrate to you that they can competently run the channels I suppose. If what you're asking is literally at the level where someone is managing pay per click and programmatic media buying, then you want to make sure that they can just do that and I would say it's less about the years of experience. A lot of times people only want to do those types of jobs for a couple years before they're like, "Hey, what's your plan for me? I'm tired of running ads and building campaigns. I want to manage the people who do that now." The people who tend to really do that are often somewhat earlier on in their careers. That's just a reality that we see.

**Lenny** (01:22:25):
One more very technical question. What do you recommend the title for this role be? Growth marketer, something else?

**Jonathan Becker** (01:22:31):
I've seen so many different names for this. I think again, if the intention is to grow out a growth marketing capability, which again is not exclusive to performance marketing, then you're looking for a manager role of growth marketing manager. I've seen paid acquisition specialist for people who just manage channels. I've seen paid acquisition manager, performance marketing manager, media planner and buyer. I've seen all kinds of different roles. But when we are launching a new role these days, there's such wonderful tools like everything from Glassdoor to LinkedIn to PayScale where you can essentially just look at what other people are calling it and borrow from their role descriptions and then create your own role description and then determine what role is meaningful in the context of your own organization.

**Lenny** (01:23:23):
Awesome. Last question. We started with the story of how you landed Uber, and I know you also have an interesting story which I haven't heard of how you landed Snap/Snapchat as a client, so maybe tell that story.

**Jonathan Becker** (01:23:38):
It's a fun story and I think it's about ultimately confidence and knowing your craft. I believe it was like 2015 or 2016, we were essentially contacted to participate in an RFP down in Los Angeles. RFPs are difficult processes and essentially a department of a company is saying, "We want performance marketing and here are all the questions that we're going to ask you and exercises you need to complete in order to vet you as to whether you are the right partner or not." Sometimes RFPs are incredibly thoughtful and they're run by people who have either done a lot of RFPs in the context of what we do or they know specifically what the outcome is. Then in other cases, they're very experienced marketing departments with senior people and an approach that they may take is every stakeholder within that department gets to submit one or two questions to a long list of questions and the respondents have to respond to all of this.

The RFP process for Snap was somewhat complex and they asked a range of different questions and we find ourselves in LA at a hotel the night before, it's 2:00 in the morning, my business partner and another team member that we had brought down are sweating and we're like, "How are we going to build a presentation out of this? They're asking so many well-meaning but difficult questions that are zigging and zagging." In a pitch situation you want to tell a story, it's important, and that story has to have a beginning, middle, and end. It was just difficult and yet here we were and we had worked with all these really cool organizations and I was very confident that we knew precisely what we were doing. I kind of had this eureka moment where I was like, "Here's what we're going to do." It was Brent MacArthur, my business partner and I kind of arrived at this together, but we're kind of like, "Here's what we're going to do. We're going to have a completely unique take on how to respond to this and we're going to build a deck that's bespoke around X, Y, and Z."

We work till 6:00 in the morning, I think we get a couple hours of sleep and then by 10:00, we're sitting in their offices. Essentially the pitch is something like this. I stand there in front of about 20 different executives from their organization and I say, "You have thoughtfully curated an RFP for us to respond to today, and you have asked us to respond to about 20 to 30 different questions. With the utmost respect, I am not going to answer any of your questions today. I'm standing here because you are looking for a marketing partner and you need expertise in this area and instead of telling you the answers to the questions that you asked, I'm going to tell you what I think you need to do to get where you want to go and if you agree with me and my logic and what I talk to you about here today, then you should hire us. If you do not agree with my logic and you think that we're out to lunch, then you should not hire us."

**Jonathan Becker** (01:26:47):
You could hear a pin drop in the room. My own team I think was a little bit surprised. We had a whole bunch of technical difficulties that day. Someone who was supposed to Zoom in couldn't make it and so I have to ad lib part of the pitch that I wasn't prepared for, lots of zig and zags. They thank us for RFP response, lots of handshakes and smiling faces, but we don't know whether we're going to land the client or not.

**Jonathan Becker** (01:27:12):
Then about two hours later, I was driving to San Francisco with a friend, immediately leave LA for SF because I had a bunch of follow on meetings, and I get a phone call and they were like, "We loved your approach. Congratulations. You're hired."

**Jonathan Becker** (01:27:28):
These days I think Snap is still a really interesting organization, but at the time they were kind of bringing the future of a social platform or what a social platform could be in the same way that we think about TikTok right now. TikTok wasn't on the scene yet and Facebook was very worried about Snap and there was tons of engagement on Snap, so this was the it client of the day and it felt amazing.

**Jonathan Becker** (01:27:55):
Essentially the lesson was that you have to trust yourself and understand your strengths and weaknesses. In situations where someone is well-meaning but may not understand what they need, be brave and tell them what they need rather than just conforming to what they're asking for because sometimes inadvertently that leads you down the wrong path. We took a big risk and it had a wonderful payoff and we have, in addition to this story, we had a wonderful relationship with them for a couple years.

**Lenny** (01:28:28):
I love that story. I love how dramatic all your new customers, your way of acquiring customers and I imagine not all of them are this dramatic.

**Jonathan Becker** (01:28:38):
Not all of them are this dramatic, but there have been some pretty dramatic ones. I think part of running a business and running an agency has been the curation and experience around all these fun, crazy stories that have accumulated as we run this really interesting services business.

**Lenny** (01:28:55):
Awesome. Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready for the lightning round?

**Jonathan Becker** (01:29:03):
I'm ready. Let's do it.

**Lenny** (01:29:05):
Okay, great Looking, very excited. Okay, first question, what are two or three books that you've recommended most to other people?

**Jonathan Becker** (01:29:13):
As a marketer, Storyworthy by Matthew Dicks is a wonderful book. He is a world world-class storyteller. I don't know if you know him. He wrote this book about how to structure and think about the art of storytelling and every marketer should read Storyworthy. It was a huge contributor to how I think about what we do at Thrive. As an entrepreneur, I love startup stories, so Shoe Dog, which is the startup story of Nike. It's basically Phil Knight talking about all the ups and downs, and it's crazy. Nike shouldn't be a company based on all the turmoil and challenges that they overcame. Fascinating read about taking risk and doing what you think is right and ultimately succeeding and building Nike. Then a book by Nick Bilton called American Kingpin, which is the story of the startup of the Silk Road, which was like this dark web marketplace for some pretty bad stuff. But it is half tech story, startup story and half gangster kind of kingpin story. It honestly should be a Hollywood movie. It reads like a Hollywood thriller. So awesome, great book.

**Lenny** (01:30:30):
Favorite recent movie or a TV show.

**Jonathan Becker** (01:30:32):
I don't know how recent it is, but I love The Big Short, just love it.

**Lenny** (01:30:35):
Not recent at all, but it's still great.

**Jonathan Becker** (01:30:37):
It's still great. The reason why I like it is because someone found truth in the data they were analyzing and then capitalized on it, which is really an analog for what we do in performance marketing. Then recently I have fallen in love with White Lotus for no particular reason. It's just raw entertainment.

**Lenny** (01:30:54):
What's something you've changed in the way that you all operate that's been relatively minor in terms of how hard it was to change, but that had a tremendous impact on your ability to execute as a team or a company?

**Jonathan Becker** (01:31:08):
The tools that we use in performance marketing change constantly. The channels themselves change and therefore what problems exist and what SaaS companies or different types of platforms offer as solutions to problems change. I don't think it's one thing necessarily, this might be a bit of a roundabout answer here, but I mentioned that change itself earlier is something that humans seem to not love, whereas in our industry, and I don't think we're alone here, but there's a culture of change. A welcoming of change, aptitude around change, having a playful mindset with new technology and tools rather than being upset about the fact that AI exists or third party cookies are being deprecated or iOS 14 removed IDFA and trying to be creative around those types of solutions has been like a constant for us. I'm kind of sidestepping the question a little bit, but it is the cultural willingness to adapt that I think has been a strong suit for us as a company.

**Lenny** (01:32:12):
Speaking of tools, final question. What is your favorite most underrated tool for performance marketing work?

**Jonathan Becker** (01:32:18):
It's Thrive Stack. It's a tool that we built in-house that allows us to pipe third party data and anonymized customer level data into a database and then ultimately visualize it in a format like Data Studio, Google Data Studio, which I think now is called Looker Studio. That has been a profoundly powerful platform from which we're capable of delivering insights that are built upon the data as opposed to just regurgitated data, if that makes sense. We have not released this technology yet. It's basically a tool we use in-house with our clients. But to a certain extent, I mentioned Supermetrics, which is another ETL and has some of the same capabilities but isn't quite as powerful.

**Lenny** (01:33:05):
Amazing. Jonathan, this is by far the deepest I've ever gone into the world of paid growth. I really appreciate you making time and sharing all of your wisdom with us. Two final questions. Where can folks find you online if they want to learn more, reach out, ask some questions maybe, and how can listeners be useful to you?

**Jonathan Becker** (01:33:23):
Thank you for having me again, by the way. This was a lot of fun. I'm available through Thrive, so thrivedigital.com. You can contact us through our site by accessing the contact form. Personally, I'm on LinkedIn under my name Jonathan Becker or Twitter, JZBecker. Then things that would be interesting from the audience, always looking for feedback in terms of whether people agree or disagree with thoughts and feelings that we have about what we do. Obviously always looking for amazing people ultimately to join our team at Thrive. If you're a practitioner of growth marketing or performance marketing and you're looking for a top place to spend some time, would love to talk to you. Also, I suppose if you need some help making this stuff work within the context of your own organization, we'd love to be at your service.

**Lenny** (01:34:12):
Awesome. What is the URL again?

**Jonathan Becker** (01:34:14):
Thrivedigital.com.

**Lenny** (01:34:16):
Sweet. You asked for feedback, be careful what you wish for. We get some hilarious C2 comments. We'll see. We'll see what comes in on this one.

**Jonathan Becker** (01:34:24):
Sounds good.

**Lenny** (01:34:25):
Jonathan, thank you so much for being here.

**Jonathan Becker** (01:34:27):
Pleasure. Thanks, Lenny. Thanks for having me.

**Lenny** (01:34:29):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [10/19] Frameworks for product differentiation, team building, and thinking from first principles | Ayo Omojola (Carbon Health, Cash App)

**Ayo Omojola** (00:00:00):
Cash App, as a team we really cared about what we could do that was different and better than what else existed in-market. Being different is not enough, because it's very easy to build a thing that's different from what exists today, because you just have to look at what exists today and build something else. Being better is not enough, because it's also easy to say, "Hey, I'm going to make this thing better, and just charge you more money for it." It has to be better than what exists today in a way that matters to the end user, and for us for a long time it was when someone says, "Hey, why are you betting on Venmo?" I'd be like, "Try and send me a dollar that I can use now," and there was only one app you could do it with.

**Lenny** (00:00:36):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard-won experiences building and growing today's most successful products. Today my guest is Ayo Omojola, Ayo co-created and scaled Square's popular Cash Card, alongside the hugely popular Cash App. He's currently chief product officer at Carbon Health, one of the biggest and fastest-growing health tech companies in the world. He's a former founder, he's on the board of Pinwheel, and he's an angel investor in companies like Mercury Bank, Fair, Modern Treasury, and dozens of other startups. In today's episode, we dig into lessons from building and scaling the Cash Card and the Cash App, the importance of differentiation when you're building a consumer product or any sort of product.

**Lenny** (00:01:17):
How to successfully build a startup within a startup, how to succeed in both fintech and in health tech, plus my favorite part of the conversation, a handful of incredibly insightful and practical principles and philosophies around hiring, team-building, leadership, and going deep on problems. Ayo is such a fascinating human and leader, and I am excited for you to learn from him. With that, I bring you Ayo Omojola, after a short word from our sponsors. This episode is brought to you by Microsoft Clarity, a free, easy-to-use tool that captures how real people are actually using your site. You can watch life session replays to discover where users are breezing through your flow and where they struggle, you can view instant heat maps to see what parts of your page users are engaging with and what content they're ignoring.

**Lenny** (00:02:01):
You can also pinpoint what's bothering your users with really cool frustration metrics, like rage clicks, and dead clicks, and much more. If you listen to this podcast, you know how often we talk about the importance of knowing your users, and by seeing how users truly experience your product you can identify product opportunities, version wins, and find big gaps between how you imagine people using your product, and how they actually use it. Microsoft Clarity makes it all possible with a simple, yet incredibly powerful set of features. You'll be blown away by how easy Clarity is to use, and it's completely free forever. You will never run into traffic limits, or be forced to upgrade to a paid version. It also works across both apps and websites. Stop guessing, get Clarity.

**Lenny** (00:02:45):
Check out Clarity at clarity.microsoft.com. This episode is brought to you by ECO. Last month, ECO users earned an average of $84 in cashback rewards. How? With ECO, the future of personal finance. ECO is the update to a misaligned financial system, providing an app that works just like your bank, but removes almost all of the middle men, helping even the best money optimizers optimize in less time, automatically. What if you earned rewards for paying your rent, or got rewarded for ordering food and shopping online? Or even earned rewards for saving each month. And then imagine if you got rewarded again, just for getting rewarded. With ECO, you can spend at some of your favorite merchants and automatically get 5% cashback.

**Lenny** (00:03:30):
Plus, ECO's APY rewards look more like $80, not 80 cents. And then there are ECO Points, the world's first open reward system. You earn them whenever you do almost anything in the ECO app. ECO is working to make these points the most rewarding points ever, so it pays to be early. Sound too good to be true? Go to eco.com/lenny, sign up for an onboarding, and find out why it isn't. Lenny's Podcast listeners who attend an ECO welcome session will get an exclusive 4% APY on deposits over $1,000. Learn more at eco.com/lenny, that's E-C-O.com/lenny. Ayo, welcome to the podcast.

**Ayo Omojola** (00:04:12):
Thank you for having me.

**Lenny** (00:04:13):
I have a feeling this is going to be a really fun conversation, I was doing a little research on you ahead of this chat and I found this interesting thing that you did in the past, where I found you answered over 100 questions on Quora about people trying to ship stuff and mail stuff, and I have no idea what's going on there. And so, tell us what is going on there.

**Ayo Omojola** (00:04:32):
In 2015 I'd been at Cash App for about a year, had massive burnout from the last company, went through IC, kind of like did a hard pivot, imploded a little bit, stuff kind of picked up, sold the company eventually. And my brother, who's my co-founder, and I had this idea, and I think it was actually from printing and mailing my section 83B for something that I'd done. And I was like, "Why can't I just go onto the internet and do this?" And so I had this idea to build an application where you could give it a document and an address, and we would print it and mail it for you. And it was right around when Lob was founded, which was...

**Ayo Omojola** (00:05:13):
Lob is like this printing and mailing API. So we built this thing called Mailform, I think it's like one of the top consumer print and mail things on the internet. I'm sure many people who listen to this will have used it for... And then we had to figure out how to grow it, and the way that I actually learned how to do SEO was running around the internet, trying to find ways to tell people that we did this, and that they would find us. And we actually ended up, funny as it turns out, we ended up building a whole sort of SEO content infrastructure around it that has really impacted my thinking. But all the answers on Quora were me just trying to get people... You know, if you remember like 2014, Quora was like this massive thing.

**Ayo Omojola** (00:06:00):
So all the answers on Quora were me trying to get people who might be thinking about the problem that we were solving to realize that we exist.

**Lenny** (00:06:06):
That was my guess, it was going to be either user research on the space of shipping and mailing things, or it was a growth tactic, and it clearly is the second. You're saying this product still exists, that some people can still use?

**Ayo Omojola** (00:06:17):
Yeah, yeah, it exists, a lot of people use it. We have maybe customers that you've heard of and use. I won't say their names, because I don't know if they want me to do that. But you know, I would say there are a couple of large delivery tech companies that use us to mail 1099s, W2 forms, what have you.

**Lenny** (00:06:39):
Holy moley, okay. And this is just a side project of yours?

**Ayo Omojola** (00:06:42):
Yeah, one of many.

**Lenny** (00:06:43):
Amazing. Let's talk about your Cash App experience, which I imagine was a pretty transformative period in your career. And from my understanding it had a major impact on the success of the app and the business that was built there. To give folks a bit of scale and understanding of just the Cash App in general, can you just briefly talk about how big was it when you joined, like the scale of the app, and then whatever you can share about just the scale today.

**Ayo Omojola** (00:07:08):
When I joined Cash App was probably sub 50K actives, like people moving money. Today I think it's north of 50 million actives on a monthly basis, will all different types of money movement, like Bitcoin, PP, card, stocks. And I think it's something like north of 70 or 80 million actives on an annual basis.

**Lenny** (00:07:35):
Wow, okay, great. What I want to talk a bit about is that Cash App to me is a rare example of a huge consumer app success story, I've been angel investing for a while now and I've just learned how rare consumer apps work. Like, they never work, and this one worked. Even within a big company, you think that there's a huge chance of something working if they have the support of a big company, and the platform, things like that. Still, they almost all fail. And so what I'm curious about is, what do you think you all did most right, one to launch it successfully in the consumer space, and then two, to keep it growing and scaling to where it got today?

**Ayo Omojola** (00:08:13):
My perspective is that, and I think this is a, people don't like this kind of answer.

**Lenny** (00:08:22):
I'm exciting to hear this.

**Ayo Omojola** (00:08:23):
But the thing Cash App did right was like 10 things, not one. There were like 10 things that actually best in class, like insane talent density, insane focus, very strong at fraud, a lot of the way Brian, and Dustin, and Jesse, and Dangi tried to organize the amount... Like you know, with Jack's support was just really firewalled from the rest of the square, the hero customer was the consumer, not the merchants, so it was like literally in 100% of the trade offs the consumer's needs came first. And that's a very, very hard thing to do, instead of accommodating like... It made people angry, actually. Really insane focus on design, incredible depth in... This is the thing that I think you will appreciate, but it's very hard to appreciate just as a consumer of things, people would be like, "Hey, what's the difference between you and Venmo?"

**Ayo Omojola** (00:09:26):
And the only reason you would ask that is if you just hadn't thought about it for a second. Now, today there's like a lot of convergence on features like... So Venmo's sort of caught up on a lot of the things. But at the time, Venmo didn't have push to debit, Venmo didn't have an instant. For like three or four years in the United States, the fastest and lowest-cost way to move money in the country between any two people who had bank accounts was Cash App. And I think that kind of changed in 2017, when PayPal, Venmo, Apple Cash, et cetera, kind of came out and launched all their things. And so I think actually it's possible that having done only one of those things well, Cash App might have been successful. But I think the reason it's differentially successful in the market today is the compound effect of all those things.

**Lenny** (00:10:12):
What are some of the lasting lessons that you take to other consumer apps that you're... Like Carbon Health, for example? Or founders that you work with, because all those things are amazing, hard to replicate sometimes. Is there stuff you extract from them, like, "Here's something that I'm going to do any time I'm building a consumer app"? Is it like the design-related component, is there anything else along those lines?

**Ayo Omojola** (00:10:33):
This is the thing I struggle with, I saw on Twitter somebody say this comment, that a lot of times when people describe their success to you what they're really saying is like, "This is my lottery ticket number." So to be honest, before I go down this diatribe I don't actually know which of the things are replicable. I just know kind of what I believe to be true, and I'm trying... Some of it worked, some of it not, et cetera. So I think Cash App, as a team we really cared about what we could do that was different and better than what else existed in market. And for us, for a long time it was instant, and if you look at all the products you'll see this sort of theme, of when you cash out there's an instant option.

**Ayo Omojola** (00:11:20):
When you get a cash card, we issue your card to you instantly. When you sell stocks, money's available instantly. When you sell Bitcoin, money's available instantly. Like literally, there's no like, "Oh, circle, circle, circle processing," it's like, "Available to spend." And I think there's something actually lasting about the concept of instant, because there still in the world today are like lots of businesses and processes that are like asynchronous, but not for any reason other than, that's just the way the world is. So I think that's like one thing that's kind of narrow. And then I would say another thing that I think is really broad is just being really crisp about why what you're doing is different and better than what exists today. And it's like, being different is not enough, because it's very easy to build a thing that's different form what exists today, because you just have to look at what exists today and build something else.

**Ayo Omojola** (00:12:08):
And being better is not enough, because it's also easy to say, "Hey, I'm going to make this thing better and just charge you more money for it." And so I think there's like, different... You optimize for doing a thing that's different, it has to be better than what exists today, and it has to be better than what exists today in a way that matters to the end user, or to the buyer, depending on what your market is. And then after all that, it also... You have to be in a domain that matters, because it's very easy to get those three right, to build like a really... How do I say this? A thing that's different and better than what exists today, in a way that matters to end users could also just be art. Which is just like, art is a complex thing to scale.

**Ayo Omojola** (00:12:58):
And so you have to like, then also get the economics right, get the entire pipeline of like how you ship, how you build, how you talk about it, all that stuff has to work as well.

**Lenny** (00:13:08):
I think there's some really great lessons there, just to kind of mirror back what you're saying. Just differentiation in this case ends up being really important, and if you're trying to disrupt someone doing something, like say Venmo. Like, you can't just be a better Venmo, you have to be different. And it sounds like instant was the differentiator in this case.

**Ayo Omojola** (00:13:25):
For a long time, yeah, yeah. Or rather, it was the cut through the clutter differentiator. There were actually like a lot of other sort of long tail of things that we were doing those different, but it was like, instant was the thing where when someone says, "Hey, why are you betting on Venmo?" I'd be like, "Try and send me a dollar that I can use now," and there was only one app you could do it with.

**Lenny** (00:13:46):
And I think the other element of this, it connects to something I'm working on in the newsletter, is when you're trying to find a big idea, especially in B2B, but in this case it worked in B2C, is just, it needs to be important, it needs to matter, like it can't be a better thing that nobody values highly, because then you will make money in B2B, and in B2C people won't even use it. So, these are really great. You mentioned in passing when we were preparing for this that Block was trying to kill the Cash App for a lot of time, early time.

**Ayo Omojola** (00:14:16):
I wouldn't say like Block was trying to kill the Cash App. I think that there were many, many people who worked there that absolutely... And I mean this in the nicest way, identities were tied with Square being a merchant business, believed that the investment in Cash App could have been better deployed elsewhere, didn't want to work on consumer. There was just like a myriad of... And then look, I'm sure people who were there [inaudible 00:14:44], like we probably also made mistakes, and didn't communicate well, and didn't sell it well, and so on. But there was a crazy amount of friction, I'll put it that way. A thing I will 100% give Brian credit for is, he was really effective at making sure that we had a shot.

**Lenny** (00:15:04):
Zooming out for a moment and thinking about just Square and Block, and how they operate as a product company and as a business, is there anything that you've taken away from that experience that you bring with you to where you are now? Which, I want to talk about next.

**Ayo Omojola** (00:15:16):
I don't know necessarily if this was intentional, my guess is it was probably just like a consequence of Square going through, going public and trying to be sort of a rigorous financial institution. I think when you are in a large organization, trying to do a actually new thing, I think small teams are better than big ones, period. And forcing the teams to be like super, sort of thoughtful about hitting milestones and actually adding value, because there's this thing people say about like, "Hey, the startup within a startup, everything's fake." And the reason I think it's fake is because when you're a startup you actually worry about paying the people who work for you, and when you aren't inside of a company you just don't.

**Ayo Omojola** (00:16:02):
And there is just a difference between having that existential fear of, "Are we going to be here tomorrow, and not?" So I think a consequence of not having that existential fear is that it's easy to just be like, "Hey, I need more resources," and the organization has some habits around how you acquire resources, and if the leadership of the... If the leadership building the new thing happened to be good at that, you can have growth in a new project's people size that doesn't match the new project's success and potential. And I think that actually ends up... It ends up being a tax over time.

**Lenny** (00:16:36):
That's a really good point, I didn't think about asking about that. But in this case it was a startup within a company that did well, and I also agree, it rarely works and it did here. What is it do you think that was so central to making it work? I know you just talked about it, how would you summarize just like, "Here's the thing everyone should do when they're maybe starting something small within a big company that's new"?

**Ayo Omojola** (00:16:57):
There are some macro things where, I do believe we were children of fortune, like mobile, et cetera. When I joined Cash App a lot of the people working on it were fairly tenured, both at Square and just like in their careers, and had done sort of really meaningful things. And as a consequence, I do think there's like... This is a thing I haven't quite been able to articulate well, but there was something around a small, tightly-knit senior team super focused on a problem. And the smallness means just like, less prior miscommunication, and then the tightly-knit means a lot more trust. And then I think Brian was obviously just, he'd been at Square for a long time, he knew the organization well, was a color operator on there, knew like talent, like who was good that he wanted to bring on board.

**Ayo Omojola** (00:17:52):
And I think that combination of things... Well, not my guess is, there are other things. But I think without that thing, it would actually have been really, really difficult.

**Lenny** (00:18:02):
I think that's an awesome lesson, just like a small, trusted team that has seniority, and leadership trusts to operate and not just like, "Hey, what the hell are you doing? It's time to share faster."

**Ayo Omojola** (00:18:15):
The Cash App team stayed super senior for a long time.

**Lenny** (00:18:19):
Mm-hmm. And you said small, how small would you... Was it/what do you recommend when you say it should be a small team for something like this?

**Ayo Omojola** (00:18:27):
You know, a lot depends on the thing, I don't think there's a one-shot answer. When I joined Cash App it was like 11 or 12, and it wasn't much more than that for like a year. And I forget how big it was when I left, but we had real scale in a real business before we had a real head count, I guess is the way I would say it.

**Lenny** (00:18:27):
Love it, yeah.

**Ayo Omojola** (00:18:53):
And you kind of had to fight for every head count. And I think the head count at this point was a Sarah Fryer thing from Square, she was just really, really disciplined about making sure that if you were trying to bring people on and spend the company's money, you really just fight it.

**Lenny** (00:19:07):
I think that's a really good takeaway. Let's transition to talking about what you're currently doing, Carbon Health. You went from consumer fin tech to consumer health tech, first of all just real quick, just how did that transition happen? Was that something you planned, or is that just like you went on exploring and that's where you ended up?

**Ayo Omojola** (00:19:22):
It was more I went on exploring, that's where I ended up. I'd say there was maybe three parts, there's one part where when I was exploring there was this guy, Russell Fradin, who now works at Carbon, who had... He introduced me to like a third of my network in Silicon Valley. And basically he said, "Hey, there's this guy who's amazing, he was the founder of Udemy, and now he started this company called Carbon Health. His name's Eren, you need to talk to him." And I was like, "Sure." And Eren, I met, and Eren is brilliant, and also had this crazy way of explaining a complex problem in a way that made the solution obvious. And so he was like, "Oh yeah," like, "Here's how we're going to do it, and here's the thing we spent two and a half hours together."

And then at the end I was like, "Oh yeah, this is obvious, somebody should just build this thing." And then I think the second part was, I think everyone's the hero in their own story, I'm no different. So I think when I left Cash App, and when I was thinking about [inaudible 00:20:33] I was thinking of starting a company and doing all this stuff. And one of the muscles that we really just spent a lot of time building Cash App was going really, really deep into like the regulatory sort of wallpaper of the problems we were trying to solve. And so we would have sessions where we'd be sitting in a room, like product, engineering, legal, compliance, et cetera, with some regs literally blown up on a projector screen, and a section of text highlighted, and being like, "Hey, what does this really mean?

**Ayo Omojola** (00:21:02):
"Okay, what if we build a product this way? What if we structure money movement this way," et cetera. And so I casted myself instead as, "Hey, what if I could be good at regulated businesses, instead of just good at money?" And that was the way that I tied the two together. There were a bunch of other sort of very personal ego things, like, "I want to build a team that's mostly founders." Both my parents were doctors, and I'd been through some sort of scary experiences in the healthcare system. So there was just like a part of it that was about sort of mission and background, but the career part was really about, how do you stick the two things together? And I also wanted to learn... There was this thing that happened in my like fourth year at Cash App where I was like, "Oh, there's this other thing that we have to build that would be amazing if we actually built it."

**Ayo Omojola** (00:21:54):
Which is what Pinwheel, the company I'm on the board of, actually is. So I was like, "Hey, we've got to build this platform for payroll," it's like the last giant money movement thing that hasn't really come to move the needle in a long time. And I couldn't get the organization convinced to build it, which kind of is what it is, A. And B, I was like, "Oh, I want to have that insight. Can I have that insight of like what the second thing is faster the same time around?" And I am sad to report that three years in Carbon, I have not had it yet.

**Lenny** (00:22:27):
You've got a lot going on, I am not surprised. So I was going to ask, what draws you towards highly-regulated industries being at Cash App? And I like that you already went there, basically you just found that that's maybe the thing that you could get really smart at, and that applies to a lot of different markets. That's an interesting insight about yourself, like, "This could be the thing that I get good at."

**Ayo Omojola** (00:22:48):
Yeah, yeah, or differentially better at than other people.

**Lenny** (00:22:51):
You kind of like mentioned this off to the side, this idea that you like to hire founders. And can you speak more to that, just like what that means in your day-to-day, and then maybe how your team looks today. Is it mostly founders, or some [inaudible 00:23:05]?

**Ayo Omojola** (00:23:04):
Yeah, yeah. I think the team looks today about half and half. So I had this experience going through IC, where... And just kind of growing up, my career in Silicon Valley, where I knew a bunch of founders who were absolute beasts, like incredible people, could do amazing things, and they would bounce off organizations. They would be like, "All right, I'm going to go work at Amazon," and just not last. And when I was at Cash App I went through a bunch of hiring processes where I was like, "Hey, we should try and hire some founders to do this, look at these companies," et cetera. And a thing that would happen that... And this part really isn't about founders, although founders are like one way sort of this happens.

**Ayo Omojola** (00:23:49):
But a thing that would happen quite often is, by the time that as a hiring manager you get a bunch of resumes to look at, like you post the job, a bunch of people apply, you're partnering with a sourcer, by the time you get a bunch of resumes to look at they've screened out everyone that doesn't just like fit inside a box. And it's like, at Google, Facebook, Amazon, Microsoft, Apple, and then at certain set of schools, and then a certain type of experience, et cetera. And so what would happen is like, if you just happened to not look like that profile I don't even see you. And I would say, "Hey, I would like to hire some non-traditional candidates here who were like founders or whatever," and I would just never get it.

It was almost like the machine just worked a certain way, like there was an algorithm, and the algorithm was upstream of me. And I had this belief that sort of these people that I had seen, many of whom have now gone on to start companies that are doing quite well, would be incredible value add. Like basically, it's kind of like, if you could just hold onto a rock for a little bit it can take you pretty far. And so this was one of the things I talked to Eren about actually, early on when I joined Carbon. And I was literally in the job posting, I'd be like, "If you've been a founder before, even if your startup has failed, please apply to this." Because [inaudible 00:25:15] anything common among founders too is, there's like this sort of imposter syndrome that goes hand-in-hand with the chip on the shoulder.

**Ayo Omojola** (00:25:24):
And so my team's much smaller now than it was, but I probably I think the whole time that I've been at Carbon, hired about 15% founders. And I'm actually 100% certain the thesis was right, and I think it just came with costs that were kind of theoretical at the time, and now they're real. I think like the two big costs are if there's any waste or bullshit in your organization, like they fucking see it right away and call it out. And so there's this like, you have to... There are just these scenarios where I'd just be like, I just have to sit and listen to somebody tell me all the things that we're doing wrong. So there's one, it's a way to cut through bullshit, that's one cost. And then I think the second cost is, and I say cost as in like it is not better for the organizations. You have these people come in, they're incredible.

**Ayo Omojola** (00:26:30):
And you really can only keep them for like two, or two and a half years. And so what ends up happening is, they're just like, "Oh, I want to..." Obviously if you're going to be a person that starts a company you're ambitious, so they're like, "I'm going to run a team somewhere else, I'm going to go try some other thing, I'm going to go build a company." And so it's kind of like a team that I think is differentially higher output, but also differentially higher attrition on the market.

**Lenny** (00:26:55):
Got it. I was going to ask about the cons, and I like that you shared them already, because I imagine working with a lot of founders adds a lot of stress too.

**Ayo Omojola** (00:27:02):
Yeah. I mean, it is unequivocally awesome, like I love it. And I think that the unexpected pro also is, I do think it levels up the team. Like people in a team that is very founder-dense really likes it, and we ended up over time in Carbon like, there was lots of people who founded companies here in multiple functions, not just profit.

**Lenny** (00:27:24):
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**Ayo Omojola** (00:28:46):
My biggest thing, and I say this all the time, is when you're hiring you pick the people, but they pick when. So you're actually like, there's these people... There are many, many people on the team who, the time between when I first met them and the time when they joined the team was like months. There was one person who was like, a year and a half almost. And so the way that I operationalize that is, I'm meeting people all the time, and I am just like, "Hey," like, if I meet somebody I want to work with, I'm like, "Hey, how can I add value to your life so you will consider me somebody who you would like to work with one day, so that when the time comes and there's an opportunity for us to work together, you're actually open to it, as opposed to just some guy that you met on a Zoom one time."

**Ayo Omojola** (00:29:31):
And I would say that's like the biggest... The biggest thing is just like, trying to be like, one of my core philosophies in life is that everybody wants something. And most of the time it's not something you have to give, or you can connect them to. But, if it is something that you have to give, or you can connect them to, it's criminal not to, actually. It's like, imagine you, like just imagine you having a conversation with somebody, and that person, knowing that you want something, having it, there's no cost enough to give it to you, and they just don't do it. How crazy is that? And so the way that I sort of bring this to life is, if I meet somebody who I want to work with, I'm like straight up with them about it.

And I'm like, "Hey, I hope we can find a way to work together one day. In the meantime, it looks like the things you want are not to work with me right now, but they look like this kind of [inaudible 00:30:26] things which I'm aware of. Can I connect you to this person, this opportunity, what have you?" And it's not my thing, like actually Russ did this for me when I came just looking by for the first time. He was like, "Hey, I'm not going to invest in your company, I think it's stupid. But here are all these people who might, go meet them." And that was like transformational for me, and it has turned out that over a long enough time horizon it does come back, and you just don't hold the cards close to your chest, just give them away.

**Lenny** (00:30:54):
Is there a story or an example of that that comes to mind of you doing that for someone else?

**Ayo Omojola** (00:30:59):
No, it's a little bit of a professional hazard because I'm an angel investor, and so I do this for a lot of my founders. But I probably made 600 intros last year, and that probably drove like, at least one person signed up somewhere as an advisor, a couple people took some jobs, a bunch of angel investors invested in companies, a couple of companies found leads for around like, I think it's... I'm not special in this way by the way, like a lot of people do this. It's just, I am very aggressive about it.

**Lenny** (00:31:30):
And you're also connected to a lot of people, as you've shared, because of all these things you've done, and the fact that you prioritize this. I think it's a really cool combination of, you really prioritize connecting and helping. Plus you know a lot of people from all the work that you've done, and there's this element you just shared which is just like, give people things that they want, because [inaudible 00:31:49]-

**Ayo Omojola** (00:31:49):
Yeah, I'm a reasonably good matchmaker, except in love. Never once introduced two people that dated.

**Lenny** (00:31:57):
Let's talk about... No, we'll move on from that. I also think I'm zero, zero for some denominator, I don't even know. I'm going to keep fishing this pool of kind of philosophies of how you build product, and then we'll come back to Carbon Health. I was reading something that you wrote about how you're really big on understanding the thing, like going deep on stuff, just generally as a product leader and as a collaborator. Can you just talk about your approach there, and where you apply that philosophy?

**Ayo Omojola** (00:32:27):
This I took away from Cash App, there was... When we were working on the Cash Card, the very first... This is like 2015, 2016, the very first iteration of Cash Card, the head of design at Cash App, this guy Robert Anderson, who's an amazing designer, please hire him if you can, had like this design. He was like, "Hey, I have this design, we're going to do this thing." And I'm like, "Great." I get some sketch files, maybe? PDFs, pre-figma. We mailed them to some card vendors, and the things they send us back are like, you would put this out as the product in your life, in the world? Like, what are you doing? And the consequence, Brian was like, "Hey, we just need somebody to go figure out how to get this thing made." And so I ended up spending a long time just going to different card manufacturing factories around the country, to figure out how do cards get made, what are the possibilities?

Is there new tech we can take advantage of, will the people even talk to us? Is the thing we're talking about even possible? And we ended up doing... At the time there was a... I wouldn't say like super new, it had been on the [inaudible 00:33:38] for a few years, but it wasn't on mainstream cards yet, this concept of laser engraving. And it turns out that the machine that you use to make laser-engraved cards has like thousands of combinations of settings, which all create like a different physical effect. Like you can increase the power setting and literally burn the plastic, and you would get kind of a red, rough texture. And you could decrease power settings, decrease the aperture, and you would get like a really fine, smooth consistency.

**Ayo Omojola** (00:34:09):
And this is like, again, a thing that I learned, which we went through. Between plastic, the overlay, the paper, the envelope, and the finishes, easily 1,000 combinations before we got to like the first version of the Cash Card that was shipped. And there's a team still there, still doing like literally physical card objects that are not the same as anything that exists in-market, just like going into differentiation thing. And then a lot of the stuff we did around our regulatory work, around prepaid, building a digital wallet, et cetera, made me realize that like a thing that would happen very frequently is, you want to work on something and you go talk to an expert. And usually for most people, an expert is not like, hey, the most expert person in the world, because that's a very, very hard thing to know who that is, especially when you're not an expert.

**Ayo Omojola** (00:35:08):
Usually an expert is the most tenured person in the world in the domain that you're questioning, and the length of tenure, and the depth of experience actually can vary very wildly from person to person. And so what happened is like, you go ask somebody something, and they would give you an answer which is like the thing that they believe to be true, they're not lying and it's not malicious, and it's just fucking wonk. And you just have to keep pushing until you get to an answer, like I don't really know the right way to articulate this all the way. But its kind of like, you can't stop until you get to the end. And that's one of the reasons why being in a domain that matters is really important, because that's a very, very expensive activity to do if you're in a small team environment.

**Ayo Omojola** (00:35:55):
So the way that I apply that today, and I'm sure people at Carbon will tell you this, is I end up asking lots of questions that people think don't matter, because I'm like, "Hey, we're trying to optimize something." And usually what I find is, when you're trying to optimize something for the first time they haven't optimized for it. You actually have to re-measure it, you have to re-instrument it, you have to like rebuild all the queries, all the visuals, et cetera from scratch. You have to look at them like 15 different ways, and then every time two things are incongruent you have to go and figure out why, and it's just like tedious work. And in regulated industries, and I think this is...

My guess is this will end up being true in almost any complex environment with a lot of variables, that are kind of... And the more sort of constrained [inaudible 00:36:48] they are, I think actually the more this matters, you can't avoid the details, you just have to get into them. And if you don't, you can still do well but it's actually more than likely fortune than skill.

**Lenny** (00:36:58):
You said you ask these questions that don't matter. Is there an example recently? Because that's a really interesting concept, of just a question you asked, or questions you like to ask that are just like, "God damn it, why are you asking these questions?"

**Ayo Omojola** (00:37:10):
Yeah. I have, there's like one from yesterday where-

**Lenny** (00:37:12):
Yeah, perfect.

**Ayo Omojola** (00:37:14):
... there is a field in a database table that tells you why a payment was made. And there's a bunch of values in that field that are very articulate, like, "Hey, this payment was made because it was co-pay, this payment was made because it was the patient was visiting without insurance," right? And then there's like a field, and it's empty. There's a value that's just null, and we use null as like, "Hey..." The way null is described is, after a claim is adjudicated and complete, and the patient has a balance, we leave that field blank if we're just billing the patient for their balance. The problem with that is, if there is any other exception or reason why a payment might occur, and we're in a complex environment, we have over 120 clinics, there's a lot of humans who can press the pay button in a bunch of different places, you will not know if it's included in that field, in that null value field.

**Ayo Omojola** (00:38:15):
And so this is like one of those things where I'm in the middle of a Slack with a colleague who's like, "Why are you asking this question?" And I'm like, "I just need us to put residual balance in that field, if that's what it's for. That's all I'm asking." So I do that a lot, and you know, I think people hate it.

**Lenny** (00:38:37):
Did they actually go ahead and do that?

**Ayo Omojola** (00:38:39):
We're in the middle of it right now.

**Lenny** (00:38:40):
You're in Slack? Okay, right, okay, I love this. So I made a list of kind of these lessons, and I really like this area we're diving into, of just your kind of philosophies to work in life. So just the ones I wrote down is, the importance of going deep, and doing the thing yourself, and not trusting that somebody's response is the end. I love the way you phrased it, of don't stop until you've reached the end, this idea of helping people if you can, connecting people and the power of that, having founders, and working with founders. And clearly the story you just told is very founder mentality, of just like going in the warehouse and trying 100 different cards. Is there more here? What else have you found to be an important approach to leadership, or product building, or things along those lines.

**Ayo Omojola** (00:39:29):
Yeah. Can I say one caveat about the first one I think you wrote down?

**Lenny** (00:39:34):
Yes.

**Ayo Omojola** (00:39:34):
It's not that you have to do everything yourself, it's that the person who you trust in the execution role, they have to become the expert. They have to be like, they can't stop until they hit the end. And, I don't know. I think in all these places where strong, ambitious people are trying big things, so much value is lost when the person in the execution role isn't really in command of all the details, and is like... So I think the reality's like, to do ambitious things you have to work with people, I can't do everything myself and I know that. The real lesson there is, it's not like I have to, just, somebody has to. And you know, they have to know that that's like what you're holding them accountable for, and that you trust them to do that, and the organization's trusting them to do that as well.

**Lenny** (00:40:30):
How do you actually operationalize that? It sounds like part of it is to hire founders who naturally want to do the thing well. Is there anything else in terms of how you set up the team where like, this person has power to do the things that need to be done? Is it like an autonomy perspective? Is there anything else you do that allows for that in a product team, in a company?

**Ayo Omojola** (00:40:48):
It's like a trust but verify, and I think it's just almost never enough for someone to say, "I can't do it because X person said." It is, "I can't do it because we are contractually obligated to do this another way, and if we do not honor the contract these will be the consequences." And another thing I like to do kind of along this is like, "Okay, articulate to me what actually will happen if we don't do it this way. Like, what will break? Like, are they going to fine us, is the patient going to be..." Do you know what I mean? Because in my mind there are many things that are used as excuses, because some person's understanding of how some regulatory thing works from like their last job is being applied here, where you're literally creating a worse experience for your consumer, for your patient. I'm like, "Why would you... If we're not here to try and make the experience better for them, why are we even here?"

**Lenny** (00:41:43):
Let's come back to Carbon Health for a bit, I just have a couple of questions that I wanted to touch on. One is just about starting a company in healthcare, in health tech, there's so many companies that launch every day, every week, trying to make the healthcare industry better in various ways. But for all these reasons, I don't know, the incentives are off, there's regulatory capture, there's things take a long time, things just like often don't work. Carbon Health is an example of something that is working really well. What is your advice often to founders who want to go after the healthcare space as a tech company? What do you need to know, what should you do right, do wrong? What is your advice there?

**Ayo Omojola** (00:42:23):
Yeah, so one thing I would say in healthcare that fortunately or unfortunately I think is true, is very often the way to make things happen is network-dependent, not necessarily about the merit of the thing itself. So it's just like, there's companies that exist because the founders know the CEO of every major payer in the country, and so there's just like a deal they can get, or data they can get that's not available in any other context. So I think there's just a thing there of understanding if that's the business that you're in. I think in Eren and Caesar's case in Carbon, because we're direct to consumer, we're not trying to sell to payers, we're not trying to sell to employers. And Eren, obviously just hugely successful, [inaudible 00:43:13] person starting the largest education platform on the planet at Udemy.

**Ayo Omojola** (00:43:18):
There was actually really, really good founder market fit, he was a person who had very, very technical, and had a ton of DTC success doing another thing that was DTC. But there are businesses, like there's a company that I recently invested on working with, where the founders are incredible and very, very technical, and not super high on network. And so a lot of what I try to do with them is like, "Hey, I need this person to talk to this person. And then also, this is like a really crisp, specific use case that you need to optimize around." And maybe I'm wrong, who cares, I'm just some guy. What does it matter what I think? It doesn't have to be what I think, it just has to be crisp. And using that as a way to like... Because the more crisp it is, the easier it is going to be for you to know who the decision-maker and the organization you need to get to is.

**Ayo Omojola** (00:44:05):
Because I just find... I'm sure you see this in B2B, this is so much... There's just so much leverage in knowing the person in the place who actually has their finger on the button, versus trying to network your way in, and people don't want to spend their social capital introducing you to this department, or they've just got like 19 other things going on. So I think that network thing is just a thing that sticks in my mind, that when I see a lot of healthcare tech startups swimming through the soup, a lot of it is about there's some organizations that have to navigate to get to the right decision-maker, and they have to do it 100 times. And so much of it is like, just waiting for the guy who promised me the intro to make the intro.

**Lenny** (00:44:48):
That is really good and practical advice. Before we wrap up, I want to give you a chance just to describe Carbon Health for folks that may not be familiar with it. Just like, what is it, where can you use it, how do you sign up, who's it for?

**Ayo Omojola** (00:45:00):
Yeah, yeah, yeah, yeah. Oh great, yeah, very, very happy to do this ad, it is a paid ad because Carbon Health pays me. So-

**Lenny** (00:45:08):
No-one's paying me, I'm losing in this situation.

**Ayo Omojola** (00:45:12):
I'm paying you in prestige, Lenny.

**Lenny** (00:45:14):
Yes, in wisdom, in insights, and your attention, yeah.

**Ayo Omojola** (00:45:17):
Yeah, exactly, exactly. So, Carbon is an extremely vertically integrated healthcare provider based in the United States. By extremely vertically integrated, what I mean is we build and run the clinics, the providers work for carbon, and we build and run the software, and we run the entire operation, and it's all like full stack in-house. And when I say we build our own software it's like, wait, how you book, how you pay, the literal buttons that the provider presses to say, "Hey, Lenny's blood pressure looks good," all of that is software that we build in-house, all the way from front, from like the patient clicking book an appointment on Google.com to the claim being sent to the insurer, we build the whole thing full stack ourselves.

**Ayo Omojola** (00:46:04):
We have, I want to say 130 clinics around the country, I believe we're in about 17 states. We do virtual care, I think we're one of the biggest healthcare providers in California, and we do both urgent care and primary care. And the thing that gets me super-excited about Carbon is, a lot of the experiences we build are the things that as a consumer, you believe should exist in healthcare. So I want to say, last year we launched this diabetes program where you slap on a continuous glucose monitor, you link it to Carbon, and it streams your blood glucose measurements directly into our EMR natively, and your providers can see it and interact with you around it. They can help intervene, they can tell you like new dietary, lifestyle choices to make. And we're going to do that with every device at some point, on some scale, and you don't have to pay $200 a month to use it. $200 a year-

**Lenny** (00:46:04):
Amazing.

**Ayo Omojola** (00:46:55):
... to use it, sorry.

**Lenny** (00:46:59):
Amazing. Well, with that we've reached our very exciting lightning round. I've got six questions for you, I'm going to go through them pretty quick. We'll see what comes to mind, no pressure, you can skip them too if you want. You ready?

**Ayo Omojola** (00:47:11):
Yeah.

**Lenny** (00:47:13):
What are two or three books that you recommend most to other people?

**Ayo Omojola** (00:47:17):
Three-Body Problem, Children of Time Trilogy, and Stormlight Archive.

**Lenny** (00:47:24):
And are these all sci-fi books?

**Ayo Omojola** (00:47:26):
The third is fantasy.

**Lenny** (00:47:29):
Good clarification, great. Amazing. I'm reading an epic sci-fi book right now called The Fire in the Deep.

**Ayo Omojola** (00:47:37):
Oh dude, amazing.

**Lenny** (00:47:39):
Okay, yes.

**Ayo Omojola** (00:47:40):
So, something that's going to really piss you off... I don't think this is a spoiler.

**Lenny** (00:47:43):
Don't, don't, no spoilers, I'm almost done.

**Ayo Omojola** (00:47:45):
It's not a spoiler. The story's not finished.

**Lenny** (00:47:52):
Mm-hmm, there's like additional books that aren't done yet?

**Ayo Omojola** (00:47:55):
Yeah. And I don't even know if they're being written, it's brutal.

**Lenny** (00:47:58):
That's okay. I find that the first book, except for the Three-Body Problem where the first book is the worst book, I feel like with this and many of these books, the first one is like... I'm just going to stop I think at the first one, that's my plan.

**Ayo Omojola** (00:48:11):
So I'd say, the other two are in my opinion very clever explorations of types of intelligence, from [inaudible 00:48:19]-

**Lenny** (00:48:18):
Excellent timing for studying what might happen with AGI. Great, I love where this is going. Next question, what's a favorite recent movie or TV show?

**Ayo Omojola** (00:48:29):
War of the Worlds was exceptional.

**Lenny** (00:48:32):
Is that recent?

**Ayo Omojola** (00:48:34):
Yeah, there's one that I think that it was a three-season thing, just ended maybe last year. And it's like a kind of more modern take, and it's just very thoughtful, and it's sci-fi, but such deep drama. I also love Succession, but I haven't got through season two yet.

**Lenny** (00:48:52):
Man, this season is incredible.

**Ayo Omojola** (00:48:55):
I know, I know.

**Lenny** (00:48:56):
You've got to get there, you've got to get there.

**Ayo Omojola** (00:48:58):
I know, I had to mute it on Twitter because I was like, "You guys are ruining it for me."

**Lenny** (00:49:01):
Oh man, that's impossible to avoid. You just have to delete your Twitter account, I think is the only strategy. There's an amazing Twitter account called No Context Succession, and they just-

**Ayo Omojola** (00:49:11):
Love it, love it.

**Lenny** (00:49:12):
... yeah, and they just tweet random clips. But it's going to totally [inaudible 00:49:15]-

**Ayo Omojola** (00:49:15):
My favorite Succession meme is the Kendall on the phone, "It would be good to connect, it would just be good to connect," just like, such a metaphor for life.

**Lenny** (00:49:27):
Interesting, very subtle. Oh, I see what you're saying. That feels so appropriate to you, Ayo. Just connecting people, it's like the core of your being. I could see why you love that meme. Next question, what's a favorite interview question that you like to ask when you're hiring, interviewing?

**Ayo Omojola** (00:49:43):
This one's not super crisp, it's like there's kind of two sides to the question. It's like a, tell me something you did that worked out but not for the reason that you thought it would work, or tell me something you did that was a good decision that didn't work. Like, tell me a bad decision that worked out, or a good decision that did not, is like I think the way to frame it. And it's a lot of like, my process is just teasing out introspection, it's just like, "Are you a person who is reflective about the decisions you've made, and why they worked, and why they did not, and incorporating that into your model so you make different decisions?"

**Lenny** (00:50:14):
Final question, do you have a pro tip for mailing something or shipping something from your experience helping everyone on Quora mail and ship stuff?

**Ayo Omojola** (00:50:24):
I'd say my biggest hack is like, if you're doing anything local where you're just like taking something point-to-point, Uber can do it for you.

**Lenny** (00:50:32):
Mm-hmm, a courier.

**Ayo Omojola** (00:50:33):
I literally sent somebody cookies recently, and I was like, "Oh." A guy showed up at my house, I gave him a bag of cookies, and my friend texted me a couple hours later and was like, "Thank you."

**Lenny** (00:50:47):
That is a hack. Ayo, this was amazing, you're an amazing human, I really appreciate you making time for this. Thank you for being-

**Ayo Omojola** (00:50:47):
Thanks, man.

**Lenny** (00:50:53):
... here. Two final questions, where can folks find you online if they want to reach out, but more maybe ask you followup questions? And, how can listeners be useful to you?

**Ayo Omojola** (00:51:02):
I am on Twitter @ay_o, and I write at kunle.app, K-U-N-L-E.app. And the way listeners can be useful to me is tell me what I'm wrong about, I love that. Just be like, "Hey, you said this thing. It's false, here's an example of why," I love that.

**Lenny** (00:51:23):
I love these answers to this question, because people love to leave comments on YouTube, and so we'll see-

**Ayo Omojola** (00:51:23):
Oh, sweet.

**Lenny** (00:51:29):
... what comes in. We'll see what the YouTubers find for us.

**Ayo Omojola** (00:51:31):
Oh God, what did I just sign up for?

**Lenny** (00:51:33):
We'll find out, here we go.

**Ayo Omojola** (00:51:34):
Yeah.

**Lenny** (00:51:36):
All right, well thank you again so much for being here, and bye everyone.

**Ayo Omojola** (00:51:40):
Awesome, thanks for doing this. Thanks for having me.

**Lenny** (00:51:45):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes, or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [11/19] Lessons on building product sense, navigating AI, optimizing the first mile, and making it through the messy middle | Scott Belsky (Adobe, Behance)

**Scott Belsky** (00:00:00):
Yeah. I've had this conversation quite a few times over the years with founders and friends who were running a company going sideways or worse and have had this question, "Should I continue or not?" I always have the same answer. I basically say, "How much conviction do you have in the solution you're building?" I know in the beginning, before you knew all you know now, you had tons of conviction. That's what caused you to leave your job. Now knowing all you know, do you have more or less conviction in the problem and the solution you're building?

**Scott Belsky** (00:00:31):
And I'll tell you, I get different answers. Some people are like, "Oh, Scott, I mean, I have more conviction. All that I've learned, all the validation I've received from customers, we just haven't figured it out yet. It's driving me crazy. We've tried three times, and it's still like each product fails. But I have more conviction than ever before." And for those people, I'm like, "You know what? You're just in the messy middle. Stick with it. This is par for the course." But oftentimes, I'll hear, "Honestly, if I knew then what I know now, I would not have done this. Holy shit."

**Scott Belsky** (00:01:01):
I'm like, "Then, quit. Your life is short. You have a great team. Pivot. Do something completely different." If you've lost conviction, you should not be doing what you're doing in the world of entrepreneurship.

**Lenny** (00:01:15):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today, my guest is Scott Belsky. Scott is an absolute product legend. He's a former founder, starting a company called Behance that he sold to Adobe where he worked up the ranks to chief product officer, and more recently, to chief strategy officer and executive vice president of design and emerging products. He's also an author of the beloved book, The Messy Middle. He's also an angel investor in companies like Pinterest, Uber, Airtable, Flexport, Warby Parker, and many more.

**Scott Belsky** (00:04:52):
Hey, Lenny. And it's great to be here.

**Lenny** (00:04:55):
I don't know if you know this, but it's been a big goal of mine to get you on this podcast since the day I launched it. And so, I'm really excited that you're here. I wanted to start with your role at Adobe. So for the longest time, you're a chief product officer at Adobe. And then recently, I noticed you shifted to this very complicated sounding role. I'm curious what this new role is and then why you made that shift.

**Scott Belsky** (00:05:18):
Well, in this new role, I'm overseeing strategy and corporate development, all of design across the company and emerging products for the business. If you look back at the last five years or so, it really has been about getting our core products to the cloud, making them collaborative, making some critical and interesting opportunistic acquisitions over the years, ensuring that we have connectivity between the products that we launched, new web apps that meet new types of creatives.

**Scott Belsky** (00:05:49):
And that was a incredible five-year-old chapter. Now with the advent of AI and new and emerging fast-growing businesses we have like the 3D and immersive space, the stock business and how that whole space is being changed by new technology, the idea of bringing that into an organization and being able to focus on that full-time was really exciting to me.

**Lenny** (00:06:13):
So what is it that you're doing day-to-day now, just even get it even more concrete? I'm curious what your days are looking like.

**Scott Belsky** (00:06:19):
Well, I think that it's the strategy of a company always needs to be iterated. And so being tasked with developing the strategy across the entire company, there's no shortage of opportunities and people to meet and things to think about there. Corporate development, certainly like new M&A stuff and integration, all that sort of stuff falls under me as well. And I have a lot of feelings about that having been an entrepreneur that went through integration myself. So it's kind of fun to be on the other side and try to improve it from that vantage point.

**Scott Belsky** (00:06:51):
On the design side, I spend a ton of time reviewing the design across every product and really trying to raise the bar for the experiences we're shipping. And that's a hard thing to do in a company that has a lot of legacy products and a lot of baggage that comes with them. And on the emerging products side, it's really about the new products we're bringing into the market and how to make them win.

**Lenny** (00:07:12):
Something that comes up on this podcast a number of times is how CPOs rarely last at a company. They stay. Like Casey mentioned this and a few other people, they stay around for a couple years, and the best they can do is just take a few swings at how things work, improve a few things and then, the CEO's like, "No, this isn't great," and then find someone else. What do you think has contributed to you surviving and lasting and thriving and taking on more and more responsibility at Adobe?

**Scott Belsky** (00:07:38):
Well, in the chief product officer role, I oversaw design, product, and engineering. And I think part of the reason I was even interested in coming into the company and taking this role is that I felt like these boundaries between these functions are at best artificial, at worst really constraining. And I always have felt like a lot of products win not because of the technology but the user's experience of the technology.

**Scott Belsky** (00:08:08):
And so, if you have an aligned team that gets that and makes decisions accordingly, I think you can ship better experiences. So a lot of the work I had to do was breaking some of these boundaries down over the years. And I think that a lot of chief product officer roles traditionally don't oversee engineering and sometimes don't even oversee design. And for me, that wouldn't be interesting.

**Lenny** (00:08:29):
Zooming into product, if there's a Mount Rushmore of insightful product thinkers, I feel like you'd be on it. And part of the reason is that you have this incredible product sense, whatever that means. It's clear that you have strong product sense. And PMs often talk about the importance of product sense and how to build product sense. And I'm curious, how do you feel like you built your product sense. And what advice would you give to younger PMs looking to build product sense?

**Scott Belsky** (00:08:56):
First of all, I think the biggest mistakes that teams make is they become very passionate about a solution to a problem they're trying to solve as opposed to do everything they can to develop empathy for the customer that's suffering the problem. And oftentimes, the empathy gives you the solution, whereas the passion you have for whatever you think the solution is might be 30 degrees off with the solution actually is.

**Scott Belsky** (00:09:20):
And so, this development of empathy is a key part of it. And of course, as I think about the discipline of crafting product experiences, to me, it's all about psychology. It's about understanding the natural human tendencies that people have in their most primal moments. I talk a lot about the first mile experiences that we have across any product we use, whether we're a consumer or an enterprise user. In the first 30 seconds of using a new product, you are lazy, vain, and selfish.

**Scott Belsky** (00:09:51):
You want to get it done super quickly. You want to look good to your colleagues or to your friends. You want to feel successful very quickly by engaging in this product. You don't want to have to watch a tour or read anything, really endure any learning curve whatsoever.

**Scott Belsky** (00:10:06):
Of course, if you can get people through the first 30 seconds, you have so much opportunity to build a more lasting relationship with that customer and have them understand your mission and the full potential of your product. But we need to ground ourselves with the fact that that's really hard to do. It's fascinating to me that most teams spend the final mile of their time building the product, considering the first mile of the customer's experience using the product. If you can just get more customers through that top of funnel, you are a world-class product team. Let's anchor ourselves on just doing that, and let's use psychology to do so.

**Lenny** (00:10:43):
And just to make sure people understand, when you talk about the first mile, essentially that's the onboarding flow maybe to the activation moment.

**Scott Belsky** (00:10:50):
I think that's right. It's the onboarding flow. It's the initial experience. It's the defaults that you see. It's the orientation of where you are. So many products you actually don't exactly know how you got to where you are and how to get home and where to get help. So I would say it's the onboarding. It's the orientation, and it's the defaults.

**Lenny** (00:11:10):
You've been a constant and early advocate of investing in that part of the funnel. And it's interesting how often that comes up on this podcast when people think about how do we improve retention, how do we improve growth. Often, the biggest wins from stories that we get on this podcast are in that part of the flow. And so, another data point to spend more time there. And I wanted to ask you, are you finding even at the stage of Adobe, there's still lots of opportunity in the first mile or do you find that it becomes less and less and less, and then it's less important?

**Scott Belsky** (00:11:41):
The answer is lots of opportunity. The reason is because the customers change. Every new cohort of new customers is different. The new customers you have in the early stages of your product are typically more willing and forgiving customers. And you might nail the onboarding process for them, and then suddenly realize that, "Wait, it's not being as effective anymore."

**Scott Belsky** (00:12:02):
And the reason is because now you're engaging more of those pragmatist customers, those later stage customers who are initially more skeptical, less forgiving, less willing to deal with your friction. And so, you have to reimagine the onboarding process all over again. I mean when you look at a product like Photoshop, for example, it used to cost hundreds and hundreds of dollars. Now, ow you can get Photoshop for as little as 10 bucks a month. And so of course, the funnel's a lot larger. A Lot more people come in with creative desires without the skills or the tolerance to develop them. And so, that dictates an entire change in the onboarding experience for a product like Photoshop.

**Lenny** (00:12:38):
It makes me think of something Shishir, the CEO of Coda, shared about how he's like, "I don't really buy this idea of product market fit because you have product market fit with your existing users that love it and know about it, and you always don't have product market fit with the people you want to be used the product." And it's related to what you're talking about. The newest people joining have no idea what you're doing.

**Scott Belsky** (00:12:57):
I agree with that, and I actually think that the role of AI going forward will be to have applications increasingly meet us where we are. To this day, we've always had to generalize onboarding experiences for the most part for everyone. And I'm really excited about the day when kind of products meet us where we are based on what type of user we are.

**Lenny** (00:13:17):
I have a billion AI-related questions for you. So I'm going to hold off just-

**Scott Belsky** (00:13:22):
No problem.

**Lenny** (00:13:24):
... a bit. And I wanted to double click on the empathy piece. So you talk about how to become better at product sense. Empathy and understanding the user's problems is really important. Do you have any advice for someone that wants to build that? What can they actually do to become more empathetic and build that part of their skillset?

**Scott Belsky** (00:13:41):
Well, the most humbling moments for me as a product leader have always been shoulder to shoulder to customers. Watching them actually go about their day, not just use my product but go about their day because what you end up getting is context for a lot of data that you're missing.

**Scott Belsky** (00:13:56):
When customers are using your product, they're using it amidst everything else around them. In the enterprise, it's all their other meetings and other products and pings that they're getting throughout the day. And as a consumer, it's between dealing with their kids or their loved ones or watching Netflix or whatever the case might be.

**Scott Belsky** (00:14:14):
And in order to really understand where the customer is and where their mentality is, you have to understand the context in which they're using your product. So part of developing empathy is being shoulder to shoulder and just encountering that reality alongside your customer. And that time, it just gives you better intuition. It helps you understand more. And with empathy, we can then better create quote-unquote, "for ourselves" because by developing empathy for others, we're feeling what they're feeling. We can then be the customer. And, of course, we all know some of the best product customers, some of the best products in the world are made when we are the makers are the customer.

**Lenny** (00:14:51):
It makes me think of Marc Andreessen as this awesome code that I always come back to that everyone's time is already allocated. They don't have time for your product. They're not-

**Scott Belsky** (00:14:59):
That's right.

**Lenny** (00:14:59):
How do I find a new app to [inaudible 00:15:01]

**Scott Belsky** (00:15:01):
And by the way, as a related note, since I know Lenny, you talk to a lot of guests around product-led growth. And sorry, if I'm skipping around here. But-

**Lenny** (00:15:08):
Please.

**Scott Belsky** (00:15:09):
... I think it's also relevant because everyone's trying to get their products to grow. And the other thing that perplexes me is that product leaders expect people to talk about a product being great. And people don't talk about a product doing exactly what they expected it to do. They talk about a product doing what they didn't expect.

**Scott Belsky** (00:15:29):
And you look at a product like Tesla. People are not going and talking about how they had a great drive today, but they're talking about the Easter egg they discovered on the dashboard or the cool new feature that they discovered that is associated with Christmas or whatever.

**Scott Belsky** (00:15:47):
And so, it always is interesting to me. In consumer and even enterprise products maybe especially so, why aren't we optimizing for those things that people wouldn't expect the product to do as a way to get that surprise and delight to talk about it, to develop a relationship with our products? I think that's another piece of the puzzle.

**Lenny** (00:16:08):
That is really interesting, and reminds me of something I just talked about with Gustav from Spotify whose episode might come out before this or after this about how every great consumer product pulls some kind of magic trick and feels like magic to you, like Spotify as an example. And-

**Scott Belsky** (00:16:23):
I like that, magic, sort of a little mystery, a little intrigue, a little surprise. It's a classic trick that Hollywood uses all the time. Why don't we use it in our own products?

**Lenny** (00:16:34):
So let me pull on that thread a little bit about just consumer products in general. You spent a lot of your career, maybe most of your career in consumer, imagine Adobe. There's a lot of B2B elements now as well. And you also angel invest and you help a lot of consumer companies. And tell me if you agree, but it feels like new consumer products basically never work.

**Lenny** (00:16:55):
And if they do work, there's a period where they work, be real, is going through this now clubhouse. Paparazzi went through this. And then, they fail or fade away. Maybe, they come back and then fade away again. I guess, first of all, do you generally agree that consumer is just so rarely successful in consumer products?

**Scott Belsky** (00:17:14):
Uber was a consumer product, but it built a network effect that was never there before. It leveraged excess capacity that was always there, but never tapped. It did something under the hood that gave it lasting power. I think of Pinterest, and I was Ben's first seed angel and product advisor.

**Scott Belsky** (00:17:36):
And with that product, he had this unique insight into the consumer psychology where it was not as much about getting likes and portraying yourself through pictures of you and seeing pictures of friends and all of this sort of anxiety that is induced by that, but rather helping people collect and represent themselves with their interests.

**Scott Belsky** (00:18:03):
And so again, that was kind of a new insight that I also think developed its own network effect that enabled it to be lasting. And there was a fascinating business component which was it drove a crapload of traffic to every source of every pin, which then got those sites to then put pin buttons themselves because they wanted more traffic.

**Scott Belsky** (00:18:23):
So there were underlying things under the hood again that it's sort of tilting the market in his favor. I think that a lot of these other more recent consumer products are just kind of clever momentary interfaces. And they are in effect at the expense of venture capitalists, R&D for the platforms that already have the network effects and already have the distribution channels and the ad sales and everything else.

**Scott Belsky** (00:18:50):
And so, I think that's why we're seeing B-reels capabilities now also in TikTok, and you're seeing a lot of flashes in the pan, especially in these creative consumer apps, which I've been paying very close attention to. They're fun and novel. But if they really work, those features are then brought into the native Apple camera, for instance.

**Lenny** (00:19:09):
So let's double click on that. I know this is a big question, but just what have you found is important for a new consumer product to work? You mentioned surprise would be great, network effects, maybe a new insight. What else do you find is important for a durable new consumer product to work?

**Scott Belsky** (00:19:30):
Yeah. And it's interesting because I think my answer 10 years ago would probably be different than my answer today. I think that there is a nimbleness. And maybe, it started in China with these super apps that were able to do everything. And that changed the idea away from the atomized experiences of a decade plus ago where you wanted a specialized product that did exactly what you wanted in a very reduced way.

**Scott Belsky** (00:20:00):
I think Snapchat emerged under that world. I think Instagram became valuable to Facebook because of that phenomenon. Fast forward to today where all of us are far more technologically literate and we are able to manage a lot more cognitive load in our everyday technology lifestyles. And so suddenly, we don't mind five tabs. We don't mind features hidden and tucked away in menus because we're sort of used to that now.

**Scott Belsky** (00:20:28):
And so, maybe that's one of the reasons why these established platforms get away with basically copying any novel new capability as opposed to those becoming apps in and of themselves.

**Lenny** (00:20:42):
So let me shift a little bit and talk about a tweet that you tweeted about one thing you've learned. You have this amazing thread of just things you have learned over the many years you've been thinking about products and consumer products. And one of them was about how you've learned that, you should do half the things that you want to do, half the features you plan to do, do half the features, offer half the options you want to offer, focus on half the market versus the market you're trying to go after.

**Lenny** (00:21:12):
Can you just talk about maybe how you came upon that learning and then also just how do you actually do that? It's like, "Sure, great. We're going to do half." But then, which half? And oh, but someone wants this feature so badly, shoot. We can't do them all." So do you have any advice in just how to actually execute that sort of approach?

**Scott Belsky** (00:21:29):
I mean one of the first comments I'll just make is whenever I'm asked by teams, what features need to be part of their MVP, how do they decide which features they need to ship first and whatever, I always tell them to optimize for the problems they want to have. You want the problem of customers getting through your funnel, feeling successful, using your product and getting value and then saying to you, "Oh, but I need it on this platform, or I need this capability, or I want to be able to share this." I mean you want those problems. So don't do those features now.

**Scott Belsky** (00:22:03):
Only do the things that prevent people from getting to the point where they care enough to ask you for anything. Make sure they can get through the signup flow. Make sure they can connect their account. Make sure they can use Google login if they need to, or whatever the case may be.

**Scott Belsky** (00:22:16):
So I always remind the teams, optimize for the problems you want to have, and make sure that you eliminate all the brick walls, the major catastrophe-type things that can happen. But in terms of the half, the half-half, I learned this the hard way.

**Scott Belsky** (00:22:31):
When Behance was launching back in 2008, I was always trying to hedge us with product features. I wasn't sure if people would be coming to join groups or if people would be coming for the tip exchange where creatives share best practices with one another, or if people were coming to build their portfolios or just share work in progress.

**Scott Belsky** (00:22:54):
Maybe, it's too much to build a whole project of your work. Maybe, we can allow people just to share snapshots of their work. And so, we actually launched with pretty much all of these features. And then, it was the most complicated form of Behance, was ironically at the beginning.

**Scott Belsky** (00:23:10):
And then, what we realized is that some things were taking off, and some things weren't. So I remember when we decided to kill the Tip Exchange. And suddenly, the publishing of projects in the portfolio went up. And we're like, "Oh my gosh. Projects being published is the core metric and it's what drives the traffic back to Behance. Let's do this again. I don't know, let's kill groups."

**Scott Belsky** (00:23:33):
And so, we killed groups. And lo and behold, more people published more projects. And it was like, "Wow." So actually if you make the whole product about one thing, everyone does that. That core crank operates at 10X the velocity and if that's the most important metric for the business, that's gold. And so, we basically went on a killing spree. And we just started killing things. And over the years, we have actually tried to have this sort of, and I pushed this on many products, things I worked with now whenever you're adding things, consider what you can replace. Consider what you can also remove.

**Scott Belsky** (00:24:11):
When we updated the portfolio on Behance, I remember we used to have this ability to change the colors of your portfolio in Behance. When people clicked on your profile and saw all your projects, you could control that and add your brand element to it.

**Scott Belsky** (00:24:24):
And so, we know. We were like, "You know what? What would happen if we just took this away? Would people again focus more on projects?" And so, we took it away. For 24 hours, we had people reaching out to us being like, "Damn you. How could you take away these controls for color of portfolio?" After that 24 hours, we basically never heard about it again. All the portfolios look cleaner and more consistent. And people did the core metric more. And so, I just took from that, try to kill things and everything you think you need to do, you probably only need to do half of it.

**Lenny** (00:24:57):
I wonder if in reality most of the time, you only realize this afterwards versus ahead of time. And that's just the way it is. And then, it's just the seal of sunset, things that aren't actually important.

**Scott Belsky** (00:25:08):
I do have to say though, Lenny, some of the best product leaders that I've worked with, I do feel like they have this great reductionist or minimalistic tendency by default. They're just very much... They anchor themselves on the one thing they want people to do and do well. And they just are pretty ruthless about everything else, being like, "Okay, but only if we have a problem with doing this core thing. Okay, put on the back burner." And so, it's something I've tried to get better at over the years.

**Lenny** (00:25:40):
What's really interesting is this is exactly like Matt Mochary who is actually the number one most popular podcast episode talks about when you let people go. And he's helped a lot of CEOs let people go that 100% of the time everything just starts moving faster as soon as you have fewer people. And so, it's the same exact model in people and products.

**Scott Belsky** (00:26:02):
I think that's right. And that's why I always feel like tough decisions almost always afterwards feel like a relief. And that's true for the product. That's true for people on a team as well.

**Lenny** (00:26:15):
Let's shift to talking about AI, which I'm really excited about because I know you've been spending a lot of time talking with people about AI, building AI products. You all launched Firefly, which a lot of people are really excited about. You also have this newsletter where you kind of just share your implications on how AI and technology is going to impact the world.

**Lenny** (00:26:33):
So I have a lot of questions I'm excited to ask you around this. And I'll just start really broad and maybe this is too big of a question, but just how different do you expect the world to be in, say, five years as a result of AI, both for product builders and then just people in general?

**Scott Belsky** (00:26:51):
Listen, I'm an optimist. And I feel like our human potential has always been held back by the laws of physics essentially. The mundane, repetitive labor you need to do to get anything done is what holds back our ingenuity. It's the friction. It's the work in workflows that wouldn't it be great if we could just have flow and no work?

**Scott Belsky** (00:27:15):
And I think that that's what AI kind of does, is it gets us from workflow to flow. It gets us into this flow state where any idea in your mind's eye, you can start to develop it. I was having this discussion with Howie who runs Airtable actually just earlier today where we were talking about the leader at IBM who announced that he's not going to hire 8,000 people that he would've hired because AI is going to be able to do that work.

**Scott Belsky** (00:27:46):
And what we were talking about was, and how he made the point, as engineers have become much more productive over the years, that doesn't mean that companies have wanted fewer engineers. It actually just means that they demand more of their engineers. And engineers have more possibility to do more.

**Scott Belsky** (00:28:02):
And so, if human ingenuity goes up, maybe we actually want to hire more people because if you have more ingenuity per human being, maybe you can actually do more as a company. And maybe, companies that used to have three products will have five products or seven products or 30 products. And maybe, that's actually the trend that we're forgetting is that humans bring this level of ingenuity to every problem and every opportunity. Whereas computers remember like ChatGPT is basically just giving you what it would look like if, right? It's not truly finding edges that will become the center.

**Scott Belsky** (00:28:38):
It's actually just mining the center. And it's trying to regurgitate the center, which is also very helpful by the way. So I'm optimistic. I think that there will be far more people engaged in delivering experiences. I'm very long the experience economy because I think that there will be some people liberated to focus more on the non-scalable things that really move the needle for experiences for customers. And then, I also am excited about humans having less grudge work to do.

**Lenny** (00:29:09):
I'm also excited for that. It reminds me it might have a TikTok account, and I have this team that helps with the TikTok and we haven't shared this, but a few of the TikToks are my voice generated with AI. And they just-

**Scott Belsky** (00:29:20):
Wow.

**Lenny** (00:29:20):
... read script. And it's me reading this story. And it sounds sort of like me. And I showed it to a friend. And I was like, "Do you see anything? You feel weird about this video?" And he is like, "No, you sound great. You sound really a great speaker." I'm like, "Okay. Say hi."

**Scott Belsky** (00:29:35):
While you were reading, instead of reading a script, you can be plotting the course of the next episode.

**Lenny** (00:29:40):
Yeah, exactly. So I totally see what you're talking about there. In the product team, which function do you think will be the most disrupted and/or the most, I don't know, optimized through AI?

**Scott Belsky** (00:29:52):
We're entering the era where we collapse the stack in every organization where instead of having to go to someone for anything, you can kind of do more things yourself. It's very empowering to get the answer from data as opposed to having to go to a data scientist or a data analyst in the middle.

**Scott Belsky** (00:30:12):
So there's going to be far less game of operator across the organization and far more empowerment for people to dig their own rabbit holes, answer their own questions and get things done.

**Scott Belsky** (00:30:24):
I happen to believe that that's the advantage typically of small teams, is that they're flat. The stack is collapsed. People all can hear each other in an audible across the room, and that's how they run circles around big stodgy old companies that are dispersed around the world. So maybe, this technology allows cross-functional work and to happen. And I'm excited about that.

**Lenny** (00:30:51):
That is really interesting. So essentially, what you're saying is a PM will be able to do more design, more engineering, more data potentially. And maybe, one day, it'll be just as good as having a data scientist in your team. But essentially, everyone becomes kind of this unicorn cross-functional mini-team,

**Scott Belsky** (00:31:08):
Which sort of suggests this idea of meritocracy. It's almost like what if people get promoted an opportunity based on how creative and how much ingenuity they have as opposed to how many reports or bug things they've gone through or whatever else. So there's something about what you're saying that I do think, yes, it's disruptive to the degree that, well, you need a data analyst in the loop. But I also would suggest that again, that data analyst doesn't have to answer redundant requests all day. She can spend time on thinking of other things without the boundaries of functions like we just discussed.

**Lenny** (00:31:43):
**Scott Belsky** (00:33:05):
Well, let me start by saying that I think that the greatest performers I've ever worked with, whether they're designers or product leaders, basically preserve the time to explore lots of possibilities. They call those possibilities down to fewer set. They get feedback on those. They refine them even further.

**Scott Belsky** (00:33:24):
And then, they present to the team. These are the two or three things I think we should do. And that's the way a great designer works, for example. That is a function of time. If you have the skills and the capabilities, it's just how much time. How much time do you have to explore the full surface area of possibility and find the best possible option.

**Scott Belsky** (00:33:43):
In my world, in my mind, generative AI and AI for all, when it talks to me about just product leaders exploring possibilities, this should expand the surface area. I was talking to a pretty well known director in Hollywood world, and he was telling me that he uses ChatGPT. I was like, "No. Are you serious? You do?"

**Scott Belsky** (00:34:04):
And he was like, "Yeah, I don't use it to write any scripts." But sometimes when I'm developing something with a writing partner, I will ask ChatGPT, "What would you do?" And I'll explain the full instance, the full situation in extreme detail. And it will spit out five scenarios. And I actually don't use any of them, but it just gives me more surface area. It tells me the things that I wouldn't want to do, which is also good data. And I just thought that response is so interesting. And so when you ask about product leaders, I think that's what we're going to have, is we're going to have the superpower of exploring far more surface area in far less time.

**Lenny** (00:34:41):
It reminds me of something I always share about why do you need a PM? Why do you need a designer? Why do you need a researcher? It's not necessarily that they're just very good at these specific skills. It's that they just have time to do this one thing that needs to be done. You can have engineers do the PM role, but they don't have time. They want to code and they'd rather do that. And so, this is really interesting that it connects to. It'll give everyone a little more time to get better at the thing they want to be doing.

**Scott Belsky** (00:35:08):
That's true.

**Lenny** (00:35:09):
Is there anything you're doing with PMs at Adobe at this point that help them leverage these tools and just the ways of working that you're actually using today?

**Scott Belsky** (00:35:18):
One of my obsessions has been bringing design earlier into the process of product development. So it's not necessarily AI yet. But it's the idea of designers, first of all, being in the room, even being in the room with some of the customer research and some of the debates around even the value proposition to the customer and some of the things that traditionally happen only with the PMs. I just find that, again, collapsing the stack, if you will. Having the designer hear these things and contribute gives them a golden gut as they are then sitting down later and going through possible interfaces to solve the problem.

**Scott Belsky** (00:35:57):
So I love bringing design upstream. In fact, that's probably been the cheat code of my career as a product leader, has just been disproportionately empowering design throughout the process. I think what we're going to start seeing is generative AI augmenting the designer's work in real time.

**Scott Belsky** (00:36:15):
So right now, I mean in Photoshop, we're experimenting with instead of just reducing an image and cropping, you can also extend an image. And that's, of course, using generative AI for out painting. And so, you can imagine as you're doing edits in that as well as in other forms of design, getting kind of thumbnails of what you might be trying to accomplish and then touching them, almost like predictive text to go to the next step, to the next step, to the next step and take leaps in the creative process as opposed to incremental steps.

**Scott Belsky** (00:36:47):
I think that that's going to happen far more. And hopefully, product designers, product managers will be involved to some extent in some of these decision points as designers have more options to choose from.

**Lenny** (00:36:59):
You threw out this term golden gut. What is that about?

**Scott Belsky** (00:37:02):
The golden gut is when you're designing an experience and a flow. You are playing around with all kinds of options. You're moving things around. You're saying, "Actually, that's too complicated. Maybe I'll separate this one page into three steps as opposed to one page with three steps in a row. How do I break this down? How do I simplify?"

**Scott Belsky** (00:37:26):
You sometimes have instincts like, "Well wait, what if I just remove this all together? What if you didn't even have this whole series of steps? What if I just had a presumptuous default instead and customers could change it if they think they need to?"

**Scott Belsky** (00:37:39):
And in some of those sorts of, I wonder if, I wonder if, I wonder if, to me is the difference between a very junior product thinker and a very experienced product thinker? I think experienced product thinkers with that golden gut of, "Oh my gosh. Wait, reduction of cognitive load." Maybe even if 10% of people get confused to get 90% of people far faster through this process is a big win and a great opportunity cost trade off. I think those sorts of little micro-decisions that we make in the process of building products, that's the golden gut.

**Lenny** (00:38:13):
I love it. I have not heard that term before. For PMs listening and they're like, "Okay, AI's happening. I don't know what to do," what would be your advice for them to stay ahead and be aware of where things are going and not be left behind?

**Scott Belsky** (00:38:28):
Quite simply in one word, play. We all have to be playing with this technology. We have to find ways. The risk of becoming more experienced in your career is you get stuck in your ways. And you're like, "Ah, no. I don't need to have that automatic draft in my email and get ChatGPT to suggest what I want to respond with. I'm fine without that." Make sure you try it. Make sure you play with it. Write poems for your friends. Try a lot of these various generative AI tools out there just to see what's possible and pursue every curiosity.

**Scott Belsky** (00:39:06):
The reason I started the Implications newsletters is because I was seeing this high velocity of new stuff every day. And I'm like, "I have to force myself to make sure I understand all of this and think about how these implications will change my business as well as the world that I operate in." And there was no better way to do that than to have to write about it, and promise my readers I'll get a monthly thing out there. So I just think we all have to do some version of that.

**Lenny** (00:39:33):
Let's plug Implications while we're at it. How do people go subscribe or do they find it?

**Scott Belsky** (00:39:38):
Yeah. No. It's implications.com. So it's easy to find, but it's a monthly exercise where throughout the month, I try to capture a few things I think are important. And I really try to go deep down the rabbit hole of what the implications are for various parts of our work and life. And it's been a fun exercise. And also, I get some good polarizing feedback in the process.

**Lenny** (00:40:02):
Oh you do? Interesting. You should share that. That'd be interesting, is here's what I'm getting in response to the stuff I'm writing. This also touches on a thread that comes up a lot on this podcast, is the power of just writing to help you think through stuff. A lot of people think my newsletters, I'm just sharing all these things I know. I'm just like, "I know it in my head. I'm just going to share it in the thing." But it's more. The writing helps me figure it out and gives me an excuse. And like you said, it's a forcing function to spend the time crystallizing it. And so, that's another reminder for that.

**Scott Belsky** (00:40:29):
And capturing those things, I think, the thing I've kind of learned over the years with writing and also with product development is sometimes you capture these little glimpses and things or sketches, and they become relevant years later. So don't always capture and write because of a foreseeable need for that content. Consider it almost like a back burner that you're constantly tending to. And imagine that three years from now, the stars will align, and this will become invaluable content or some crucial idea for a problem you're facing at the moment.

**Lenny** (00:41:03):
There's a lot of people actually in your shoes that want to write more and put content out, but that also have a full-time job with a lot of things on your plate. Any advice for actually getting it done the way you've been getting it done?

**Scott Belsky** (00:41:15):
Listen, there's no hack to it other than ruthlessness of time and prioritization saying no to most things. This morning, I went for a run and I was like, "I have 40 minutes exactly until I have to get in the shower and I have to be somewhere in 30 minutes from that moment." I'm going to take those 40 minutes or at least 35 of them, and I'm going to write. I don't care if I write five words or five pages. And it's just a great... Without that discipline though, as you said, it's super hard to get it in the seams of the schedule.

**Lenny** (00:41:49):
Speaking of discipline, you wrote a book called The Messy Middle. And without even talking about what it is, title's pretty... I think people feel like, "I get it." And imagine many people listening are founders or PMs that are feeling like they're in this messy middle. What is one piece of advice for people in this period that you think might help them through the messy middle?

**Scott Belsky** (00:42:12):
The bottom line is that these years in the middle of whether it's a venture, [inaudible 00:42:19] new startup, old turnaround within a big company, they are messy because they are full of lows. It's very volatile. When you're in those lows, you need to find a way to endure them. You need to endure the anonymity and uncertainty and anxiety.

**Scott Belsky** (00:42:32):
I'm sure a lot of listeners, whether they're in big companies or starting their own company, it's hard to be doing something that no one knows or cares about. And I always like to remind myself that the life expectancy of humans a hundred plus years ago was 25 years old. So the idea of spending three to five years of your life on something, especially if it might fail, was a bad decision. And I think biologically, we feel the need for constant rewards and affirmation to stick with something long enough.

**Scott Belsky** (00:43:01):
And in fact, most of your listeners were all building things that take many, many years to defy the odds. And we have to overcome our natural human tendencies in this instance by sticking together long enough to figure it out. So how do you do that?

**Scott Belsky** (00:43:16):
I mean, obviously, part of it is culture, wanting to serve the customers you serve and working with the team you are working with and that being enough to kind of stick it long enough. I think part of it is short-circuiting the reward system, finding micro goals and milestones that are mutually agreed upon. We're going to celebrate these even though in the greater scheme of things, they don't matter much.

**Scott Belsky** (00:43:39):
I think that's a key part of keeping the team and keeping the dream alive. I always like to use the analogy of we're driving our teams across country as product leaders with the windows blacked out in the backseat and everyone's sitting in the backseat. And so, if they don't know what we're doing that we're making progress, this traffic is clearing, we just cross state lines. If they don't receive the narrative, they will go stir-crazy. And so there's a lot of research around progress, be getting progress and how progress is a source of motivation. And so as product leaders, we have to merchandise progress. We have to be the steward of this narrative.

**Lenny** (00:44:19):
And you touched on this a bit as you were just talking, but there's also this moment where it makes sense to quit like you shouldn't stay with things endlessly. And I guess any advice on just when something is like, "Okay, you should probably move on from this." Makes me think a little bit about there's all these companies that just keep going that maybe shouldn't keep going because they have enough money or they're just like, "No, founders never quit." Any advice or thoughts that you share there?

**Scott Belsky** (00:44:46):
Yeah. I've had this conversation quite a few times over the years with founders and friends who were running a company going sideways or worse and have had this question, "Should I continue or not?" I always have the same answer. I basically say, and I really ask, "How much conviction do you have in the solution you're building?"

**Scott Belsky** (00:45:12):
I know in the beginning before you knew all know, you had tons of conviction. That's what caused you to leave your job. That's what caused you to take all this risk and hire people and raise money and all this stuff. Now, knowing all you know, do you have more or less conviction in the problem and the solution you're building? And I'll tell you, I get different answers. So some people are like, "Oh, Scott, I mean I have more conviction. All that I've learned, all the validation I've received from customers, we just haven't figured it out yet. It's driving me crazy. We've tried three times, and it's still like each product fails, but I have more conviction than ever before."

**Scott Belsky** (00:45:49):
And for those people, I'm like, "You know what? You're just in the messy middle. Stick with it. This is par for the course." But oftentimes, I'll hear, "Honestly, if I knew then what I know now, I would not have done this. Holy shit. " I'm like, "Then quit." Your life is short. You have a great team. Pivot. Do something completely different. If you've lost conviction, you should not be doing what you're doing in the world of entrepreneurship.

**Lenny** (00:46:19):
Sometimes, there are moments of that, I imagine. And so, there's probably some spectrum of just how little conviction and how long you felt that, right?

**Scott Belsky** (00:46:27):
I think so. But at the same time, listen, we all have ups and downs. We all have good days and bad days. However, I do think that great founders are just... They absolutely know in their core that something needs to exist, and they will just be ruthless and relentless until it does. But if you lose that, I actually don't know if you have the fuel to continue. So listen, you're right. Don't make a bold decision on a bad day. But if the conviction generally dissipates, be open-minded about other options.

**Lenny** (00:47:03):
You do a lot of angel investing, talked to a lot of founders. What is it that you look for? What do you think is important for a startup to show you for it to feel like a good bet that it'll likely work out? What are some of the important attributes that you look for?

**Scott Belsky** (00:47:18):
I'll talk for a few things on team and then a few things on product.

**Lenny** (00:47:21):
Perfect.

**Scott Belsky** (00:47:22):
On team, I really value founders who listen, who really learn, who long to shake shit up a bit, and also value the mission that they're on more than the money that it yields because I do think that especially during a period of time where you don't have revenue, you're going to need to be motivated by something grander and bolder than revenue.

**Scott Belsky** (00:47:47):
I also have an allergic reaction to founders that are real promoters who are constantly trying to sugarcoat the truth, who like to gloss over the hard parts. I've always admired leaders that are optimistic about the future but very pragmatic and somewhat pessimistic about the present. So the founders that I have a great sort of chemistry with are people who are like, "This is how big the market is. This is how amazing this is. I know this needs to exist."

**Scott Belsky** (00:48:15):
But we've got a lot to figure out. There are things that are not working. We don't have these data sets. These are the major obstacles we're struggling with. These are the things that keep me up at night. Those are real people. And you know that in that volatile messy middle that they're going to inevitably go through that their team, their investors are going to have the real truth and they're going to be able to engage and find solutions.

**Scott Belsky** (00:48:37):
So I really love finding those types of founders, and I'm very wary of the name-dropping overly promoting folks who are unlikely to be able to partner in that way. On the product side, I'm looking for an object model way of thinking about a product that I am confident the will scale and as they solve their problem. And when I say object model, what I mean is it clear whenever you're seeing the product, how it works, where you came from, where you're going?

**Scott Belsky** (00:49:11):
Those are the three questions I always ask when I'm doing product reviews. It's like, "How did I get here? What do I do now? And what do I do next?" And I feel like every screen and every product experience, you should be able to answer those three questions. Sometimes, I'll be talking to a team that says they're design driven, says that they're building a incredible product, and they'll show me a demo and I'm like, "This is all over the place." There's no clean clear breadcrumbs and object model for how this thing works. How are they ever going to get people through their funnel? Clearly, they don't value this as a core principle, and that's also always a red flag. And then finally, I just obviously have to believe in the problem they're solving. So those are some of the things I think about.

**Lenny** (00:49:53):
And you focus primarily on consumer or do you invest all over the place? And I'm asking in case people want to reach out and maybe, "Hey Scott, you want to [inaudible 00:49:59]."

**Scott Belsky** (00:49:58):
Yeah. No. I'm pretty agnostic. I look for product design-oriented teams making things that need to exist. Beyond that, I try not to be too prescriptive.

**Lenny** (00:50:06):
Okay. Excellent. Any last words of wisdom that you think impact the way people build product in the world that tens of thousands, hundreds of thousands of listeners listening? Is there anything else you want to share before we get to our very exciting lightning round?

**Scott Belsky** (00:50:20):
Two quick things. One, for the moment that we're in, and then one for why we do what we do. For the moment that we're in, we're in a resource-constrained environment. Let's face it. We're all going to have less money, fewer headcount, all that kind of stuff.

**Scott Belsky** (00:50:35):
And I've always found that resourcefulness brings you further than resources despite the fact that over the last seven to 10 years, we've basically thrown resources at every problem. Oh my gosh, this is not scaling. Throw more money at servers. Oh my goodness, we need more people on the social media team. Throw more money at headcounts. We've had a resources way of solving our problems as opposed to a, well, let's refactor how we run that database, or let's refactor how that team answers customer service requests. Let's bring a new technology to make it more efficient. Let's leverage and play with AI to see if that can help us.

**Scott Belsky** (00:51:11):
We are in this era now where we're being forced to be resourceful and to refactor as opposed to hire and throw resources at problems. I think that's a great opportunity. I feel like this is where the best teams are going to build that muscle, that are going to go the distance. That's why all these VCs say it's so cliche that the best companies are always built in errors like these.

**Scott Belsky** (00:51:33):
So my point number one is capitalize on the crisis, everyone. If resources are carbs, resourcefulness is like muscle. It stays with you. It makes you stronger, and it helps you have a better intuition and better performance over time. And then, I guess taking a step back, I would just encourage folks to recognize that anything amazing in the venture world is ultimately an exception.

**Scott Belsky** (00:52:05):
And with all of the best practices, Lenny, that you and I just discussed and all the stuff that we read and books and whatever else, I always try to remind myself that at the end of the day, sometimes, exceptions are the rule when it comes to doing something truly transformative and that nothing extraordinary is ever achieved through ordinary means. And so, while we should always take these best practices and, sure, listen to some of the lessons I learned the hard way and whatever else, but at the same time if everyone says you're crazy, you're either crazy or you're really onto something. So take that with a grain of salt.

**Lenny** (00:52:41):
Love that. Speaking of extraordinary, I thought it'd be cool to just give you a chance to talk about what you're doing at Adobe. What are some of the products that you're working on? What should folks know about potentially what's happening in Adobe they may not be aware of?

**Scott Belsky** (00:52:53):
Yeah. No. Thanks for asking. For us, I would say there's really three trends that are driving or three waves of transformation, I would say, that are driving the strategy right now for us. One is just that people are becoming more creatively confident. It's kind of wild that we're like most confident as five-year-olds creatively when we're drawing and our parents are like, "Oh my God, that's beautiful. That's amazing. Let's put it on the fridge." And then creative confidence kind of goes down from there for most adults, and that's really sad.

**Scott Belsky** (00:53:22):
And with generative AI and tools, we have something called the Adobe Express in market, and our generative AI offering is called Firefly. These types of tools make people feel more creatively confident right away. It's pretty amazing to see people that would never pick up a pen and draw or suddenly feeling confident. So I would say that's like wave number one.

**Scott Belsky** (00:53:42):
Wave number two that we talked about a little earlier is the fact that creative professionals can now explore 10X the surface area of possibility. These tools are making them so much more efficient. And some people are like, "Oh my gosh, creative pros are going to be replaced." No. No, no, no. They're not. They're just going to find 10X better solutions. They're going to have that capability to explore more possibilities. And that's what makes design great, is finding, exploring more surface area.

**Scott Belsky** (00:54:10):
And then, I would say the third wave that's fascinating to me is personalization. I think we talked about this a little bit, our apps will meet us where we are. I think that every marketing experience will be increasingly personalized for each of us. Every commerce experience, they'll know who we are. They'll just show us our shoe size and no one else's.

**Scott Belsky** (00:54:28):
These sorts of transformations will really change the entire world of commerce, and content, and media, and everything else. And Adobe has a big digital marketing business that is focused on enabling some of that. So those are factors of strategy that I would say are driving some of the new products we have under development. And now, it's all about let's talk more shit.

**Lenny** (00:54:50):
I love that. You need a banner of that. It's been amazing to watch Adobe's rise over the last decade. It just felt like it was going nowhere. And all of a sudden, it's a juggernaut. And so, great work, Scott and everyone else involved. But with that, we've reached our very exciting lightning round. I've got six questions for you. We'll try to go through it pretty fast. Sound good?

**Scott Belsky** (00:54:50):
Okay.

**Lenny** (00:55:09):
Okay. Sound excited. Here we go.

**Scott Belsky** (00:55:12):
Sounds good. Let's do it.

**Lenny** (00:55:12):
Let's do it. What are two or three books that you've recommended most to other people?

**Scott Belsky** (00:55:19):
First is Build by Tony Fadell. Tony is just an amazing, charismatic, deeply pragmatic, product builder. He's been brave enough to do both Adams and Bits as he says. And his book is just chock-full of wisdom. I do appreciate some of these kind of laws of nature, laws of power type books. I love psychology books.

**Scott Belsky** (00:55:47):
I'm trying to think of some offhand that have really struck me. But understanding the natural human tendencies of people, I think the laws of power talks about tons of wars over centuries and what sorts of natural human tendencies or inequalities drove massive rebellions and revolutions. These sorts of insights, believe it or not, parlay into decisions we make in products and making people feel successful and productive. So I don't know. I love those books just because I think that they remind us of the limitations and opportunities or possibilities of humanity.

**Lenny** (00:56:27):
What is a favorite recent movie or TV show?

**Scott Belsky** (00:56:29):
What I love is these documentaries about the cosmos and about the edge of our understanding of black holes and what happens out there in space. So I don't remember. I know one is called Cosmos on Netflix. There are a few of them. But in my downtime, I get lost in some series like that.

**Lenny** (00:56:49):
You have kids, one or more kids.

**Scott Belsky** (00:56:51):
Yes.

**Lenny** (00:56:52):
What are you doing to help them plan for this future?

**Scott Belsky** (00:56:54):
I think about this all the time. What are our children going to do in a world where if you believe Vinod Khosla's prediction that 80% of the work, of 80% of jobs will be replaced by AI, what will people do? As we talked about their ingenuity will be unleashed, that's great. But ultimately, I always revert back to this one belief that if people are passionate, they become successful in something.

**Scott Belsky** (00:57:21):
So I've always just been focused on trying to make sure that they find something they're super passionate about. And it doesn't even matter if the thing they find now is the thing they do later because I do believe that passion in itself and taking initiative on your passion is a muscle memory that once you develop it... I have a daughter who loves horseback riding. I don't know if she's going to do horseback riding forever or whatever. But I think that the passion that she has for it, and this desire to be better and to constantly learn more and do more, that in itself is like a replicable muscle memory. So I don't know what the future holds, but I believe that passionate people will always have a path.

**Lenny** (00:58:01):
Love that. What's a favorite interview question you like to ask when you're interviewing people?

**Scott Belsky** (00:58:05):
There's a real one, and there's a snarky one. So I do love trying to understand if people are introspective. And so, I like asking about something people have learned about themselves that reveal the limitation in how they work. It's a way to test introspection. And once this person hits their limits or struggles, can they be open and introspective or are they going to blame and point fingers? So I do ask that. I also like the question, like, "Do you consider yourself lucky?" I think it's a fascinating question because also some people who are super insecure about where they are and how they got there and might decline admitting luck, those who are comfortable should admit that they were lucky, I mean, I think the truth is we're all very lucky and certainly privileged. And I just think that that's always an interesting conversation.

**Lenny** (00:59:05):
What's a favorite reason product you've discovered, app or physical product? Anything that comes to mind?

**Scott Belsky** (00:59:10):
I've been playing with a product called Queue. And it's Q-U-E-U-E, I think. And it's basically a way to keep a queue of all of this content you want to watch across every streaming platform because there's so much content across so many streaming platforms and to make your own queue and then to see your friends queues and to see what content is in most of the people you know queues, it's actually an incredible graph of kind of stuff that people want to watch or have liked that I think we're going to need in this world where there is just a billion sources of content.

**Lenny** (00:59:44):
I'm definitely going to check that out. I've been looking for an app like that of I'm sitting in the evening, "What the hell should I watch?" I've seen everything that exists on the internet. So that's awesome. What's a favorite AI tool that you've recently discovered or find useful that isn't something Adobe has made?

**Scott Belsky** (00:59:59):
Okay. Well, I will mention if it's okay a product that I did invest in.

**Lenny** (01:00:05):
Absolutely.

**Scott Belsky** (01:00:05):
But it's a product called Tome. And they can take a narrative that you want to put into a presentation, and with AI basically create just a draft of this presentation with imagery and compelling points. And it's almost as if you handed this off to an intern and said, "Come back to me with something I can work with." And suddenly, it's instantly there. So that's been like a fun one to play with.

**Lenny** (01:00:34):
I will check that out. We'll link to that. Also reminds me Kevin Kelly on Tim Ferriss was talking about how AI and ChatGPT is basically an intern. That's like the level of their skill right now. They're just this intern that's helping out with stuff.

**Scott Belsky** (01:00:46):
I think that's right. And that's why we have to see it as a resource but not a constraint because, again, it's answering that question like what would it look like if as opposed to doing true distinct thinking per se.

**Lenny** (01:01:00):
Scott, this is the first time we've ever chatted. But I feel like I know you. You are wonderful. Thank you so much for being here. Two final questions, where can folks find you online if they want to reach out, learn more? And how can listeners be useful to you?

**Scott Belsky** (01:01:13):
Yeah. No. Awesome. Listen, thanks, Lenny. And your podcasts and your emails are probably among my more forwarded pieces of nuggets and resources that I send to product teams I work with. So thank you for elevating the field for all of us, I should say. And it's an honor to be on this podcast. I'm easy to find, just scottbelsky.com or @scottbelsky on your favorite social network of choice. And implications.com is where I'm writing these days.

**Scott Belsky** (01:01:45):
And then, you know what? I welcome folks to share what they're working on. I just love taking as much data points as possible. I love connecting dots for people and making introductions. I feel like that can be a contribution to this whole world of better and better products, and I welcome you to reach out.

**Lenny** (01:02:04):
Awesome. Scott, again, thank you for being here.

**Scott Belsky** (01:02:06):
Thanks, Lenny.

**Lenny** (01:02:07):
Bye, everyone.

**Lenny** (01:02:10):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [12/19] Gustav Söderström

**Gustav Söderström** (00:00:00):
The internet started with curation, often user curation. So you took something, some good like people or books or music, and you digitize it and you put it online and then you ask users to curate it. And that was your Facebook, Spotify, and so forth. And then after a while, the world switched from curation to recommendation, where instead of people doing that work, you had algorithms. And that was a big change that required us and others to actually rethink the entire user experience and sometimes the business model as well. And I think what we're entering now is we're going from your curation to recommendation to generation. And I suspect it will be as big of a shift that you will eventually have to rethink your products. We have to rethink the user interface and the experience for recommendation first era. And so what does that mean in the generative era? No one really knows yet.

**Lenny** (00:00:47):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today, my guest is Gustav Söderström. Gustav is a product legend and he's now the co-president, chief product and chief technology officer at Spotify, where he's responsible for Spotify's global product and technology strategy and oversees the product design data and engineering teams at the company. I've had Gustav on my wish list of dream guests to have on this podcast since the day I launched the podcast and I'm so happy we made it happen.

**Lenny** (00:01:19):
**Gustav Söderström** (00:04:11):
Thanks for having me, Lenny. Pleasure to be here.

**Lenny** (00:04:13):
It's my pleasure to have you on. So at this point, you've been at Spotify for over 14 years, which is a rare feat in the tech world, and you've held a lot of different roles while you've been at Spotify. Can you just start off by giving us a sense of what these various roles and what you've done over the years at Spotify and then just what are you up to these days? What are you responsible for now?

**Gustav Söderström** (00:04:33):
So I came into Spotify in early 2009, late 2008. And my job then, I had been an entrepreneur, started some of my own companies in the, back then, very, very early feature phone, smartphone space. So I had a bunch of knowledge there. I had sold the company to Yahoo in the mobile space. I worked there for a while. I came back to Sweden and then I met through a mutual friend, Daniel Ek, the CEO and co-founder of Spotify. And they had built the desktop product already, the free streaming desktop product, and it was amazing and I could try it, but they needed someone to figure out what to do with mobile. And because I had been an entrepreneur in that space, I got that job.

**Gustav Söderström** (00:05:20):
So my job was to head up mobile for Spotify and figure out what the mobile offering would be, which was a challenge because, obviously, Spotify desktop was a free on-demand streaming application and back then, specifically with edge networks, you couldn't really stream at all in real time. The performance wasn't there and also you couldn't fund that with an ads model. So it was a product and business model innovation that was a lot of fun. So that's how I started. Then after a few years, I took on all of product development for Spotify. And then a few years later, I actually took on the technology responsibility, the CTO role for Spotify as well. And recently, my official title is co-president of Spotify together with Alex Nordstrom. So we run half of the company each. I run the product and technology side and he runs for the business and content side. So that's the super fast version.

**Gustav Söderström** (00:06:20):
Aside from getting more responsibilities taking on the technology department, it has been the same job by title. I've always reported to Daniel, but because Spotify's grown so much every six to 12 months, it's been starting at a new company. First, it was sort of a Swedish Nordic challenge and then it was a European challenge and then it was getting into the US and then we became a public company. So it's as if I had jumped around between a lot of jobs actually, even though it was largely the same title and role.

**Lenny** (00:06:55):
Your story makes me think of the classic be careful what you're good at because you end up taking on more and more. And clearly, you've been given more and more responsibility over the years and so clearly things are going well and you're doing well.

**Lenny** (00:07:08):
Shifting a little bit. So you're on my podcast currently. You actually have your own podcast, which was this limited series on the product story of Spotify, which I listened to and loved, and it's surreal to listen to your voice in real time because I've been listening to that recently in preparation for this conversation. Two questions, just what made you decide to launch your own podcast knowing you had a full-time job and a lot going on and the production value for your podcast was very high for what I could tell? And then two, just what did you learn from that experience in terms of the product you ended up a building and just empathizing with the podcast creator side of?

**Gustav Söderström** (00:07:41):
There were a bunch of different reasons why I did that. One is, and not a small one, I think, like you, I love writing and I have this secret creator dream in me. I used to write blog posts a long time ago and I write internally a lot. You can't write that much externally when you work at a company like this.

**Lenny** (00:08:01):
Yeah.

**Gustav Söderström** (00:08:02):
But I love writing and talking and presenting. So there was certainly that. And then no small part was, from a product point of view, to empathize with one of our main constituents, the podcast creator. I'm, unfortunately, not a great musician. I try to play instruments and so forth, but I don't have any records. I don't sing very well. But I decided to make a podcast and that taught me a huge amount about what it's like to be a creator, creating different styles of podcast.

**Gustav Söderström** (00:08:33):
For example, we wanted to do a higher production cost podcast with music and then right away you run into a bunch of problems as Spotify is actually pretty well positioned to solve, but still, it's really hard to have music in a podcast from a rights perspective. So you understand all these problems that podcasters have and you can be better at solving them. But the biggest benefit and the real reason for doing the public podcast was that I have actually done an internal podcast through a hack where we could gate the podcast-only employees. And I tried to figure out internally how to build more culture around Spotify and help define for new employees and existing employees, who we are, the mistakes we did, the successes we had, and how we think about strategy specifically in product strategy because we were quite well known externally for technology and the squads and all of these things, not so much for product strategy.

**Gustav Söderström** (00:09:36):
And because I love storytelling more than Google Docs, I decided to do an internal podcast and I went around and I interviewed actually Daniel's direct reports. So the CMO, the CHRO and CFO. And just ask them about a bunch of stuff. And the idea was to make them more approachable for employees because I felt listening to podcasts, even these people that have no idea who I am because I've never met them, I feel like I know them, I feel like I know how they think and I just like them much more. So the secret idea was, what if you could get to know your leaders much better than you do through occasional meetings or some town hall? So I did that internally, and because I'm a product person, we ended up talking a lot about product and product strategy. And people internally really like that.

**Gustav Söderström** (00:10:26):
So next time, the question was, what if people that don't even work at Spotify yet could feel as if they knew people at Spotify? That'd be great because most leaders in most companies are very opaque and appear as some otherworldly creatures that aren't really real, I think, when you see them in business papers or something. So what if you have heard them talk for an hour or so? So that was general idea. So a combination of recruitment tool, sharing more about how we think about product strategy and just because I think it was a lot of fun. I got to interview a bunch of smart and interesting people both externally and internally.

**Lenny** (00:11:09):
Did it have the effect that you were hoping after looking back?

**Gustav Söderström** (00:11:12):
I think it did. The podcast did well and, no, we did not give it our own promotion. I had to compete as everyone else, which also gives you a lot of empathy for the problem of like, okay, now you have a product, what about user acquisition? How do you actually get people to listen to it? So it did achieve what I wanted in the sense that we have this thing called intradays where especially in the past few years when we've hired a lot, we actually fly people to Stockholm for an onboarding session to learn about Spotify. And the leadership is on stage, talking about what they do and the departments and strategy and so forth. And it's very common that people come and tell me that, "Oh, I listened to this podcast or this and the episode and it's at least one of the key reasons why I joined or sometimes the reason why I joined." So it's anecdotal, but it may be in the many tens of people, at least, who have said it. So that seems to work.

**Lenny** (00:12:12):
That's really interesting. Just again, and this comes up a few times on the podcast, is just the power of content in all these different ways for hiring for culture building. And it sounds like the original goal was just internally build this clinic culture and strategy.

**Gustav Söderström** (00:12:24):
That was the original goal, make senior leadership more approachable and reduce the distance and then also share more of the thinking in an entertaining way rather than just through docs that people end up not reading.

**Lenny** (00:12:38):
I love that. So I was listening to it, as I said, and what was really interesting is I think episode four was actually all about AI, and I think your first attempts at leveraging machine learning in AI within Spotify. And I think that's what led to Discover Weekly and a few other tools. And that was years ago. And it's interesting listening to it now where AI is, again, a huge deal. And so I'm curious very tactically on the product team what you advise product managers and product teams on how to think about AI in their product thinking and also just in their day-to-day work.

**Gustav Söderström** (00:13:12):
I can give a few examples there and I don't know that we're more sophisticated than anyone else, but we'll be doing at least the traditional machine learning for quite a long time. And I think in the podcast, I think I talked about the journey of the internet in stages. And one way to think about it is that the internet started with curation of the user curation. So you took something, some good, like people or books or music and you digitize it and you put it online, and then you ask users to curate it. And that was your Facebook, Spotify and so forth. And then after a while, the world switched from curation to recommendation, where instead of people doing that work, you had algorithms. And that was a big change that required us and others to actually rethink the entire user experience and sometimes the business model as well.

**Gustav Söderström** (00:14:04):
And I think what we're entering now is we're going from your curation to recommendation to generation. And I suspect it will be as big of a shift that you will eventually have to rethink your products. So that's one lens. So I tend to talk to my teams about, even though it's all machine learning, I ask them to think of this as something completely different. The recommendation error was one type of machine learning. The generation error is a different type, so don't think of it as just more of the same, think of it as something actually completely new instead. And what we learned in ... Well, a few things. So if you look at this new era of large language models and the fusion models and so forth, there are two types of applications. As I said for the recommendation error, we had to rethink the user interface and the experience for recommendation first error.

**Gustav Söderström** (00:14:57):
And so what does that mean in the generative area? No one really knows yet. As usual, there are a bunch of iterative improvements. So we use these large language models to improve our recommendations. You can have bigger vectors that can have more cultural knowledge. You can use it for safety classification on podcasts that no one has listened to yet and so forth. So there's lots of obvious improvements and we're doing those. But so far, we've only really done one real generative product in the hard definition, which is a product that couldn't have existed without generative AI, and that is the AI DJ. So that's a concept that we've been thinking about for a very long time. And the AI DJ is you press a button, a digitized person, there's a real person named X, digitized X. So he's now an AI, comes on and talks to you about music that you like and suggests music, and you can listen to it. And if you don't like it, you can just call him back and he says, "Okay, now, let's listen to something maybe from a few summers ago," or "Here's some new stuff that were trending yesterday in The Last of Us episode or something like that."

**Gustav Söderström** (00:16:10):
So that product couldn't have existed without generative AI, both generating the voice and generating the content of what the voice says. So you can have individualized, personalized voice at the scale of half a billion people. And so we had the use case we have seen for many, many years. Sometimes people call it the radio use case. We called it the zero intent use case internally when you actually don't know what you want to listen to at all.

**Gustav Söderström** (00:16:40):
Spotify wasn't that good. Spotify was good when, at least roughly, you knew the use case of what you want to do, if it was a workout or dinner. We had lots of options for all of those. But if you really didn't know at all, it was hard to open Spotify and stare at it. And people used to say longingly that this was the one thing that radio was good at. Radio was quite bad, to be honest. I mean, it's not personalized to you at all. It's not on demand. You come in in the middle of things, it's actually terrible in many ways. But people still often say that there was something good about it. And I think that's something was the fact that you had a knob and you could just switch between contexts. It's like no, boring, boring, boring, boring, okay, this is good.

**Gustav Söderström** (00:17:23):
And Spotify never had that mode of, I don't know what I want, but I want to cycle through things until I find something that I like. And I think with the AI DJ, that's actually the use case we managed to solve. So X comes on and says, "I'm going to suggest something to you that you can listen to." And if you like it, you can keep listening, but if you don't like it, you bring him back again and you change channel. And for one reason or another, we tried to solve that for many times for a long time, but just starting to play a random song without any context as to why you would hear this, it just never worked. So that was our first foray into a product that couldn't exist before. And I think to your question of principles around that, there are a few pretty distinct principles that we've learned.

**Gustav Söderström** (00:18:09):
One that I really like that is not my principle at all, I think it is straight from Chris Dixon, is the principle of fault-tolerant user interfaces. So I can't say how many times during the early machine learning era when we said we're moving from curation to recommendation. I saw a design sketch that was a single big play button because clearly that is the simplest user interface you can do, but if you don't understand the performance of your machine learning, you can't design for it. The quality of your machine learning, if you're going to have a single play button, needs to be literally 100% or zero prediction error, and that's never the case. So let's say that you have a one in five hits, four out of five things are done, then you need a UI that probably at least shows five things at the same time on screen. So you have a one in five of something being relevant on screen.

**Gustav Söderström** (00:19:03):
So you need to understand the performance of your machine learning to design for it. It needs to be fault tolerant and often you need an escape hatch for the user. So you make a prediction. But if you were wrong, it needs to be super easy for the user say, "No, you're wrong, I want to go to my library or to this or to that." So we have that principle of having fault-tolerant user interface and a user interface that corresponds to the current performance of your algorithms. And I think that is going to be true for generative machine learning as well. I think a very clear example actually is Mid Journey. If you think about the early Mid Journey user interface inside the Discord channel, actually generating an image was very, very slow.

**Gustav Söderström** (00:19:48):
It took a long time to generate high-quality image and they could have built the silver button thing where you put in a prompt, you wait for minutes, you get an image, and I think one out of four times, it's going to be bad. So you would've been disappointed three out of four times and it's a minute each, so like four minutes later, you'd be, "This is a shitty product." What they did was they generated four simultaneous low-res images very quickly and you could say, "So apparently, their performance was probably one in four, that's why they showed four and not six." And so one in four was usually pretty good. You click that one and either continue to iterate or scale it up. So that's also an example of, I think, people understanding where the performance of generative AI was when they built the UI. So that's something that I would be inspired by.

**Gustav Söderström** (00:20:37):
And for the AI DJ specifically, another principle is to try to avoid this urge of just wanting to show off the technology and then have this voice that talk and talk and talk and talk. You have to remember that people came there for the music. So the principle for the AI DJ coming from the team, by the way, this was a bottoms-up product actually, it required a lot of support. We actually acquired big companies and so forth to be able to build it. But the idea had been built by teams bottom up. So the principle there was literally to do as little as possible and get out of the way. And I think that was really helpful. It's not telling you what the weather is and what happened in the news and going on and on and on about this band. It is trying to get you to the music and I think that's why it's working because it is working very well for us.

**Lenny** (00:21:24):
I love this distinction between recommendation and generation. And this begs the question of, there's this trend that I imagine you're seeing of people autogenerating music using artists catalog. There's this Drake and The Weeknd thing that came out a week or two ago. Where do you think this ends up going and how do you think artists adjust to this world where music can just be autogenerated? This play button is all of it is generated versus just like the DJ in between the songs.

**Gustav Söderström** (00:21:53):
First, big caveat, this is just super early. No one knows anything about how this is going to play out or the legal landscape and so forth, but I think it's going to have a lot of impact. And I think if we talk about two things, one is what it could do for music, the other is the right situation, and if rights-holders are getting compensated and so forth. So we talk about the first thing in isolation. I think an interesting example is right about when I grew up, Avicii came along. And it's interesting to think about because Avicii was not really considered by the existing music industry as a real artist because he couldn't really play an instrument and he couldn't sing, and he was just sitting with this computer in this DAW, digital audio workstation. And so it wasn't really considered real music. And I think now all of us consider it very real music and that he had tremendous real musical talent.

**Gustav Söderström** (00:22:51):
So I think right now, we're probably in the face where people say this isn't real music and it's somehow fake. I think the way to think about these diffusion models if and when they get good enough at generating music is probably the same like an instrument. It's just a much more powerful instrument and we'll probably see a new type of creator that wasn't proficient at any instrument and they couldn't assemble a full orchestra and do the thing that they had in their head and they can now generate very new things. I also think, by the way, that there is this distinction between AI music and real music that doesn't exist. For sure, very talented real musicians are using AI to get better and to help create new ideas. So that distinction doesn't really exist. It's all going to be AI. The question is what percentage, which makes the problem harder because you can't talk about if it should exist or not.

**Gustav Söderström** (00:23:50):
You have to talk about what percentage should exist and who gets to use it or not. But I think the way to think about it is probably as an instrument and that could help create a huge amount of art. And I think this is not news to you who probably use these things a lot, but I think if you don't use these generative models, there is the perception that you tell it to create a hit and you will get that. That's not how it works. Actually, what these models do is because they've been listening to a lot of music, they are very good at doing something that sounds very similar to what already exists. Actually being original is very hard. And from one point of view, as it now gets easier to create more generic music, it will actually be more difficult than ever to be truly unique.

**Gustav Söderström** (00:24:39):
So I still think there would be tremendous skill in creating something truly unique. And my hope would be that what happened with the DAW and that technology jump was you got a whole new genre like EDM that you couldn't really produce it with an orchestra or live. And maybe we'll see completely new music styles with these technologies. I think that would be very exciting. So that's on the positive side, but then you have the rights issue, which I have a lot of empathy for. And Spotify specifically has seen this before. So we had a different technology shift like this, which was the technology shift to online downloads of music and piracy and peer to peer. So first, it was a big technology shift in peer to peer and it was exciting for consumers. More consumers started listening to more music than ever. And I think that's where we are now with generative AI.

**Gustav Söderström** (00:25:31):
There's a new technology, but it also required a new business model before creators and industry could actually participate and benefit from this. And that's, obviously, self-serving to say because we were a big part of innovating that business model. But I still think that's what's necessary and I hope that that's what I and we could be part of. So I think we've seen the first part, the technology shift, and there will probably be a lot of discussion and chaos here which have a lot of empathy for, but I think we haven't seen the second part yet. What is a model where this could be a benefit? What actually happened after piracy is that the music industry got bigger than ever, not just as big but bigger than ever. And I think that could happen with this technology as well. But we're right in the beginning.

**Lenny** (00:26:20):
So along the same lines, something else you teach is this idea of all truly great products have to pull some magic trick. This comes up in your podcast a lot and I think you mentioned this other places, and thinking about all the stuff you're talking about here, it feels like, in a sense, everything's going to feel like magic because AI's baked into it.

**Gustav Söderström** (00:26:38):
I think when we did the AI DJ, we did a small version of that. When people first listened to it, we could see that reaction in use of testing when they've wondered ... So the magic trick there was that how could they record this person saying so many different things because it's talking about my music. So the magic trick was, obviously, didn't record a person saying, it's generated, and that magic trick wears off. You hear it all the time now and so forth, but it was one of those magic tricks. So I still think that concept is important and it seems to correlate with products going viral and taking off.

**Gustav Söderström** (00:27:15):
And I think it was the same using something like Dall-E or Stable Diffusion or Mid Journey the first time. It completely seemed like a magic trick. And, obviously, there is no magic, it's just data and statistics. But I think getting to that point and iterating a product to the point where it feels like magic the first time is very helpful. And it's often a question of just getting the performance to a certain level, scoping down, removing things. There's a lot of fine-tuning, I think, that makes you cross that line from it's cool and impressive but not magic to it feels like magic. I don't understand how this could be done.

**Lenny** (00:28:00):
Yeah, it reminds me of the launch of GBT which ended up being the biggest, most fastest growing product in history, and it's like the epitome of a magic trick. It feels like actual magic.

**Gustav Söderström** (00:28:09):
Absolutely, absolutely. And to most people, it is still very ... Actually to a lot of ascent, even to researchers, it's a little bit magical. No one really understands fully. So I guess there's maybe some magic left in the world.

**Lenny** (00:28:23):
Absolutely. And I think a lot of people are worried about not understanding what's going on there. Shifting to the way you all build product at Spotify. So Spotify is famous for popularizing this idea of squads and tribes. And correct me if I'm wrong, but you guys have moved away from that approach.

**Gustav Söderström** (00:28:39):
Yeah, that's right.

**Lenny** (00:28:41):
Okay. So I'd love to understand just why you shifted and what you learned from that approach to building product, and then just like how do you organize the teams now? What do you do now?

**Gustav Söderström** (00:28:51):
This was something that we focused a lot on early and it turned out to be smart of us to name these things into squads and chapters and so forth. It wasn't really ... Well, maybe it was deliberately branding, but it wasn't for purposes of branding that we made it up. We made it up because we thought it was a good structure to use and we needed names for things and this was the early internet eras you were allowed to make things up. And so it was very good for where we were at the time and it certainly helped us in recruiting. It's become a little bit of a cost to us because people still think that we organize that way and it's not a very efficient way of being organized at this scale or maybe even if you started over right now because we've learned more.

**Gustav Söderström** (00:29:35):
But I think the big difference is the idea with the squad specifically was twofold. They were supposed to be small and full stack. So squad should be about seven people and it should have front and backend, mobile, QA, agile coaches and so forth, and it should be very autonomous was the idea. And that's really what we shifted. So, first of all, as you grow the company, scaling in increments of seven engineers just creates a ton of overhead. So, obviously, our teams now tend to be much bigger, maybe two, three times that at least per manager to maybe have 14 or something instead of seven and just less overhead roles. So that's one. It looks more traditional as you learn more and is reasonable as you scale. The second big thing I think we struggle with was back then when I joined, the average age at Spotify was ... I mean, I was the oldest and this was 14 years ago. So I think the average age was probably under 30 or something and it wasn't most tech companies.

**Gustav Söderström** (00:30:46):
And so we had coming from Sweden, which is a different culture than the US, and I love a lot of things about Swedish culture and I think we managed to keep the best parts, but Sweden is a very bottoms-up autonomous culture. There's this famous drawing on how you make decisions in Sweden. In the US, I think it's just a hierarchy. In Sweden, it's a circle. It's in a circle, no one is in the middle, there is no leader and so forth.

**Lenny** (00:31:13):
Interesting.

**Gustav Söderström** (00:31:14):
So I think by culture, we're very inspired by this super autonomous thing. And I think the idea with autonomy is very reasonable and the right one, which is we work and we are hiring the smartest people we can find and we pay high salaries for that. So if you're hiring smart people, one way to think about it is you're renting brain power.

**Gustav Söderström** (00:31:39):
So if you're renting all of this expensive brain power and then you give them no room to think for themselves, that doesn't sound smart, then you should actually hire less smart people and keep your costs down or something. So I think you have to give a bunch of autonomy to actually maximize the value of the investment you're making. So that's very reasonable that you would give a lot of space for people to use as much of their talent and capacity as possible. But the problem with that is if you put autonomy very far towards the leaves of the organization, and also if you combine that with having a very junior organization, which we did back then, there's a fair chance that you're just going to produce heat. You're going to have a hundred squads with a hundred strategies running in a hundred directions. And Spotify has been there in that camp.

**Gustav Söderström** (00:32:29):
I mean, we managed to get somewhere, for sure, in spite of this, but I'd struggle to say we were efficient in doing that. So we've done a few things. The team structure is more traditional, larger teams, less overhead. And we've been specifically working with where in the org do we put the autonomy because the extremes are at the leaves and we were there. The other extreme may be at the top, let's say maybe some Twitter, there's one person. Both have problems. If you have it at the leaves, you're going to produce a lot of heat. If you have it at the top, you need someone with a lot of capacity and Elon has a lot of capacity, but you are, by definition, going to bottleneck. All decisions have to go through there. And Daniel, it's not his personality that he even wants to make all the decisions.

**Gustav Söderström** (00:33:19):
He wants to maximize throughput rather than to bottleneck the throughput. So the question is, if it's not at the top and not at the very bottom, where do you put it? And what we've found, which I don't think is very contrarian at all, I think this is the case in most companies, is around the VP level. So if you have Daniel, then you have the C level, myself and others, then you have the VP level, that is a good mix of instead of having one person in the company think, so only Daniel then and the rest just do, you have on the VP level in the company this many tens to maybe hundreds of people that have a lot of autonomy to think. So you get a good amount of freedom of thought and people thinking in different directions, but it's not like 8,000 people. And these people on the VP level are both quite a lot of them, but they're also usually quite senior. They have a lot of pattern recognition.

**Gustav Söderström** (00:34:16):
So I think that solves for, it's a good ... If you think of it as an optimization problem, it's a good optimization space. So the autonomy level in Spotify now tends to be quite high at the VP level and then lower around those levels.

**Lenny** (00:34:33):
And when you say autonomy, what does that actually mean? Is it the VP of, say, the podcasting product has a lot of say over what happens and there's not a ton of ... I don't know how involved are people above? And I know Maya's the VP of product, I believe, for the podcast product.

**Gustav Söderström** (00:34:48):
Exactly.

**Lenny** (00:34:49):
Who I think is going to come on the podcast someday. What does that mean in terms of Tommy for her, what practically?

**Gustav Söderström** (00:34:54):
So it means that I would ask Maya to define a strategy for what we do in podcasting, how are we going to be different, why would a podcaster want to be here? Whereas another company, I will make that strategy or another company, Daniel would make that strategy. Same with ... The AI DJ, for example, came from our personalization team. And so that was a bet that they made. So they have autonomy to make those kinds of bets and define strategies. Same with the user interface, we have an experienced team, can talk about the org structure later, but I put a lot of autonomy on the VP of experience to define and suggest what it is that we want to do. And in other companies, I would define all of that myself, for example.

**Lenny** (00:35:45):
Just going even a little bit further here, I know you have just strong opinions on the way to organize teams and how the organization helps you optimize for specific things. What are your just thoughts along those lines and what have you learned about how the impact of organization and what you're optimizing for?

**Gustav Söderström** (00:36:03):
Yeah. So I talk about an idealized spectrum or maybe not idealized but exaggerated spectrum. Nothing is really true, but you create extremes to make a point. So on one spectrum, you have something like Amazon, which is known for two-pizza teams, no dependencies. You try to minimize dependencies so you can run in parallel. Teams compete with each other even on the same project and so forth. But they have direct access to the user.

**Gustav Söderström** (00:36:37):
And so the benefit here is if you have an idea, the time to get the user is very low and it has worked for them. It's produced Kindle, it produced Alexa, it's produced a lot of very novel things. There are a few interesting downsides here. One downside that I'm extremely impressed with Jeff Bezos' foreseeing is if you have teams that compete with each other, the incentives are to hide your results, hide your code. And that should make for an organization that gets no platform leverage because no one's corporating. And I think either he had that insight or because he saw this, he had to do this, but he's well known for pushing extremely hard on hard APIs. If you don't create hard APIs to your technology, you're out. And if you think about it, it has to be that way because otherwise no one would do it.

**Lenny** (00:37:32):
And a hard API is essentially everyone knows how to use this API and connect to this team to interface with.

**Gustav Söderström** (00:37:38):
Exactly. You have to expose your technology to others. You have to maintain those APIs and they have to be very structured because otherwise the whole thing would collapse as everyone's supposed to compete because there are no incentives. You have to centrally force that. And interestingly, even though theoretically then they're the worst position to have a structured platform, I think, because they forced it so hard, they were the ones who did Amazon Web Services because they had such hard defined APIs because of this rule that it was easier for them to turn it inside out and expose it the rest of the world. Whereas if you look at someone like Google, I think they struggled more with externalizing their APIs maybe because it is so friendly and soft. So they didn't need as hard APIs on the inside because there was no competition. People could just go into each other's code.

**Gustav Söderström** (00:38:18):
So it's interesting anecdote around it, but the main point is you're faster there, but it's going to be hard to corporate. And so you will see something like maybe exaggerating a bit. Sometimes you'll see multiple search boxes on the same page from different teams. And this has been true in Spotify, by the way, as well. You've seen multiple toasters on the Now Playing view coming up from different teams because they're working. When we were in the autonomous mode, everyone running. And then ... So you get the benefit of speed, but you get the drawback of shipping your org chart and shipping complexity to the end user. But clearly, that's been the right choice for Amazon because they're a trillion-dollar company. But then on the other spectrum, you have something like Apple who's also a trillion-dollar company. So clearly, both models work, where you would never see two search boxes from the same team popping up on an iPhone. That is centrally organized by something that is close to single individual.

**Gustav Söderström** (00:39:20):
So they are instead in what is probably the world's biggest largest functional org, they're doing as much. If you think about what goes into the Apple, I mean, they certainly do everything we do. They have music service, podcast service, audiobooks, and they have a billion other services. So it's not like they have an easier problem. And yet they build something that feels more like it was built by a single developer for a single user. So they centralize and they have this bottlenecking function that everything has to go through and be decided how it fits with everything else. And so that has the benefit of the user experience being simpler and not shipping the org chart and increasing complexity. But it also has the drawback of speed without having facts on it. I've heard people working at Apple have said, "Yeah, it took seven years to get that thing to market," because you just had to wait in the pipeline.

**Gustav Söderström** (00:40:17):
So you have these extremes. And I think the most interesting example, I think, to think about is when you double click the power button on an iPhone, the Apple Pay comes up. That decision, how did that happen? You can imagine that all the services team would like to pop up when you double click that button. And so someone had to decide, should music come up, should payments come up, should something else come up? And so they have a different structure there. And on that spectrum of centralized versus decentralized, because of our strategy, which is we're a single application, trying to add or not trying to, we have added multiple types of content with actually very different business models on the backend, rev shares and royalties and book deals and so forth into single user experience. That is our strategy. We think the user experience in keeping that simple is the most important thing.

**Gustav Söderström** (00:41:12):
So we've chosen more of the centralized model, where these different vertical businesses, if you think about it, the music business, podcast, audiobooks business, they have it to go through a single recommendation organization because that's another problem. Which one do you recommend to which user? Should be a book or podcast or music? And how do you weigh them against each other? And also the user interface could easily get incredibly complicated if everyone built their own UI. The music team built their UI and then someone added features on top. So that's how we chose to optimize. But it is based on our strategy and I think both models work.

**Lenny** (00:41:50):
**Gustav Söderström** (00:43:21):
I think so. In almost all industries, you have this smiling curve concept, where you want to be at the extremes on the smiling curve, and that's where big business opportunities are but not in the middle. So it's probably true in terms of organizational models as well.

**Lenny** (00:43:34):
Speaking of extremes, I want to talk a bit about taking big bets. So you guys had this big launch event recently where you basically redesigned the whole primary feed of Spotify to make it feel more like where apps are going, like TikTok reels feel of just stream, and you start hearing videos and music starts playing and some people loved it, some people did not. And I'm curious as a product leader, how you think about thinking long term and dealing with people that are just like, "What the hell's ... I hate change, stop changing things." How do you think about that? Who do you listen to? Who do you ignore? How do you know to stay the course? How do you approach that?

**Gustav Söderström** (00:44:10):
Yeah, you're being very kind. There was a lot of negative feedback on Twitter on some of that. So let me actually dig into some detail because I think for product people listening to this, this is an interesting lesson that I think few companies talk about because you want talk about everything that went exactly as you thought they would and you don't want to talk about the things that didn't go exactly as you thought they would.

**Gustav Söderström** (00:44:39):
So I'll go through what we are trying to achieve and what we learned. So Spotify is mainly a background application, and for a long time, we've been considered very good at background music and podcast recommendation. When the phone is in your pocket and you're listening to an EDM playlist or pop playlist or something, we're really good at inserting another EDM track there or another pop track there or something like that in the background.

**Gustav Söderström** (00:45:09):
What we hear from users again and again, though, is that they say that they get trapped in a taste bubble. So I love my Spotify, I love this, but I'm a little bit bored with EDM now and Spotify's not suggesting something completely new. And if you think about that problem, it may sound similar to the recommendation problem, it's just another recommendation problem, but it's actually fundamentally different because when you're recommending another EDM track inside the EDM playlist, you have a lot of signal from that user that they like EDM. But if you're going to recommend a completely new genre, by definition, you have no idea. Because if you had an idea, it wasn't new to them. So you can't know anything. So back to hit rate, your hit rate is going to be incredibly low when you suggest something completely new to the user.

**Gustav Söderström** (00:46:03):
So this problem of helping people get out of the taste bubble isn't that easy as it sounds. And we can't really take some genre that maybe isn't typical. So I'm a big fan of Reggaeton, for example. It's not typically ... It's not that common in Sweden. And if you would look the rest of my profile, it's EDM heaviness, you probably wouldn't have guessed it. And Spotify wouldn't have guessed it. So if I'm listening to my favorite EDM playlist in the background or maybe my metal playlist, metal is very big in Sweden, it's really hard for us to just insert a Reggaeton track in the middle of that. Most people are going to think Spotify's broken.

**Lenny** (00:46:41):
Yeah.

**Gustav Söderström** (00:46:41):
What the hell are they thinking? So that doesn't really work. So in order to help people break out of their taste bubbles, you need something different. You need something where your hit ratio can be very low and you need people to expect it to be very low.

**Gustav Söderström** (00:47:00):
So when we recommend things in the background, our hit ratio needs to be at least nine out of 10, maybe one dud is okay, but if you get five duds, you're going to think we broke your playlist and your session. We need something where one out of 10 is a success. If you find one gem out of 10 tries, you're very happy. So you need a completely different paradigm. And you also need to be able to go through many candidates quickly because the hit rate is so low. You can't take three minutes per item. It's like, "Okay, I didn't like this," and it's still like two minutes left before the next one comes on. You need to quickly say, "No, no, no." So the obvious candidates for this are these feed-type experience, where you can go through lots of content, you're expecting the hit ratio to be much lower. And if you don't like it, the cost is very low, you just swipe.

**Gustav Söderström** (00:47:50):
And then this is the reason why people have been ... When they want to break out of their taste bubbles or when they come into Spotify and listen to something completely new, it is usually because they found it on one of these services, like a TikTok or YouTube or something, where they get exposed to lots of new content. So people were asking us for these tools and so that's what we wanted to solve for. And so we built a bunch of features, feed-like structures, where you can go through either a new genre with many tracks or a podcast channel with genre with many episodes or even full playlists. And we implemented those and we put them in something called subfeeds. So in the current experience, and this is roll out worldwide, if you click the podcast subfeed, you get a feed of podcast episodes. Click the music subfeeds, you get a feed of playlists where you can go through many playlists. And if you don't understand the name, you can quickly hear what they sound like and check out a few tracks and understand if this is for you. And if you go through the search and browse page, you can find completely new genres that you can quickly go through.

**Gustav Söderström** (00:48:59):
And so those are working as we intended. People go to them when they want to find new music. They browse through them and they save new songs. So they're working as we intended. The thing that didn't work as we intended was when users asked us for this again and again, we took the sum of these things and we put it on Home because people ask so much about discovery and we can see clearly how correlated discoveries with retention on Spotify and so forth. But what we misjudged or failed or rather learned about our own homepage is that the way it works right now, and this is what you can see in the Twitter comment, if you remove the angry voices and try to see what they're saying, they're saying the following, which is actually quite clear in the quantitative data as well, that if you look at what people do on Spotify's homepage, the current one, it is almost 90% what we call recall.

**Gustav Söderström** (00:49:59):
So it is either getting to a session that you're already in or a specific playlist that you know you want to get to or at least a specific use case. So you come in with a high intent, you actually knew what you wanted, and maybe only 10% of the time as a true discovery, like I don't know what I want. So if you think about, that is 90% recall and 10% discovery. When we tested the design ... So the subfeeds were working and not working, but when we tested some of them on Home, we switched it from 90/10 to 10/90. So 10% recall, 90% discovery. And while people want discovery, they probably don't want 90% discovery, instead of 90% recall. So if you then look at the comments on Twitter, what they're saying is like, "Hey, I can't find my playlists anymore. Where are these things?"

**Gustav Söderström** (00:50:47):
They're not really complaining about the discovery, they're complaining about the things they don't get anymore. And we can see this in the quant data as well. And you can see traffic shifting from home into search and into library, which is a clear sign people are trying to find the things they can't find anymore. And you can even see people then trying to use these discovery tools which are optimized for quickly understanding new things to do the recall. Where's that workout playlist I know I want? And it's actually very bad UI for recall, it's like a slot machine, right? Very unpredictable if you ever get to that workout playlist. It was optimized for finding new things, not for recall of existing things. When you do recall, you want the dense UI with many items on screen because you know what it is you're looking for. So you don't need a lot of real estate when you're doing discovery of new things. You want a lot of pixels and you probably want sound because you don't know what it is.

**Gustav Söderström** (00:51:40):
So what we learn about our UI, and I think there's maybe a little bit of product jealousy here, you always look at other experiences. And if you look around, it could be forgiven for thinking that most other products, if you look at something like YouTube, for example, their homepage is exactly that. It's a huge single-item discovery feed with only new items. And people don't seem to tweet angrily about how angry they are at you to say they love YouTube and it's a big product. And I think what we discovered was that we actually did something really well on our homepage, which was supporting you being inside a multiple sessions at the same time. So you could be in the middle of two podcasts and an audiobook and also them actually I just want to get to that workout playlist. I don't remember the name of it, but I know it's workout.

**Gustav Söderström** (00:52:31):
We actually did that part really well. I would venture just say much better than the other experiences where you literally have to go to some tab and into library and start browsing to get back to where you were. And so maybe it's path dependent. Because we have done recall pretty well, people got, I think, reasonably upset when they couldn't do the recall anymore. And we didn't want lose that because it was one of the things we did well and underestimated. And my takeaway is actually we do it better than other experiences. So we certainly want to keep that. So what we did was now we're just updating their hypothesis to achieve the same goal, which is these things are working and when people want to discover, they use them and they seem to work, they can also get better.

**Gustav Söderström** (00:53:20):
You're on this hill-climbing journey from a machine learning point of view, but the question is, how do you make sure that whenever people feel that they are in that I'm trapped in my taste bubble, they understand that these things are there and they're easy to use? So now we have a version of Home that we are also testing, obviously, where these things are very available but voluntary and you can still do all of the recall. And so from my point of view, this is the reason we A/B test because you want to be scientific about it and you want to learn as much as possible about your own product and your users. And now I'm sharing a lot of the learnings. Maybe we should keep them to ourselves, but my hunch is that it's going to make it a much better product.

**Gustav Söderström** (00:54:09):
But what I told my teams when we went into this, because I've done this a few times, agree to signing, I think there are two fundamentally different types of product development. One is designing a new feature. It is hard, but it's voluntary for people to use. So you do the AI DJ. Some people love it, that's fine. If you don't like it, it didn't make it worse for you. But when you redesign, it is much more tricky because it's not voluntary to participate in the redesign. So there's a cost even for people who don't like it. Then you have a very tricky problem here, which is there are going to be two types of feedback. One is you did something and it was right, but people are upset because you changed stuff. The other is you did something and it wasn't right, and people are also upset but for good reasons.

**Gustav Söderström** (00:55:08):
And so how do you separate these two? Because I think I explained this to ... When we talk through this with my teams, I think the analogy to think about is you have your desktop, your physical desktop, you have your computer in one place, you have your pencil over here, you have your notebook over there, and I come in and I just rearrange all of it. And you have spent, in our case, maybe 12 years with that setup. It doesn't matter if I have a lot of quantitative data that my new setup is better, you're going to get upset because you are effective in this old setup. And it's hard to tell those apart. The most classic use case is the Facebook newsfeed, which people are very upset about when it became a single newsfeed. But it turned out to solve a lot of user problems that you didn't have to run around all of Facebook collecting events yourself.

**Gustav Söderström** (00:55:58):
So there are some ways of understanding if you made it better, but people's habits are broken or if it's not better. And one thing is, for example, to look at new user cohorts that don't have that behavior versus all user cohorts and so forth. So we went through all of this with the teams. Before we did it, I said, "This is going to be painful." There's probably going to be a lot of tweets because chances that we get it exactly right are very low. So for that reason, it hasn't been very hard on the team. It is hard ... You want to respond to people, but the right way to do it is to listen, understand, try new hypothesis to really figure out what's going on. So I think I've done it maybe three or four times now. Three maybe. One unsuccessful, two successfully. So kind of knew what I was getting into.

**Gustav Söderström** (00:56:45):
So it's almost like you punish yourself, very painful, but also the most exciting things. And I think any product person knows that the easiest, the most straightforward thing to do is to iterate around where you are. There's no risk. You're not going to get fired, no user is going to get angry. But everyone also knows that eventually if you don't adapt new technologies, new paradigms, et cetera, you're going to get replaced. You have to find this balance of trying new things. And when you work in software, you have this tool of A/B testing and being scientific about it. When you build hardware, it's worse. If you're wrong, you're wrong. You can't update.

**Lenny** (00:57:26):
I love this story. I so appreciate you sharing it. I imagine also with a big launch like this, you can't actually A/B test it ahead of time because of the press season. They're like, "Oh my God, look what Spotify's doing." And so you're limited there. Imagine, right? You couldn't really test this ahead of time.

**Gustav Söderström** (00:57:40):
The hardest thing about this is if you're trying something completely new, the MVP needs to be very big so you can build a new IU, but if you didn't do algorithms for single item feed, you can't tell if it was the right idea but poor machine learning, right? UI poor machine learning. Or you have to build a lot and that gets quite expensive. That's actually ... The biggest why it's painful is not really the feedback from the outside. It is the cost you have to take on the inside. You incur a lot of costs as you're really hoping you're right.

**Gustav Söderström** (00:58:15):
And in our cases, the changes on the homepage aren't that hard for us to do. The important thing is that the underlying hypothesis of, can we help you break out of your taste bubble actually works and then you update the acquisition funnels into that experience. But I think the problem is that you need to get so many things in place to be able to say, "You might get a false negative," just because you didn't do it well or not. That's the biggest challenge, I think, with these big rewrites where everyone has to update everything before you can know if you're right or wrong.

**Lenny** (00:58:52):
What was that process like of helping you understand what is not working and what is working and what you wanted to change? I imagine there's a bunch of data you're looking at, some tweets, things like that. What was the tactical, "Oh, shoot, something's not going the way we expected, here's what we should do?"

**Gustav Söderström** (00:59:08):
Well, the feeds, we tested, but the home feed, we rolled out and tested afterwards. And we tested out on users, a few different variants of it. And then we got the data back and we looked more at the quantitative data. And we do a lot of user research where people sit and use the feeds to understand and build our own theorem mind of what is working and what is not working. And then, obviously, you look at user feedback, of course, and some users are very good at expressing what is of it that isn't working, others are not as good as expressing what isn't working. So it can be hard to parse that, but certainly, that's a factor as well.

**Gustav Söderström** (00:59:49):
And so then once you do that, then you have quantitative data to look at. And then you sit in recent through, what do you think is right and wrong? What are the different hypotheses? What is working, what is not working? And then just update and test again and again until you prove or disprove your hypothesis. Trying to be as scientific as possible about it. And also I think the biggest risk also when you've invested so much time in something is getting precious about things. You have to just be brutal. You have to believe in things 100% until the data says no and then you believe in something else 100%. That sounds easy. It's very hard to do, to the extent that people get upset when you do it because, for some reason, people don't like when people change their minds. It is what we should want from everyone. I would love a politician who said, "I'd looked at the data and I realized actually this is right and now I believe this." But we hate politicians that do that. They feel untrustworthy and we ridicule them.

**Gustav Söderström** (01:00:56):
So I think that's the biggest risk with anyone. You just have to be unemotional and just look at the proof and the data. And then if you do that, you just move on and then you get to where you want to be, and you solve the same problem but you adapt.

**Lenny** (01:01:14):
I really like that philosophy. Essentially, it's the idea of strong opinions loosely held. Is that-

**Gustav Söderström** (01:01:19):
Exactly. Exactly what it is. And it sounds so easy, but it's hard.

**Lenny** (01:01:23):
Right? Because to your point, people don't respect someone changing their mind. They're like, "Oh, I see, they were wrong the whole time and they were so confident about being wrong."

**Gustav Söderström** (01:01:31):
Yeah, exactly. And it's unclear why it is what we should want, but I think it has something to do with human psychology. We actually tend to love profits and people who hold very strong opinions with very little data. Those are the people we like. People will look at a lot of data and actually that, we don't like. Not sure why.

**Lenny** (01:01:57):
We're flawed creatures.

**Gustav Söderström** (01:01:59):
For sure.

**Lenny** (01:02:00):
Is there something that you've recently changed your mind about along these same lines that maybe comes to mind of like, "Oh, yeah?"

**Gustav Söderström** (01:02:06):
No, I think these learnings about the science system and homepage does really well, maybe better than others, that we don't want to wash out with a bath water or whatever the [inaudible 01:02:20] expression is. I think that's the biggest current learning I'm actually very happy about.

**Lenny** (01:02:26):
Yeah, I love learning that we're doing some really well that we didn't really realize necessarily and maybe we should lead into that more.

**Gustav Söderström** (01:02:34):
Exactly.

**Lenny** (01:02:35):
Going in a somewhat different direction. Shishir Mehrotra suggested to ask you something. He's on your board, I believe.

**Gustav Söderström** (01:02:41):
Yes.

**Lenny** (01:02:41):
And he suggested to ask you about your 10% planning time. What is that about?

**Gustav Söderström** (01:02:46):
This is a concept that I think Shishir has used for a long time ever since he worked at YouTube. And the idea is that, roughly, you shouldn't be spending more than 10% of your time planning versus executing or building, which means that if you're working quarterly 10 weeks, you should spend one week planning as we work in six-month increment. So we try to spend two weeks planning and roughly successful. And this is ... Actually, when we talk about org models, give a shout-out to Brian Chesky at Airbnb, who is actually one of the first, I think, to have these more contrarian old models. He's much more applesque than most of Silicon Valley. He also works in six-month increments. He has a lot of experience in that as well. So that's what the 10% planning time is. And I think if you find yourself planning much more than that, you're either planning too much or your execution period is just too short for that amount of planning. It's a rule of thumb, but I find that it works.

**Lenny** (01:03:53):
I asked a few PMs what I should ask you, PMs that work at Spotify actually, that I haven't told you. And someone pointed out that you always bring a lot of energy and clarity to a room. That's something they see you as really strong at. What have you learned about just the importance of that or just how to do that well as a leader?

**Gustav Söderström** (01:04:11):
Well, that's great to hear. I didn't know that so I'm trying to figure out what to answer. I think that the energy, I don't know. I guess I'm just excited about what I do. I've always been excited about technology. I love seeing new things. My core drive is still this notion of you see something which I think you'll empathize with that doesn't exist yet. And you're like, "Wow, I wonder if that could exist. That would be so cool." And then in order to get people to do it, you try to share that excitement. So I don't think I can bring a lot of energy for something I'm not excited about. So I have to work on things I actually believe in and that I'm excited about. And so maybe then the energy comes more naturally. Unfortunately, for me, so far, Spotify has been in this phase where a lot of innovation is allowed and I'm even asked to try to do new cool things.

**Gustav Söderström** (01:05:09):
Maybe I would have less energy for a pure optimization phase. On the clarity, I've always liked trying to explain things. It's a well-known fact that the best way to understand something is to try to explain to someone else. So I go around explaining things to people who didn't ask for it and not to sound smart, but to see if I actually understood it. And so maybe it's that practice. And on that note, I actually do ask my leaders that work for me and I ask them to ask their leaders to always explain themselves. And I think when ... We talked a little bit about autonomy and so forth, we don't promise everyone that they have to agree, but I think the promise we should make to all employees is that even if they don't agree, they should be entitled to understand why you're making the decision.

**Gustav Söderström** (01:06:06):
What I don't think is acceptable is to say, "No, we're going to do it this way because I'm more senior. I've seen this a bunch of times. You are not smart enough." All of those things. I think you have to explain yourself so you owe an explanation. And I find that valuable back to the only way to understand something is to explain it because it usually turns out that if you can't explain it yourself, you probably don't really even understand it yourself. Sometimes I think it's possible that you can have product instincts that are good but you can't express them. But most of them, when people say there's something there but they can't explain it, they actually don't understand it themselves. And many times, there actually isn't anything there. And also if you can explain it as a product person, that knowledge is now shared. So it just becomes much more effective for the organization. So sometimes I try to provoke people a little bit and say ... When people ask how much is art versus science, I say, "It's 0% art, 0% magic, and 100% science." And that's because I want to force people to try to explain it. I think we use the word art and magic. We have historically used the word art and magic for anything that we couldn't yet explain.

**Gustav Söderström** (01:07:33):
Genetics was magic and art until it was science. And quantum physics was magic until it was science. And most recently, actually, intelligence and creativity was art and magic until it was statistics in an LLM. So I think I try to push people to say, "Are you sure you can explain this?" because that forces people to think through. So maybe I like it and I try to force it on people. So maybe that's why people think I sometimes bring clarity.

**Lenny** (01:08:07):
I love that. Question along those lines, is there a system or an approach to explaining that you recommend? Is it just write it out in a document? Is it explaining in a certain style or is it just however is natural to the person?

**Gustav Söderström** (01:08:20):
I used to write everything and then write and rewrite and make it more and more condensed. So that worked for me. I don't write as much anymore. Now, I tend to walk and talk in my head myself. What I actually do is I ... And I found this different for different people and a lot of people want to bounce something with someone else, that's how they think. You repeat the same thing again and again and you get some feedback on it. And so I used to write a lot. I sometimes do when it's an idea I want to understand better. And at some point in my life, I would love to write something real like a book or something. But what I do increasingly now is I do my one-on-ones with peers or people who report to me or something, and I just put on AirPods and do a distributed walk and talk.

**Gustav Söderström** (01:09:12):
Both people are walking but in different locations and you spend an hour discussing something. That has actually turned out to be very, very fruitful. So then you get the power of you're not alone so you get more brain power than your own. And I don't think there is strong evolutionary proof for this, but there's certainly indications that you're thinking better when you're walking, whether it's because you're oxygenating your brain or because it's evolutionary for some other reason, I'm not sure. But I found that walking, talking, and thinking actually even if you're not in person, just over AirPods, it's super effective. It was the pandemic that forced us. I thought we would get less creative and strategizing will suffer during the pandemic and I found the opposite. We had more of this than ever and I started thinking about why, and I think it's all of these walk and talks that we did.

**Lenny** (01:10:07):
You threw out there that you want to write a book someday. What do you think your book would be about?

**Gustav Söderström** (01:10:11):
I have no idea. I have no idea. Statistically, it's probably going to be about something that I did a lot, so it has to be about something with technology or product or something. But I would love to write something fictional. That'd be a lot of fun.

**Lenny** (01:10:26):
Oh, boy. I'll pre-order as soon as that's up. Another concept I wanted to touch on that another PM suggested, which is he called it the P in the pants analogy. Does that ring a bell? And is that interesting to talk about?

**Gustav Söderström** (01:10:40):
I don't know exactly which occasion this person is referring to, but I know I've used that analogy a few times.

**Lenny** (01:10:49):
Okay. Promising.

**Gustav Söderström** (01:10:50):
I don't know if it's like a Swedish analogy because I thought it was more widely known. But the idea is that you do something ... So the saying is that's like peeing in your pants in cold weather. It feels really warm and nice to begin with. And then after a while, you start to regret it. It's about being short term, basically. So now I just say that's like peeing in the pants inside because people know what I mean. It's a short-term thing.

**Lenny** (01:11:21):
That's a hilarious way of communicating that idea. Must be a Swedish thing.

**Gustav Söderström** (01:11:25):
Yes, I think Swedish people do it for some reason, apparently others don't.

**Lenny** (01:11:30):
Maybe because it's cold a lot of times of the year.

**Gustav Söderström** (01:11:33):
Yes. That's probably it. This is a saying in cold climate. In the warm, it doesn't help. No one understands what you mean.

**Lenny** (01:11:39):
Speaking of Sweden, do you watch Succession?

**Gustav Söderström** (01:11:42):
Yes, I do.

**Lenny** (01:11:43):
Okay. So Sweden's become a big part of the show, specifically the company trying to ... I guess I don't want to spoil, but there's a character that's really important. Yes, exactly. That is Swedish. And so I'm curious just what do you think of the way they portray the Swedish culture and Swedish business dealings?

**Gustav Söderström** (01:11:59):
It's super fun to see this as a Sweden. And I guess, first and foremost, like anyone or any person or any country that gets represented by super tall, well-built, great looking Alexander Skarsgård should probably be pretty happy. So that's good. Then I think there's this episode where they are in Norway, without giving away too much.

**Lenny** (01:12:25):
Yep.

**Gustav Söderström** (01:12:26):
There are elements that are authentic. There's a lot of, I think, paid brand positioning from a Swedish brand named Fjällräven, which I think means arctic fox, which is actually a very popular outdoor brand in Sweden. So that's authentic. The sauna things and so forth are authentic. So it's real, but it's exaggerated. Actually, the thing that isn't very authentic is his negotiation style. Swedish people tend to be serious, cautious, and this guy's more of a player. So he's not the typical Swedish businessman from a negotiation tactic point of view, I think.

**Lenny** (01:13:11):
Yeah, it doesn't make me think of the way you described it where in Sweden, people sit in a circle and no one's in the center.

**Gustav Söderström** (01:13:15):
No, exactly. He's very much in the center.

**Lenny** (01:13:19):
And then when people go saunas, there are just like a chant, sauna, sauna [inaudible 01:13:23].

**Gustav Söderström** (01:13:23):
Exactly.

**Lenny** (01:13:24):
The last episode.

**Gustav Söderström** (01:13:25):
It's a great show. I love it.

**Lenny** (01:13:26):
I love it. This season is insane. I'm so curious where it all goes. Maybe just the last question before very exciting lightning round. Spotify is, at this point, the biggest podcasting platform for me specifically and I think globally, and I love using it. It works great. I'm curious just what's next for Spotify and specifically Spotify podcasting.

**Gustav Söderström** (01:13:48):
There are two sides to it. It's for Spotify creators and for Spotify listeners. For Spotify creators, there are two things. One is, and this is what we talked about at Stream On, we talked about it also for music discovery, but it's the same problem and even harder for podcast. So we're still focused very heavily on helping podcast creators find more audience. This is ... Like I said, it's even a bigger problem to break out of your habits and your bubbles in podcasting. Such a big investment to find a new podcast. And so that is something, I think, we could and should do really well. So we keep investing a lot there. And as I said, you'll see more as we roll up more features now.

**Gustav Söderström** (01:14:37):
The other big need for creators is monetization and you can monetize today in many ways with DEI and Spotify SEI and so forth. But we're working hard to expand that and make it better because the industry is starting to mature and I think this is one of the biggest needs and the biggest things we could do for creators to help them monetize better, actually both free and paid. We also have paid podcast. So that's on the creator side.

**Gustav Söderström** (01:15:07):
On the consumer side, I don't want to share too much. We've shown that we're investing a lot in discovery. I want to keep some secrets for when they roll out, but we are investing a lot in the user expense itself. I think it's far from optimal yet what it could be. One thing that I can share that we're investing a lot in is just the ubiquity and playback across different devices and in cars and all these things that we've done well for music. But I think the listening experience can get a lot more seamless. I think search can get better. The data about podcasts and ... Well, I don't want to say too much, but looking at AI and generative technology, there is a lot that can be done.

**Lenny** (01:15:52):
All right. Well, I'll take what I can get. With that, we've reached our very exciting lightning round. I've got six questions for you, Gustav. Are you ready?

**Gustav Söderström** (01:16:01):
I think I am. Let's do it.

**Lenny** (01:16:03):
Okay, we'll find out. What are two or three books that you've recommended most to other people?

**Gustav Söderström** (01:16:08):
Okay. This is why I try to squeeze in seven into two and three. So if we start on product, I think it's well known, but one that I would recommend product people to read is 7 Powers by Hamilton Helmer, and Netflix has used a lot. We use a lot. It's just if you're starting out, it's great to have a strategy framework. No strategy framework is right, but having one is better than none.

**Gustav Söderström** (01:16:31):
Another in the space of mental models and frameworks, I think, is The Complete Investor by Charlie Munger. So, yes, it's about investment, but really it's a bunch of mental models that he uses. And I think the key takeaway is you have a problem, you should always apply three different models to it because what models do is they simplify and reduce dimensionality. The world has probably infinite dimensions and they reduces to maybe three or four. And the risk with that is you happen to get rid of a really important dimension, maybe pandemic diseases or something. But if you use three models that have different dimensions and was reduced in different ways, statistically, and it comes to the same conclusion, even the second model you apply vastly increases your chances that you're right. So that was a good book to read.

**Gustav Söderström** (01:17:24):
Then I think if we go outside of product, I'm very interested in just science and mathematics. So a few quick ones. The Mystery of the Aleph, an amazing book. Something Deeply Hidden by Sean Carroll on the interpretation of quantum mechanics. Helgoland by Carlo Rovelli on the relational interpretation of quantum mechanics. The Beginning of Infinity and The Fabric of Reality by David Deutch. The Case Against Reality by Donald Hoffman on the evolution versus truth and that evolution doesn't optimize for seeing the truth, just for fitness. Gödel's Proof, I think, is an amazing book on his incompleteness theorem, that in any axiomatic systems, there will be true statements that can never be proven, which is a weird thing to think about. And then maybe one of my favorites is The Demon in the Machine by Paul Davies that, I think, is lesser known on how information is really just entropy and this concept of information engines, that you can power something by just information and exhaust is also information. That was not a quick list.

**Lenny** (01:18:39):
No, I was just going to say you've set the record for the most number of books, but it also shows how you've become so insightful and wise just reading books like these. And so I think if people are looking to get to a place that you're at now, I think there's the lesson.

**Gustav Söderström** (01:18:55):
I'll keep the artist much shorter, I promise.

**Lenny** (01:18:57):
It's all good. We got time. Okay, next question. What's a favorite recent movie or TV show?

**Gustav Söderström** (01:19:03):
So we talked about Succession and it is a recent favorite. So I'll just frivolously take something that isn't recent but is an absolute favorite, which is Halt and Catch Fire, which I think is on FX. Amazing show. If you ever worked in technology, kind of starts out in the Silicon Prairie in the '80s and follows up to present day. Amazing show.

**Lenny** (01:19:24):
Halt and Catch Fire. Yeah, I watched some of it. I actually fell off of it, but it's a good reminder to go check it out.

**Gustav Söderström** (01:19:29):
Got to go back.

**Lenny** (01:19:30):
I'm going to go back. What's a favorite recent interview question you like to ask?

**Gustav Söderström** (01:19:34):
I don't ask it, but my favorite question is Lex Fridman's small ending question that is usually something like, so what's the meaning of it all? I like that. It's a tough question to get.

**Lenny** (01:19:46):
I'm so tempted to ask you, but-

**Gustav Söderström** (01:19:48):
No, don't.

**Lenny** (01:19:50):
Okay. Let's move on. That'll be another ... That'll be our second take at this.

**Gustav Söderström** (01:19:53):
Yes.

**Lenny** (01:19:55):
What are some favorite products you've recently discovered that you love?

**Gustav Söderström** (01:19:58):
The obvious one is ChatGPT GPT-4 and just playing around with that, trying to create bots for yourself that do different things for you and so forth. But I don't think that's probably true for everyone. The other really favorite is something you've written about and talked about, which is Duolingo, which I think is both very impressive from a product point of view, the execution and what they've done. It is also insanely used in my family. We have a family account and everyone is using it and competing every day. So I'm both impressed by the product and I also use the product quite a lot.

**Lenny** (01:20:35):
What languages are folks learning within your family?

**Gustav Söderström** (01:20:38):
In my family, it's Spanish right now.

**Lenny** (01:20:41):
How's it going?

**Gustav Söderström** (01:20:41):
Bien.

**Lenny** (01:20:44):
You get a gold star.

**Gustav Söderström** (01:20:47):
I only have a few thousand XP. I'm not that good yet.

**Lenny** (01:20:51):
No, I don't know if that's good. That sounds pretty good. Next question, what's something relatively minor you've changed in your product development process that's had a tremendous impact on your team's ability to execute?

**Gustav Söderström** (01:21:01):
I'm not sure I've done anything minor that had a tremendous impact. Usually, it takes something bigger to get a big impact. I think maybe one thing that I've tried to do back to clarity and so forth is this thing I mentioned about I'm trying to push a lot for what I call Socratic debate, where the idea is obviously that the best idea wins, not the most senior idea and so forth. And trying to push for this notion of having people explain themselves, not saying I think there's something there or have a feeling or something like that. And apparently, as you said, that has had some impact because people apparently say that about me. So that's probably the biggest thing.

**Lenny** (01:21:53):
Final question, what is one fun ritual of the Spotify product team, and is it saunas?

**Gustav Söderström** (01:21:59):
So Spotify is so big now that it's quite local actually, different parts of Spotify, different product rituals. I accidentally created one ritual many years ago, maybe 12 years ago, when we talked about which phase a product is in. And it was ... We needed some definition. So I think off the cuff, I said, "Well, it's four phases." It's think it, build it, ship it, tweak it." And then the think it phase, it should be cheap, not a lot of money spent. In the build it phase, you're going to start spending a lot of money. So then you must have reduced the risk in the think it phase that you're right. And then you have the ship it phase and then you go over and tweak it. And it was something that wasn't that thought through, but it's funny because I still hear it sometimes even from other companies like, "Oh, we're in the think it phase," or "We're in the tweak it phase." So it stuck. I don't know if it's very good, but it's stuck.

**Lenny** (01:22:57):
It is catchy. I think anything getting stuck in people's head is a success. Gustav, thank you so much for being here. We are two for two for Swedish people. Gustaf, with an F, Alströmer was on the podcast.

**Gustav Söderström** (01:23:10):
Who is also an amazing person.

**Lenny** (01:23:12):
Also an amazing person. I feel very jealous of people that get to work with you and for you. Thank you again for being here. Two final questions, where can folks find you online if they want to learn more, maybe reach out, ask some questions.

**Gustav Söderström** (01:23:23):
[inaudible 01:23:23] @GustavS.

**Lenny** (01:23:24):
Okay. Say it again

**Gustav Söderström** (01:23:28):
@GustavS.

**Lenny** (01:23:29):
Awesome. And then final question is just how can listeners be useful to you?

**Gustav Söderström** (01:23:33):
Just reach out. I do read feedback and I try to remove the angry comments and understand what they're actually thinking and why they're upset or what's not working.

**Lenny** (01:23:44):
And then the reaching out, would you recommend an angry tweet at you or more of a email to that email address you shared?

**Gustav Söderström** (01:23:50):
Well, the @GustavS is the Twitter handle, so just tweet at me.

**Lenny** (01:23:54):
Okay.

**Gustav Söderström** (01:23:56):
You can be nice as well.

**Lenny** (01:23:57):
Okay.

**Gustav Söderström** (01:23:57):
It's okay.

**Lenny** (01:23:58):
Amazing. Gustav, thank you so much for being here.

**Gustav Söderström** (01:24:01):
Thank you for having me, Lenny. It's been a pleasure.

**Lenny** (01:24:03):
Bye, everyone.

**Lenny** (01:24:05):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [13/19] The power of strategic narrative | Andy Raskin

**Andy Raskin** (00:00:00):
The way I learned how to pitch in business school, and I think the way most people did is what I call the arrogant doctor. So you have a problem, a pain, I have a solution, a treatment, and I'm going to tell you why it's better than all the other treatments. And the structure that I read about in these movies was different. Every movie starts with some kind of shift in the world, and I call this shift the shift from the old game to a new game. The archetypal example of this, I think in the business world, is what Benioff did with Salesforce. So he comes in and he says, "Hey, software is over and there's this new world called the cloud, a new game, new rules. That's the new way to win. And we're going to help you if you're in there." This structure really is about defining a movement, and that's very different from, "Hey, I'm going to solve your problem."

**Lenny** (00:00:54):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard won experiences building and growing today's most successful products. Today my guest is Andy Raskin. Andy helps CEOs and company leaders align their teams around something he calls a strategic narrative, which as you'll learn all about in this episode, is essentially a simple story that helps people understand why they need your product. And with that helps you align your sales, marketing, and product teams along with your fundraising and even your hiring efforts.

**Lenny** (00:01:25):
**Andy Raskin** (00:04:18):
Oh, thanks Lenny. So great to talk with you.

**Lenny** (00:04:21):
You are quite known as someone that helps CEOs optimize their pitch, their story, their strategy, which we're going to get deep into. But before we do that, can you just give us a little glimpse into how you found your way into this line of work?

**Andy Raskin** (00:04:35):
I started as a coder. I was a computer science major, undergrad, a friend and I had an idea for an app. So this was like during the dot com years. So Windows app, and we coded a little prototype and we started, we put it out there, we started getting some users and we thought, "Oh, okay, maybe we can get some investments." So of the two of us, I spoke English fluently. So we decided, okay, I'll write the investor pitch. So I wrote the pitch, we sent it out and the reaction was really bad. One VC wrote back and said, "Listen, I rate every plan I get on a scale of 1 to 10, and yours is a 1," and the next to the one he wrote in parentheses, "Worst," in case we thought maybe that was the top of his rating scale.

**Lenny** (00:05:20):
Brutal.

**Andy Raskin** (00:05:22):
Yeah, brutal. But then lower down, so this was back when they would like you'd print, send the hard copy of the plan and they might mail it back with comments written in. And he had written in, "Not a compelling story." A few weeks later, I'm walking by this Barnes & Noble and there's a sign in the window that says, "For anyone who wants to tell a compelling story," okay, that's me. And there's an arrow that points to these books and they turned out to be screenwriting books. I didn't know anything about this, so I started reading these books and it strikes me a movie is a pitch. What is Star Wars a pitch for? It's a pitch for be good, care about people, trust The Force in their terms. But I don't have couple hours. I'm pitching a business. It's very different. I'm not writing a three X screenplay.

**Andy Raskin** (00:06:11):
So what applies, what doesn't apply? I mean these are questions I think I'm still asking, but I did my best to take some of the learnings of how the movie was structured. It was very different from how my pitch was structured and kind of restructure it. And we did that and we sent the pitch out and we start getting more interest. It was really clear. And then we had a term sheet I think a few months later and I'm like, "What is this story thing?" That we didn't change the product, it was basically the same business just sort of how we talked about it. That was really interesting to me.

**Andy Raskin** (00:06:49):
I mean, over the next 10, 15 years, I thought about, "Hey, maybe I could do consulting with this." CEOs who heard about this were asking me about it. But I still was like, "No. No CEO's going to budget a line item for the story. That's not a thing." So I just didn't do it for a really long time until eventually I was proven wrong about that.

**Lenny** (00:07:13):
And how many years ago was this at this point?

**Andy Raskin** (00:07:15):
So this was dot com. This was like '98 when I was pitching that company.

**Lenny** (00:07:20):
Amazing. I think there's a couple interesting tidbits about this. One is that interesting opportunities arise when you're doing something you're excited about. So you had the startup, it didn't work out, but you had a problem that you solved for yourself and that led to another, a bigger opportunity for your career.

**Andy Raskin** (00:07:34):
Yeah, totally.

**Lenny** (00:07:35):
So that's interesting. And then also just some of the best opportunities arise from solving your own problem, not planning to start something with it, but just like, "I have a problem." Turns out [inaudible 00:07:44]-

**Andy Raskin** (00:07:44):
Yeah, I think that's same with you. Right, Lenny? You started writing about stuff and boom, that became the thing.

**Lenny** (00:07:49):
Absolutely. It was not quite boom, but eventually it became boom.

**Andy Raskin** (00:07:53):
Feels like boom from outside.

**Lenny** (00:07:55):
Yeah, that's how it goes. It always overnight for everyone else that isn't here.

**Andy Raskin** (00:08:01):
Right, exactly.

**Lenny** (00:08:03):
Yeah. Okay, so let's get into it. So you help CEOs at this point come up with what you call a strategic narrative and you help them not only come up with this strategic narrative, but you help their teams align around this strategic narrative. So let's just start with what is a strategic narrative?

**Andy Raskin** (00:08:19):
Yeah, you'd think, I've been doing this for 10 years, I'd have a very snappy definition of it there, and I don't know if I'm really happy with ... like I've ever found one that totally gets at it yet. The one thing I say is it's this one story that the CEO uses to drive success in marketing, sales, but also product. That it becomes like a north star, strategic north star for product roadmap, for fundraising, for recruiting, really everything.

**Andy Raskin** (00:08:54):
What I think is really interesting as a kind of qualifier is that this story has a certain structure. Like I said, when I found those screenwriting books, I sort of shifted the structure. And the traditional structure, the way I learned how to pitch in business school, I think the way most people did is what I call the arrogant doctor. So you have a problem, a pain, I have a solution, a treatment, and I'm going to tell you why it's better than all the other treatment.

**Andy Raskin** (00:09:24):
Not to say it's not better, but just this is the structure of it, and it kind of sets you up for bragging. Let me tell you why it's so great. And the structure that I read about in these movies was different. In the movies, every movie starts with some kind of shift in the world, in the character's world. And I call this shift the shift from the old game to the new game. And the archetypal example of this, I think in the business world is what Benioff did with Salesforce. So he comes in and he says, "Hey, software is over," meaning software in the sense that we're going to own it and maintain it, "And there's this new world called the cloud, a new game, like the new rules, everything has changed and that's the new way to win. And we're going to help you if you're in there." This structure really is about defining a movement and that's very different from, "Hey, I'm going to solve your problem."

**Lenny** (00:10:34):
I think the Salesforce example is an awesome example of your approach. If they were thinking about it in the old way, what would Salesforce have done? How would they have pitched it if not for, "Everyone's moving to the cloud, your dumb for using desktop software,"?

**Andy Raskin** (00:10:48):
Well, I think they would've just come out and said like, "Oh hey ..." I mean CRM by the way, was already a category. I mean, already Siebel was the huge giant of that space. There were already even companies doing it online, doing it through the web. And so they would've come and said, "Oh, we're easier to install, faster to get up and running than Siebel," or, "We have this much functionality compared to," I think it was, was it NetSuite? Or, I don't know. It was some early Salesforce-like thing that was out there. They would've done these sort of comparison things.

**Andy Raskin** (00:11:25):
And Benioff, I mean he is a pretty proud guy. I think he did still say like, "Hey, we're the number one CRM," but wasn't what they led with. They led with this story about this fundamental paradigm shift and, are you in or are you not in? And what they did was instead of just saying, "Hey, we're better than," they said, "Hey, all those others, those Siebel's, they're part of that old game. You want to play that software game? Be my guest, go buy Siebel," and of course we know how it played out.

**Lenny** (00:12:02):
So the crux of the approach is instead of, "Problem, solution, you should go do this," it's, "The world is changing, here's where it's going and we're going to help you get there." I want go in a little more depth of the framework. But before that, what are some other examples to give people a sense of like, oh, I see, I understand what this might be.

**Andy Raskin** (00:12:19):
Yeah, so another great example and no coincidence, so is Zuora. So Zuora is the company I wrote about in this post called The Greatest Sales Deck I've Ever Seen, the CEO of Zuora, Tien Tzuo, was employee number 11 at Salesforce. So he learns this from Benioff. And he's pitching, "Hey, in the old world, businesses operated on transactions. You sold things to people outright. In this new world," he calls it the subscription economy, where people want the benefits of those things without necessarily having to pay for them. And of course gives all these examples of all the winners in this, look at all the winning companies. They're all basically going to this new model.

**Andy Raskin** (00:13:05):
And so he's pitching someone like Ford and you can imagine they're going to Ford and pitching a subscription for car service, which is quite different from just a lease. And they're starting out with this. This is the big shift. Another one, team I worked with early on, and I think they'd agree their story came out of this work was Gong. So Gong everyone probably knows by now, they take the video recordings of all your sales calls and they stick AI onto it and come out with all these insights. And that story is, hey, goodbye opinions. Used to be a world where sales is run on opinions. Hello reality, that now all the winners are adopting this new mindset where we really have to see what's really going on.

**Lenny** (00:13:56):
In the Gong example, let's say, what would they have done if they were going, "Here's the problem, here's the solution, here's what we're going to do for you,"?

**Andy Raskin** (00:14:03):
Yeah, I mean that's kind of what they were doing when they started out. And I'm not saying that didn't work totally. I mean already by the time they started doing this, they were starting to become a big company. I remember Bendov said to me, "Listen, Andy," they were around series B, I think this is around 2018. It's like, "We're going to be a huge company. The question is how huge. And I think that this narrative along the lines of Zuora or Salesforce, if we get this right, this is going to be a multiplier on our growth."

**Andy Raskin** (00:14:38):
So I don't remember exactly the pitch beforehand, but it was very much like, "Hey, we're going to record your calls. We're going to get insights from them. They're better than the insights you could get from Salesforce." There wasn't this kind of unifying kind of movement ideology that put it all in context. And what was really interesting was one thing, I don't think they'd be upset if I shared, and maybe it's known. Initially, they were seen as a tool for sales operations, for someone who's going to record the calls and what this narrative did for them. And I think it was already starting to happen, but what it really coalesced was this is a tool for sales leadership.

**Lenny** (00:15:23):
You talked about Zuora in the post you wrote, and I imagine many people listening are like, "Oh, shit. This is the guy that wrote that post that everyone's always sharing with me about how to make a deck." And I wanted to ask, how impactful was that one piece of writing for you in your career, just like as a tangent?

**Andy Raskin** (00:15:39):
I had written some other posts on Medium in particular. Medium has changed quite a bit, but back then I found that I could write stuff there and get really a lot of people who were interested in what I was interested would sort of come in and create some noise about it. So I was already doing this kind of work for a couple of years, but that post immediately got something like 2 million views around the world and I started getting inquiries from teams all over the world.

**Andy Raskin** (00:16:12):
And it was I think what really allowed me to say no, okay, I could do this work. That CEO's would budget a line item for this. Because I think if you really understand that post, it's not really about a sales deck, it's really about this story that Tien, the CEO is telling everywhere and that is showing up in the sales deck and structuring it that way.

**Lenny** (00:16:40):
I think it's just another example that comes up a bunch on this podcast is just the power of writing and the power of content. Yeah, and you're shaking your head.

**Andy Raskin** (00:16:48):
Totally. I mean, I had a little mini career as a journalist, as a freelance writer and I really loved that. I actually, I took a class in New York called How to Write a Magazine Article, because I was sort of mid-career, I was curious. And the class wound up being more about how to sell a magazine article. And I found I really loved that, pitching articles, but one thing that was always a downer for me was there's always this editor sort of deciding what's going to be out there.

**Andy Raskin** (00:17:23):
And when you work with a great editor, it's great, they make yourself better and they're priceless. But still there's this intermediary. What started to happen, I think around when I started writing around 2013, '14, you start to see these platforms, like Medium, even LinkedIn where you can just write and have this audience and I think no way I could do this, the work I do if that development hadn't happened first.

**Lenny** (00:17:53):
I'm taking us off track, but I want to go a little deeper with this. I find that there's kind of two paths to writing online. One is your path where you write one piece that just blows up like crazy. The other path is more my path where I just write consistently for a long time, and both work and most people try to go your path and they never succeed. It's really hard to make something gets 2 million views, but you can go that path.

**Andy Raskin** (00:18:14):
This is like you said earlier, hey, it seems like boom, but really it didn't. So that was probably the 30th or 40th piece and they were gradually getting more and more traction. There was one I wrote before that about, it's kind of dissecting Elon Musk's pitch for the Powerwall, the battery that they sell. And that one got maybe few hundred thousand views and also was a big jump. And then the next one got some poultry number. So what I find is like, yeah, there's this a while where you're writing and it feels like you're talking to nobody and then gradually it grows and you'll have these peaks, but then over time is where the magic is.

**Lenny** (00:19:03):
Okay, I'm really glad you pointed that out, that it rarely is just you write one thing and it's boom.

**Andy Raskin** (00:19:08):
I'll also say, sorry, because I worked in a magazine, I haven't done a newsletter because that idea of having a deadline all the time and constantly having to, we used to call the magazine Feed the Beast, I feel so free not to have that. So for now at least I haven't done that.

**Lenny** (00:19:27):
I know that well, so let me take us back on track and let's talk about just the high level framework here. So you talked about, it starts with this idea of tell people worlds changing, join this movement. What's the simple way to think about this, the pieces of this strategic narrative framework?

**Andy Raskin** (00:19:42):
A lot of times people will contact me, say, "Hey, I tried it, didn't work." Well, one very common thing, at least earlier was they would basically just take the Zuora deck, they'd get ahold of it and just put their logo on it. And so that's not going to work. One thing is we're not just saying, "Hey, the world is changing." And then sometimes I'll see, "The world is changing," and there'll be, "Used to be," and there's a long list of things and then, "Now it is," a long list of bullet points.

**Andy Raskin** (00:20:11):
What's really, I think key is naming it, naming that old game. The examples you saw, software, cloud, transactions, subscription opinions, reality. This very, very concise naming is really key. And it's hard because in making it compact you're losing completeness. So you can imagine you're in a meeting, someone says like, "Hey, how about we do transactions to subscriptions?" And someone says, "Well I don't know, there's a lot of things I don't really subscribe to. Subscription economy, really?" So we're always kind of overstating it in a way, but it's not a problem. I don't think people say like, "Oh that's wrong, subscription economy, because I still go to the grocery store and buy things." So anyway, that's the first piece.

**Andy Raskin** (00:20:59):
The second piece is what I call naming the stakes. And there's a few ways to do this, but one that's really great if we can do it is to name the winners to show that winners are already playing this new game. So for instance with Zuora they're saying, "Hey, look, look at all the new winners," this is like 2015 so, "Airbnb, Box," all these companies, they're already doing this subscription thing.

**Andy Raskin** (00:21:28):
And by the way, overall they show this scary stat about the longevity of Fortune 500 companies. It's getting smaller, and so it's a little disingenuous, but basically they make this case that, "Hey, companies are dying, the ones that are winning are doing this." And so to the extent we want to make this life and death just like a movie. This is again, I'll make the parallel to Star Wars. So Luke, he spends the first 15 minutes of the movie belly aching. He wants to be a pilot, he wants to go out and have adventures in space. So Obiwan comes, he says, "Hey, we got this mission, this princess we got to go," and all this stuff, "Let's go. I'll teach you to be a pilot. We'll go have adventures in space." What does Luke say? He says, "Ooh, you know what, I can't really get involved. They got to go home. It's late." Who does this sound like? The reluctant buyer.

**Andy Raskin** (00:22:27):
So yeah, "I want to be innovative and all this. Ooh, you know what? I don't have budget this quarter." So how does George Lucas change Luke's mind? He basically kills the aunt and uncle, sorry, spoilers, it's been 40 years though. If you haven't seen it, you're probably not going to see it. Kills the aunt and uncle. Now it's pretty clear they're coming for Luke. Now the stakes are life and death. Probably he's going to be dead. But there is this other path that Obiwan holds out for him.

**Andy Raskin** (00:22:55):
And whenever I work with teams and I talk about this, so they're like, "Okay, I guess we got to then for kill the prospect's aunt and uncle," and basically yes, I mean figuratively. We got to show them that the future is not going to just be sort of okay. People talk about making it emotional and I've always wondered, what does that mean? Literally, what is the definition? This is for me the definition, is that the prospect doesn't see the future as sort of okay. They see it as split between a very negative outcome and a potentially very positive outcome.

**Andy Raskin** (00:23:29):
The third piece is what I call naming the object of the new game. I used to call it the promised land message, but I've changed it to this because I've found that it's sort of a little more fruitful. This subscription economy, transactions, it can get a little highfalutin and sort of big, but on the website when we just have to boil it down to a couple of words that's going to be clear right away, what can we say? And I find that what's the object of the new game really boils it down as kind of the rallying cry of the movement. So the example with Zuora, the object for a while was turn customers into subscribers. Very simple. It just sort of flows from it. Airbnb for a while had this one, live anywhere. If you think about-

**Lenny** (00:24:21):
Belong anywhere.

**Andy Raskin** (00:24:23):
Well actually it was-

**Lenny** (00:24:24):
Oh, live like a human.

**Andy Raskin** (00:24:25):
So you're right, it was, "Belong anywhere," and then it switched to, "Live there." I may have the chronology wrong, but it was the two of those things. You know better than I do. But either one, I mean think they're saying very similar things. Hey, there's this new world where you don't have to live in hotels, you can stay in people's houses. What's the object of that game is to belong anywhere, but live there. And I love it when it works that way where it's almost like an asymptotically unachievable thing. You are never literally going to live there. And if you think about it, this buyer mission statement, this rallying cry, I think of it really as the mission of the company. I mean, what is the mission of Airbnb other than to help people live there if they're going to be customer focused and all that?

**Andy Raskin** (00:25:17):
The fourth piece is, okay, well this object of the game, winning this game, it better be hard because if it's not, why would we even exist? Just with the movie, if Luke can just go destroy the Death Star then no movie. So there's got to be sort of obstacles in the way, things that are preventing them from. So saying, "Okay, you want to turn customers into subscribers." So whereas Zuora, where they go next is to say, "Okay, well how are you going to measure lifetime value?" Because now you have this always on thing. "How are you going to measure preferences and how they're changing over?" All these new kind of challenges that didn't exist before. And then these are like the monsters in Lord of the Rings or the Empire in Star Wars, these are the obstacles.

**Andy Raskin** (00:26:11):
I think about them because they sound like problems. This is what people would normally say, "Oh, these are the problems we solve." But by setting up this story thing first we've repackaged them as obstacles to a new goal state that we've already positioned as life and death. So they take on this much more emotional meaning. We understand why they matter. And then of course the last piece is now talking about, well, how are we going to overcome these obstacles? Narrative people, in the movie business they call these the magic gifts that the main character gets to go help them win. What are the ways? Now we can talk about that and success stories and all the rest of the stuff.

**Lenny** (00:26:58):
There's some obvious parallels to the hero's journey here. I imagine that it was a source of inspiration, and the Star Wars I think is the epitome of that journey. Can you talk about just how related those two are, how you think about that?

**Andy Raskin** (00:27:09):
Yeah, I mean so hero's journey is this book that comes from, I think it's Hero of A Thousand Faces is a book by Joseph Campbell, a sociologist. He looks at myths over different cultures and different times and he finds this kind of common structure that he calls the hero's journey. I mean it's some controversy about that, about his book. Is it a very male oriented sort of take on things and a bunch of things.

**Andy Raskin** (00:27:38):
But even that aside, I found when I would talk about hero's journey and stuff, it's just like, it didn't really tell me what to do. Yeah, okay, yeah I got to do this pitch. So in the hero's journey there's like refusal of the call. That's actually that thing where Luke says he doesn't want to go and where the buyer says, "Hey, I don't have budget." But I don't know, it was just too theoretical for me to really ... when I use it, people seem to sort of glass over. So I just don't really talk about that at all. But yeah, I mean that's behind a lot of this stuff for sure.

**Lenny** (00:28:17):
Yeah, that makes sense because I think if people hear about that all the time when they're like, become a better storyteller, tell your story in this hero's journey, and it's like, "I don't know what I'm doing."

**Andy Raskin** (00:28:25):
Also, I would say there's storytelling as a skill kind of thing, which is a great thing. Learn how to tell stories better, blah, blah, blah, blah. I'm not really interested in that in my work, what I'm interested in is the one story and the structure of that one story. And this one story, it doesn't really have ... like, the world is moved from transactions to subscriptions. There's not a main character in that story who's like having a problem and getting saved. It's almost as if what's happening is we're turning the person we talk to into the main character. By spelling out the shift, we're changing their world and we're saying, "Hey, you got to change and you want to come with us."

**Lenny** (00:29:13):
It's almost like you're putting them into the hero's journey, like, "Here's how you win."

**Andy Raskin** (00:29:16):
Exactly. I love that.

**Lenny** (00:29:18):
Let me just try to summarize what you shared, this five step framework. So you start with here's a new movement that's happening and you want to name it, you want to name the stakes and there's winners and losers and here's already happening and it's really important. Then you want to name the object of the new game, like turning customers into subscribers. Then show the obstacles, here's why it's challenging, and then talk about how you're going to overcome these obstacles.

**Andy Raskin** (00:29:41):
And by the way, the naming of the object of the new game, I find it often is really nice to do it as a question. So we hey, there's this shift from transactions to subscriptions and look, everyone's doing it. So we asked a simple question, what would it take to turn every customer into a subscriber? And this way we're kind of bringing the person we're pitching to almost like they're coming along with us as a co, I don't know, adventurer in crafting this story.

**Lenny** (00:30:17):
**Andy Raskin** (00:31:41):
Okay, great. So there's a company called 360Learning. So this company, I don't know if folks know, but this company is raised over $200 million. They're in the space of corporate training software. So big companies, they have to train their people on all kinds of stuff. So you want to go through that one?

**Lenny** (00:32:01):
Yeah, that sounds great.

**Andy Raskin** (00:32:03):
Okay, great. By the way, Nick Hernandez is the CEO and Nick's been on my podcast, so he's talked about this. So they for a long time were pitching themselves as collaborative learning. So they have features that let people sort of collaborate on courses and all kinds of stuff. And Nick is often pitching CEOs, of course his team is as well. And he told me that it was sort of falling a little bit flat. People, collaborative learning, whatever. How are you different from this learning platform, this learning platform?

**Andy Raskin** (00:32:42):
And so when we worked together this collaborative learning, it's almost like a category name or a descriptor or something. They were so embedded that I decided, I don't even want to take it out, but can we define it in terms of a story? So the story they came to was, hey, used to be that companies train their people through basically a mindset of top-down learning. There's going to be some learning guru at the company, they're going to get all the courses, they're going to put it all together and sort of send out this training material to everybody.

**Andy Raskin** (00:33:23):
What's happening now is winning companies are approaching this differently. They're adopting this approach we might call upskill from within, which is if you look at Google, there's this page where I think you can go, it's a public. You can connect with Google's AI experts. They literally turn their internal experts into champions that are educating, not even just the company but even external people. They've created this culture of our own people are going to be the educators. So that's the shift from top down to this upskill from within. And of course I just even started to do the second piece which was like, hey, look at the big companies who are doing this.

**Andy Raskin** (00:34:10):
And then I think they showed, "Hey, you're not doing this. Look, training is becoming very expensive. People don't care. So this is the downside. So we're creating these sort of stake ..." And also I think he has something about how training now, like companies, if you don't adapt, if you can't get these skills to your people, if you're a car company and you can't get these skills around electric cars, you're dead.

**Andy Raskin** (00:34:35):
Nick was in France and he saw this poster, a recruiting poster from McDonald's and it said, "Hey, if you work at McDonald's you're going to learn from everybody else on your team." And it was like, wow, there it is. So there's another example we used as a kind of winner example. And so then the question became, I can't remember exactly, it was something like, how do you upskill from within? What would it take for you to turn your experts into champions of learning in the company and turn them into stars, and all this?

**Andy Raskin** (00:35:06):
And then I'm going to forget here what all the obstacles were. But I think it was things like, well, how are you going to make it possible for anybody to create a course? People who might have expertise in electric engines but don't know how to create a course, how are you going to make sure that there's still the learning department, they're going to keep control and can ... all this. You can imagine all the different kind of questions. And then of course now 360Learning starts talking about all that stuff.

**Andy Raskin** (00:35:36):
What Nick has told me, I'm actually going to be on a webinar with Nick where someone asked me, "Could you bring in a CEO who could talk about this stuff? Not just you B blabbing on about strategic narrative." And so Nick is going to join it. And we had a dress rehearsal the other day and he was telling me it's just like when he starts with this now he doesn't even get the question anymore of well how are you different from this other learning platform? Which used to always be the thing. It's just a much more seamless, okay, yeah, talk to our learning people, get this going. So it's just sounds like it's been really effective for them.

**Lenny** (00:36:13):
That's actually was what I was going to ask next is what kind of impact have you seen with someone shifting their pitch story from this doc? What was the arrogant doctor approach to the strategic narrative?

**Andy Raskin** (00:36:23):
Yeah, I mean it's always this kind of thing I hear. I mean, of course it's very difficult to measure this. I mean, what was the value of the strategic narrative for Gong and its growth? Was it 3X versus 1X, 2X? Or I don't, who knows, right? But the things I hear from CEOs, a few things. One is that when they're pitching, they're not pitching features out of context, they're pitching now a movement which is a lot better place to be, I think. In a way you're not pitching product. Product is like a prop for making the story come true. Very important prop, but there's this higher level overlay that becomes the focus of the conversation, at first, and of course we're going to get into product and that helps sell. Once we have this story then everything in marketing can be all about this story.

**Andy Raskin** (00:37:21):
**Andy Raskin** (00:37:51):
Another thing I just hear always, I just interviewed a CEO this morning for my podcast and this is the first thing he actually said was, "It becomes the strategic north star for the product." So what he was telling me, and this was actually a little unusual, I asked him, "Why did you come to me at first?" And of course I'd asked him that before, but he said something this time that was a little different from what I'd heard before. He said, "We are constantly getting feature requests through sales, through customer success. And we had sort of no way, bar to decide well what do we take on, what don't we take on? And this clearly has become our bar."

**Andy Raskin** (00:38:38):
If you think about it for 360Learning, does it help us upskill from within? It's in. Does it not? Or it's prioritized. Does it not? Less prioritized. Amit Bendov told me this directly, he said we exactly the same thing. He said, "We get a lot of requests for features and a lot of them are basically about opinions, some way to record opinions."

**Lenny** (00:39:04):
And this is Gong.

**Andy Raskin** (00:39:04):
"We're not going to do those." In Gong, yeah. "We're not going to do those."

**Lenny** (00:39:08):
Are there any companies out there that maybe aren't clients that you see as like, wow, these guys are nailing it and they're doing a great job of this strategic narrative?

**Andy Raskin** (00:39:15):
Well, one that really comes to mind is, I mean it's been out there for a while, but Drift. Drift comes out with essentially like a chatbot for your website, which might be the 30th chatbot for your website. And they don't say, "Hey, here's why our chatbot is the best one." They start from a completely different place, which is, "Hey, used to be people would sort of wait around for you to get back to them. It was a world of later. They called it the world of forms. You put up a web form and you expect someone's going to fill it out and maybe wait a few days while you take your sweet time deciding if you're going to get back to them."

**Andy Raskin** (00:39:58):
And David Cancel and David Gerhardt started from right the beginning saying, "Now we're in a world of now, where buyers are ..." I think they showed this woman, I remember it was this woman sleeping with her phone. That's your prospect. They're always on and they're going to expect you to be engaging with them right away. And they called this conversational marketing, and they really went with that and created I think a whole movement and they broke away from all of the other chatbots.

**Lenny** (00:40:35):
Awesome example. So earlier you threw out this word category, and I've noticed you haven't talked about category and category creation too much, and I think that you're kind of not a fan of this idea of creating a category and focusing on category. I'd love to hear your perspective on how that all relates to the stuff you recommend.

**Andy Raskin** (00:40:55):
Lenny, are you trying to get me in trouble? Like that guy who guy on your podcast who attacked jobs to be done?

**Lenny** (00:41:02):
Apparently, let's do it. Let's see what kind of trouble we can get into.

**Andy Raskin** (00:41:06):
I would soften it a little bit and not just ... because I don't want the ire of the category design folks, but I really would soften and say, I wouldn't say I'm not a fan of creating category. Look, I think if you look at Play Bigger, which has become The Bible of that category creation thing, if you look behind that going to, what do they say the category is? They say it's a narrative. It's a story about how the world was to how it is. And so what I find though is that when people think about category creation, they tend to just focus on, okay, well, what is this category name going to be that we got? What are these three words or two words, whatever, that are going to magically make us seem like we're totally different from everybody else?

**Andy Raskin** (00:41:52):
And A, I think that's not really possible. These three words aren't going to do it. Take Gong, I mean already other companies were using this term revenue intelligence. With Gong, it suddenly becomes a thing because I think they have this opinions-to-reality story behind it. At one point, again, I asked Amit, he said, "Yeah," because I remember he really struggled, "What should we call it? What should we call it?"

**Andy Raskin** (00:42:20):
He came up with that one. But then when I asked him later, he is like, "Yeah, you know what? In hindsight we probably could have called it strawberry intelligence. It didn't matter. It was really the story that sort of mattered." I think he was exaggerating a little bit. And I think the category people would actually agree with this, I think they would agree with, hey, these three words are, it's sort of a shorthand for this movement of old game narrative.

**Andy Raskin** (00:42:48):
But I guess I feel like still by calling it category and category name, we're just focusing on those three words so much. And what happens often is CEOs will, they'll kind of come up with this little category, like what happened with Nick at the 360Learning with collaborative learning. We have this name, but we don't know how to tell the story around it. So my feeling is like, well, let's focus on the story. So that's why I talk about strategic narrative and movement creation versus category creation. If someone decides that your movement is a category, great. Bonus.

**Lenny** (00:43:32):
I see. So essentially your approach is category can play a part of this, but there's a bigger question you have of what's the story, what's the movement, what are the obstacles and categories and element of that potentially?

**Andy Raskin** (00:43:45):
I mean, I almost see them as orthogonal, like with HubSpot. HubSpot had this narrative around inbound. It used to be just outbound stuff, now we're going to have inbound. And that wasn't really a category. Back then they were probably known as marketing automation. Now they're probably known as CRM because they've broadened. But this movement is the thing that's sort of the constant and in some ways orthogonal to whatever category they're in.

**Lenny** (00:44:16):
Is the strategic narrative framework right for essentially any company or is there a sweet spot? And I've noticed most of the companies you've been talking about are B2B SaaS. So I don't know, maybe if there's a spectrum of perfect fit for strategic narrative framework and then not a fit at all. What's along that spectrum?

**Andy Raskin** (00:44:33):
Yeah, well you can see, I mean it takes a little time to tell this story and you were kind of framing it a little bit and we're telling it in lots of different channels. So I think it does really play well in this enterprise sales context because also we have a group buyer there. So it's not just one person who's doing some research. This whole group has to have a uniting story. So I think you're right that in noticing that the companies that this tends to resonate with tend to be B2B, enterprise sales, technology I think because often the product is very complicated. That arrogant doctor stuff comes from an age when the things people were selling were products on shelves that didn't change much, cans of soup at the supermarket or a car in a dealership. Even software back then, shrink-wrapped in a box, doesn't change.

**Andy Raskin** (00:45:44):
B2B software, this stuff is changing by the minute. And does it even make sense to make a claim to say, "Oh, we have these features and they have those features, therefore we're better," does that make any sense? That said, hey, I was looking for a sports watch, a Fitbit and I'm comparing specs and I'm doing all that stuff. And so that mode of buying is still happening, but I think, so yeah, when consumer products companies contact me, I usually say, "No." Occasionally they still say, "Okay, yeah, we'll build this, we still want to have this narrative." But yeah, I think it has the most value, most impactful right away for B2B enterprise technology companies.

**Lenny** (00:46:33):
Just a few more questions. One is just what's a sign that you should spend time in this area, that something is broken in your strategic narrative story pitch?

**Andy Raskin** (00:46:42):
Well, I can tell you what I hear from CEOs when they contact me. I always ask, what's happening? Because that idea I had, no CEO's going to budget a line item for this. I'm basically asking, why was I wrong? So a few things they tell me, one is that the company is maturing from a point a stage where they've been successful, but that success is ... one CEO put it this way, was brute force of the founders. So the founders are in every meeting, they're in every product discussion, every sales call, and that's shifting, the company's getting bigger.

**Andy Raskin** (00:47:21):
Usually I'm seeing this around series B where the company is getting ... so they can't be in every sales call, every market call and they're looking to transmit all the good stuff and some direction in a way that people are going to remember and all that. Everything from how we pitch to what the product should be and all that, and they see this as that.

**Andy Raskin** (00:47:47):
There's another point that I see people contacting me at, which is where they're growing. It's usually a bit later where they've scaled tremendously successfully. Now we're either acquiring or building out whole new product units. And that old story we told is just, it's just not big enough and we got to expand it to something bigger. This is the example of OneTrust, which the CEO I had on my podcast recently. Starts out with just, I think it's data privacy around the regulations that people have to be able to say, "Don't track me," things like that. And then they buy these other company and now we have this much bigger offering. So how do we tell the story? And then I guess the third one is some form of pivot where hey, we were telling an old story but whatever, the market changed or whatever and we want to go in a different direction.

**Lenny** (00:48:53):
Say a founders listening to this and they're like, "Okay, I realize I need to do this. I haven't spent enough time on this. Something's not working. This could be a huge unlock for us." What are the first couple steps they could take to start to figure this out? And I imagine at some point it's like, go talk to Andy. He'll help you through this. Is there stuff you can do on your own? How do you go about figuring this out?

**Andy Raskin** (00:49:11):
Well, a lot of folks have emailed me over the years like, well I told you before, there were some who emailed me like, "Hey, tried it, didn't work." But many more have emailed me, "Hey, I tried it, it did work. Thank you." And so yeah, just try to lay out that structure and try it mean even when I work with teams, I adapt what people might call sort of lean approach. I want to get that thing out there into sales calls. We're not rolling it out to the whole sales team right away, but getting it out into some sales calls and get a sense, "Hey, is this resonating? Are people given the nods?"

**Andy Raskin** (00:49:49):
Ideally by the way, one way I look to test it, is it working, is when we talk about this shift and the stakes and do they stick. Do they kind of say, "Yeah, let me tell you how that's playing out for us,"? Or, "Am I? Yes, I'm seeing that." Sometimes I'll literally, I'll train salespeople to ask them that question, like, "Am I crazy or are you seeing this?" And what do they say? And you can usually tell if they're in and it's qualitative. But I really like that kind of testing to see if it's working. And I think anybody can do that.

**Lenny** (00:50:32):
Is there a template or guide you have online for folks to follow other than maybe just listening to this podcast and reading? Is there a post that's like, "Here's the framework defined, and go follow these steps,"?

**Andy Raskin** (00:50:41):
I mean, I guess the closest is that The Greatest Sales Deck I've Ever Seen post, which is the Zuora deck. But even there, people have asked me for a framework and presentation companies say, "Can we have your template so we could make it available to people? We'll revenue share with you or something." And I am so against this template. Every team I work with, it's different. It's not the same number of slides. Sometimes we can lay out this shift in one slide, sometimes it just feels better or the team likes it better, whatever, if it's a few and we're sort of getting people into it. Sometimes there's no slides. So I am really hesitant to recommend any template. And what I'd say is these are principles for building it, not any prescribed formula.

**Lenny** (00:51:37):
If they do want to reach out to you while we're on this topic, what's the best way to contact you?

**Andy Raskin** (00:51:42):
Connect with me on LinkedIn. That's usually a good one. And I'm usually posting things on LinkedIn that I've learned from working with other teams.

**Lenny** (00:51:52):
Awesome. Last question before we get to a very exciting lightning round. Speaking of LinkedIn, you posted how in a working session with companies that the second session is always this low point they all go through and that everyone's starting to get discouraged and pained. And first of all, I love the expectation setting. You're like, "This is going to suck initially and it'll get better." Why is that the low point and what is it that they focus on in that second session?

**Andy Raskin** (00:52:17):
Well, apparently I'm not doing enough of an expectation setting, because what that post was about was this woman. So when I work with a CEO I always ask them to create what I call a strategic narrative team of up to four people. And usually those are leads of marketing, sales, whatever. In this case, the CFO was a really important person in this company. And so the CEO wanted her as part of this team. And she said to me at the end, she's like, "I love where we got to." I always ask, "What worked? What didn't work?" And she's like, "I love where we got to. That worked great. What didn't work was like, you told us that this second session was going to be bad, but I think you could have drilled home more like exactly how bad."

**Andy Raskin** (00:52:58):
And then I asked her, "Actually, could I have that quote with your face on a slide that I now present to future teams?" She said, "Yeah, you could do that." So the way I work it is I have a kickoff session where essentially I'm asking people on the team, what are these pieces? What is this old game, new game shift? How do we talk about when to set the stakes and everything I just took you through? And we have like five people in the room. There's going to be ... we're going to come out of this with notes and notes, boards and boards of ideas of this stuff.

**Andy Raskin** (00:53:34):
And so then two things happen. One is I ask the team to start interviewing customers about how they see this shift and sometimes the customers will literally give us the words and that can be helpful in sort of aligning if we have differences. But I also start working with the CEO one-on-one and we build a first version of this thing, and it's the second session where we present this first version to the team and think about what's happening.

**Andy Raskin** (00:54:02):
The team has just given us millions of gold ideas, truly they're all ... and in order to make something sort of clean and powerful, the CO and I have had to pretty much throw out all of them, save one or two. And there's going to be feelings about that, first of all. Second of all, if this were easy to just get all ... interview everybody, come up with it, they would've done it. So it's going to be wrong.

**Andy Raskin** (00:54:30):
But the good news is this is where the team gets to weigh in. I also ask, what's working, not working in this thing? And when we learn how it's not working, that gives us the juice to then me and the CEO go back to the drawing board. We plan on this in advance, we're going to go back to the drawing board and then bring up something good. So having a shit draft is a million times more valuable than having all these great ideas. But it's also really painful. It's painful not only for them, but for me. No matter how many times I say this, I expect they're going to love it in that first one too. And I'm really pissed off when they don't. But luckily now I've done enough times I know that's going to happen.

**Lenny** (00:55:20):
I was just watching a documentary about Annie Lamont who came up with the first draft concept for writers that I stick to.

**Andy Raskin** (00:55:27):
I'm a firm believer in that. Yeah.

**Lenny** (00:55:30):
As you're talking, one last thought that I had is, so you'd work with because and founders. I feel like this could be just as useful to product leaders, product managers working on a product that they're launching, just like what is the movement, where it's happening, here's why this product's important. Do you find that too?

**Andy Raskin** (00:55:45):
Absolutely. And very frequently, the product leader, chief product officer is part of this group. What I'd say though is that the reason ... so after I did this work for a few years, I looked back and I was like, which were the engagements I did where I can see it, and the narrative is really this true north star for everything?

**Andy Raskin** (00:56:10):
It was always the ones where the CEO was leading it, not just in name, but literally the person who called me who was working on the drafts with me and going through. And so initially I didn't insist that it would be the CEO doing that, but eventually I started to, and I think even for a product leader, you're going to want the support. You don't want to be just telling that story in product. You're going to want that supported from this Zuora person who gave me the initial deck, he said it, "It was like I had air cover and I was just going down and knocking down deals on the ground." You're going to want that air cover in marketing, sales, recruiting, everything. And how much better is it if it's really driven by the CEO and you have that?

**Lenny** (00:57:01):
Amazing. Is there anything else you wanted to touch on or you want to share before we get to our very exciting lighting round?

**Andy Raskin** (00:57:07):
No, except I love category design people and it's really just sort of terms that I like that are ... you know what? Forget it. Scratch that part.

**Lenny** (00:57:19):
I thought that was funny.

**Andy Raskin** (00:57:21):
Oh yeah. Okay. Yeah, we could leave it in. We could leave it in. You could even leave this in where I'm telling you to scratch it.

**Lenny** (00:57:26):
Sounds good. I was actually going to joke that I was going to cut this out and leave you hanging, but okay.

**Andy Raskin** (00:57:31):
No, you can do that. Yeah. Category design people. Love you. Don't hate me. Thank you.

**Lenny** (00:57:37):
Great. I love it. We're going to be okay, I think. Well, with that, we've reached our very exciting lightning round. I've got five questions for you. Are you ready?

**Andy Raskin** (00:57:46):
I'm ready. I saw like what you sent them, but I didn't really look at them, so I'm just going to tell you what I said. I'll go off that.

**Lenny** (00:57:52):
Perfect. Excellent. The best version of this. What are two or three books that you've recommended most to other people?

**Andy Raskin** (00:57:59):
One of the books that I read initially from that Barnes & Noble, it was Story by Robert McKee. I think a lot of people know about it who are sort of interested in story stuff, but it's kind of a Bible of people who are doing screenwriting and stuff. If anyone who's in Hollywood who thought about going to Hollywood, they know about this book. I love a book called Out of Sheer Rage. It's really not about what I do or anything, but the author is Geoff Dyer. Geoff, he's written a lot of books that are kind of essay memoir, and this is a book about him trying to write a book about DH Lawrence. So it's all about procrastinating and like, "Oh, I'm supposed to write this book. I'm about to go on a trip somewhere. Should I bring the collected works of DH Lawrence with me on the trip because that'll help me start the book, but maybe I shouldn't because it's not going to ... Then I could come back refreshed without having ..." Basically, it's all that. It's this sort of in the head. I just really enjoy that book.

**Lenny** (00:58:59):
What's a favorite recent movie or TV show that you really enjoyed?

**Andy Raskin** (00:59:03):
Station 11. Station 11. That was just so beautiful to me.

**Lenny** (00:59:09):
Trippy. That was a trippy movie. Did not expect to go where it went. I usually ask what's a favorite interview question you like to ask, and I don't know how often you're interviewing people, but does anything come to mind when I ask that?

**Andy Raskin** (00:59:21):
Well, I can tell you one thing I ask when I speak with CEOs is I like to ask, what role has this narrative played in your leadership? How does it work in your leadership? And it's always really interesting for me to hear that, 'cause I often hear things that I don't expect.

**Lenny** (00:59:39):
What's a favorite product you've recently discovered that you just really like?

**Andy Raskin** (00:59:43):
I recently got a Fitbit. I think I may have mentioned it earlier. I was looking for a product like that, and so far I'm really loving it.

**Lenny** (00:59:53):
Amazing. Have you tried other versions of Fitbits or that's the one that's working?

**Andy Raskin** (00:59:58):
I also ordered a Polar at the same time and wound up returning the Polar. Basically, it was just a little clunkier on my wrist, so I went with a Fitbit. Well, do you have one that you recommend instead?

**Lenny** (01:00:13):
I just have the Apple Watch and I've never tried a Fitbit and it gives me all this stuff that seems cool, but I've never gone further.

**Andy Raskin** (01:00:21):
I got the Fitbit like a week ago and I actually still am on the fence whether I bring it back to return it for the Apple Watch, so I'm enjoying it, but we'll see.

**Lenny** (01:00:28):
Okay. Final question. You're expert on presentations and I imagine you spend a lot of time in decks, and so just what's like one small change people can make to how they put together a deck or a presentation that will make their presentation a lot better?

**Andy Raskin** (01:00:41):
This is the one thing, make the title the takeaway of the slide so that the person looking at it has to do zero work to take away. So example, you'll sometimes see, "The problem," or, "The team." Replace, "The team," with, "Our team is veterans of whatever industry," or every single slide it's a takeaway, not a label. It'll make everything flow a lot better.

**Lenny** (01:01:17):
You did a killer job answering the lightning round questions without having a peek at what they were going to be. Andy, this was incredibly insightful. I'm going to go start working on my strategic narrative for my podcast and newsletter. Two final questions. Where can folks find you online if they want to reach out, learn more, maybe consider working with you? And then how can listeners be useful to you?

**Andy Raskin** (01:01:35):
So I mentioned LinkedIn as a way to connect with me. That's fine. My website is AndyRaskin.com. I also have a podcast where I talk with CEOs, so if you're interested in hearing more details about actual use of this, it's called The Bigger Narrative. My mom introduces every episode. I sent her the interviews in advance. I call her and interview about what she thinks people will get out of it, and that conversation becomes the intro to the podcast episode. And what was the last question?

**Lenny** (01:02:04):
How can listeners be useful to you?

**Andy Raskin** (01:02:06):
Useful to me. Just if you try any of this stuff, let me know. Like, "Hey, worked. Didn't work. Have this question." I would love to hear that stuff.

**Lenny** (01:02:17):
Amazing. Andy, thank you again for being here.

**Andy Raskin** (01:02:20):
Thanks so much for having me, Lenny. This is really fun.

**Lenny** (01:02:22):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at LennysPodcast.com. See you in the next episode.

---

## [14/19] Storytelling with Nancy Duarte: How to craft compelling presentations and tell a story that sticks

**Nancy Duarte** (00:00:00):
A lot of people think that the only time you really need to present well is when you have a big stage talk and you make the big investment in the script. The big investment in the contrasting story. I'll tell you a dirty little secret. I can get my husband to do chores for me on the weekends with a real quick, what is, what could be new bliss. So, the ability to just have that contrast as a framework in your brain during a meeting, on a phone call, any moment of influence, like literally it works. It works in any format.

**Lenny** (00:00:29):
**Nancy Duarte** (00:03:31):
Thank you for having me, Lenny.

**Lenny** (00:03:33):
How many presentations have you helped craft at this point, both directly and indirectly?

**Nancy Duarte** (00:03:38):
That's a great question. People know I'll like take a swag at data and pretend it's real. So, I had a president who took us a whack at that number in, it was 2014, and he said at that time it was 225,000, and that was almost 10 years ago, so I can't even tell you, I mean we stopped tracking, but it's a lot. I mean, in 35 years we have thousands of projects we open and each sometimes has two to a hundred presentations in it, so it'd be hard to tell.

**Lenny** (00:04:13):
200,000.

**Nancy Duarte** (00:04:15):
He said 250,000, but that was 10 years ago and I didn't do the math. So, when my team questioned it, I'm like, oh, Dan did the math. They're like, "Oh, then it's accurate." Because they thought I was just making up this number. I'm like, no, no, we actually went in and looked.

**Lenny** (00:04:31):
Okay. I was not expecting it to be that large. That's insane.

**Nancy Duarte** (00:04:34):
It's so funny because I have the whole history of the Silicon Valley in a way. It's like every little startup and then they grew to massive brands like Cisco and you could actually look at the rise and fall of all these companies. And then I actually have all the decks. I still have a lot of these archives, so I could actually verify that number exactly.

**Lenny** (00:04:52):
Okay, well this next question's going to be extra hard then. Of all the presentations you've worked on, which one stands out to you as the most memorable or most impactful?

**Nancy Duarte** (00:05:02):
I mean, it has to be Al Gore's Inconvenient Truth. It kind of hit the world in a season where nobody really knew or had an example of a really well done presentation. So, it came out before TED Talks were even out on the web, and so people had never seen someone tell a data story and stand in front of data and the scale in 90 foot screen, but we had worked with him for five years before an Inconvenient Truth. People think he went from vice president to this presenter and I didn't work with him. I let my team work with him. So, they were the ones jetting around jumping backstage at Oprah. They loved it. It was a real peak season.

**Nancy Duarte** (00:05:40):
But the thing actually that was most memorable is we work with these 20 some year old CEOs here in the Valley and they tend to show up and act like they know better than someone who's been doing this for so long. And what was so interesting about this large figure politician communicator is the team would sit in a room and say, "Hey, we think you need to do this way. We think you needed to convey it this way. We think it should be visualized this way." Or whatever it was we were proposing. And he would literally pause and touch his chin and really think, and really consider that we might actually be experts.

**Nancy Duarte** (00:06:18):
And more times than not he would adopt the way we said it should be done. And so I think as the customer who actually probably had some of the most power in the whole world to thoughtfully defer to us as experts was delightful customer and consulting experience. I mean, I remember when they called me to say it was going to become a movie and that it had gotten funded and I started to get the information. They wanted us to do a lot of work to get it movie ready. And I'll never forget, I said, "Wow, that's going to be a lot of work we'd have to do for free, and who's going to go see a movie about a slideshow anyway?" That's literally what I said. So, yeah, I just didn't believe it would become what it became. So, the whole process was amazing.

**Lenny** (00:07:05):
Did you expect the impact of what happened after that presentation or was it just like, oh, we got this one job we got to do, let's just get through it and then move on?

**Nancy Duarte** (00:07:14):
Well, we've been doing it for five years. I think the strategy, whether it was intentional or not, I don't know. So, he would go city to city to city, because he was traveling for five years seeding, like planting seeds for a groundswell, and he went into, he would go to the Stanford campus invite the Bay Area Elite, and it was always private and it was always VIP. And so he did a really good job for five years, traveling, traveling, traveling, traveling and really delivering that talk. And I think that created a desire. I don't know that it would've gotten that much traction. I don't know if people already didn't know about the presentation and hadn't already seen the presentation and they brought their friends to the movie, is how I kind of picture at least that part happening.

**Nancy Duarte** (00:07:59):
And he was generous, Lenny. I mean, at the end, when he traveled around for those five years at the end, he always had a slide with our name on it and would thank us if you're in the audience. I mean, super, and paid, mostly paid for what we did that we did give a lot of our own time. But yeah, super generous and yeah, movie became what it was. It was a bit of a surprise. It was good. The movie was good.

**Lenny** (00:08:24):
It was good. It also makes me think about a pattern that I often see of it wasn't just one presentation that changed everything. It was, you said five years of prep ahead of that, and you always see these wow overnight success stories and you always find, okay, it wasn't actually that.

**Nancy Duarte** (00:08:42):
Yeah, and he did a good job after, once it got traction, we built a whole training program where he could fly people out to his place in Tennessee and start to train people. So, it almost became a train the trainer and he could sanction you as a ambassador for it. So, it was just the way the whole thing kind of unfolded and scaled and then got traction was lovely.

**Lenny** (00:09:03):
Speaking of impressive clients, I only learned this recently, but Apple has been a client of yours since the day you were founded as an organization. Is that right?

**Nancy Duarte** (00:09:12):
Yeah, it was. Yeah.

**Lenny** (00:09:12):
Okay. How did you land that initially? And then also just what have you learned from that experience that's informed your approach to presentation, design, communication, and how you work with clients?

**Nancy Duarte** (00:09:22):
I love that question. So, yeah, I had a real job. I was working my real job and my husband had bought a Mac and he's like, "I think this is a business. I think it could be a real business." And he was an illustrator, wasn't a designer, but he had been a fine artist. And he's like, "Look, I can draw." Of course it's all pixelated and bit mappy. He goes, "Look, I could draw lines in here." And if I could show you his art studio, his work is just gorgeous. So, he's definitely a fine artist. And he's like, "I think this is a business. I think this could be a business." And I'm very pregnant. We were talking about that earlier. I am very pregnant with my son and I'm like, "Dude, you're going to go get yourself a real job. I don't want you playing around with this little Mac thing."

**Nancy Duarte** (00:10:02):
And he begged me twice in our marriage. He literally has gotten on his knees and to try to get me to see his perspective begged me. He's like, "Just read a Mac World magazine, just read it through once, and if you still don't think this could become a thing ..." Because I was working on a mainframe, I'm like, I work on a real computer. So, what happened was I made some phone calls. I called NASA and I called Tandem, which is now HP, and I called Apple and we won contracts at all three brands at the same time. And back then our company was called Duarte Desktop Publishing and Graphic Design.

**Lenny** (00:10:36):
Oh, wow.

**Nancy Duarte** (00:10:37):
I know, I know. And we slipped in. When you talk about a product lifecycle, very early, everything was still bit mappy, was not attractive. Most people as users didn't know how to typeset, didn't know how to do columns, didn't know how to make in this tool at all. And there's about an 18 month window in the life cycle of the Macintosh where graphic designers refused to use it, refused. It's a toy, it's ugly, it's bit mapped. Nobody would do it, a font like that. We use Linotype. It was very, the snobby kind of, we won't touch it. And that's right when we entered right then went and checked out books at the library on type setting, we tried to figure out what we could do, what could we do with this tool, and then the rest was kind of history. And so that's how it started and the timing and just kind of pushing the tool that nobody was that interested in that we're in the design community. It was small adoption.

**Lenny** (00:11:36):
So, that's interesting that it was cold emails basically are cold reach out just like, "Hey, we want to work with you." Yeah, that's an awesome [inaudible 00:11:42]-

**Nancy Duarte** (00:11:42):
Cold calling. Cold calling, yeah, it was.

**Lenny** (00:11:45):
What did you take away from that experience that kind of informed what works and doesn't work in presentations?

**Nancy Duarte** (00:11:51):
Presentations used to be 35 millimeter slides in an old carousel. In fact, that's what Al Gore had when he showed, he was like, here's my slide carousel from the seventies. It was just how it was done. But Apple was the first company to hook up the computer to a projector at scale. Now the projectors at these big venues like San Jose Convention Center, I mean it was huge and it was risky. So, because we were first in, they pushed us to start to do the presentations in this tool and it was black and white. Everything was black and white when we first started. And then we started to push and push and push from how we illustrated things in the tool, how we would colorize clip art. I mean, I'm talking like clip art packages just came out and they're like, "Hey, grab these, colorize them."

**Nancy Duarte** (00:12:32):
And so it was a really momentous moment to win them as an account. And I remember the tool had started to really take off and it was ugly. You can call it fugly, I don't know what you want to call it, but everyone who made slides did it so poorly, just so poorly. And we were kind of pushing the boundaries of it to make it look attractive. And there was a sales conference in 1992 in San Francisco and the leader of sales at the time was kind of a creative savant of sorts. And I remember he's like, "I don't know how you're going to do it, but I want you to take the whole slide." This is when slides were basically teleprompted covered in text. If you could stick a piece of clip art on it, you were lucky. And he said, "I want you to just make the whole slide, it's just covered with the word big in hot pink. And I want the background black, because when this slide pops up in all pink big, I want it to actually light the faces of the people in the audience."

**Nancy Duarte** (00:13:26):
And it was like I didn't know how to, we couldn't do that. We had to go into free hand, convert it to this, do these six steps, and then we came up with a small JPEG at the time or png or something and we scaled it up. So, it was still kind of pixelated. And I remember I was in that hall during the rehearsal and the production team gasped. Couple people squealed. They're like, "Who did this? I mean, it was just the word big in magenta pink." And I just remember thinking, this is how it's supposed to be done. Putting the tool in the hands of the masses kind of destroyed the medium itself.

**Nancy Duarte** (00:13:58):
And I feel like the first 10 or so years I was in business, it was reshaping this medium that ran amuck when it got into the hands of the users, it just went completely the opposite way that it was supposed to. So, it's weird to say that was a real defining moment for me to say, wait, we can do this different and we can return to how they used to be done when they were 35 millimeter slides. So, that's one story. And then I think we're very good at mapping to the brand requirements. So, we take this tool, whatever the tool, we have all our brands use different ones. They use Slides, Keynote, they use PowerPoint. We use whatever tool the brand wants and we push it in each medium. But we take their brand guidelines and really push it into the spoken word medium where when they stand up on a stage, it's cinematic. The visuals can become an experience in itself.

**Nancy Duarte** (00:14:57):
And I remember when Apple came up with the Think Different campaign. Steve Jobs was just back and my designer, everyone Photoshop was new. And everyone's doing these beveled backgrounds with tons of crap on the background. And I walked by, I'm like, "No, oh, we can't have a blue frame looking photo frame to for the Think Different campaign. This is not going to work." And so I remember looking at all the posters and remembering the Alfred Hitchcock ones. It had these particulates like these particulates, and it was just shadows.

**Nancy Duarte** (00:15:34):
And I found a stock video that Adobe had made at the time, and it was just particulates floating through the air at the angle and we stuck the six color apple on top of it. That was so revolutionary back there to push the brand and get out of the way every, the whole world was making these hideous templates. So, there are these moments that pushed the company forward because of an idea that I knew would not be okay for the Apple brand, therefore it shouldn't be okay for any brand. And I think those are just a couple stories of how to really push the medium in a way that is more pleasing to the audience. The audience just likes it better when it's really clear what you're supposed to focus on. We love that brand. We love it.

**Lenny** (00:16:22):
Okay, so let's get a little tactical, because you're talking about some very specific things that you've found to be working. So, everyone listening to this podcast has probably heard many times it's really important to be great at presentations that there's so much power in storytelling and communication, all these things. And they probably read a bunch of books and blog posts and watch videos of how to give a great presentation. But myself, and I feel like most people sit down at a deck when they're about to present to an all hand, say a week later or are going to do a meeting. And I'm always just like, okay, what do I do? Okay, there's like a beginning, middle end, they should have some kind of problem. And it's always like, I don't know what I'm doing. So, if someone were to just be listening to this podcast and they're like, I'm going to write a post-it to myself of three bullet points of things that I should remember when I'm starting a deck, what are those three bullet points?

**Nancy Duarte** (00:17:11):
Your audience is the hero. That was in my TED talk from 2011. I would say it's infuse your talk with story. And I would say it is asking yourself, can they see what I'm saying? Those would be the three tips other than starting with empathy. I mean that that's, well, audience is the hero, is the empathy centric approach.

**Lenny** (00:17:33):
Let's dive into these then. And I was actually going to ask around empathy, and it feels like that comes up a lot in your recommendations to people's empathy is kind of the heart of your methodology of telling great stories, telling great presentations. So, let's spend a little time there. Why is that so important and what does that actually look like in practice?

**Nancy Duarte** (00:17:50):
Empathy is important to Duarte, everything we do is empathy first. And some of it comes from my own childhood story a little bit. I was raised by a clinically narcissistic mom and narcissist are missing the empathy gene. So, I feel like that void of not having it modeled for me is why I keep clawing at empathy as being important. And I think a lot of people listening might work for a boss that does not have empathy, that isn't other centric, that doesn't think before they talk and all of those things. And I was raised by someone like that. And so every single book and every single model that I ever make has empathy at the core because you have to have to think about who am I speaking with, especially in communication, who am I speaking with? And so when I went on my journey through storytelling, I figured out that I thought, okay, the presenter's the hero, for sure the presenter's the hero, they're the central figure. They're talking the most. They're well lit, they're up on a stage.

**Nancy Duarte** (00:18:48):
So, when I started to look at all the archetypes, that's where I landed. And then I was like, oh my god. When I got to really digging into the mentor, I realized it's really the mentor in myths and movies that's the presenter and who really holds the power in the room of a presentation is the audience, the audience gets to make a choice if they accept or reject your idea. So, the balance of power is with them and not you. So, it really is the role of the presenter to be the mentor. And in myths and movies, the mentor comes alongside the hero. In other words, the presenter should come alongside the audience and help them get unstuck or bring a magical tool. So, I think Obi Won Kenobi's a great example.

**Nancy Duarte** (00:19:32):
He did two things for Luke Skywalker. He gave him a light saber, which was for his outer journey, the physical journey he was doing, and then an inner tool, which was the resolve, which came to him through the force. So, when you're speaking to an audience, they're going to have an internal conflict that you have to give them something to soothe. And then you're asking them to therefore go and do this thing, take this action, do this call to action. That's asking them to physically do something or physically change in some way. So, they're not going to do that for you if you haven't empathetically thought about how hard what you're asking them is going to be for them to do. And so you have to change your mindset when you're starting to build your deck to think about who am I talking to? How am I going to help them get unstuck? And that's just a super foundational principle in everything we do.

**Lenny** (00:20:29):
What is an example of that in practice as we go through these? Because this is really great of that implemented the deck that we know about maybe?

**Nancy Duarte** (00:20:38):
Oh, that we know about. So, I could talk about our own internal ones. Most of what we do is under MSAs because they're fantastical brands. So, in my own company, before I do a presentation that's going to require goals or them reaching goals or we do an annual vision talk, we do a listening tour first. So, some of it's based in survey, some of it's based in interviews. And we feed that information up and then we compare it to what we're going to ask them to do. And we do some gap analysis. We literally, there's some actual questions you can ask yourself, which are somewhat classic design thinking kind of questions about where they're at. And then what we do is I create a real rough cut or the exec team creates a real rough cut and then we invite the next level of leaders in and we do a fake, I mean the slides are ugly, we don't spend time on the slides.

**Nancy Duarte** (00:21:31):
This is about the message and maybe a model or two or three that we're going to go through to feel like it may amplify or make the message more concrete. And then they get feedback and that's when it's hard. It's hard to go from rough cut, here's what we're going to say to making it absolutely resonate. And then we deliver it after all of that work has been done, then we share it to the company. So, we go through that knowing that's the hardest presentation I deliver all year. I used to travel and speak and be a public speaker, but it's my own internal ones I have to take more time with.

**Nancy Duarte** (00:22:05):
So, when I travel and speak, they're like, oh my God, I love your models. Oh my gosh, can I get a picture with you? But when I'm standing in front of my own team, they're like, I wonder what she's going to say, because she's about to either make my job harder or she's going to change my priorities. They come in more skeptical. And we definitely have nailed the annual kickoff meeting. Definitely have nailed that. And then we do quarterly updates to that annual kickoff meeting. And it's a cadence and people get enthused and we're kind of killing it right now.

**Lenny** (00:22:40):
Yeah, that's what it feels like from the outside. I'm just thinking about the pressure to create presentations within Duarte Design. If you think about your job as hard, creating a deck for your company, imagine that.

**Nancy Duarte** (00:22:52):
Presentations in front of presentation experts is like-

**Lenny** (00:22:55):
Oh my god.

**Nancy Duarte** (00:22:56):
And I get nervous. I get really nervous because I have one slide that's kind of flawed or I say um or I pace too much. You lose a third of your team each time. They're such experts. So, it's hard.

**Lenny** (00:23:10):
I want to walk through these three bullet points. So, the first is make the listener the hero of your story. And that comes from being empathetic and understanding their challenge. So, if you're trying to do that, what are signs that you're doing it well or not well? Is there the way the flow of the story start? Is it the here's the way it starts? Or what should people identify of I'm doing this well or I'm not doing this well?

**Nancy Duarte** (00:23:31):
If the audience is the hero, you would see visible signs that they get it. People would come before I did a really good talk and people were tweeting saying, "Hey, come to this talk. It's really good." So, you'd see a reaction. You know you've done it well if you're infusing your talk with story, which is the second bullet by utilizing story structures. So, when I say storytelling, I'm talking about an anecdote. When I say story structures, I'm talking about this format of a three act structure of storytelling that goes back tens of thousands of years, which is fused into the brain like FMRI machines now you can see them while a story's being told and the science is beautiful, if you're telling me a story and I'm listening, our brains are firing in the exact same order, in the exact same place. So, it has power to align our brains.

**Nancy Duarte** (00:24:26):
And so by implementing attributes of story like a beginning, a middle, and an end, and we have method for that. And in also incorporating the rise and fall story kind of builds tension and releases it. And that's why we love it so much is we escape through someone else's messy middle and conflict and problems like it's messy and then it resolves. You build the tension and resolve it. And that's what a really well structured presentation can do. It can pull on that rise and fall in a way that creates longing.

**Nancy Duarte** (00:24:58):
So, story creates longing. It helps people long for something they'd never wanted before because if the future is told in the shape of a story and they see this alternate future, so many people escape through sci-fi. They escape through movie making into these future worlds. And so picture that you could verbally paint a picture of this future state and then you could bring your whole audience to this future state in an amazing way using this cadence of rise and fall. That's how you can incorporate story into a presentation where you need to influence others, actually really can be beautiful when it's done well.

**Lenny** (00:25:38):
And so you gave a TEDx Talk on this exact topic. And so I want to go deeper here. And you kind of shared this very visual way of thinking about a great story where it kind of goes up and down and up and down these teeth almost. Can you actually talk about-

**Nancy Duarte** (00:25:51):
[inaudible 00:25:51] pumpkin teeth. Yeah, it does.

**Lenny** (00:25:54):
Can you share what that structure visually looks like? And we'll share a link in the show notes of what that actually looks like and then just why that is so impactful and important.

**Nancy Duarte** (00:26:02):
Yeah, I love that. So, I went on a three year journey through story and I knew that the greatest speeches overall time did have that rise and fall and rise and fall. But it wasn't one single story. It had a whole lot of other very important information, but it still did this rise and fall and risen fall. So, I am not a digital native. I took a quarter inch graph paper and I would listen to all kinds and map out, took the words. When I analyzed Steve Jobs's iPhone launch speech, I did it all by hand. I wrote every word I did quarter inch graph paper. I needed to know, I needed to see it the way I work, which was analog. And so at first it was zigzaggy and I realized, wait, you can't map something over time and have it be a zigzag.

**Nancy Duarte** (00:26:49):
There was too much data lost. So, to verbally describe it, you could picture a line at the bottom of your screen and that line going left to is what is. And you need to set up every talk by stating what is. And then it moves straight up and you move to what could be come back down to the bottom line again say what is, back up, what could be, what is, what could be, what is, what could be? And then at the last what could be you state the last horizontal line is what we call the new bliss. So, this motion of traversing between what is, what could be, what's is, what could be, what is, what could be, that sense of longing for the future, it makes people leave their current state or the status quo or our current reality and makes them long for this future state by using contrast.

**Nancy Duarte** (00:27:37):
So, that rise and fall of hey, here's our current problem, here's a solution, or here's the state of the union. But we imagine it could look like this. There's so many different ways to build that cadence of contrast that's so lovely. I mean it really works. I think the talk came out in 2011 and the amounts of notes and emails of things people have accomplished by changing the structure of their presentation has been really astounding.

**Lenny** (00:28:09):
The State of the Union is a really interesting example because I'm trying to imagine this and presentations I've seen and that totally resonates of just like, here's the problem we're having and here's where we're going to go. Here's another problem we're having. Here's what I'm going to change.

**Nancy Duarte** (00:28:20):
Steve Jobs was great at that. When he launched the iPhone speech, he always did, here's the state of the company, here's how we're doing. Oh my God, our stores are more full than 10 Mac world expos. He always did a setup of what was going on. And then he did a really rapid what is, what could be when he started to compare the iPhone to the Blackberry. It's like, look how much it sucks now that you've seen what we're doing. It's just what is, what could be, what is, what could be. And so I took all the classic speeches, historical speeches, everything, presidential speeches and knew that if I could find a pattern in Dr. King and Steve Jobs's iPhone launch speech that was the same, that had the same type of nature of cadence and pulsing to it, for lack of a better word, that I knew I had solved it using story. It was a really great moment to finally draw that out on my quarter inch graph paper.

**Lenny** (00:29:19):
I love that.

**Nancy Duarte** (00:29:19):
It was awesome.

**Lenny** (00:29:22):
I feel like there's just so much opportunity for primary research that still I feel like that's why my newsletter does well is I just spent the time doing that work that you're describing of watching a thousand interviews and then just distilling, here's a takeaway here.

**Nancy Duarte** (00:29:34):
Pattern finding, that's an interesting point. I worry sometimes with the emergence of new technologies and stuff, the ability to be able to sit and think, synthesize and all of that is because a human's going to come up with different insights and synthesis than any future machine can do. So, I think it's fascinating that you do that so well and it really shows that.

**Lenny** (00:29:34):
Wow, I appreciate that.

**Nancy Duarte** (00:29:59):
Yeah, you're really putting your mind and heart into it all.

**Lenny** (00:30:02):
Enough about me, I'm thinking about, but I appreciate it, I'm thinking about product managers and founders maybe listening to this and they're like, oh man, every time I do a deck, I need to create this whole story and this up and down thing. In your experience, when do you go that far to create? Is this when you have an epic important presentation, you think about a story structure like this, or is there always a way you should put this into your presentations of some kind of story with this contrast?

**Nancy Duarte** (00:30:31):
It's interesting question. I think a lot of people think that the only time you really need to present well is when you have a big stage talk and you make the big investment in the script, the big investment in the contrasting story. But I'll tell you a dirty little secret. I can get my husband to do chores for me on the weekends with a real quick, what is, what could be new bliss, kind of just that first bit, what is, what could be new bliss. It's like even the very, very short talk that Abraham Lincoln gave in the Gettysburg address, it was basically a funeral, it was a eulogy. And back then eulogies used to be two hours long. It was an Aristotelian structure and he only had a couple hundred words, so there's no pictures of him giving it because it was so short, so tight and done.

**Nancy Duarte** (00:31:16):
They were setting up the cameras, still thinking they had tons of time. So, the ability to just have that contrast as a framework in your brain during a meeting, on a phone call, any moment of influence, getting the husband to do some chores for me, literally it works. It works in any format. And I think the investment that you make in the longer form or when it's a huge audience, you add the visuals, you really hire the speaker coaches, you really make that moment. And there's these moments that breach above all other moments where you really have to nail it just in basic conversations, in a moment of influence. If you practice it enough, it'll live in your head as a mental model for when you're in a situation where there's influence in the air that you could do.

**Lenny** (00:32:07):
How do you actually do it with your husband if you could share for helping you do the dishes?

**Nancy Duarte** (00:32:11):
Well, I won't get graphic about what the new bliss might be, but early in our marriage we figured out that, not early, I actually spent almost in the only the last 10 years we've been married for 40. And we realized that when we tangle it's usually only about process. So, the gaps are if I ask or he asks me to do something or we start to kind of pick on each other, it's because the way I'm executing something is different than the way he chose to execute it. And so it'll be anything from like, "Why are you chopping onions like that?" He'll say to me. And now I'm like, oh, we have a process gap. "Do you want to chop the onions or do you want me to chop them my way?" So, for the what is, what could be new bliss, it happens all the time.

**Nancy Duarte** (00:32:59):
So, he needs a lot of context. He's a detail-oriented person and I've started to learn with him that my what is needs to be quite a bit longer than sometimes I have patience for as I start to frame, "Oh hey baby, I need you to take the dog over to the dog care." I don't start there. I start with, "Oh my gosh, tomorrow I've got back to back meetings, in fact, I'm going to be on Lenny's Podcast right about here. And that's when she's whiny. And what's going to happen is if that doesn't happen, I'm going to have to reschedule next week and next week it's just loaded up. And you know how it is when I'm stressed out at the end of the day and I'm kind of hard to deal with and I say, well, what could be, the doggy place, she was loved it last time she was spooning with a red cavalier king spaniel and loved it."

**Nancy Duarte** (00:33:46):
It's like that, I have to unpack it a little bit more for him. And then the new bliss could be any sort of marital promise you want it to be, but I just have to unpack the current state a little bit of the process, and then I state what could be. And it's funny because acts of service like that, like him taking the dog to the doggy daycare for me or is I feel loved. So, when someone does something generous with their time for me, it's how I feel loved. And so there's a whole lot there in shaping how you communicate with someone. Empathetically at my company, everyone knows each other's love language. They know that this person feels more appreciated when they get a written note. This person feels more appreciated when they get a gift and everyone knows that. So, that's just baked into our, I don't know, our marriage, our company, just how it rolls.

**Lenny** (00:34:43):
I imagine people listening to this podcast were not expecting marriage advice. And so I love that. I'm going to try.

**Nancy Duarte** (00:34:50):
You can scrap that if it doesn't work the process tip though is good.

**Lenny** (00:34:52):
This is going to be the best part. This is going to be the whole podcast is just the segment. Just joking. But this is really good advice. I'm going to try to use it myself. So, the structure, I think it's even easier to think about this less as story, infused story. For me it's more this, what is, what could be, what is the ideal bliss, that's almost the simpler way to think about it. The story is this like, oh my God, I got to think of a story.

**Nancy Duarte** (00:35:17):
It has a beginning, middle, and an end. So, the first, what is is the beginning. The middle is the messy middle. That's where you're trying to contrast and show them that it's messy. It might be hard, it's worth it. And then the new bliss, you end with what in western cultures, where's like a happy ending. So, the new bliss is just imagine a world with your idea adopted, and then you paint a picture of that world poetically or pragmatically, and it works. It definitely works.

**Lenny** (00:35:41):
Okay, this is really great. So, just to recap, point one is to make your listener the hero of the story and come at it with empathy. And I was actually thinking the Think Different campaign is an excellent example of that because it's about you thinking differently and being this incredible creative. And then item two is infuse your presentation with story and this what is, what could be new bliss. And then, okay, and number three, what was number three again?

**Nancy Duarte** (00:36:09):
Oh, it was ask yourself if they can see what you're saying. Can they see what I'm saying would be written on the note?

**Lenny** (00:36:16):
I love this. Okay, let's talk about that. What does that mean and how do you do that?

**Nancy Duarte** (00:36:20):
Yeah, so for people to see what you're saying, that you have an opportunity to use visual tools like the presentation software, you have opportunities to have live sketchers sketch it while you're talking. There's so many ways you can help people see what you're saying. I would contend that you can use something in your talk that gives people something they'll always remember. We call that a star moment. And it could be a piece of dramatic data where the big numbers put up there. It could be an evocative story, it could be a beautiful picture. And one of the things that happens really well, especially with tech companies, is demonstrating through a picture so you can get alignment. So, the concept of a diagram when you describe your product that you're working on, is this thing inside of it, outside of it attached to it, is it on it is above it, especially architecture slides or just how technology works as something flows through a complex system.

**Nancy Duarte** (00:37:20):
When people can see that and it accompanies your verbal narrative, they can actually understand what you're conveying and move on. If you only had a verbal narrative, it wouldn't work as well. There's a lot of times though, where you don't have the support of a presentation or slides. You could be at a dinner table. If you're in a interesting conversation and you want someone to see what you're saying, that's where you pull out the napkin and you draw it. So, you could both see it, in meetings sometimes someone will just walk right up to the board and draw something. And my team, especially my design team is so good at this because they'll just stand up and say, I want to draw for you what I see, because we're about to prepare them to present to an audience. When you verbally said that, I saw this, was that your intent?

**Nancy Duarte** (00:38:03):
And then the room will stand up and we'll start all co-creating a graphic so that everyone sees the exact same thing, the exact same steps, the exact same insights in the order. So, nobody leaves with a question in their mind. And that's just so important for there to be an alignment around what is this? What are we all fighting for? What are we all living for? What are we all working for? And those moments of alignment are so, so important. And I'm a leader who sees things in the air. I just see it. And to me, my pattern finding nature, which you're like that too. I could see these patterns and to me, I see a whole scene and I could see it all clearly, but when my team's trying to look at the same thing, they might see 22 mosaic tiles out of a massive mosaic beautiful picture.

**Nancy Duarte** (00:38:53):
I see the final beautiful picture, but I've only served up a little tiny mosaic tile in a few places. And so I even have to be better about really bringing it to earth and saying, oh, here's the seven steps to get to this amazing outcome. Sometimes we see things so plainly in our mind's eye, and I was working with a really famous, powerful CEO and as she was talking, it's like, yeah, I could see her. I was watching her hand motions too, and she was like in this thing and she's moving her arms around in a distinct way and I said, I can tell you you have a picture in your mind's eye.

**Nancy Duarte** (00:39:31):
Let me draw for what I, and I did the same thing, walked up, drew had this, had this, had this. And she's like, "Exactly." And we were brought in because nobody could articulate at all what she saw in her mind's eye. And so that was a massive program to be rolled out to the entire retail. It was like a hundred thousand retail workers needed to understand this graphic and the whole process she was trying to roll out wasn't getting traction. So, the minute people could see what she was saying, then it had all the breakthroughs that needed to happen around that program.

**Lenny** (00:40:04):
That reminds me of when I was working on the super host program at Airbnb. I don't know if the story will be of any interest to anyone, but I just remember I had this very clear handset of motions that described the strategy of the super host program. And then my friend's like, you should draw this on a slide-

**Nancy Duarte** (00:40:19):
You should draw it. Unless it's such a powerful hand gesture, right? Yeah, you could do that because your body is visual. And the other thing we try to get our customers to do is, if Dr. King had slides that day of the I Have a Dream speech, it just wouldn't been as beautiful. His words painted the pictures in our mind's eye. And so when we can have the slides off so people are focused on the verbal stream and what's coming out of your mouth that is such a powerful moment is to not have any visuals supporting you. So, they're a hundred percent focused on your body, how you're showing up and on the words coming out of your mouth and they're verbally seeing what you're saying versus actually pictorially seeing what you're saying. It's good.

**Lenny** (00:41:03):
I like the idea that people are not staring at me and I prefer them distracted with a slide and I want to talk about nerves and stuff presenting in a bit. But that's interesting. So, you were talking about very kind of some concrete tips for slides and something I've heard a lot is when you're sharing a deck internally or talking an internal meeting, it's really powerful to just have obviously just a quick image thing, but then also the title of the slide is the point you want them to get from that slide. Is that something you recommend? And then generally any just very tactical advice on how to make a slide effective?

**Nancy Duarte** (00:41:35):
Yeah, the concept that each slide should make one point. So, your whole presentation should be grounded in what we call the audience journey, which is the big idea where you're trying to move them from where you're trying to move them to. Then a big idea is what is your point of view and what's at stake if they do or do not adopt it? That's the organizing mechanism for your whole deck. And then each slide itself that supports that one big, big idea, each slide itself should make one point in support of that big idea. People can't process too many things at one time, so depending on where you work, some people want something that's not the key insight at the top of the slide, some people do. So, some might want the action to be taken or some might want the dreamy future state to be clear.

**Nancy Duarte** (00:42:22):
Some consulting firms where the slides are much denser because they were paid millions of dollars to make a big old deck. Some of them are like, "Oh, it always belongs in the lower right corner." So, it's kind of a little bit up to the brand and everyone believes it belongs somewhere else. If you're making what we call a slide doc, which I think your listenership would be interested in, presentations go from big staged event to in a meeting where you're trying to persuade your peers too. Can I make a presentation I can just circulate on email and everyone gets it? Well, that's called a slide doc. You put more words, you put stronger picture. You could have a hundred page appendix and maybe the front of it's only five slides, but everything they need to see your thinking, it follows behind it.

**Nancy Duarte** (00:43:08):
And you could circulate those and people read it. You write full sentences, you write full pros. It's kind of like the six page memo that's so popular to Amazon, but we contend that the F words and pictures, the six page memo is better. So, how do you send a memo around without the help of a presenter? And that's on one extreme. And those are called slide docs that you build in presentation software. And then the other extreme is I'm on a massive stage somewhere and there's all kinds of usage in between. And so I think the one idea per slide is important. And then this guiding principle, don't make a single slide unless it supports the one big idea of your whole talk. That's another principle for slide making, because most people go back to some sort of repository in some data store somewhere and they dig through old crappy slides and see if they can assemble something super quickly.

**Nancy Duarte** (00:44:01):
And that's a cop out. Most of the time if you really think empathetically about your audience, going to the repository might get you halfway there, but you should be modifying and mapping all of the content based on who you're talking to and especially if it's high stakes. And sometimes you're speaking to an audience that wants high density slides, because that's how they communicate in their culture. And if you showed up with cinematic stage ready slides, they'd laugh you out of the room. And so you really got to, I mean, you got to know your audience, you got to know how they communicate, who they talk to and map to that.

**Lenny** (00:44:39):
**Nancy Duarte** (00:45:59):
Sometimes it's effective. So, the Minto principle is amazing. She's got the, was it horizontal and vertical thinking? So, your main segues or your main section head should add up and then all the slides should support it. And then also how the construct of it is and when you state the conclusion first, that's a great thing to do with execs. It's a great thing to do when you are fundraising. There's a certain type of an audience that works for, and there's other audiences where they really need to be taught to long for this future state and you need longer to unpack it. So, one of the reasons you would start with the conclusion is especially in a funding round, now my version of a conclusion or result or is different than how she describes it. Because I would say you start with the new bliss. So, if you're trying to raise funds, you would say, I am going to share with you something today and you share how your solution increases human flourishing.

**Nancy Duarte** (00:47:02):
It needs to be tied to the humanness and the big problem you're going to solve and how humankind will benefit. Well, that's different than just a consultant would show up and say, hi, I have this 800 page deck and the results of it are this. Let's unpack it. It's just a completely different motion and we use a three act story structure that's quite a bit different too. But that work is solid and it was based kind of like my work, her work was based in going super deep in McKinsey's thinking over time, whereas my work is going laterally across the 35 highest performing brands in the world that have been our customers. So, I went laterally across all those brands and then come up with solutions that are based, foreign story and are based in a bit of a broader application across companies that I have tons of respect for that body of work.

**Lenny** (00:47:57):
Awesome. And willing to, I wrote a post about this whole concept for folks that want to dig deeper. Maybe one more question around tactical slide stuff, and I know this is, people ask you about this stuff all the time, but I can't help it. I guess just any other tips for just like you're sitting there trying to create a couple slides. What else maybe people should keep in mind to make it effective and let's say this is for a small meeting kind of thing.

**Nancy Duarte** (00:48:18):
Yeah, that's a good question. I think that if do some thinking first, if it's important, if it's an important point of the meeting, my team is taught to just kind of sketch, change your environment up a little bit. A lot of people will fire up the deck, which is very linear. It's like make one slide, second slide, third slide. So, just think and plan for a minute. And we tend to draw up storyboards. It's like, okay, the first point, the second point, the third point or the just think first. It can be analog or digital. Put a page in front of all your decks. It's just boxes. Just get the narrative right. And then when you actually open up the software, that's where you have to think about, what's the slide type that will convey this the most? Is it a table? Put a table. Especially for program managers, you have to convey dense project information, program information, product information, and that comes with density.

**Nancy Duarte** (00:49:12):
So, if you're in a room with your peers and everyone in the room is a team and everyone has their own shorthanded and way of working, put that common slide up there. That common slide for that team might be dense to the outside world, but everyone's used to using it so there's no harm in using a commonly known, commonly acceptable framework or slide or table or Excel spreadsheet because you're aligning around a process. And so don't feel like every needs like cinematic pictures of kittens because that's not going to get you anywhere. You're trying to move an objective along, and that does mean that your slides might be more dense and sometimes internal slides have a lot more important information that needs to be on it to kick a product along or kick a process along.

**Lenny** (00:50:00):
You were just talking about process and that is a great segue to a question I wanted to ask is just what does your process look like when you're working with a company to help them craft an awesome presentation?

**Nancy Duarte** (00:50:10):
Yeah. Yeah. It's funny because I don't have to do this much anymore. I haven't done it for about 15 years, which is nice. I have a gorgeous team of strategist, writers, conceptual thinkers, beautiful design.

**Lenny** (00:50:22):
I was curious.

**Nancy Duarte** (00:50:24):
Coaches. Yeah, I know. I get coached. It's fun. I definitely, my books look awesome, not because of me, but because I'm followed around by people that do really gorgeous work. But the phrase that we use internally and sometimes with customers is we make presentations the way Pixar makes movies. And that's very similar to the way we get somebody that has this high stakes moment where it's a big deal in this moment. You have to win in the moment to push things along. And so we do, we literally craft a narrative, craft the big idea, craft the script and visualize certain moments. We start to map it out, we start to chunk it out.

**Nancy Duarte** (00:51:05):
And then big models sometimes when you're really making a revolutionary model, one that could drive all the web assets, a lot of that stuff people don't realize actually happens in the presentation first as an idea. So, sometimes we'll start working on some of the key models right away too, and we start to circulate that around the company, because everyone has to build consensus around it. So, sometimes there's multiple motions happening at the same time. Let's sketch this. You go away, you work with this department, you try to get this settled, you get that set, you get this.

**Nancy Duarte** (00:51:36):
And then it gets reassembled at the end. And then the narrative is where you work all the kinks out and then when they stand and deliver, it's like, yes, it's the voice track that all the process supported. And then other times we're building a report in a slide doc, or there was a time where we had a head of a multinational company that will remain nameless and the guy that was head of all of India was going to come over here and petition the CEO for a hundred million dollar budget.

**Nancy Duarte** (00:52:09):
It's not trivial. And he comes, is like, "Okay, I need your help with these five slides." And he just sends us the five slides and we're like, "Well yeah, a hundred million. That's kind of a lot. You really want to put technology between you and the CEO. Do you really want to sit side by side and both be looking at a computer in this moment where it's like you're petitioning him for, that's a lot of money." And he's like, "Yeah, you're right." So, what we did is we made a mental model he could hold up in his head and the structure was so simple and clear. And then there was three moments where we're like just, I don't know, just grab a piece of paper or go to a whiteboard and just start to draw in front of him. Let him see your eyes, let him have eye contact.

**Nancy Duarte** (00:52:46):
Let him see your passion. Don't be dispassionately looking at this computer. And he did it and he called us and he's like, "I got a hundred million bucks." So, it's just those moments where you have to realize, wait, wait, wait, wait. Do I need a deck? Who am I talking to? And should is this a cookie cutter thing? And does the same process work every time? No. So, every time we solve something it's very different and we try to make it unique to the presenter and the audience that they're speaking to.

**Lenny** (00:53:18):
Along the same lines, a lot of presentations now are actually remote and on Zoom and virtual. What do you recommend to people in terms of how they present and put presentations together being remote?

**Nancy Duarte** (00:53:28):
Yeah, it's funny, we spent a lot of time coaching people to look in the camera. So, while I've been talking to you, I'm not actually looking at your face. I'm looking at the little dot at the top of my screen and my camera. And not a lot of people can do that. So, it's gotten to where I can see that little white glowing dot and my heart warms, I know you're there, I feel you. I can get sensations in my skin when I know I'm talking to someone that I adore or admire. And that took a long time to get there. And I was presenting remotely pre COVID. So, a lot of our coaching was about eye contact and doing that. The other thing that happens is people don't see our hands anymore. They're under the table. They can't see how much space in a room we're taking up.

**Nancy Duarte** (00:54:15):
They can't see a lot of the characteristics that are common in communicating. And so there's a lot of coaching around presence and how do you have presence in a room? How do you even get the microphone away from someone that's remote and all those kinds of things. And a new study just came out, I just came across my desk today and it said that soft skills really suffered. And the people who did it right say and looked at the camera, they don't have good eye contact skills anymore. When they are looking face-to-face in someone's eyes, it's like, oh, they're not used to it. It's been so long.

**Nancy Duarte** (00:54:50):
And then the other thing is, where do I sit in a room who's got the position of authority? Just kind of some classic things that convey information in real life. So, it's interesting, it peaked and now people are going back to the office some. A percent are back in the office. And now we have this weird place where it's, oh, it's half in the office and half people are remote. And the people that are remote are having a hard time getting their voices heard because the people in the room consume most of the air. So, it's kind of going through this undulating life cycle of new communication skills people need while they're remote. It's all changing.

**Lenny** (00:55:34):
I'm glad that I was not a PM in this remote world to be honest. I never experienced it, but I have a lot of empathy for being a product manager in this remote work world. Feels like the job got a lot harder.

**Nancy Duarte** (00:55:44):
It did. I think it did.

**Lenny** (00:55:46):
Yeah. So, let's talk about nerves and stage fright. So, I hate public speaking. I get extremely nervous people. They may not feel this when they watch me, but it's not my natural state. You work with a lot of people that I imagine are like, oh my god, I'm so scared to give this presentation. What advice do you give them to help them through that and feel more comfortable?

**Nancy Duarte** (00:56:06):
Yeah, I think people who are more thoughtful and contemplative about speaking have better content. They tend to really think through stuff than someone who's like, I got this. I'll just wing it. I'll just walk on the stage. Anyone who's like, tells me I am a nervous presenter, I'm like, you have probably got gorgeous content in your heart that the world needs to hear, because usually they are really deep and thoughtful. Like you already mentioned, you're a pattern finder and you like to do thoughtful work. And so it's hard. My husband is actually a brilliant communicator, just getting him to feel like he wants to take up the space. He's a better communicator than I am. And so what happens is the reason you get scared, it's a fight or flight instinct. For some reason stepping out on that stage, you feel your body and your mind and your psyche is feeling threatened like you would be attacked by an animal.

**Nancy Duarte** (00:56:56):
That's literally what's happening. And so you couple things you could do. You can actually sit in one of the seats of the auditorium and just sit there and look at the stage, look at the setting so you can imagine yourself on it. But then picture yourself as that friendly face, the one that's happy to see you, the one that's delighted that you're speaking. And then as you're standing up, remember that you saw yourself sitting there smiling and very happy. You have to change your visual model that people's faces will be scowling, they'll be judging you, they'll be doubting you. All of those things are only in your head because getting you out on the stage to be able to start to expose people to this amazing content you have, the biggest battle is to get you out on this stage and delivering it.

**Nancy Duarte** (00:57:47):
And I asked a bunch of people once, I did a survey of all these public speakers and was like, how do you prepare? How do you prepare? What's your pre-talk ritual? And some of them were like, "I play heavy metal music and I skip around the entire convention center, just get all fired up." I'm like, "Wow, I have to calm myself down because I already have over to the top energy." So, I literally find the dark. I don't go to the green room, that stuff. I don't like to hear gibber jabber. I have to be focused on my content. And so I find the darkest corner of the backstage and calmly sit and just breathe. I just breathe. Sometimes if I'm nervous, if there's someone real famous in the audience, I have a little list playlist of funny things that people sent me, but I never watch. And that way right before I walk on stage, I chemically, my whole body chemically shifts from nervous to laughter. And that really helps me too, because it's chemical and you have to train your chemistry a bit.

**Lenny** (00:58:46):
I really like that tip. What are these funny things you watch if you-

**Nancy Duarte** (00:58:50):
It's like YouTube things, TikTok things. Just things that I tag and I try not to watch them or things that make me laugh. There's this dorky low watched video of a guy with tin cans wrapped around his waist and he plays them. And my husband walks around the house like him and making the noise and I could probably sing the beat if I had to. And so sometimes I just play that, because it just transports me home, because a lot of times I'm presenting away from home and it just makes me laugh at my husband who's hysterical. So, it's just random things, but if you laugh and somehow can transport yourself outside of the fear of walking out there, it helps reset you before you walk out on stage.

**Lenny** (00:59:39):
I really like that. Is there anything else just off the top of your head that just like right before you go on stage that you find to be really effective? So, watching funny videos, I love that. [inaudible 00:59:47] use it. Anything else?

**Nancy Duarte** (00:59:48):
I breathe. I think I've learned a breathing pattern. I take a deep, deep breath and then I take that one while my lungs are full, I take another gulp of breath and I have to let it out real slow. But when I got the feedback that my friend and some people get over their fear by headbanging to heavy metal, so I'm not saying that's not the wrong thing. So, I thought, well, maybe I should try that before I do a talk. And so I literally didn't do that. But I stretched, I jumped a little, just low jumps, put my arms real big up in the air. And then I walked on stage and I happened to be speaking at a massive medical company, like big brand. And I finished my talk and my assistant got a call and they were like, "We're little worried about Nancy. We think she might need to see a doctor. She could never control her breathing and we're really concerned."

**Nancy Duarte** (01:00:38):
And it was just because I just pumped myself up a little bit. So, I don't do that whatsoever anymore. I went back to my calming, contemplative, meditative pre-talk ritual. So, for some people, literally I do encourage people to try headbanging to heavy metal. It might work. It's just a matter of what you need. And nobody would guess that I'm not one to dance around or pump myself up, but I am not, I have to calm myself down. It's the opposite.

**Lenny** (01:01:09):
Awesome. Just a few more questions.

**Nancy Duarte** (01:01:12):
Sure.

**Lenny** (01:01:12):
So, you wrote a book called Illuminate and something that stood out to me from that book is this idea of a torch bearer and torch bearer leader. Can you just talk about what that is and why that is important in power?

**Nancy Duarte** (01:01:22):
Yeah, I loved writing that book. Co-author Patty Sanchez, a hat tip to her. So, to come up with this book, we knew that there's one presentation, there's a single presentation, could be on a stage, could be in a meeting, just updating people on a project status. And we knew though that every presentation usually is part of a larger movement where you're trying to move people in mass to this alternate future. So, we studied movements, we deconstructed the largest movements. We met with Marshall Ganz at Harvard to say, "Hey, could this be true?" Because he studies movements. It was so fun. And then movements have a five act structure. So, picture, there's this moment where you have to verbalize the dream like, hey, we're going to head to this new place and this is what I have to do at my kickoff meetings. It's like imagine this place in the future that we're headed to.

**Nancy Duarte** (01:02:15):
So, it's five steps, it's a five act story structure, if you want to call it five acts. It's dream, leap, fight, climb, arrive. So, the torch bearer, the reason we called that is the leaders know where they're headed, but they might not ever see it super, super clearly. And we chose a torch because a torch, if you're in a cave and you have a torch, you only see about five, eight feet around you, but it's enough to dissipate the fear of the people following you in. And so nobody sees the future clearly. Nobody has that kind of level skill. All we know is I need to traverse this direction to be at the right place in the future so all my staff is safe, all are, we stay a leader in the industry. That's all I know. And as we start to head there, there's these moments of communication you need to do, which is, hey everyone, here's the dream. Here's where we're headed. That's the dream phase.

**Nancy Duarte** (01:03:09):
Then there's this moment where they either choose to jump in and go with you or they choose not to. You could talk about Frodo like Sam and only a few hobbits followed him. And so it's like people select to commit this journey. That's the beginning of your movement. But then the middle is the messy middle of a story. We call it the fight and climb phase. So, what happens is they commit to your idea, they commit to your program, your project, and they're like enthused at first. And then they go into the state of, oh my God, this is harder than I thought. It's a long slog. This climb is getting exhausted. I don't know if I have this much fight in me to make this all work, not fight with each other, but like, oh my God, I'm having to overcome this roadblock and that roadblock and we have to go get that budget.

**Nancy Duarte** (01:03:53):
So, it's just, it's like a fight, climb, fight, climb, fight, climb. And then ultimately you arrive. Each one of those five phases you need to use speeches, stories, ceremonies and symbols at each phase to give the people traveling with you the emotional fuel they need to keep going, to keep seeing that idea become realized. And it literally is about fueling the right emotions with speeches, stories, ceremonies, and symbols while you're moving people toward a bigger initiative. So, it's bigger than just one presentation, it's multiple presentations, multiple stories, multiple ceremonies. So, I loved that book. People are really feeding off of it right now because leading change has been nonstop. It's just been change, change, change the last especially few years.

**Lenny** (01:04:40):
Change is the only constant like they say.

**Nancy Duarte** (01:04:42):
Exactly.

**Lenny** (01:04:43):
I really like this metaphor of the torch giving you a sense of, as a leader, you can see some portion around you, but you're not going to see the entire cave necessarily. That is really interesting. Maybe a final question very tactically is I give an interview where you shared that you had kind of two videos, one where it's very informal, you're just standing in front of whiteboard in jeans or something, just talking about some about data, I think in presentations. And then you had a similar video where it was very well constructed, high production value, and the informal video did a lot better. Is that something you're seeing? Just that kind of content ends up being more successful and why do you think that is?

**Nancy Duarte** (01:05:21):
I think video content, production quality now isn't the expectation for it being high quality. It's just completely shifted over the last five, eight years or so as everyone's an expert and can show up as an expert. There's a big difference to me about showing up as a keynoter, which is like, I'm going to stand, I'm going to look right. I'm going to have this eye contact, I'm going to nail it. My slides are gorgeous, I'm driving the industry. And for people to think that our explanations of things needs to be done as a stand and deliver keynote, that's just not true. So, I experimented with that and I had some videos I had done, and one of them, like you said, was me looking in the camera. I even had HD makeup, a film crew. I was well lit, I looked amazing. I mean, I did look amazing and it was polished.

**Nancy Duarte** (01:06:09):
I delivered it really well. And then I thought, because on LinkedIn I post a lot, that's where my primary channel is, and I thought what would happen if I just posted a rando shot of me? And I'm maybe airing on a little bit like orange, I look a little Trumpian, a little bit orange. It's not color corrected, but it's super informative, really full of information. And that was my highest viewed video so far. And I realized that it's like people want the content and we do as a presentation company, I have to nail it maybe more than others, but it doesn't have to be fully video edited, infographics spinning, swooshing things forward and swooshing things back.

**Nancy Duarte** (01:06:50):
That kind of nature of it is not necessary to get the message across. And so we actually have a whole process and program we're rolling out where you're going to see a lot more video from us, partially from that insight, but partially because my team, I have a team of experts, they have a lot of great things to share, and so I'm trying to give them, I'm trying to make it be like Duarte does not equal Nancy Duarte. I'm trying to make it so it's like so many experts work at Duarte, you got to watch any video from any of them is where we're moving at Duarte. They're freaks of brilliance and just experts. They're world class experts. So, that's what we're trying to do.

**Lenny** (01:07:27):
I feel like you have a similar challenge to me where I named my newsletter, Lenny's Newsletter.

**Nancy Duarte** (01:07:32):
Yeah, same thing.

**Lenny** (01:07:33):
[inaudible 01:07:33] talk about that.

**Nancy Duarte** (01:07:33):
Same thing.

**Lenny** (01:07:33):
Yeah, can never be anyone else. It's a challenge, but yeah, don't know, it worked out. Okay. Actually, real final question before we get to a very exciting lightning round. Have you seen examples of product managers specifically telling really good stories?

**Nancy Duarte** (01:07:46):
The product management process has multiple phase. There's the creative explorative process all the way through to getting it produced. And I think story can take you along in each phase. So, there's example, which I read about, I wasn't actually even part of, but Brian Chesky at Airbnb, there was a whole article where he unpacked this moment in their product development cycle where they decided they would take a walk in the shoes of their customer and they hired a Pixar illustrator to illustrate each scene as the team's like, okay, okay, they said this is her name. And they were like, okay, what happens? Her alarm goes off. Okay, what happens next? What happens next? Okay, now she's decided she needs to book something. What does she do? She wants to do that. They realized from this little walk in the shoes of their customer just this day in the life, which is a classic storytelling method for any product, they realized that they had their strategy wrong, that they needed to move as soon as possible to a mobile first strategy.

**Nancy Duarte** (01:08:46):
And it was just because they actually thought about, okay. She goes, brushes their teeth, they do this. They were just literally walking through the life of their ideal customer and that was when they realized they had it all messed up. But the other phases, after all this work people put into product and the making of the product and the managing of pushing it through. We have a large client that makes shoes or athletic things. I love telling stories, but I can't say this. And there's this moment where we get brought in and could you please train our product people in story? We're like, "What's the big problem?" They're like, "They'll spend a year or two on a shoe and be like, chunk, put it on the table. And they're like, what do you have to say about it?" They're like, "It's red." And it's like all these years of investment, all these years, they couldn't unpack any sort of story or any sort of reason or even their passion for why they chose red.

**Nancy Duarte** (01:09:41):
And it was like, here's my shoe, it's red. And so this ability to move things along by adding meaning or why and then wrapping it in a story actually can get a product chosen or rejected or there's just so many examples of different spaces in the product cycle that could benefit from a really well told story from, like I said, how the products innovate in the roadmap all the way through to what gets accepted. And then the big reveal, you think about even all the big Apple launches, it's about a big product reveal. It's about revealing this thing that had been hidden for so long and it's another moment to tell amazing stories. So, that's kind of a little bit of an insight on the product side of how to use story.

**Lenny** (01:10:27):
The Airbnb example is an awesome example. It's all true. When I joined Airbnb is actually right there in the process of doing that.

**Nancy Duarte** (01:10:34):
I love that.

**Lenny** (01:10:36):
And they ended up drawing these key frames of the journey as you described, and they put it right in the center of the office. Here's the journey of a host and a guest that's like 12 frames of that journey. And that actually became the strategy of the company is let's pick six of these frames and make them awesome. And that's what we're going to do.

**Nancy Duarte** (01:10:36):
That's awesome.

**Lenny** (01:10:54):
Make booking experience awesome. Make the arrival experience awesome. So, there's a lot of truth to that.

**Nancy Duarte** (01:11:00):
And it was visualized, right? The vision was visualized like what you're saying we're headed in the future. And it was super clear. I love that story. So cool you were there.

**Lenny** (01:11:09):
Yeah, it was very cool. And they actually were very mobile. You could grab one of these drawings and bring it to your desk and how are we going to make this moment better this week?

**Nancy Duarte** (01:11:17):
That's awesome.

**Lenny** (01:11:19):
And it was actually indeed, Pixar storyboard artist that they hired for a year. That was his job. Draw these key frames.

**Nancy Duarte** (01:11:25):
Oh, that's amazing.

**Lenny** (01:11:27):
And it connects so directly with your point about empathy. That was the epitome of empathy. Here's what the guest and hosts are going through, and here's where we can do better.

**Nancy Duarte** (01:11:37):
Yeah, it's amazing. Yeah, it does tie together.

**Lenny** (01:11:40):
If folks want to look this up, by the way, we'll link in the show notes. If you just Google Snow White Airbnb, you can watch a video of how they all kind of came about this. Well, with that, we've reached our very exciting lightning round. I've got six questions for you if you're ready.

**Nancy Duarte** (01:11:54):
Yep, I'm ready.

**Lenny** (01:11:56):
What are two or three books that you recommended most to other people?

**Nancy Duarte** (01:12:00):
I think I always classically recommend the gospels because there's just so much love and groundbreaking thinking there. And then for people who do wind up taking an interest in story, I think one of the best books, if you want to pick that up, is Chris Vogler's, The Writer's Journey, where he took Joseph Campbell's Hero's Journey, made it 12 Steps, and he was a Disney story analyst. So, it's just really classic body of work that had really helped people get their minds around story and the archetypes.

**Lenny** (01:12:30):
What is a favorite recent movie or TV show?

**Nancy Duarte** (01:12:33):
It's my little sinful pleasure. It's way into K drama, Korean drama. Don't even ask me how, but I'm way into that. I've seen almost all of them now. I'm at the bottom of the barrel of them.

**Lenny** (01:12:44):
Is there a favorite?

**Nancy Duarte** (01:12:45):
No, my husband just watched one. It's called Business Proposal, and he watched it with me and he's like, oh no, now I'm going to be hooked too. They're just real. They're just cute as a button. And they have a longer arc. They're like an epic length tail. They drop in 12 part seasons or one season 12. Anyway, don't even get me started. It sounds dumb, because I like the epic tales and the dramas, but they're cute.

**Lenny** (01:12:45):
I love it.

**Nancy Duarte** (01:13:07):
They're just cute.

**Lenny** (01:13:08):
This is great. Getting very real. What is a favorite interview question that you like to ask people that you're hiring?

**Nancy Duarte** (01:13:14):
Oh, favorite interview question. We ask a lot about who they are. So, we use psychometrics a lot here, and we really understand who they are, and we actually ask people to tell a story. And if that's uncomfortable or those psychometrics are uncomfortable, they're not really a fit, because we are a systemic story culture, and we define empathy at the company as know yourself, accept yourself, kind of work on yourself, and then adapt to others. So, if people aren't open to really understanding how they show up then and then adapt and change under our care, then we don't hire them.

**Lenny** (01:13:51):
What is a favorite product you've recently discovered that you love?

**Nancy Duarte** (01:13:55):
I'm excited about a tool I just paid for last week. It's called writer.com. So, it's built on multiple language models and including, it's going to be trained on our own, all my IP, all my books, every blog post, it'll learn the voice and it'll use my own kind of language model to help us write faster. So, we put really good prompts in and we get a really good product out. So, I'm super excited about that.

**Lenny** (01:14:17):
I'm actually an investor in that company, so this is great to hear.

**Nancy Duarte** (01:14:20):
Oh yeah. That's awesome.

**Lenny** (01:14:21):
Writer.com. What is something relatively minor you've changed in your approach to developing presentations that has had a big impact on your ability to execute and get them out?

**Nancy Duarte** (01:14:33):
Yeah. I think there's the biggest roadblock for so long that made things painful was the edit cycles. How do we do a round with a client? Then you have multiple version, then you have version control. So, we've come up with this annotation system, so everyone on a project knows exactly the status of that slide, and there's no way really to check slides in and out. And so we've come up with this amazing, beautiful, very visual process where everyone knows the exact status of the slide, and it's really easy. You could put it in thumbnail mode and be like, hmm, we're 80% complete. Everyone's going to focus on just these two things. So, that part of the process, especially enterprise at scale where 20 or 30 people are contributors to a deck. That process we made is the clients are really liking it.

**Lenny** (01:15:14):
To leave people with one final tip to give better presentations. What would that be?

**Nancy Duarte** (01:15:18):
To become a better presenter, pick a topic you are passionate about, something where you're like, oh my gosh, I've got to see this happen. And pick that topic and be so passionate about it. Work on that talk or stand up at a volunteer thing and really work on something that makes you feel passionate. And then in the future when you're presenting something that you're not passionate about, everything you learned will apply to a business presentation, but you're going to have that feeling. You're going to know what it's like to present from your soul and from a place of passion and the great presenters tap into that passion point and pull from that, and that's what makes them a great presenter on other topics, that they might not be as passionate about.

**Lenny** (01:15:58):
Nancy, I so appreciate you making time for this. It's been an honor.

**Nancy Duarte** (01:16:01):
You're amazing.

**Lenny** (01:16:02):
Everything. You're amazing.

**Nancy Duarte** (01:16:03):
You're amazing.

**Lenny** (01:16:05):
You're amazing. Two final questions. Where can folks find you if they'd like to reach out, and how can listeners be useful to you?

**Nancy Duarte** (01:16:12):
Oh, they can find me at duarte.com. There's also a duarte.com/nancy where I've got a ton of free stuff where you could find a lot of the things I've talked about. I'm on Twitter @NancyDuarte, and I do connect to everyone who connects to me on LinkedIn, which is kind of fun. So, I think, how could they be useful to me? I think it will cure so many problems if everyone became a really good communicator, so you can help me by working hard on your communication skills, working hard on your clarity, and making everyone around you much happier people.

**Lenny** (01:16:47):
What a beautiful way to end it. Nancy, again, thank you so much for being here.

**Nancy Duarte** (01:16:50):
Oh, you're amazing. Thanks for having me.

**Lenny** (01:16:52):
We're amazing. Let's end it.

**Nancy Duarte** (01:16:52):
We are. Let's just say it.

**Lenny** (01:16:56):
All right. Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [15/19] Moving fast and navigating uncertainty | Jeremy Henrickson (Rippling, Coinbase)

**Jeremy Henrickson** (00:00:00):
It's very, very tempting to float up here as a leader and say, "Hey, you take that hill over there. You guys do this over here." When in fact, where you really learn where the challenges are, or the problems or the successes is by just being there with the people in the trenches on one of the things, whichever one seems hardest or most complicated. And so I try to do that as often as I can, and I found that I always learn a lot by going through that detailed exercise.

**Lenny** (00:00:32):
**Jeremy Henrickson** (00:03:30):
Thank you so much for having me. I'm excited to be here.

**Lenny** (00:03:32):
So I've heard nothing but amazing things about you and I'm excited to learn from what you've learned from your experience at Rippling, at Coinbase, and all of the products and teams that you've built. And so thank you again for being here.

**Jeremy Henrickson** (00:03:45):
Yeah, super happy to be here.

**Lenny** (00:03:46):
So I want to start with your time at Coinbase where you were chief product officer and you were chief product officer during maybe the craziest time in the crypto markets. It was I think 2016, 2018 when I was looking at the Bitcoin prices and it was like it went from a $1000 to $20,000 I think in a matter of months. So I'm curious, what was that experience like, and in particular, what was like leading a product team through that experience?

**Jeremy Henrickson** (00:04:11):
The strongest memories for me are during 2017 where crypto, which had kind of been at its nadir in early 2016 and slowly started climbing out, just kind of took off and became a real thing in the public consciousness. And Coinbase, which at the time had an exchange just like on-ramp and off-ramp from fiat to crypto and back experienced over the course of 2017 40 x growth in usage.

**Lenny** (00:04:39):
That's like a dream come true for a lot of people.

**Jeremy Henrickson** (00:04:42):
No, I mean it was both a dream and a nightmare and I was incredibly lucky to be working on it with a team of people that I could really trust and could stand shoulder-to-shoulder within the trenches. And it was a lot of learning about how you can rapidly scale systems over time and people like to trade crypto on Saturday mornings, so a lot of Saturday mornings just some new thing would break on the edges of the system and we need to get in there and work on it. And so it was just a lot of really incredible lessons about who you choose to work with and focus and making sure you have the right people in the room at the right time.

**Lenny** (00:05:25):
Okay. So let's actually unpack a couple of those. So focus is really interesting and something people always talk about, but hard to actually do. I guess how did you keep the team focused? I imagine just everyone's getting rich all over the place in crypto.

**Jeremy Henrickson** (00:05:39):
Huh.

**Lenny** (00:05:39):
Things are breaking all the time, like how did you maintain focus on your team?

**Jeremy Henrickson** (00:05:43):
Well, the first thing is you don't talk about people getting rich. It's a very technical, you talk about like its customers, it's their money, and number one, it had to be secure. So there's a guy named Philip Barton, a friend of mine now, and he is just this amazing security leader at Coinbase, and he was able to always put these decisions that we were making extremely quickly in context and say, "Look, these are the kinds of decisions we can make and still have it be secure no matter how fast we need to move." And so security was always the number one thing. And then the second thing is focusing on both the kind of immediate nature of the issue. Hey, site is down or whatever, and resolving that, but also trying to set those in a context of where we need to go over the next six months. What are we actually shooting for? What do we believe the volumes are going to be? What's it going to take to have everything from a user experience to the deep back end of the product that what would actually work for them?

**Lenny** (00:06:41):
What was maybe the biggest challenge as a product leader trying to keep people focused and everything on the rails as things were going 40 x?

**Jeremy Henrickson** (00:06:50):
I think the biggest challenge was that in crypto there's just so much uncertainty in general, simple questions like, is Ethereum going to be a thing, are the subject of debate. And no one actually at the time had an answer to that question. Lots of really strong opinions and so you have to be able to have those debates because lots is going on, but then you have to be able to come out of those conversations with a clear kind of company point of view that you're all shooting toward. And while there may still be differing points of views and debates that happen on the margins, you go full speed toward this answer until you decide to go full speed toward a different answer. And I thought we were pretty successful at that at Coinbase and it wasn't always easy.

**Lenny** (00:07:32):
Maybe just a last question there.

**Jeremy Henrickson** (00:07:34):
Sure.

**Lenny** (00:07:34):
Living through a time like that, a lot of people are going through these periods of just intense work and it's like, holy moly, this isn't crazy stressful working, like incredibly long hours, but then you look back at those times, and end up being some most important meaningful periods of your career.

**Jeremy Henrickson** (00:07:50):
Mm-hmm.

**Lenny** (00:07:52):
I guess one is that, is that your experience too? And then two, I guess is there any advice for someone that's maybe going through something like that of just here's maybe the silver lining of being in a period like that?

**Jeremy Henrickson** (00:08:03):
So it's hard, right? It wasn't always easy. I had a new daughter who had been born just a few months earlier, really tough to balance those things, but I've always loved the rate of learning. And so it is those experiences I feel that have most sort of accelerated my own personal growth and personal learnings because it's in the crucible of things being hard. And so I think when people are going through those times, it's nice to take a step back and talk with friends or whatever about what's really going on and setting it in the context of, hey, three, four or five years now from now when we look back on this, you realize, wow. A, we did something amazing with that time. And B, we learned a lot and we were able to take that with us into whatever we were doing next after that.

**Lenny** (00:08:52):
Before our chat, I'd asked you what people ask you for advice most around, and you said that people often ask you for advice on how to maintain velocity at scale, which is something every founder and product leader is always striving to do. And so what have you learned and what do you tell people about maintaining and maybe even improving velocity as you scale?

**Jeremy Henrickson** (00:09:12):
I think there's a lot of different answers here, and I think a lot of them are very specific to the nature of the business that someone's in, like different businesses can maintain velocity in different ways. I think there's kind of a universal truth that you want small teams with clear missions. Right? If there's 300 people trying to work on one thing, the just sheer communication challenges, Dunbar's number, all of those things come into play and it's really, really hard to act quickly. And so having smaller groups of people breaking down what is always a very, very large problem into sufficiently small bits that small groups can attack wholeheartedly and minimize horizontal communication, I think is the first thing. I think the second thing is that to the extent it's like a technology problem. The more you can bake into a clear platform, it reduces the decision-making complexity for everyone who's working on the domain part of the problem.

And so a clear like a platform with a clear interface [inaudible 00:10:12] easy to use in all the ways that both engineers and product people want it to be easy to use, simplifies the space in which people have to think about these problems. And that's not always easy. Platforms are not, you can't just write a platform and hope it's going to work for the products. It's very much an iterative thing, but the more one can invest in that and have the right kinds of people who are capable of doing that sort of both systems thinking and product thinking simultaneously, I think is really important. The third thing, just from a leadership point of view is diving deep. Right? It's very, very tempting to float up here as a leader and say, "Hey, you take that hill over there, you guys do this over here." When in fact where you really learn where the challenges are or the problems or the successes is by just being there with the people in the trenches on one of the things, whichever one seems hardest or most complicated.

**Jeremy Henrickson** (00:11:05):
And so I try to do that as often as I can. And I found that I always learn a lot by going through that detailed exercise. And I think the last thing is it's just making sure that teams have the right distribution of experience and seniority. Sometimes you get a team started and the team is perhaps doing something that's zero-to-one and they're amazing at all this zero-to-one stuff.

And then two or three years later, those same people are trying to scale the product to millions of people and it turns out that A, they don't like that part of the job as much, and B, maybe they're not as good at it. So I think you [inaudible 00:11:40] constantly look at the team and make sure that a people are doing things that they love and if they're not like, Hey, we've tried this other thing instead and recalibrate the team and make sure the right kind of skill sets are there. And I found if you do all of those things and then have product leadership where we're saying this is what we need to do and very, very clear and precise on what needs to be done, then you can usually actually even accelerate over time because you bake more into this platform, it allows your engineers to do more with less, and that's always pretty amazing.

**Lenny** (00:12:07):
Okay, let me dig into a couple of these. These are really great.

**Jeremy Henrickson** (00:12:10):
[inaudible 00:12:10] please.

**Lenny** (00:12:12):
So with the small teams with clear missions, is there an example of that at Rippling or Coinbase where that was a really good example of this being true?

**Jeremy Henrickson** (00:12:20):
One example is maybe three years ago when I was just starting at the company, we decided that we needed to build a time and attendance product, lots of market demand for us and that we hadn't built it yet, something that many customers need. And so there were a bunch of ways we could have chosen to do that, but the way we did it was to say, look, let's find one engineer, really talented systems engineer who's actually capable of doing kind of product thinking and have Parker, CEO also spend time on it. And you start there and Sachit brought a few people on with him.

**Jeremy Henrickson** (00:12:56):
And those four people over the course of maybe nine months or so, built a time and attendance product. It was the only thing they were doing. They didn't have to worry about what was going on with our payroll product except to the extent they had to integrate with them a little bit. They didn't have to worry about what was going on with the benefits team or our IT products. They were monomaniacally focused on this one thing and then identifying the places where yes, you, there's connectivity to the rest of the suite, and that allowed them to move extremely quickly.

**Lenny** (00:13:24):
How much of that was Parker being on the team, helping them unblock everything versus being very small and focused?

**Jeremy Henrickson** (00:13:30):
I think it was mostly small and focused. Obviously, Parker can do things and unblock them in the way that only a CEO can and that helps. But the thing is at Rippling, like we've now replicated that a dozen times. That's our model for starting new things. And so it can't just be him unblocking things, though he does unblock things. It's more that this pattern of having these small groups be able to do things and then being able to have go to those people, whether you're Parker or somebody else in the company, and be able to say, Hey, how are things going? Or are we working on the right things? Or let's see the latest designs for that thing and comment on it.

**Jeremy Henrickson** (00:14:05):
All of those things can happen just at a much greater tempo than if you're trying to go three layers down into the org and do things. I think that's the other, maybe the key point here that everyone is exposed senior leadership, yes, we have a management structure because you have to, but that management structure does not interfere with the ability of anyone anywhere in the organization to look at what's actually happening. And that happens very directly.

**Lenny** (00:14:29):
So let's talk about that model you just described. So what is that model? So this is how you approach new products, and I know within Rippling there's many, many products and features we're going to talk about this. And you're saying that you have kind of an approach to adding a new business unit essentially, or a new product feature.

**Jeremy Henrickson** (00:14:42):
Yeah.

**Lenny** (00:14:43):
What is that model roughly?

**Jeremy Henrickson** (00:14:45):
Yeah, so the model's quite simple. In the vast majority of cases, we realize we need to build something and we have the one-page view of what that is. And usually, we're lucky enough that the things we're building sort of exist in some form in the industry today, not in the differentiated way that we can build it, but time and attendance is an example. That's a well-known thing in the industry. There's whole companies that do only that, right? So we start there, we find a single engineer who is extremely entrepreneurial, understands what it means to operate at tempo, understands what it means to make decisions with low information, understands how to work very, very quickly with a design partner.

**Jeremy Henrickson** (00:15:22):
So we have a design partner and we say, "Look, come into Rippling, spend a few months getting to know the platform first of all. So go work on this other team, understand what's easy for them, what's hard for them, how the platform works, how other products have been built on top of this. Go talk with other people who founded products here and understand what their experience is so that you can learn from and iterate on it, get an opinion about your product, and then start building it."

**Jeremy Henrickson** (00:15:48):
And during this intervening time, they're also recruiting a team of usually 2, 3, 4 other engineers who kind of have that same zero-to-one mentality and they start building. And usually over the course of six to nine months, we can get a product from a blank sheet of paper to something that is launched or at least that we're using internally when we dogfood our stuff really heavily. And then it grows from there. And then sometimes when you launch one of these products, you get close to launch, you realize, hey, actually a team of five or six people can handle this product ad nauseam. Sometimes you have to bump it up. It's like, okay, this thing's about to go to production, there's all these other things to do, the team needs now needs to go from 4 to 15 or something like that. Really depends on the product, but that's the general life cycle and then you keep growing and scaling it.

**Lenny** (00:16:34):
That is fascinating. So just so I understand, you find a founder type to take the lead on a new idea and do you recruit them internally or you sometimes find them externally just to focus on this product?

**Jeremy Henrickson** (00:16:34):
Both.

**Lenny** (00:16:34):
Interesting.

**Jeremy Henrickson** (00:16:34):
Both.

**Lenny** (00:16:46):
Okay. And then you find a design partner for them to work with to figure out what exactly needs to be built. And is it idea pick one design partner or you try to encourage a few?

**Jeremy Henrickson** (00:16:57):
Usually, it's one. So there's a designer, so we have a design-

**Lenny** (00:17:00):
Oh, design partner, meaning a designer, not a company that is like their partner in design.

**Jeremy Henrickson** (00:17:06):
Oh, no, no, no. Literally, somebody who knows Rippling's products, knows our component library, knows all of that stuff and is skilled and doing UX and interaction and visual design.

**Lenny** (00:17:19):
Got it. Okay, design. Okay, cool. And then they basically with maybe a couple engineers, just that's the team that initiates a new product line and then launches it, and then as it scales, it maybe grows the team, maybe not.

**Jeremy Henrickson** (00:17:33):
Yep, that's right. And it's pretty ad hoc, but every couple of weeks or something like that, they're meeting with me or with Parker or whichever one of us is the DRI on it and giving feedback on the designs, having a critical life or like "Oh man, if I were using this as a admin, a small company or an admin at a large company, how would I feel about this? Would this interface work for me?" And so we were pressure testing it throughout that cycle and trying to get the balance of speed and comprehensiveness, right.

**Lenny** (00:18:03):
This reminds me you're also, I hear not a big fan of MVPs that you building products to further point. Is that true? And then if so, how do you think about the initial version of a product?

**Jeremy Henrickson** (00:18:16):
First of all, I don't want to knock on MVPs. I think MVPs have their place extremely useful, particularly if you're literally the zero-to-one company that's never done anything before and you don't have clear market validation. I think in our case specifically for Rippling, a minimum viable product would do a disservice to both our customers and to the very team that was building it. And the reason I believe that is that when you design a minimum viable product, you're optimizing for speed. And in that set of optimizations, you are minimizing the deeper product thinking about what can fully differentiate our product based on not only existing kind of capabilities within our products and platform, but based on what it ought to do in the future.

**Jeremy Henrickson** (00:19:03):
And so it sort of limits product creativity, but worse, it leads to building the wrong thing technically, right? So if you're only thinking through the simple cases and you're an engineer and no one's pushing you on saying, "Wait, what about that healthcare hospital administration case where it's mission-critical life," then you're going to make a different set of as architectural assumptions, and then you're going to build on those and you're going to build on those for six months, nine months a year, and you'll have dozens or 100s of assumptions built on top of those.

**Jeremy Henrickson** (00:19:38):
And it's extremely difficult to unwind those decisions once you've built them into the product. And therefore we believe very deeply it's like, sure, understand those simple cases. Understand if you're a two-person company, you don't need all of these other things. And what is the product going to look like for you to approach it but also understand what it would mean to have 10,000 people globally around the world with this ridiculously hard use case? What's the model that would support that? And let's make sure that as we're doing the technical and product design for this thing, that it accommodates that view, even if we're not going to support it in the first version, even if we make the product decision to say, "Look, we actually don't need to handle that case right now." You still build the product in a way that's not going to prevent you from getting there in the future. And does that take a little more time? Sure, yeah. But does it save you time in the long run? Absolutely. Right. And so that's our approach.

**Lenny** (00:20:39):
Is there an example that comes to mind of a product you build at Rippling or Coinbase of just, it could have been this really simple MVP and then ended up being like, no, we did the right thing by building it further along the spectrum.

**Jeremy Henrickson** (00:20:49):
Yeah. So I think a great example of this at Rippling is our global payroll product. We could have said, "Hey, look, we just need to support this one country. We need to support, whatever, the UK," let's say. So we're going to copy all of our US stuff, just replicate it and change all the things to be UK-like. That would've been the fastest thing to do to dramatically oversimplify, but that's not what we did. What we did is we said, look, we need to launch a six countries and these are six super different countries that we want to look at. And they're going to have different requirements from an HRIS standpoint, from an employer of record standpoint, from how you pay global contractors, from how payroll works, and we're going to make a system that works for those countries. And there's lots of downstream implications for that.

**Jeremy Henrickson** (00:21:39):
But what it means is that now our global payroll system, adding a country is, it's not easy, but it's a lot easier than it would've been if you had to continue to stamp out and replicate and then of course maintain all of these things that have very little underlying connectivity. And instead, what we have is 80% of the system is baked into our global payroll platform, and then the 20% is country-specific. And most of that specificity can be handled not by engineers who are very, very expensive to change things that are local specific, but instead can be configured by somebody that's in compliance, by somebody that's in legal that needs to get the right documents into the system. And all of that stuff can be handled by the system, which allows us to move much faster sort of going forward.

**Lenny** (00:22:27):
I've heard you describe this kind of idea as you encourage teams to design for the most complex use case first.

**Jeremy Henrickson** (00:22:27):
Yeah.

**Lenny** (00:22:32):
Is that kind of the instruction you give these teams?

**Jeremy Henrickson** (00:22:35):
100%, many times. And so it's one of these things that until you're here, it's a really difficult thing to kind of grok because A, it's so counterculture to what the background that most people have come from. It's like, no, no, no, don't think about all those things. Just zoom in on this one case, use it as a wedge, and then grow from there. And this is one of the reasons that we have people, especially new people in these kind of founding roles, come in and spend a few months just absorbing the culture to really learn these lessons. And it's one reason that we're extremely high touch with kind of new products in their infancy to make sure that we just don't fall into that trap, right? Especially because simultaneously with doing this, we're like, "Hey, but we need to ship this as fast as possible." Right? And so you want to get the balance of those two things right.

**Lenny** (00:23:17):
So when I think about Rippling, I think of you got the culture is to do things the hard way and the right way. And an element of that is there's this concept that I've heard that Rippling is this compound startup? What does that term mean? And then how does that approach impact the way you build product and organize teams and all the things you were just talking about of MVPs and build new products?

**Jeremy Henrickson** (00:23:40):
The idea of a compound startup for us is that we're basically a lot of businesses that all work together. If you think about the products we offer, we have payroll, well, there's entire companies built just on payroll, insurance, and benefits, entire companies. That's our entire life. In fact, a fragment of benefits is the entire life cycle of a whole company. Our IT products, device management, and identity management, time and attendance, each of these things are industries into themselves with multi-billion dollar companies serving each of them. The insight Parker had before he founded the company was actually the result you get that when you have that is that there's all this data that gets replicated and copied and as impossible to keep in sync everywhere. The right answer is to have a single system of record, one place, one database where all of that information is resident so that each of these downstream systems can always have the right data at the right time.

**Jeremy Henrickson** (00:24:34):
And then you can build on top of that things like workflow and reporting and analytics and permissioning and all these kinds of underlying capabilities. So the idea of a compound startup is all of these different businesses benefit from being built on top of one platform. The activation energy for that is extremely high. So before my time at the company, Parker, Prasanna, the technical founder, and others, built all of the first versions of all these products and it was a minor miracle, they were able to do that. But having done it, we then had that platform and we could continue to build new verticals and new startups on top of that foundation.

**Lenny** (00:25:16):
This touches on something that comes up a number of times in this podcast, which is the importance of differentiation. And it feels like this is the differentiator for Rippling. It's not going to be just a better one of these vertical solutions like the main differentiators, we're going to do it all and everything's going to be so much better because it's all in one platform. Is that kind of where the original idea came from or is there a different way to think about that?

**Jeremy Henrickson** (00:25:38):
Yeah, I think that's right. So I mean, the fundamental contention is having a single system of record is better for many, many, many reasons, right? The most simple of which is there's a single source of truth and all of these other products can rely on it. But also, unless you start without assumption of everything being in a single system of record, there's a bunch of other things you can't do. You can't build out a, I don't know, a permissioning system that looks at the various attributes across all of these products. You now suddenly have to do an integration and each of these products talks different languages. You can't do simple things, build a product and say, who is this person's manager? Most products, you can't do that. Most products you find some system of truth, export everybody's name and email address and a spreadsheet, have another email address or another name, maybe an employee ID of who that person reports to and upload that to another system, which by the way is immediately out of date because organizational structures change all the time.

**Jeremy Henrickson** (00:26:35):
Whereas with Rippling, it's always correct. We are the system of record. So all of our products, they're like, "Hey, who's that person's manager." And the system immediately knows. And that's a very, very simple example of something that you can only do if you start with solve it to come back to an earlier point, like solve the most complex use case first, solve the fact that this data all needs to be in the same place. And so our ability to differentiate boils down to that one fundamental decision, which just allows us to do things that are literally impossible for any other company to do.

**Lenny** (00:27:09):
What would you say is one of the most unique things about Ripplings culture that maybe you haven't mentioned yet?

**Jeremy Henrickson** (00:27:15):
I would say it's fundamental, speed of execution. I think in speed of decision-making. It's the thing that is probably the hardest to explain to people before they're here. It's hard to understand until you experience it. It's like let's not schedule a meeting for next week or tomorrow or later today. We're in the middle of a meeting, we need to make a decision. Let's either make the decision or if we can't, let's Slack call in the person that we need in order to make that decision. And we'll be done with the decision today.

**Jeremy Henrickson** (00:27:44):
And like sure there are irreversible decisions you can't make that way, but for the most part, we really value the tempo of decision-making and the speed of response. And no company I've been at any scale, 5 people, 5,000 people, has ever operated at the tempo this one does. And I think that our ability to continue to operate at that tempo, which is partly due to the fact that we are a compound startup and have these small teams independently operating teams and all the rest of that is a really differentiating thing about the culture of the company.

**Lenny** (00:28:14):
I'm reading Kevin Kelly's new book where I don't know if you've seen his new book. It's all these little tidbits of advice and one of his pieces of advice is that usually the best time to do something is right now. And that feels like that resonates with the way you all think. I'm curious just how you create that culture and ability to make decisions fast. Is it purely top-down founder, this is how they behave, or is there something else that you found as effective to create this culture of moving fast, making decisions really quickly?

**Jeremy Henrickson** (00:28:43):
Obviously, a huge piece of this is Parker himself. It's an attribute of his personality, he likes making decisions quickly, and it's also a deliberate strategic decision on his part to have a company that makes decisions quickly. And so he models this constantly, right, in Slack, in conversations in person, and in every way possible. And there's an expectation throughout the company. If you kind of look at our leadership principles, this ability to make decisions quickly is something that kind of everybody promulgates. But also I think there's a number of things we've done to bake it in the way that we even do say quarterly planning. And the fact that there's this timeline for decision-making that doesn't leave a lot of room in the way that we expect people to know their domains, especially in product, right?

**Jeremy Henrickson** (00:29:29):
In product, you don't own little feature, you own your product and you're expected to be the world's foremost expert in it. And if you are, what that means is instead of having to come back to people three days later with an answer, just off the top of your head, you can be like, "Yes, this is what I think I should do about that or give me 30 minutes, look something up and I can tell you what we need to do about that." And so all of those things in combination just yield an environment in which these decisions happen very quickly.

**Lenny** (00:29:55):
You talked about quarterly planning and you're saying that there's like, here's the timelines we need to make decisions on these dates, and there's a culture of just we stay firm to that. And if you don't, then we're going to move on.

**Jeremy Henrickson** (00:30:06):
That's right. And it's shocking to people when we actually move on, right, that haven't been here yet. It's like, no, no, that date passed. You don't get to retroactively make everybody react to the fact that you didn't operate quickly enough, right? And it's not a hostile thing, it's just a, people just have to get used to. It's a deep cultural principle. And the fact that everyone stands behind it just means it's gets reinforced on its own, out of its own gravity.

**Lenny** (00:30:34):
Do you have internal values that you've kind of outlined that are a part of this? Or is that not something that you find super valuable?

**Jeremy Henrickson** (00:30:42):
No, actually I find them quite valuable. And actually our COO, Matt MacInnis, who joined the company about a year before I did, he has been the one to really drive this and you go to, I can't remember this specific URL, but on Rippling there's a search Rippling leadership principles. There they are. And they are really true to the culture of the company. The way we came up with them was to us a couple years ago, to introspect and to what actually made people successful at the company? Like who's successful, why are they successful? Why do they enjoy being here? Or alternatively the opposite, like why people not worked out, why do some people not enjoy it here? And those are the things that are differentiating and those are the things that we wrote down.

**Lenny** (00:31:23):
Are you hiring or on the flip side, are you looking for a new opportunity? Well, either way, check out lennysjobs.com/talent. If you're a hiring manager, you can sign up and get access to hundreds of hand-curated people who are open to new opportunities. Thousands of people apply to join this collective. And I personally review and accept just about 10% of them. You won't find a better place to hire product managers and growth leaders. Join almost a 100 other companies who are actively hiring through this collective. And if you're looking around for a newer opportunity actively or passively join the collective, it's free. You can be anonymous and you can even hide yourself from specific companies. You can also leave any time and you'll only hear from companies that you want to hear from. Check out lennysjobs.com/talent. For someone listening that's like, we need to move faster. And everyone always feels this, we need to move faster, we make decisions faster. What piece of advice would you give someone for helping them do this at their company?

**Jeremy Henrickson** (00:32:27):
I think it's really context-dependent, but I think it starts with whoever is in the role of making the top-level product decisions of them being one extremely clear about what those priorities are and more importantly, extremely clear about what all the priorities aren't. Right? There are so many things that could be important or people can make the case for being important or whatever that are fundamentally distracting from the core mission of getting something done.

**Jeremy Henrickson** (00:32:55):
But secondly, for that person to go all the way to ground on it, we have one of the leadership principles is go and see. Right? So to look at the thing and then walk all the way to ground and talk with the engineer who's writing the code on the thing. Because inevitably this top-level communication is insufficient to get to the detail of what matters and doesn't matter. And you don't have to do that everywhere, but if you do it in enough places, what it does is it creates a clear expectation of that kind of clarity across the board and forces everyone to up their game a little bit and just helps people understand what the expectation is. Right? And I think in the absence of those sort of clear expectations, it's difficult for people to perform at their best. Right? And so we try to do that pretty frequently.

**Lenny** (00:33:43):
Okay. I definitely want to spend more time on this, but before we get there, so go and see. I love that. And that actually has come up recently on a number of podcasts, just the importance of people continuing to ask questions and going to the end of what's possible. Recent story was IO talking about building the cash card and going to the warehouse and watching the printings of the cards and things like that.

**Jeremy Henrickson** (00:34:03):
Yeah.

**Lenny** (00:34:04):
I guess first of all, do you have a sense of where that came from and why that ended up being so important to y'all? And then two is there an example of you doing that or someone you've seen do that and that leading to something really important?

**Jeremy Henrickson** (00:34:16):
In the early days of our global efforts, when we were first trying to figure out what global payroll was, it was really tempting to say, "Oh, well we're going to go into the UK and that's going to be relatively similar to what we're doing in the US." But our kind of head of payroll went in and said, actually, here are the ways in which we knew it was going to be different, but here are the ways in which we didn't anticipate that it was going to be different, which made us realize that we had to completely alter our approach for how we think about learning about each of these countries and going into them and having a fulsome experience.

**Jeremy Henrickson** (00:34:50):
And that then backs into things like, well, every country does tax filings, every country does them slightly differently, but how are we going to build a tax filing system that's going to allow us to satisfy the needs of every country in which we're going to run payroll? And it was only through that very early on deep look at how one country was actually operating and then doing the same thing with the next country that we were able to set in motion, all of those things. It's not like we knew all the answers at that point, but it allowed us at a much earlier stage to put in motion a bunch of stuff that we need to do that then got subsequently much more clarified and much more precise over time.

**Lenny** (00:35:30):
And so the leader of that team basically just went and studied the tax laws of each-

**Jeremy Henrickson** (00:35:35):
Yeah.

**Lenny** (00:35:36):
... country.

**Jeremy Henrickson** (00:35:36):
That's right, went all the way to ground. It's like, okay, let's go and open up the big old, I mean, it's online these days, the big old textbook and look like it's, or you're in the United States, it's like you have to go look at Ohio or Pennsylvania, which have all these little local city or county based taxes. And it's incredibly instructive to look at just a few of those and think, wow, how do I think about configuring these change unannounced? Some city administrator or the city legislature, whatever they call them, they decide to change the tax rate. Well, how are we going to know about that? How are we going to change it? How are we going to change it so it's effective at the right time?

**Jeremy Henrickson** (00:36:14):
And you don't think about those things until you've gone all the way to ground and looked at how these things are actually worked, how they're communicated, and how they're thought through. And I think the same thing is true of every aspect of every product in different ways. Right? It might be a technical thing, it might be a design thing, it might be a compliance or a regulatory or a governmental thing, but whatever it is, that detail always exists. And unless you're getting down there and seeing it and understanding it firsthand, you don't really understand what your product needs to do.

**Lenny** (00:36:42):
And I think an important element of this that's between the lines maybe is don't delegate this to someone. You may have a tax expert on the team, and I imagine many leaders would be like, go figure this out and tell me. And I think what you're saying is you go do that and learn, become the world expert at it.

**Jeremy Henrickson** (00:36:55):
That's right. That's right. You go do it. You go learn and then we can make the case for hiring the tax expert, which we do have by the way now. That's an incredibly important part of our success is having that specialist but not before somebody with a product mindset. The tax specialist is amazing at tax, right? That's what they're, they love and that's what they do, but that doesn't make them necessarily a great product thinker. So the person with the product thing has to get into those same weeds first to really understand it.

**Lenny** (00:37:24):
Do you give any guidance and just how much time to spend on all that stuff versus the regular day-to-day of, say, a product leader on a team, it takes a lot of time to become a world expert on the tax systems of many countries, or is it just there's nothing more important than that, that is your job, and what are you doing not doing that? How do you think about it?

**Jeremy Henrickson** (00:37:42):
I think it's equally if a job is 80 hours a week, it's 40 of your hours. I think that you can't really understand a product unless you've gone there. Right? And yes, it takes time and you're right, you can't just ignore the other half of the job of communicating with the engineering team and writing documents or whatever, but what's the point of writing a document if you don't know what you're talking about? And so we very deeply value that. And it's one of the reasons that we keep, at least at Rippling, our product organization really thin. We expect a single leader to be able to know the full scope of the product. In fact, great product leaders can in fact do that because they have this native curiosity and interest and ability to absorb a lot of stuff. And it makes, it's a lot of fun because now I have a group of people around me who are all really good at what they do and really understand what they do and that's kind of just an amazing place to be.

**Lenny** (00:38:42):
I'm looking at this list and I just want to keep asking questions about it. One of the sure principles that I love is it reminds me of Amazon has the same principle I believe, which is leaders are right a lot.

**Jeremy Henrickson** (00:38:52):
Yeah.

**Lenny** (00:38:53):
Why do you find that to be important? I know you weren't necessarily design all these principles, but I imagine that something that you guys follow often and comes up a lot.

**Jeremy Henrickson** (00:39:01):
I mean, this is one of my favorite ones because I think particularly for a product org, right? Because product leaders have to be right most of the time because their decisions reflect across the entire org and their decisions fundamentally spend time and they spend energy. And if they make good ones, the company does really well. And if they make bad ones, the company doesn't. And one of the things I really value in product leaders are people who can go into an ambiguous information with ambiguous situation, with incomplete information and a complex decision space and can look at that and listen to everybody and read whatever they need to read and say, this is where we need to go.

**Jeremy Henrickson** (00:39:43):
And even if everyone else is like, ah, I don't know, that feels wrong for this reason, this reason if they have the confidence to make that call, and then a year later when you look back on it, for them to have been right, that's extremely valuable. And it's one of these things that it's really hard to test for. You can get it by talking with people and asking, "Hey, was this person usually right in respect?" And people think about it, but in the context of a given company, just you have to take the time and see if those decisions are largely right. And it's the one value we have. It's like you can't really learn it. Either you're really, really good at making those kinds of decisions or you're not, right? It's a very peculiar skill that we really value.

**Lenny** (00:40:28):
Awesome. Shifting a little bit, I know you all are going through this global expansion. We talked about this a little bit.

**Jeremy Henrickson** (00:40:28):
Yeah.

**Lenny** (00:40:35):
And so just a few questions along this lines, because a lot of companies start one country, most companies do, and then they decide let's expand to new markets. So I guess first question is just how do you decide which markets to go after? And specifically where to start first and then just prioritizing the list of markets? What's kind of your algorithm for that?

**Jeremy Henrickson** (00:40:55):
So it starts with an assumption that we're going to have to be everywhere ultimately, that you don't actually have to build native global payroll in every country in the world. Just makes sense to do that every country in the world. But you definitely want to be able to pay people in any country in the world and you want to be able to have contractors anywhere in the world and have their information be in your HRS anywhere in the world. And so the decision for us, we were fortunate to, or when we made that decision, to have quite a few customers already, like thousands of customers. And so we knew not only where their kind of US employees were, but by virtue of being an employee system work, we actually knew where they had other employees. And so it was quite easy for us to say, focusing on US-based companies, which is incomplete data.

**Jeremy Henrickson** (00:41:35):
But if we just look at our US-based companies, we know that there is immediate demand for those people to pay people in countries X, Y, and Z. And we just listed those out in raw numerical order. And then we kind of looked at, okay, how hard is it to build in these countries and how valuable is it to build in these countries? What is the strategic value of building in the UK or Canada or Germany or India or wherever? And then we had a discussion on where is there risk or where is this hard? Where is there a long pull? Where does this like, in what countries does it take a long time to get approval or whatever? And we just stack-ranked them and then we revisited that decision. The early decisions that we made on exactly which countries. We have subsequently reordered those over time. And as we've dove, dived in the countries, and learned more, we rejigger things like a little bit. But for the most part, that same basic list we started with is still mostly right.

**Lenny** (00:42:29):
Okay. And then the other question a lot of founders always struggle with is when is the time to start expanding internationally? Because there's pros and cons. Do you have a sense of what convinced y'all to start going international?

**Jeremy Henrickson** (00:42:41):
I think our case is slightly special, but I think the right answer to that question is always before you think you do before you think you need to because there are, it's harder than everyone if they've never done it before, it's harder than you think it is. It's more specialized than you think it is. People in the UK really, really care if there is a U in color, just as we care if there's not a U in color. There's just all of these subtle lessons that, like cultural lessons for companies that take a really, really long time to absorb. And so my view is you always should do it earlier than you think you should that, than you think you have to. In our case, it was always something we knew we had to do. In fact, we have a very clear thesis that companies that aren't global, particularly in payroll, but also in kind of insurance and benefits in IT. If you're not global, you're just not going to be around in 10 years because companies were becoming global, and then COVID happened and companies became global much faster.

**Jeremy Henrickson** (00:43:35):
It stopped being the province of 100-person companies plus and started filtering down into very, very small companies. It just became commonplace for small companies to be multi-country. And so that very much accelerated our timetable. And then you saw other people noticed that too, and you saw other companies starting to try to address parts of this problem as well. And so there's this kind of competitive dimension, which is sort of secondary in most ways because we were going to do it anyway, but that also kind of adds a little bit of a fire under the thing.

**Lenny** (00:44:06):
What have you found to be most surprising about expanding internationally to be successful in expansion? For folks that are maybe starting down this road of like, oh shoot, we should think about that.

**Jeremy Henrickson** (00:44:16):
I think the thing that was most surprising to me the first time I did this back at Guidewire in the [inaudible 00:44:23] and remains the most surprising thing to most people every time I do this again, is that every country is unique. You can't just take your US-based approach and drop it into another country. Other countries find it insulting. It doesn't matter how much success you've had here. Everyone always believes rightly or wrongly that their local context is special. And you have to respect that. And it comes down to little things like they're being a you in color or not. Or if you ever see a demo delivered to somebody in another country where they see a detailed screen about a person and it includes a social security number, it's like that you immediately lose credibility. Doesn't matter how good all the rest of your stuff is.

**Jeremy Henrickson** (00:45:08):
And I think that that is consistently the thing that I think is most surprising to people is the degree to which that's true, which seems obvious in retrospect. If you took a German system or something and demoed it in the United States with poorly translated stuff, we would think it would suck too. But it's not, it's really hard to adapt to that mindset. And so it takes just a lot of energy to overcome that organizationally.

**Lenny** (00:45:32):
Makes tons of sense. I'm going to go in a different direction now.

**Jeremy Henrickson** (00:45:36):
Sure.

**Lenny** (00:45:36):
Frameworks. So I know that you're not a huge fan of frameworks. We were chatting about this before we started recording. And so I'm curious just to hear your perspective on why you're maybe not a fan of frameworks and then also just how you crystallize processes and concepts for your team if you're not just like, Hey, here's our framework you should use.

**Jeremy Henrickson** (00:45:54):
Look, I think frameworks are very helpful. So I'm not exactly anti-framework, but I am anti-process as a substitution for deep product thinking, right? So I like to have just enough process to create a frame so that the right decisions can happen and know more. And I think there's a danger, especially as companies scale, that you end up saying, well, if only we categorize everything correctly and Jira, like we will be able to make really good prioritization decisions. So I'm like, sure, extremely helpful to have clear categorization and things that Jira doesn't have like data and analysis and to be able to do all of that stuff. But what you really need to do is decide important to build and then have a way to build it really efficiently. And so I think the right answer, the right amount of process for any given team is like, or the right framework for any team is really just dependent on their specific life cycle.

**Jeremy Henrickson** (00:46:47):
So you won't see me saying like, oh, we need to use this scrum thing or that combine thing, or whatever the latest, newest thing is. It's like, don't care about any of that. What I care is about something that's going to enable this team in this context at this point in their life cycle to build the right thing as efficiently as possible. And I'm fine if those are different for different teams. And the only place I care about unification is one on the quarterly planning process. And two, everything does need in fact to be in Jira because otherwise, you can't rationalize about what's actually getting done in not.

**Lenny** (00:47:18):
Is there a process or framework that you find is counterproductive that you're just stay away from this thing? We've had a lot of trouble with it, or generally, it's like let's just rethink everything ourselves.

**Jeremy Henrickson** (00:47:31):
No, I don't find one to be particular, I don't consistently found one to be particularly problematic. So I think any framework sort of has its place, the right place, right time. I think there's danger any one time somebody like dogmatically says, I think we should use process X because that's almost never the right answer in my experience. I think there are places where that can differ. Like you start a company on the basis of process X and everyone's bought into that process and everyone understands it. I think they can be really, really great. And on the engineering side, I think this is hugely valuable. It's like test driven-development, first line of code's going to be a test, not the actual thing. Like fantastic, very supportive of all that. I think it's kind of different in the product world.

**Lenny** (00:48:08):
If you had to compare the way Coinbase builds product process-wise or just product development to Rippling, what would you say are the bigger differences?

**Jeremy Henrickson** (00:48:17):
I think the differences are largely born of the different domains. So crypto, as we talked about earlier, really hard to predict what's going on. There's all these questions about what's the future of crypto, what's going to matter, what do we even need to build? What's going to survive? And so the process we had at Coinbase run, having those debates and getting to a decision and disagreeing, committing. And then from an execution point of view, being able to move fast. That was the trick at Coinbase. Here we know the things that we need to build at a high level. And the trick is how do we really differentiate it on the basis of these amazing platform capabilities we have? Or how do we have to evolve those platform capabilities in order to continue to build something that's just discontinuously better than everything that's out there? And that yields a different decision-making process. So for me, it's the mental model is actually of how I approach those things with the same, but they just yield different results in the actual making of the software.

**Lenny** (00:49:12):
What is that actual difference? Do you find day-to-day? Is it timeline differences? Is it how quickly, I don't know the way you structure, how far out you plan, what do you find is the concrete difference as a result?

**Jeremy Henrickson** (00:49:25):
I think the difference is in the day-to-day velocity of decision-making, because we can, Rippling, if you're on, I don't know, pick a random team. If you're on the device management team, you know what you got to do, right? There's no ambiguity. You're not debating about whether Mac or Windows is going to exist in the future. There's none of that cognitive dissonance. There is, we need to build this. It's hard to figure out how we need to build this, right? Because there's all these different things that we could leverage, but we need to basically get this done.

And so the kind of total velocity I would say is higher here, which does not say people work harder or less are at Columbia. Columbia was an amazingly fast environment, but it was also subject to the fact that you just don't know what the crypto markets are going to do, and you have to be incredibly reactive to that. And so I think maybe that's the one thing, like the reactivity to the environment and the crypto environment, what's going on, and the uncertainty of the regulatory environment, all that stuff. We got really, really, really good at handling those things really rapidly, which is something that we need to handle somewhat less [inaudible 00:50:34].

**Lenny** (00:50:33):
Sounds quite stressful at Coinbase.

**Jeremy Henrickson** (00:50:38):
Yeah, I mean it was fun. Yes, it was stressful. I mean, every job I've ever had has been stressful, but in its own unique way. But all of that stress I think is in the shape of a problem, that's in the context of a problem that's really interesting. I mean that's why I stayed at these places. But yeah, it's stressful.

**Lenny** (00:51:00):
And looking back, what a joy.

**Jeremy Henrickson** (00:51:02):
Yeah. No, there are very good memories. I look back, I don't really, I remember the stress, but I don't like re-experience it, right. I remember foraging these relationships and building these amazing products that I've been so lucky to be a part of. And so I have almost only good memories of the places I've been.

**Lenny** (00:51:21):
That's what I find too. You go through these hardships and then you look back and you're like, wow, that was so cool. But assuming they go well, assuming the company works out and-

**Jeremy Henrickson** (00:51:21):
True.

**Lenny** (00:51:29):
... it feels like it was successful. A lot of times you're at a startup, your life sucks for two years and it doesn't work out and that there is a lot of upside and good memories to that, but it's less glorious.

**Jeremy Henrickson** (00:51:41):
Yeah, that's fair though. I mean, the first company I was really at out of school's company called Reactivity back in internet one era, and we were trying to figure out how does this internet thing work and how do we start companies on the basis of these tech new technologies and how do we help other companies build stuff and figure it out? And that company fundamentally didn't work out, ultimately got kind of spun itself out and got acquired, which was great, but it was this extraordinary set of people that I was so lucky to work with and I loved all the time I spent there and it was foundational to everything else I ever did. And so even though that effort didn't pay off in the traditional set, the value of the learnings I had there and then the people I had a chance to work with was just really exceptional. So I feel very lucky.

**Lenny** (00:52:30):
That's a really good point actually. And I think I should correct even what I said that even when things don't work out, traditionally those experiences end up being incredibly valuable in all these unexpected ways.

**Jeremy Henrickson** (00:52:42):
Yeah, 100%.

**Lenny** (00:52:44):
Yeah. Okay, so final topic.

**Jeremy Henrickson** (00:52:45):
Sure.

**Lenny** (00:52:45):
I want to talk about hiring product managers and interviewing.

**Jeremy Henrickson** (00:52:48):
Yeah.

**Lenny** (00:52:49):
So you've hired a lot of PMs over the years. I'm curious, what's something you've learned about what to look for in product managers and also just in product leaders that other people may not be focused on as enough?

**Jeremy Henrickson** (00:53:00):
I mean, I don't know that I have any particularly special insight here. I think there's a couple things that I do ask that maybe are more of an emphasis because it's Rippling than not. But the first of those is when people are going through our process, there's a part where they do this case study and an important part of the case study is that it's actually too complex for people to have all of the answers upfront. There's just the space of the problem is too large to do that, which means that in the interview there's a lot of opportunities or in the case study there's a lot of opportunities. So just ask ad hoc questions or to change one assumption. And seeing how people react to that is really indicative of how deeply they understand a new problem or how quickly or how mentally agile they are.

**Jeremy Henrickson** (00:53:47):
And some people are extremely good at that here in assumption and they blink a couple times. They're like, oh, well that has these 400 implications. And they just start rattling them off. And some people get really flummoxed. I mean obviously for our environment, that former is really, really important to us. I think the other thing that really matters to me is the insightfulness of questions that people ask, which is indicative of number one, their actual interest in the job.

**Jeremy Henrickson** (00:54:14):
People tend to ask better questions when they're more excited about working at a place and done their research and are asking people about it. And also the quality of those questions can vary quite dramatically. And that's okay. I don't expect the quality to be the same all the time, but sometimes people ask a question, I'm like, "Oh man, I would've never thought to ask that question. That's such an insightful question." And then I pause and I have to think about my answer a little bit. And so it kind of pushes me to be a little bit better. And when that happens, I know I usually have pretty good candidate on my hands.

**Lenny** (00:54:42):
Is there an example of someone asking a really good question that comes to mind that you think back to and like, Oh wow, that was great.

**Jeremy Henrickson** (00:54:49):
I remember about three years ago I was interviewing a guy named Kyle Boston and Kyle is now runs our platform product organization. And I can't remember the specific question he asked, but it had something to do with, wait a minute, if you have all these products and you have this employee system of record thing underneath it, we be thinking about how to create these various pillars of underlying platform technology, things like [inaudible 00:55:22] all this stuff. And this was before we fully formalized the concept of our platform beyond the kind of employee system of record.

**Jeremy Henrickson** (00:55:29):
And I remember thinking, yes, we should, and that had entered our minds before, but the fact that somebody which who had almost no context on the company, that's what was impressive about this question. It's like, man, you've been thinking about Rippling for a couple weeks while you're interviewing with a bunch of other companies or whatever. And you've thought about it deeply enough to have this insight into the nature of the platform that we're building immediately gave me a bunch of confidence in his ability to think through the sorts of things we need him to think through.

**Lenny** (00:55:58):
And I think it touches on PMs need to be business leaders and great questions are often about the business and the future of the business and how to make it run more efficiently and this, and there's a product org element to it. But I find that that's a really underappreciated element of PM interviews, just thinking about the bigger business, not just the PM product.

**Jeremy Henrickson** (00:56:19):
For me it's two things. It's thinking about the bigger business and having the context around whether it's revenue questions or strategy questions, but also the detailed questions. It's like, oh wait a minute. The implication of this thing that I'm getting asked or of this thing with Jeremy that you said earlier is all of these things. And their ability to understand that this isn't a simple business, it's really hard, it's really complex. And the ability to have these insights to help them think through those details is really cool.

**Lenny** (00:56:49):
You talked about this prompt you give product managers not to give away what you actually asked these days, but is there an example of a prompt that you've given in the past or you think is a good example of a type of prompt to give a product manager candidate.

**Jeremy Henrickson** (00:57:01):
In terms of a general kind of approach, I think a prompt should always reflect the actual business that they're going to kind of come into. So when we do, so our process overall is actually quite short. It's basically get in contact with us somehow, eventually get connected with a hiring manager, have a conversation with them. Then more or less you have a conversation with me, which is a product discussion. And then we have a case study which follows that. That's the whole process. Modulo, other conversations around the edges. And the questions that matter are around how do people think through that product discussion, which is relevant to our business. How do people think through that case study? That's number one. And the second thing is there's always a part of my interview, which is maybe sounds very simple, but it's just like, Hey, what questions do you have for me?

**Jeremy Henrickson** (00:57:53):
We actually do that before we do the product discussion. And that's an incredibly important question because it is again indicative of these things that people have thought through or not thought through or the depth that they're thinking or their interest in engagement in the role. And at that second discussion, it doesn't have to be perfect or anything, but it is a very strong signal when people, whether they've thought through a set of questions they want to ask or just on the fly generating them, you learn a lot about how people think about product, about what they're looking for, about what they like doing and not doing, just through those questions.

**Lenny** (00:58:30):
For PMs that are maybe in their early career that are listening to this, what advice would you give them to help them accelerate and advance their career most in the early part of their career?

**Jeremy Henrickson** (00:58:41):
Be humble. Being a product person means that by definition you're living in a world where no one knows the right answer yet because if somebody did, they would've already built it. And so having, no matter how smart you are, there's a lot of smart people out there. There's always stuff you don't know. There's always people who are going to know things that you don't know. And it is only through that acknowledgement that you can actually have the humility to say, I'm open to absorbing all of this stuff, I don't know. And open to synthesizing all this stuff and coming to different conclusions.

**Jeremy Henrickson** (00:59:12):
And so I found that that humility is one of the biggest differentiators in early career leaders who are able to let go of how awesome they were in school or in their first job or whatever. I mean, I had to do this and realize the job is always hard and the job is always about discovery every single day. And if you can maintain that curiosity and elasticity of thought and creativity and light coming solutions could be awesome. But if you close yourself off to that and think you always have the right answer, then there's like no hope.

**Lenny** (00:59:49):
This touches on another principle that I still have sitting on my screen here, which is great leaders change their minds a lot or just change their minds.

**Jeremy Henrickson** (00:59:57):
Yeah. Willing to look at new information and say, my mental model is adjusted by that or I was wrong very simply. I mean I think it's also important to be operating in an environment where you're allowed to say that you're wrong, right? Everyone's wrong sometimes. I mean be right a lot, but everyone's wrong sometimes. Right? And being in be able to be an environment where you can just say, yep, I was wrong. Here's the way in which I was wrong. Let's move on, is incredibly powerful.

**Lenny** (01:00:19):
The final question you've brought up Parker a number of times and something that is clear about him is that he's a very product-minded founder. He has a lot of strong opinions about what product should be. And as a product leader with a founder like that is often a challenging place to be similar to being the first PM at a startup and the founder has strong opinions about product. So my question is just what have you learned about being successful as a product leader with a founder that has very strong opinions about what the product should be?

**Jeremy Henrickson** (01:00:47):
Yeah, no, that's a great question. So I think you've got to be adaptable, right? It's like any other relationship, right? You have to understand what the nature of that relationship is, where that person's going to care, where you're going to care, the ways in which you can challenge each other. I think fundamentally you need to make sure that person is willing to be challenged, right? So I've seen product leaders or CEOs who are kind of unwilling to be challenged and I wouldn't be able to work with those people.

**Jeremy Henrickson** (01:01:17):
But yeah, Parker is incredibly strongly opinionated, but he's also incredibly informed, which makes for some really, really great debates. And I've just found that whatever, and it's not even CEO, but whatever a manager's idiosyncrasies are, you have to find a way to work with those. And I think that adaptability, like I'm just sort of, I like being a moldable puzzle piece where I can just fit in. I think that's actually one of my core skills. And so that's worked out for me and Parker and I before I started developing a deep foundation of respect, which is extremely important to building that. And over the years it's just gotten deeper and deeper and we don't always agree, but when we can have a totally reasonable discussion about it, and that's what makes it fun.

**Lenny** (01:02:06):
Adaptability actually is, I took a strength finder test once of finding my own strengths and that was my number one strength is I'm [inaudible 01:02:14] I think we share that.

**Jeremy Henrickson** (01:02:15):
That's excellent.

**Lenny** (01:02:15):
Yeah, seems like an important attribute for being in a place in. Well with that, we've reached our very exciting lightning round. I've got six questions for you if you're ready.

**Jeremy Henrickson** (01:02:25):
All right, I'm ready. Hit me.

**Lenny** (01:02:27):
Here we go. What are two or three books that you've recommended most to other people?

**Jeremy Henrickson** (01:02:31):
Well, first is my favorite series of books ever, which is the Baroque Cycle by Neal Stephenson. It's a nine-volume epic or three-volume, nine-book epic depending on how you want to look at it. But it's about the time just before and into the enlightenment, historical fiction, a lot of fun. And I also love the Culture series by Iain Banks, which is just super fun, far-future sort of universe that I've really enjoyed.

**Lenny** (01:02:59):
What's a favorite recent movie or TV show?

**Jeremy Henrickson** (01:03:01):
Watched The Last of Us, was an avid fan of the game and I thought they did a really nice adaptation. Favorite mov, like I guess, recent movie, it's not that recent, but I really like Tenet, which I thought was a, I was impressed with their ability to go there and make that movie and I just really enjoyed it end to end.

**Lenny** (01:03:23):
It kind of ended, but we had a drinking game anytime someone mentioned Last of Us, which took over White Lotus. I'm going to drink some tea right here.

**Jeremy Henrickson** (01:03:30):
Okay, fair enough. I'll try. I've only got water normally I got tea, but water today.

**Lenny** (01:03:33):
That works. But it's interesting, it hasn't come up often, so I think maybe we end that for now and see what the new pattern emerges. And then Tenant feels like, I was just thinking it feels like a compound movie, compound startup as a movie, a movie is very complicated too to stay-

**Jeremy Henrickson** (01:03:50):
Yeah, That's why I enjoyed it. I like trying to figure out the multi-timeline chart in my head as the movie progressed.

**Lenny** (01:03:56):
The puzzle piece within you trying to find all the puzzle pieces.

**Jeremy Henrickson** (01:03:59):
Yeah, for sure.

**Lenny** (01:04:00):
What is a favorite interview question you like to ask? You already maybe answered this, but anything else come to mind?

**Jeremy Henrickson** (01:04:06):
I think I did, no, my favorite one is What questions do you have for me by far?

**Lenny** (01:04:09):
Great. What are some favorite products you've recently discovered that you love?

**Jeremy Henrickson** (01:04:14):
I guess I'll just mention, I don't know if I go as far as I call these favorite products, but there's two that come to mind. My wife's computer broke the other day and I realized it was the CPU cooler that went bad and the Corsair H60 CPU cooler was super easy to use and really adaptable to lots of motherboards. I thought that was great. My other favorite product is the one I'm wearing in my ears right now, which my first pair of nice headphones I ever bought died late last week, and had to do some really quick research into my new favorite pair of headphones. And these Focal Bathys are super nice. I'm a bit of an audio file. I like to listen to classical music and ambient stuff, so we need a lot of dynamic range and noise cancellation and these have been great so far.

**Lenny** (01:04:57):
Okay, so what are they called?

**Jeremy Henrickson** (01:04:59):
Focal, I think it's Bathys, B-A-T-H-Y-S. Okay.

**Lenny** (01:05:04):
And has there a specific model or there's like that one?

**Jeremy Henrickson** (01:05:06):
That's it.

**Lenny** (01:05:06):
Okay.

**Jeremy Henrickson** (01:05:07):
You'll know it when you see it.

**Lenny** (01:05:09):
Okay. We will link to them in show notes, so maybe I'll get one. What's something relatively minor you've changed in the way that you built product that has had a lot of impact on your team's ability to execute?

**Jeremy Henrickson** (01:05:20):
Maybe the most recent innovation sort of at Rippling was the kind of introduction of what I'm calling imperatives. These things that whether they come bottom up or top down are things that like everybody across the entire product and engineering team needs to do and what's important about that list of things that are not on it. And in a world where we could choose to do hundreds of things at once, being able to force rank that list of things, draw a line, say these are the ones everyone has to do, has created a lot more focus and clarity than we had before.

**Lenny** (01:05:48):
So imperatives are essentially here's the priorities for the next, say quarter six months here?

**Jeremy Henrickson** (01:05:53):
Here are the priorities for everybody and now integrate that into your own team's priorities, right? So each team still is building their own priorities, but they have to factor in this set.

**Lenny** (01:06:05):
How many of those do you usually have? This is awesome. I like this tip.

**Jeremy Henrickson** (01:06:09):
It depends on what level of granularity you want to talk about them at, like maybe 10, right? It's a lot. We're going through between globalization and large improvements of the platform and a bunch of other large companies. All these things, it creates a bunch of things that just have to be cross-team simultaneously. I think it's pretty natural part of a company's evolution and we're just in that part of the cycle, so-

**Lenny** (01:06:33):
Awesome.

**Jeremy Henrickson** (01:06:33):
... used it.

**Lenny** (01:06:34):
Final question, what's a question I should have asked you that I didn't ask you?

**Jeremy Henrickson** (01:06:38):
I guess, what do I do with my kids maybe? I have two kids, they're nine and-

**Lenny** (01:06:38):
What do you do with your kids?

**Jeremy Henrickson** (01:06:43):
... six. What do I do with my kids? My son, I'm a big board gamer and while I didn't push it on him, my son, he will play board games morning to night. And so we play a lot of European strategy games together and my daughter's now getting old enough that she's getting into them too. And so we just finished as a family playing Pandemic Legacy and the reward tomorrow night as we get to start playing Gloomhaven. So that's going to be fun.

**Lenny** (01:07:12):
I don't know either game, sounds very hard and complicated.

**Jeremy Henrickson** (01:07:15):
They're fun. They're fun.

**Lenny** (01:07:17):
Amazing. Jeremy, we covered a lot of topics. I feel like this is a compound podcast episode and so thank you for spending time with me. Thanks for being here. Two final questions, working folks, finding online if they want to reach out, learn more, and how can listeners be useful to you?

**Jeremy Henrickson** (01:07:32):
Awesome. LinkedIn is the easiest way online and if what I've been talking about today sounds interesting to you, we're definitely hiring like senior entrepreneurial PMs. And so if those leadership principles on our website look interesting, I'd love to hear from you.

**Lenny** (01:07:46):
What's the best way to explore those roles and apply? The

**Jeremy Henrickson** (01:07:49):
The website has by far the best channel. It gets to this right recruiter who will tell me about it right away.

**Lenny** (01:07:55):
Great, surfline.com and there's probably a site for careers.

**Jeremy Henrickson** (01:07:58):
There is a career site on there that you, pretty easy to find.

**Lenny** (01:08:00):
Okay. Rolling to that in the show notes. Jeremy, thank you again for being here.

**Jeremy Henrickson** (01:08:04):
Thanks so much for having me. This was a lot of fun.

**Lenny** (01:08:06):
Hi everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcast, Spotify, or your favorite podcast app. Also, please consider giving us a rating or a leaving review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [16/19] Building a long and meaningful career | Nikhyl Singhal (Meta, Google)

**Nikhyl Singhal** (00:00:00):
When I was a kid and I was growing up in the Midwest, entertainment was like going to the dog tracks. The way that they motivated the dogs was they had these fake rabbits. These tails would go around faster than the dogs, which would then motivate the dogs to go around in circles. And what was interesting is the moment that the dogs, if they accidentally touched the rabbit, they would never run again because there was like, "Well, what's next? I've achieved what I was looking for." So I think this happens a ton, it's like your listeners are spending time focused on like, "Well, one day I will be X. I will be that vice president. I will have more money. I will have built something. I will have started a company." But they don't think about what happens next. What's the second thing? What's your career next look like? How do you ensure that you are always going to have something important and motivating to do with your career? Otherwise, you'll keep working because you know nothing else to do, but you'll be sadder or you'll find ways to create war when peace is needed.

**Lenny** (00:01:05):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Nikhyl Singhal. Nikhyl has worked on and led large teams on four different influential consumer products including Facebook, Credit Karma, Google Hangouts, and Google Photos. Currently, he leads product teams for the Facebook app at Meta, overseeing groups, stories, messaging, and the feed. Before that, he served as chief product officer at Credit Karma and held various leadership roles at Google. Nikhyl has also co-founded three different startups, and as you'll hear in this episode, is extremely passionate about coaching and mentoring, sharing his knowledge through his newsletter and podcast called The Skip.

**Lenny** (00:01:47):
**Nikhyl Singhal** (00:04:43):
Thank you, Lenny. I appreciate it. I'm happy to be here.

**Lenny** (00:04:45):
So I have a very simple question to start. How many product managers have you been a mentor to if you had to put a number on it?

**Nikhyl Singhal** (00:04:53):
Good question. I guess I haven't thought about it from that perspective. I would say hundreds is probably the way to sort of answer the question, and a little bit has to do with whether how we define being a mentor. I know that was supposed to be a simple question and I'm going to give you a complicated answer, but I think that I started out just helping people 10, 15 years ago, trying to help them through their careers. I find the whole area really interesting. And then what happened was just I started to scale because people were always like, "Hey, can you find time?"

**Nikhyl Singhal** (00:05:22):
So now what I do is I tend to help and coach hundreds of folks through transitions. So if they're in a moment where they're trying to decide between another job, if they're trying to decide to leave, if they're having sort of an alert at work, I call them 911 calls. I take a few 911 calls every week and from a relatively large group of people. So I find those are the most substantive times to help people, is when they're in moments of dilemma or forks in the road, and that's why the number is more closer to hundreds.

**Lenny** (00:05:54):
Okay. Follow-up question: How many of those people you've mentored have been on this podcast?

**Nikhyl Singhal** (00:05:58):
Probably half dozen to kind of close to a dozen at this point.

**Lenny** (00:06:02):
Oh, wow.

**Nikhyl Singhal** (00:06:03):
Yeah, easily half dozen.

**Lenny** (00:06:06):
Amazing. Okay. Is there any names you want to name or should we keep it anonymous?

**Nikhyl Singhal** (00:06:09):
Yeah. We'll keep it anonymous because I want people to feel they can always call me in and not feel like that. I don't tend to share the names of most people.

**Lenny** (00:06:17):
Okay. I know the one person that self-identified was Annie Pearl from Calendly, who is a big advocate of the stuff that you do. So we don't want-

**Nikhyl Singhal** (00:06:23):
Yeah. Annie is someone I learned from and helped talk with, and she's also part of a community that I also build on the side where we pulled a bunch of CPOs together and they've been building community. I'm a big fan of community and learning, and she's part of that as well.

**Lenny** (00:06:39):
Awesome. I definitely want to talk about that, but maybe just set a little context for our conversation. I feel like you're in the very high percentiles of people that have seen a variety of careers in product management, both good careers, bad careers, junior people, senior people. So I want to focus most of our time on talking about just the PM career path and what you've learned about what is important to have a successful, thriving, happy PM career. Does that sound good?

**Nikhyl Singhal** (00:07:07):
Perfect.

**Lenny** (00:07:08):
Okay. So I'm thinking we break up the chat into early career, mid-career, and late career. So within the early career section, you've talked about how people often make a mistake in their early career, specifically being very short-term focused in deciding where they're going to go. And that's a very dangerous way of thinking about it. So I'd love to hear just your take on exactly what does that mean, and why is that actually a bad idea?

**Nikhyl Singhal** (00:07:33):
Yeah. I tend to be long-term focused in most of my counsel, and maybe to give you an example of what a short-term focus career kind of framework looks like is, "I really dislike my boss. I feel like this company doesn't have it anymore. There's just too hard to ship things." Those are all maybe true statements, but they probably exist in many of the jobs that one would consider if they were to move for one to another. Lateral moves are by definition not forward moves. So what I try to tell people to think about is work backwards from your end state.

**Nikhyl Singhal** (00:08:12):
Almost think of career as a product. So if you're building a good product, you think about, "Well, here's what a great product would look like," and then you break it into version one, version two, version three. Well, in some ways the reason I called my newsletter, my podcast The Skip is because I always think about not the next job, but the one after it. Maybe think about not your boss's job but your boss's boss's job and what do I need to think about to get there. And in many ways you may think, "Well, okay, if I need to found a company one day and that's my job after next," then you want to look at maybe your current job and then maybe the next job in service of that. And that may lead you to saying, "Hey, maybe I need a grit of doubt and maybe I should stay and maybe I should learn how to deal with some of this ambiguity. That's why I want people to be a bit more longer term and not so short-term focused.

**Lenny** (00:09:07):
What are some other examples of that short-term thinking? You talked about "my manager sucks, things are moving really slowly." What other examples where people maybe like, "Oh, okay, I see, this is actually short term. Let me think longer term"?

**Nikhyl Singhal** (00:09:17):
I'd say the biggest one in workplace is focusing career and promotion together. I think that there's perhaps a light connection between promotion and career addition, but I feel like too many people are, the moment we talk about career, they're like, "Well, let me talk to you. I want to have a career talk with you." And I said, "Sure, why don't you find some time?" We sit down together and they're like, "Well, what do you think I need to do to get to promotion?" And then I said, "Well, promotion is our system at this company to see you moving forward. And it's pretty clear in terms of levels and what you're doing and what the process is and who makes the decision." And that's pretty short term because you can ask, "Hey, it's two years away, how do I make it 18 months?" It's a classic.

**Nikhyl Singhal** (00:10:09):
But in reality, if you're thinking career, you're thinking about the sort of long term arc and, as I said, maybe the job after next, and then you need to look at the promotion in service because how many people have you and I talked to who said, "Well then, as soon as I get promoted, I'm going to leave"? So then I'm like, "Well, okay, then what's the promotion in service of?" And you get into that conversation, which tends to be, again, very long-term focused.

**Lenny** (00:10:36):
This makes me think about this interesting two-sided challenge with thinking about your future career and where you want to go. On the one hand, it's valuable to think about getting more logos in your resume and working at Netflix and Meta and Airbnb and Uber, all these guys, there's power and value to that. On the other hand, you just keep doing that. And then what is your life turning into? You're just chasing more fancy logos and feeling better about better brands and your resume and stuff. This might be too big a question, but just how do you advise people to think about how important it's to get some of these companies in your resume and build that side of it versus just doing things you actually enjoy and having a fulfilling life and doing things that are meaningful to you?

**Nikhyl Singhal** (00:11:18):
Yeah. I mean I think collecting labels does feel shallow to most builders because if you're a product person, you probably got into the business because you like building stuff. And frankly, not just product people want to do that, a lot of technical people want to just build stuff. And then the question is, is the things that you're working on in service of building? And then when you ask people, "Were you happy?" as they always say, "Well, when I was able to build this thing," and oftentimes they don't care whether it worked or not, which is kind of ironic. So for me, when I see people chasing logos, I think about it as well. I'm actually really a big fan of a diverse set of experiences, that I think learning about pre-product market fit then seeing smoke turn into fire and witnessing and maybe shepherding that and then taking fire and turning it into something great and being an experience set where you can see the movie in these different frames makes you just a better builder.

**Nikhyl Singhal** (00:12:20):
So you can't really go wrong if you're looking at those experiences. And you're looking at inside the building problems and outside the building problems, those are maybe consumer problems and business-to-business problems. The more diverse career you have, the better builder you are. And that usually comes up being satisfied. But the idea of just doing that because you think it's going to make your chances better for the next job maybe scares me and it feels very much in service of some future dream that is not build oriented. And I think that can be leading to sadness.

**Lenny** (00:12:54):
I love that advice, and I say this often actually on this podcast, the power of a diversity of experiences for so many reasons. Maybe just to close this loop, would you agree there is a lot of value in having one of these FAANG ish companies on your resume? Like a lot of opportunity gets unlocked if you work at one of these companies that people are like, "Oh wow, okay, this person's interesting." Or not? Or do people maybe overthink that?

**Nikhyl Singhal** (00:13:17):
Generically, the answer is yes. I think it's especially important for executives. I think that many executives are hired because they are to bring expertise of the next phase of organization to this company. We're growing, we want to go after the next phase. We want someone who's has expertise. The MAGMA or FAANG companies, however you want to describe them, they really have challenges and expertise at how to build things at scale, how to manage millions or billions of users and customers. So the advantage is, to be successful at that is an endorsement. Having said that, those specific companies, experiences can be substituted for other later stage companies, but if you're coming in as an executive to bring someone to the next level and you've never experienced it, it's very difficult thing to get that executive experience and to be like a C-level for that growth company.

**Lenny** (00:14:26):
To point out, FAANG is no longer accurate because Facebook is now Meta. So MAGMA is the term that you prefer.

**Nikhyl Singhal** (00:14:33):
I prefer that. I think it unfortunately kicks out Netflix, but it also doesn't pay homage to Adobe and Salesforce and a number of other great companies. So I think-

**Lenny** (00:14:42):
FAANG doesn't. Okay, I like this. Okay, let's try to make MAGMA the new thing. MAGMA, make that the title of this episode. Just joking.

**Lenny** (00:14:50):
So the next area I want to touch on is, you wrote this kind of hot take on something you call ex-growth companies and how it's not good to be at an ex-growth company currently. So can you just talk about what is an ex-growth company and then why is that not a good place to be as a product manager for probably any kind of role?

**Nikhyl Singhal** (00:15:09):
I have a pretty strong opinion on this that I think that for 10 years we created the hypergrowth, blitzscaling type phenomenon, and there was a lot of good reasons for that, some of which were just distribution platforms just got so good. You could take out Facebook ads, you could grow with Google, and you could grow in 18 months that maybe took previous companies 10 years. So I think that the idea was that all of these companies could instantly grow when they found product market fit and that birthed all these unicorns. And then suddenly, 18 months ago, it almost like the music stopped. 0% interest rate went away, and it became a lot harder to find growth through just fueling it with capital. And I think that the sudden change meant that not only capital was harder to raise, but companies started to focus on their core products. You've talked about it on this podcast, just how many layoffs and restructuring and managers moving to ICs, and all of that work is happening.

**Nikhyl Singhal** (00:16:16):
Well, the one funny pocket was there's these large number of growth companies who have raised substantive dollars. So they're not going to run out of capital in 2022 or 2023. What's going to happen is, they actually have quite long periods of time, so you don't see them raising new rounds, you don't see them laying off, but in some ways they're still hiring or they're still seeking the next product. The sad truth is that many of their contemporary companies that went public are worth 10% or less than what they were worth back then, and these companies are privately held and so they're sort of sleeping in the shadows.

**Nikhyl Singhal** (00:17:07):
My fear is, from a career point of view, so many tech professionals are in these organizations or joining these organizations with the expectation that they'll make money on their equity, that they'll continue to do fine. And my sense is we're going to see, even in the second half of this year, lots of boards pulling back, taking their capital back, companies essentially saying, "Hey, we're capitalized. We're a scaled ocean liner, and now we need to go find product market fit." But doing that with 300 people and expectations of hitting a multi-billion dollar valuation just isn't going to happen. So that's the reason why I'm like, "Danger. This is not the company to join, this is the company to leave. Find another phase. Time's a wasting." And I worry very much that people aren't getting the message.

**Lenny** (00:18:00):
I know you probably don't want to name any names of companies, but what are some signs that may be you're at one of these companies?

**Nikhyl Singhal** (00:18:07):
I think that the moment that you are reframing the core product, trying to find that product market implies that this company's valuation needs to be a pre-product market fit valuation. So the two questions you ask yourself the day after we listen to this podcast is, "Hey, are we scaling a product? We have customers that love us and we have a tremendous sucking sound? Or are we trying to find that customer sucking sound?" And if the answer is, "We're still trying to find it," and then you're like, "Is your evaluation hundreds of millions or tens of millions?" and if the answer is hundreds or more and you're still trying to find that sucking sound, you're an ex-growth company.

**Lenny** (00:18:57):
As a founder listening to this, I bet you're like, "Damn, we don't want people leaving. This isn't the kind of message we want to hear." On the other hand, as an employee at a company, that is your advice, just generally recognize it and then you should probably leave as soon as possible because things are not going to work out for you.

**Nikhyl Singhal** (00:19:15):
As an employee, I think you have almost no recourse because you almost have to start over in terms of it's a new four-year investment. I think that as a founder, you can recap your company. You can reset your stock price, you could reissue. You can make those hard decisions and you can maybe return some of the money to the board and still continue, or you can pull the plug and restart the company that maybe you really wanted to. But I think the founder is in a better position, but they also have a lot more to lose and far more constraints. But employees, they're not... If you listen to this and come to this conclusion, a lot of times, the listeners here, half or more of their compensation is an equity and we just concluded that most of their equity may not be worth anything. In which case, are you willing to take a half pay cut or work for 20% of what you can get on the market? My question is, that seems to be quite concerning, the opportunity cost is just too rich.

**Lenny** (00:20:19):
An important variable in this framework/piece of advice is product market fit. This might be too big of a question, but just, what tells you that something might have not have product market fit when you're at a company like this? What are signs to you and smoke signals of like, "They may not have product market fit"?

**Nikhyl Singhal** (00:20:36):
For me, it's always around this pull that sort of how much work do you have to do to basically generate pull? So right now with OpenAI for example, we're seeing ridiculous pull, but we may not be seeing, for example, massive revenue or profitability. So that's the reason why I tend to feel like you can kind of tell by how hard it is to acquire your users. When companies are putting very little in marketing and there're people coming into the door or there's such an easy sale, you've got it. I think that this sucking pull kind of concept feels like the most appropriate way to define it as opposed to the sort of unit economics of acquisition and time to pay back. There are lots of mathy ways to do it, but early on you can tell how hard are you working to bring people in the door.

**Lenny** (00:21:32):
Is there any reason to consider staying at a company like this?

**Nikhyl Singhal** (00:21:35):
There are counter examples. I think the counterpoint is, this is the biggest role that you feel like you could get and you have an appetite to sort of learn like, "I'm on the executive team, I'm not going to get that somewhere else. That experience is career additive. I want that moment." Great. Sometimes I see loyalty come in, "This was my baby. I feel a commitment to the team, the team that I've made, et cetera."

**Lenny** (00:22:07):
Yeah.

**Nikhyl Singhal** (00:22:08):
I actually respect that. I think that you have to put bounds on that. I think that you should have that conversation. But the learning position, the loyalty tend to be the primary reasons to maybe delay the decision, but fear of finding another job is a bad reason, but is an often common reason as well.

**Lenny** (00:22:34):
Now that we've given many listeners an existential crisis, let me move on to another question within the early career phase and then I'm going to move on to mid-career. I guess the question is just, is there any other piece of advice, wisdom for early PMs? Maybe the question is, what do you think they should most get right in their early career?

**Nikhyl Singhal** (00:22:56):
There's probably two answers that I would share. One is, they want to build something that they as much as possible are world-class in. So if you think about the different types of product ambiguities that exist in industry, you can be a great crafter. You could be incredibly strong at market ambiguity. You could understand how to navigate markets and create something new that doesn't exist. You can be great at organizational ambiguity. I know how to take complex teams that have complex goals and solve an inside the building problem. You can be a domain expert. I'm an ML expert, I'm a really strong hardware PM. You can be a team expert. I just really thrive in managing managers and I just know how to get the balance right. So, being a product manager means you're confronted with maybe all five or maybe more of these. I want to know that you pick up one of these as early as possible.

**Nikhyl Singhal** (00:24:07):
So maybe you become an expert in domain, maybe you become a great crafter, maybe you really think through how to manage growth. Growth is another one that I would add to the list. But picking a lane is kind of goal number one. And then maybe goal number two is having a story to tell to that next employer and that next, next. What I worry about is, sometimes when I'm in an interview, and you and I have probably done hundreds, and you're talking to someone and then they talk about those early jobs and they just sort of said they were there, this happened and it's very hard to connect, tell me exactly what you learned and what you did, I want to know that story. So it's just like Amazon talks about building the press release before they start creating a product. Think about the story, think about the skill, then solve your day to day, your week to week, your month to month, your performance review. That's my biggest advice I seize.

**Lenny** (00:25:12):
I love that advice. It connects to your other earlier piece of advice, of just try to get a variety of experiences because that'll help you figure out which of these things is maybe best suited for what you're interested in, what you enjoy doing.

**Nikhyl Singhal** (00:25:24):
Yep, absolutely.

**Lenny** (00:25:25):
Awesome. So let's transition to mid-career. Let's talk about promotions. You mentioned getting promoted earlier. We chatted a bit about that. There's probably no one ever that didn't want to get promoted. It's a common topic in people's career, but a lot of times people don't understand why they're not getting promoted, they're not sure people are looking for to get promoted. You've promoted a lot of people and you've gone through a lot of promotions. What would be your advice to give people who are trying to get promoted and just haven't been promoted? What would you suggest people in that position generally do?

**Nikhyl Singhal** (00:25:57):
Yeah, it's a great question. I think that we want to kind of understand why, and oftentimes asking your manager won't reveal the answer. So then you'll start with that. I think that the answer of what you do is correlated with what's the real reason. And I think that there may be, I'll suggest four kind of common things I've seen that really hold people back. And then depending on your environment, you have to decide how many of these apply.

**Nikhyl Singhal** (00:26:25):
So I think the number one is that you just don't have advocacy. You need someone to see the magic in you to be promoted. There is many of your listeners who have that magic but maybe have a manager or a promotion team, it doesn't always have to be the manager itself, who doesn't see said magic. And in that case, if you have the magic, you're in a bad setting and you just need to change. That could be a shift within the project. You could find a manager who sees it. It could be leaving the company. I think the second that's very common now, Lenny, and I think it's coming up a ton, is the next role doesn't exist.

**Lenny** (00:27:10):
Mm-hmm.

**Nikhyl Singhal** (00:27:11):
So this is not as present in hypergrowth because the next role always did exist. There was always growth, there was always hiring, you're always hiring people above you, below you, et cetera. Now, I think there's lots of examples of people who are really qualified and working at the next level, but the job doesn't exist. So you can't really create that job and ask them to be working at that next job if their position is mostly the previous one. Again, I feel like it's not that satisfying because it means you're still being held back, but it's radically different than if you're unqualified. These two are sort of more, the system is not in a position to advocate.

**Nikhyl Singhal** (00:27:58):
The third is when you are being impatient. And I think the hardest ones that I think I've worked with is, the highest performers have succeeded because they have set their goals to be more aggressive than what was essentially average achievable. By default, we expect you to be two years in this role. They're like, "Great, I'll see you in a year." And then they get frustrated when they can't do that, and leadership takes longer to absorb. It's more soft skills, it's more subtle. Oftentimes it's based on impact, which is a lot of times lagging, and that tends to be frustrating. So if listeners are like, "I know I'm used to being promoted annually and now I'm a leader and I'm not moving as quickly, it's time for me to go," I'm like, well, maybe that's working as intended. So impatience is a number three.

**Nikhyl Singhal** (00:28:54):
And then the fourth one I think is about 50% of the cases where it's really, there is a development area but it isn't quite connected to the individual. The listener has a development area, it's substantive. The manager is poor at identifying it, perhaps even doesn't see it, but the promotion committee does, the individual refuses to hear it, which is a very common one. Or they hear it and they just don't want to change it. And they don't do it because they're arrogant, they do it because it's like, "This is who I am. You want me to be X and I'm Y, and that's what a Y is and I don't want to be X." This is the hardest one because this is where coaching and development and self-awareness come in.

**Lenny** (00:29:46):
Amazing. This super resonates. So just to summarize the four reasons you may not be getting promoted: One is, there's no advocate that sees your magic and understands that you're awesome. Two is, there's no actual role that's available and so there's nothing to get promoted to. And that's so true right now, there's just not. Everyone's laying people off, they're getting rid of manager layers. I totally see that all over the place. Three is, you're probably just not being patient. Four, you actually have some work to do and you shouldn't be promoted. Maybe to follow a thread on that first one, if someone doesn't see your magic, I see a lot of people just complaining that like, "Oh, I'm doing so well, I'm so great and nobody understands it. No one gives me credit. No one really appreciates me." I don't know if there is an answer to this, but is there a way to help people see that no, you're actually not doing great versus you are and people just don't see it? What's a sign maybe? Maybe you're not as great as you think you might be.

**Nikhyl Singhal** (00:30:41):
**Nikhyl Singhal** (00:31:43):
You have to be great at pulling feedback, listening to it. You have to triangulate it from people that don't see you all the time, that do see you all the time, your peers. But you have to create an environment of safety where people feel like there is no worry about retaliation or concern, et cetera. And the more comfortable people are about giving feedback to you and the more you have the skills to pull it and you don't trust formal or you don't trust manager, the better shot you have of truly understanding what that real issue is and solving it.

**Lenny** (00:32:16):
This reminds me of Jules Walter who's on the podcast. He gave a bunch of advice. I don't know if you saw that. I've had to accept feedback and get people to give you feedback. And one of its pieces of advice is, ask people for real feedback. And no matter how much you're melting inside hearing it, just be like, "Thank you so much for that." Because then, people feel like, "All right, he's listening."

**Nikhyl Singhal** (00:32:34):
I think Jules is a great, probably one of the world's best people in pulling feedback in my experience. I think that the one that even ones up it is, when I talk to Jules, Jules will look for feedback, then he'll repeat it back to me better than even I presented it. And then I'd say, "Well, let me now feel safer to even provide." Because anyone who's explaining it to a place that they all not only internalize it but they can articulate clearly understands and values it. And that's the really powerful way is, "So what you're saying is I just interrupt far too often and some ways it's almost to a point that it's annoying. Is that a fair assessment?" "Oh, that's actually not the words I use," but that's what really gets people comfortable in sharing with you what's really going on.

**Lenny** (00:33:24):
Amazing. I think we're discovering some of these people that have worked with you that have been on the podcast slowly. Maybe while we're on this topic, I didn't expect to go here, but in terms of other tips for getting good feedback, is there anything else that just comes top of mind of how to get better feedback from people? Because it's hard to do. Most people talk about getting feedback and then don't, or they just don't know how. So one is just, you said repeat back exactly what they told you and be like very appreciative. Is there anything else?

**Nikhyl Singhal** (00:33:51):
I'd share out feedback. It's a little easier when you are a manager, but for example, most managers that are listening have a staff discussion. Maybe it's sort of awkward, but maybe you have a standup and you are giving notes to people. So as a manager, someone will come to me and they'll give me a piece of feedback. The next Monday when I have my staff meeting, I'll make a comment about something and I'll say, "Well, lot of this came because I got this great piece of feedback from..." and I'll name the person, and I'm like, "It really helped me see this challenge." Now, that feedback could be about me or about this project or about the team. And it might be positive, it might be constructive. People hear that and they're like, "Wow, I get recognized for giving this guy feedback. Sign me up." You're always trying to find way to break down that barrier.

**Lenny** (00:34:45):
I love that tip. You talked about managers and how often managers are not great at managers. Maybe they don't identify development areas, maybe they're bad in other areas. So maybe just a question here of just, why are managers often not great? And then two, if you're a new manager, I think a lot of listeners are maybe transitioning to management or about to transition, what's your advice for being successful as a new manager?

**Nikhyl Singhal** (00:35:12):
I'll start by saying that, in a hundred years when the archeologists look back and they see tech in the sort of early years of tech, the first 34 years, they'll say that the biggest surprise was how much we thought it was okay to not train managers. The military probably didn't make that mistake for very long before they corrected it. And most immature industries really train managers, but boy, if you're a good coder, you are ready to manage. That's the way the industry works. If you can talk, you are ready to product manage. If you can product manage and ship something out the door, you should definitely tell people what to do. I think that there's such a loose coupling between the skills to be successful at building things and teaching people how to build. It's the difference between if you can make a good car, you must know how to make the factory that makes the car. I don't think that's true at all.

**Nikhyl Singhal** (00:36:18):
I think that this is a massive epidemic, that I think there's the thousand challenges that stem from this, whether it's challenges around bias, challenges around enabling coaching and teaching and solving development areas. My hope is that one day as an industry we find ways to improve and fix it. But podcasts like yours are actually quite meaningful steps. I would say that your podcast might be more meaningful than most L&D departments in most organizations today. So that's powerful because you're having a tremendous amount of impact, and I think learning is essentially a lifelong opportunity and I think that is the type of resources that just didn't exist a decade ago.

**Nikhyl Singhal** (00:37:03):
I think to answer your question around what are the common pitfalls, if you're a first time manager listening or maybe someone who's considering it, I think there are probably two quick things that I would say you have to get bravely thoughtful about as you enter into this journey. One is, your challenge is going to be to share the steering wheel with the person or the set of people you are managing. And I think that there's this three modes that people have in their head. They're like, "Oh, management is divide and conquering. You go there, I go there, we meet up."

**Nikhyl Singhal** (00:37:39):
Or they'll say it's like riding a bike, or teaching to ride a bike, I should say. Someone starts out on the bicycle, I hold your hand, I let go, and then I hope that you fly. I think it's more like the sidecar on the motorcycle, where person's driving the motorcycle and I'm on the sidecar and whether I like it or not, I'm attached, but I have this relatively specific role of giving counsel. I think that that model of how do you share the steering wheel, not just say you got it or I got it or I got it for a while, and then I hand it to you is the key question.

**Nikhyl Singhal** (00:38:15):
And then I think that the second miss that people tend to have is they tend to, because they have power, by the way, organizational power, not because they've earned that power, they start managing whatever they define that to be. And what I find is that you're more like the vampire knocking on the door of someone. You have to be invited in. You just can't walk through the threshold. And I think that no matter how senior the person that is the manager, you have to earn the right to be the person's manager. So maybe to be specific, well, if I start managing someone, the thing I'd like to understand is like, "Hey, well, what can I help you with?" And they can invite me in. Oftentimes, the answer is, "I don't need you. I actually wasn't excited about you as a manager. I don't need another layer between you and the CEO. Get out." And I'm like, "That's cool," because anything I say after that is just going to be annoying and it's going to backfire.

**Nikhyl Singhal** (00:39:20):
Now, one day they will need help, and I will be in the sidecar waiting to say, "Perhaps I can assist." And then when you finally get to that moment where you're invited in, you pick an area or two, and then you really partner with that person on that area. I can give examples on that, but I generally think that it's this invitation picking specific and then making sure we're sharing the responsibility is the key set of notes that I would share with you.

**Lenny** (00:39:51):
What's your take on the IC path, senior IC path, something that a lot of companies talk about? I know Meta is big on this right now, the layering managers and things like that. I find a lot of times there's a lot of talk about it and there's not really a real career opportunity there. I guess, what's your just take on as that is a real option for most people trying to basically avoid the manager out and staying in IC, PM long term?

**Nikhyl Singhal** (00:40:17):
Yeah, I think that it's a little bit more acute now because of the backlash that we talked about between growth where management was perceived. So in this case, management was perceived as a way to drive expansion. So if you're in charge of expansion, you're managing the people that are doing the build and now we're doing a lot fewer things. So I think that's what's mandated this sort of growth in the IC track, for lack of a better term. I think it is one of the best things that happened to our industry because what's happened is, in the last 10 years, and you can tell I'm particularly hard on our managers here, they've basically been promising ICs that early promoted into management. They didn't get taught, and now they're sort of average managers and promising ICs. But now the story that they tell and what they've built is not awesome.

**Nikhyl Singhal** (00:41:22):
If I'm looking to hire, if I'm in a growth company and I'm the next hottest thing and I'm looking to hire someone and someone walks into the interview and said, "Look, I've managed two people before and then I was in the charge of this thing, but they really did the details. And then by the way before that, I was early in trying to get this thing out the door and then they picked me to be manager," I'm like, "Okay, that's an interesting set of experiences. I'm looking, for me, in my company to build something."

**Nikhyl Singhal** (00:41:47):
The next person walks in, it's like, "I've been an IC for that whole time. And during that time I went from learning something to demonstrating it to really being able to take it forward. And I got one of these ambiguities master. I'm an expert in domain. I'm an expert in managing organizations," I'm like, "I don't need a team ambiguous expert. That's not my hard part. My hard part is actually cracking the code on this complex market or this very complicated organization where we have two teams that have different goals. You're the type of person I want."

**Nikhyl Singhal** (00:42:19):
So I think Lenny, to your question, I think the IC track is one of the best things that's going to happen for people career. But to your point, those tracks, from a promotion and from a industry, how we perceive it, they're not in cement yet. They're tender. You wait six months, you wait nine months, they'll become very, very strong and solid. And I think then, we'll be able to lean very hard into them as a real promising crack for builders.

**Lenny** (00:42:54):
Your sense is, this is going to become more and more real as these layoffs have happened and kind of pullbacks on growth have happened.

**Nikhyl Singhal** (00:43:00):
Yeah, I mean, if you think about it, it's the reality in engineering and design. So in engineering, you can be the sort of VP of engineering or CTO, and in a design, a lot of designers become design managers, a lot of them stay as crafters. And then for whatever reason in product managers, maybe because they were managers in our title, we just all became managers. What about the product? What about the other side? So I actually think it's a bug that has existed for a long time that actually we're going to correct permanently now.

**Lenny** (00:43:33):
I wonder if part of it for PMs is, once you become a manager, this happens to me, I didn't want to be an IC anymore. It's like, "I'm done with that. I really enjoy this management layer." And I imagine with engineers, maybe they'll enjoy the coding. When I was an engineer I was like, "Oh, I don't want to just sit around and manage. I just want to code." So I wonder if there's any part of that.

**Nikhyl Singhal** (00:43:52):
But a lot of your listeners like to build. And actually, when they talk to their managers, they're like, "I don't know if that job is awesome. It feels like you spend all your time writing docs and telling your boss's boss what to justify resources and headcount. I just want to build stuff. You don't build stuff." So I think there might be some of that. I think that it's not perfect, but I think hopefully builder and IC will become more synonymous.

**Lenny** (00:44:19):
**Nikhyl Singhal** (00:45:37):
I think I may have come across kind of hard on managers and I think I kind of said, "Hey, your manager and your manager's manager isn't really doing much teaching. Find the right podcast, good luck." And I think that that's a pretty soulless answer. So maybe the way I describe it is, well, I think learning is changing, and there's the self-service tools that are getting better and then there's the structured teaching which I think is weak. And then there's community, which I think whether it's within your company or outside of company, I think is the answer that we'll see more and more. I think community as a way of creating safety, having authentic conversations, feeling that you're not alone, that others are going through the same thing, and then sharing best practices is so powerful. And what social software has done is it has really empowered community.

**Nikhyl Singhal** (00:46:46):
And now the tools are awesome. How many great communities have Slack channels or Discord channels or Zoom calls? And we do a lot of that in the CPO community that I created. Whether you're a new manager or whether you belong to a diverse group, whether you are new to a company, I think that all of your listeners should be part of an active community where they can be very authentic and very safe. Sometimes it's hard to do that with your coworkers, and so you need to find another community. Unfortunately, those communities are not the easiest to find today, but I believe that the notion of community as a powerful propellant for learning is the critical ingredient and hopefully many people are creating these communities so that new managers can find the right services.

**Lenny** (00:47:40):
Can you actually talk about this community that you've built? This could be a good time to talk about it. It's called The Skip. Is that right?

**Nikhyl Singhal** (00:47:45):
Yeah. It's funny, it's all kind of fun products. They were always a reaction to something. They weren't really intentional. I, as you opened the podcast, did really enjoy teaching and coaching. I learned just as much from coaching others as they learned, I think. And yet I couldn't really scale. So I had this summer where I had just come off of being a head of product, and more and more of my people I was talking to were also head of products. What would happen is, I would have these conversations and they would ask me a question. I would say, "Well, that's the same conversation I answered on Tuesday." What you realize is, it's a very lonely job. Being lonely at the top is not just an adage. Really, everyone's so busy now. It's like, how do you have time to connect? Everything's a single player, you don't really have community.

**Nikhyl Singhal** (00:48:39):
So I thought, "Well, what if I took the half a dozen people I talked to this month?" And I just said, "Hey, all of you are all interested in talking through how to navigate this crazy world of year one, year two, chief product officer. I think you would really gain. I know all of you and I think you can be safe with one another. Why don't we spend some time together?" So we did a WhatsApp channel and we brought a Zoom call. This was during the pandemic, so you really couldn't meet up. And we started talking. We started talking every month, and people were so empowered by the fact that the problem they were hitting was not just them. It was, "My crazy CEO is telling me this." And the next person is like, "Oh yeah? Let me tell you what my person said." And then they would say, "Oh my gosh, that sounds worse than my situation."

**Nikhyl Singhal** (00:49:33):
But then, we would sit down and say, "Hey, the third person said I actually kind of had this and now I figured out a way out, and here's what I did." And you're like, "Wow, that's amazing. I'm going to try it." The next day they come back, they're like, "It works." And we started to connect and we built this trust, and community building is interesting and powerful work. So six went to 12, and then 12 went to 15, and now we have 28 members. A lot of folks are interested in these types of communities, but I'm so worried about scaling it because it's the enemy of trust and authenticity. So for all of you that are building communities, it's like tree balancing act. But I do think that the goal is to find ways to take all of this sort of like-minded folks that are in these same situations and connect them together. Late stage chief product officer happened to be one of the ones that had some of the most substantial importance to me because of all the coaching I did for that group.

**Lenny** (00:50:35):
If someone's listening and they're like, "Oh, I need to join this thing," how do they find out about it? How do they potentially apply and try to join?

**Nikhyl Singhal** (00:50:41):
Well, we have enough members now. There's a LinkedIn area called The Skip CPO Community, and you should contact any of the members that you know and ask them to join. My request and my requirement is that they are, number one, product leaders in their organization and a company that's not early, but that's mid to late. And the reason being is, those sets of problems tend to be the most similar. To be honest, I think this is not the only community that I want to be part of and help create, but this one happens to be the preexisting one. I think there are lots of powerful communities that can be created, but this particular one is very much focused on The Skip CPOs.

**Lenny** (00:51:28):
Awesome. I'll mention the community around my newsletter just so folks are looking for a community join. I try not to promote these sorts of things, but it's a good time, may as well. If you're a paid subscriber to my newsletter, there's a Slack community you get access to. There's about 12, 13,000 people in there. There's meetups happening all over the world every month. It's amazing. Very proud of it. People are getting a lot of value of it, and it's basically open to any level of product manager. Other functions are in there too. So it's a very different sort of experience, but willing to add that also in the show notes if you want to check that.

**Nikhyl Singhal** (00:51:59):
I think that that would be my put, because so many of the managers will say, "Hey, I'm an IC," here's a greater one, "I am not being told I have the next job. I just was told to become an IC and I was a manager. I feel like my learning opportunities are stuck, but this is a bad time to look for a job." They should be in your community. They will learn more from that community than they will learn from managing one random person that they were attached to managing in some project that may or may not see the light of day, yet that's how our society is programmed. Our industry is like, "No, no, go manage that person because that's going to make you closer to the top. Forget learning." And I'm like, "Well, learning isn't happening. Learning's happening in your community. Learning is happening in our communities in general." That's why I'm pushing so hard on this.

**Lenny** (00:52:54):
This is a good segue to talking about the third bucket, which is kind of later career CPOs. That's the segue in my mind there. Something that I've heard you talk about is that a lot of really senior leaders have real development areas, but they're hiding behind these superpowers that they have. Plus, people don't like to give real feedback to senior people. So I'd love to hear just what you're seeing there and how maybe people can work through that and what we can learn about that issue that you've noticed.

**Nikhyl Singhal** (00:53:27):
This came from my notes as I was talking to a therapist on this. They talked about the shadows of superpowers. And I thought it was an incredibly powerful phrase that everyone focuses on your superpowers, but no one ever thinks about what shadows they create. Shadows of superpowers to me is the story of a lot of executives. There's an adage that's thrown around, which is, what gets you there isn't what got you here. It's sort of the tools that have made you successful today, you need to almost rebuild or relearn to get to the next phase. And I think both of these sort of speak to the same point, that oftentimes people have a great superpower. They go into a performance review, person says, "You're getting some feedback from your peers that you struggle in collaboration." And the manager even sometimes is puzzled, but the individual will say, "Are you kidding me? My last five performance reviews told me that I was one of the best collaborators in the company. How in the world is that possible?"

**Nikhyl Singhal** (00:54:42):
And then what you realize is that, "Well, you're collaborating as long as people agreed with your point of view. Now as a leader, we're asking you to be opinionated, and because you just think you're an amazing collaborator using the exact same tool set. And it turns out that when you're dealing with senior people, that may not even be in your function, they may not be product, they may not be tech, they recoil, but you're moving so fast because it's your superpower. You would never think that this needs to be rebuilt." Sometimes it could be more extreme. Great collaborators sometimes are very reticent to present their own opinions because they're so good at assimilating others. Or people that are amazing at growth struggle to be innovative. People that are world-class storytellers struggle to get in the details. People that are very taste maker, they are always the first to have point of view. They don't necessarily introduce change particularly often. You're strong politically, but your decisions are unprincipled. You're a structured thinker, but blue-sky innovations are very tough. You're an amazing listener, but you're very weak to be decisive. I can go on forever.

**Nikhyl Singhal** (00:56:10):
And what I would say to you is, sometimes even in a 30-minute conversation, walking into the room, just knowing what I know about the person, I can unlock their development area faster than anyone ever before, simply because my secret is, I'll bet you, because of this person's world-class here, these are the three things they're going to hit. And they don't even realize it because it's their identity. This is what got me here. If you make me work on that, you will make me change my superpower. And I'm like, "That's why you're stuck. That's why your career is plateauing." And then they get sad and then they take a long time to process, and then the work actually begins and then they solve and they go. Almost everyone, once they have the name and the face, they're able to solve. But facing the name is hard when it's sitting in the shadows of superpowers.

**Lenny** (00:57:08):
Wow. That is an incredibly important point. For someone to recognize this, do you find that they need someone like you that's like a coach, mentor, person to come in, and be like, "Here's what I see"? Or is there a way, I guess, as someone that's a peer or an employee to help them recognize this without them shutting down and being like, "No, shut up. No problem'?

**Nikhyl Singhal** (00:57:28):
No, you don't need a coach. What you do need is to listen to contradictory feedback. So what was the premise here is you're being told that something that you hold as your strength is actually in your way or a development area. Do not dismiss that. Recognize most likely you're doing it correctly. You just have gotten to the next level. So what I'm hoping the listener does is it goes back through all the feedback that they may even have and then looks at all the discard stuff. What's on the discard pile? Things that were discarded are anomalies because they're artifacts of my strength. And often, your managers are the ones that do the discarding, "Oh, that was just a weird... That person, they were just into it. They have it out for you. They got reorged or they were upset." I'm like, "No, no, no, no, no, no, no, no. Perception's reality. Talk to me about that one. That might be it." That's what I'm looking for.

**Lenny** (00:58:29):
Fascinating. This makes me think about companies that have the same issue, companies strengths, like say Meta for example, move fast and break things and then, "Oh, that ends up being the biggest Achilles' heel." Uber, similar. Airbnb has similar challenges like that.

**Nikhyl Singhal** (00:58:43):
Absolutely. This exact thing applies to relationships. This applies to companies, this applies to a lot. And I'm so happy that I was able to learn about it. Frankly, it was a critical unlock for me because I was stuck on something for years and I just could not understand how, for me, it was, I was very opinionated about something. And then I realized being loosely held on my opinions didn't mean that I became a weaker executive, but it was my opinions that got me to be so successful and it required me to rewire who I was as an executive. And that took a lot of time and a lot of energy. But it came from this realization and then I started to apply it for other strength areas. And now, every time I have a strength area of myself for those that I coach, I immediately talk through all the things that I bet you exist and most of the time were right.

**Lenny** (00:59:46):
So what is it for you that you said was your superpower and your shadow?

**Nikhyl Singhal** (00:59:50):
I think that I was, as an entrepreneur, very opinionated about using small amounts of information to make decisions. And then I was very good at driving those things. So when you become an entrepreneur, you're great at grit, you're great at opinion, you're great at being decisive. And then as an executive, you spend a lot of time making sure everyone has context, everyone is heard, your opinions are actually edited for good reason. And it's not just to placate, it's actually to improve. But as someone who's basically been right a lot, that requires almost a complete and you're like, "Well, that's not who I am." And I'm like, "Okay, you start with the sentence like that's not who I am." You're definitely doing it right when you hit your leadership.

**Lenny** (01:00:40):
What was the process like for you to work through that? You said it took a long time. What made it effective for you? Was there a coach involved? Something else?

**Nikhyl Singhal** (01:00:49):
I got a lot of setback. I get a lot of negative feedback. I had a lot of abrupt challenges at work where folks would say, "You're not collaborating well. Your peers don't have the same level of respect as they should." And I was like, "Are you kidding me? That's not who I am. These things that are being said about are completely ironic." I was very much struggling and that's when I said, "You know what? I can struggle and blame others, but what if they were right? I'm going to be doing this for 30 more years, it's kind of worth it to figure out if they're right. If they're wrong, then you don't lose." And that's what kind of forced it. And then the tooling starts, then you start talking through. My self-awareness was strong enough that I was able to say, "Okay, now I understand it." I had some peer feedback that helped bring it home from someone I trusted. So that was a kind of linchpin to this, but these are tough, tough things to break through. And oftentimes they don't come nicely, I guess, is the point.

**Lenny** (01:01:53):
I was going to ask what that turning point for you was, and it sounds like it was direct feedback from someone you really trusted that's like, "Oh, I really need to take this seriously."

**Nikhyl Singhal** (01:02:01):
You got it. You got it. Because I had a lot of feedback that I was dismissing and then I had feedback from someone, I'm like, "That person I should listen to because they're giving me the feedback for the right reasons and they have the right language."

**Lenny** (01:02:13):
Comes back to the power of getting feedback and getting good at that.

**Nikhyl Singhal** (01:02:17):
And making people feel safe and giving it.

**Lenny** (01:02:19):
Mm-hmm. That's a good segue to maybe the last question. You told me once that a lot of the people that you work with that have kind of made it have a lot of mental health challenges, that they didn't expect their life to be the way it is necessarily when they got there. Can you just talk about what you see there in that group?

**Nikhyl Singhal** (01:02:39):
Yeah. This is a story that I don't think is told very well right now, and partly because it's such a luxury problem, it's almost a little embarrassing to discuss it openly as so many people struggle with so many basic needs, going through layoffs, going through all these challenges. I mean, these are real issues. But I think that what I've noticed is that if you kind of break career as we've done in this podcast between sort of act one, act two and act three, if act one is sort of learning and being that sort of builder and then maybe building the car, and then act two is building the factory, act three is like, what's after that? What do you do after that? And I think that act three in the past wasn't as long as it is now. Before, people would proverbially retire in their 60s when they used to actually physically work.

**Nikhyl Singhal** (01:03:35):
Now almost all your listeners sit at a desk all day, so they don't need to retire by any means. And health is getting better. You might see folks work until their 70s or 80s. So that means that their careers are potentially 60 years long. So even if you're 20 years or 30 years in your career, you're only halfway through. So this act three could be a thing. And I don't think we talk about act three enough. What often happens is, and this is what I've been watching for people that are at my age, is they sort of succeed and then they become lost. They almost goes hand in hand.

**Nikhyl Singhal** (01:04:14):
So when I was a kid and I was growing up in the Midwest, entertainment was going to the dog tracks, and not even the horse tracks, we didn't have horses. So it was the greyhound dog tracks. So people would bet on a dog and greyhound would go around the ring and then you would see. I bet on number three and I'll make a buck or something. The way that they motivated the dogs was they had these fake rabbits, which sounds kind of cruel and horrible, so I don't want the SPCA to come after you. But the point is that they'd have these fake rabbits. And what was interesting is, the moment that the dogs, if they accidentally touched the rabbit, the sort of the tail because the machine broke, because these tails would go around faster than the dogs, which would then motivate the dogs to go around in circles. Sometimes the machines would break, the dogs would actually catch the rabbit, they would never run again.

**Nikhyl Singhal** (01:05:17):
The reason why they wouldn't run again is because there was like, "Well, what's next? I've achieved what I was looking for." So I think this happens a ton. It's like, your listeners are spending time focused on like, "Well, one day I will be X. I will be that vice president. I will have more money. I will have built something. I will have started a company." But they don't think about what happens next, and when it happens, when they succeed, their North Star, their entire way of wiring their career, themselves, it has been around getting to that place. And I think that if you're going to get there 30 years in and you have a 60-year career, a lot of the discussion I've been having with myself and with others has been, you probably need to start working on that North Star now.

**Nikhyl Singhal** (01:06:08):
What's the second thing? What's your career next look like? How do you ensure that you are always going to have something important and motivating to do with your career? Otherwise, you'll keep working because you had no nothing else to do, but you'll be sadder, or you'll find ways to create war when peace is needed, or you'll spend money in an attempt to earn more, or you'll find habits that are bad. And I really want us to have long 60-year, 70-year careers, not just 30-year or 10-year, which is why I enter this into the vocabulary out there.

**Lenny** (01:06:51):
That is really resonating with me. I had a similar experience. I had a startup, and my whole goal was just like, "I just want to start a company." That's my goal. That's all I got in life. I want to start a company and then maybe sell it, maybe go somewhere with it. So I did and then we sold it to Airbnb and then I got to Airbnb and I was just like, "What the hell do I do now? I don't have any other goals." And it was pretty sad. Exactly how you're describing. It was just like, "I guess I'll just work here and I don't know, maybe I'll start another company, but I already did the thing I wanted to do."

**Nikhyl Singhal** (01:07:21):
Your story is I think very inspiring because what you did is you said, "I think the thing that I want to do is give, but I want to do it in my own way and I want to create something, but I want to do something that I think I can do for 30 years and I want to do it." It has lots and lots of spokes to it. So you reinvented yourself professionally, but you created a new North Star.

**Nikhyl Singhal** (01:07:48):
My sense is, for every one of you, Lenny, there's a hundred that could do that, that could do giving, that could do things that could scale, but that end up falling into what got them to be successful in act two and they get stuck. So this is the reason why when you hit your skip, keep looking for the next skip, is the point I'm trying to make. And I think you're an inspiration for a lot of folks who have seen you transition and realizes life after just being a tech professional entrepreneur, there's got to be ways to do more of this for all of your listeners. And I think it's never too early to start thinking through. It's actually quite powering to think that you have such a long career. You can make mistakes and you can do some amazing things down the road.

**Lenny** (01:08:34):
Yeah. This is my fourth career, is what I realized. I was a engineer, then a founder, then a product manager, and now whatever this is.

**Nikhyl Singhal** (01:08:43):
Whatever this is.

**Lenny** (01:08:45):
Whatever this is. I guess, just to give people something inspiring, productive, what are maybe some examples of North Stars you've seen that people can evolve into? I guess one path is this path of content creation, helping people learn stuff. What else have you seen that might work out for people?

**Nikhyl Singhal** (01:09:00):
I think that all variations here come into two categories. One categories are ways to drive more scaled economics. I've made millions. My North Star is to now make it tens. I've made tens. My North star is to do hundreds. That's what drives people from, it's not entrepreneurship, it's investing; it's not investing, it's private equity, et cetera. Whether we describe that as a bad quest or a good quest is a decision for your listener. The other arc is around giving. Eastern philosophies that have been around for thousands of years talk about this as the sort of end state of happiness. I think that maybe to be provocative, I think that it's okay for you in act one and act two to not predicate yourself around the notion of giving to others because this is maybe the time on the planet where you need to take and you need to create.

**Nikhyl Singhal** (01:10:11):
But boy, if you're going to work on an act three and you have 30 years, regardless of where you are economically, if you feel like you can take that off the table, if you can find ways to give, whatever that means to you, however that translates to you, is that content, is that volunteer, is that starting a company that is more mission based, that is not my role, but I think that if you are able to do that for 30 years and be giving, not only is that going to be more fulfilling than your act one and act two, but it's tremendous for society, very empowering. And that's where I commend you because you're giving through your passion but also making a livelihood. And I think that that's a very powerful blend that is hard to achieve in act one and act two given constraints. And that's the liberation that act three provides.

**Lenny** (01:11:08):
What do you think your act three plus ends up being?

**Nikhyl Singhal** (01:11:12):
Many have asked me about this. I would say that I'll use the word, and then I'll tell you I won't use that word. So it is around my passion around coaching and giving to others. But because I'm a product person, because I've seen success in building products, thinking about scale, thinking about community, I definitively plan to devote my act three towards coaching and giving to others and lifting up those that with the right advice at the right time can change their trajectory. But scaling that and doing that in a way that is very authentic is really the hardest part and it's product problem. So that's what I'll devote 30 years to and I look forward to that every day.

**Lenny** (01:11:59):
That is beautiful. That feels like an exactly correct fit for you, and I'm here to help you on that journey any way I can.

**Nikhyl Singhal** (01:12:05):
Thank you, my friend.

**Lenny** (01:12:06):
Absolutely. Is there anything else you wanted to touch on before we get to our very exciting lightning round?

**Nikhyl Singhal** (01:12:11):
No, I just appreciate your genuine offer to have me attend and participate in this wonderful podcast that you created.

**Lenny** (01:12:18):
It's absolutely my pleasure. And it's not over yet. We've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Nikhyl Singhal** (01:12:25):
I am ready.

**Lenny** (01:12:26):
What are two or three books that you've recommended most to other people?

**Nikhyl Singhal** (01:12:30):
So two, and both business books. Sorry, I'm going to come across boring. But one is this sort of little bit of an old school book called Crossing the Chasm by Geoffrey Moore. I don't know if other speakers have spoken about this, but it's a book that Geoffrey Moore wrote, and it's a book that really talks about how to get your first product on base. So it's this concept of creating a beachhead. I like that concept. Marketing is something that we don't talk about in enough and product.

**Nikhyl Singhal** (01:13:02):
And then the second one is a book that none of your listeners have actually probably heard of called Leadership and Self-Deception. It's a six-hour audio that I highly recommend. It's a story about a person who has hit a wall and who's getting all this feedback that they don't know what to make of, and it's around their mindset being stuck in a box. That was very powerful when I listened to it in my late 20s. So I encourage all of your listeners to grab that one. It's not one that anyone normally would hit, but it's a fun story. It's a good ride, and I think maybe you'll get something out of it.

**Lenny** (01:13:41):
I have not heard of that second one. I'm excited to check it out. I have Crossing the Chasm back behind me on that shelf somewhere. And you talk about how marketing isn't something product leaders and managers think about enough, and I have many marketing-oriented guests on this podcast and those episodes do the least well, but I'm just going to keep doing it because I totally agree with you. I think there's so much to learn from marketing. It's connected to growth, which is connected to product. So I agree.

**Nikhyl Singhal** (01:14:07):
Yeah, and I think that marketing is a language of connecting products with people. That is what a product manager does, but we often lack the language. We lack the thinking around how to explain it, and yet we spend all our time on data and features for that. The diversity of having both playbooks can make one of just a much more powerful builder. So I agree with you. Marketing folks is probably some of the best content and the least listen to. So maybe that's a plug for people to go back to those episodes.

**Lenny** (01:14:39):
100%. That's what everyone should do. I don't know if you know this, but actually, at Airbnb, the product manager function has been renamed to product marketing. So all the product managers are product marketers because Brian is so big on, you're not just building product, your job is also to make sure people use it. We'll see how that experiment goes, but that's a bold move I thought.

**Nikhyl Singhal** (01:14:59):
Very much so. Very much. But it's an homage to this concept.

**Lenny** (01:15:02):
Exactly. Okay, back to landing ground. What is a favorite recent movie or TV show?

**Nikhyl Singhal** (01:15:08):
I'm a huge sports fan, so I have tickets to the Warriors and 49ers, and I am a big Bay Area sports fan. Giannis is my son's favorite player. He's a basketball player for the Milwaukee Bucks, and they have this Disney+ story called the Rise story, and it's a story about his childhood and how he struggled to find notoriety and how he made it into the professional leagues. It's a great Disney+ family show and it's a great kind of zero to hero type thing. So I love that story.

**Lenny** (01:15:41):
I feel like you're going to have a really good answer to this next one. What is a favorite interview question that you like to ask?

**Nikhyl Singhal** (01:15:47):
I like the format of, what's something that everyone takes for granted that you think is essentially hogwash or inaccurate? Sometimes I'll ask a manager, "Look, you've managed hundreds of people in your career, what's conventional wisdom that you bet against that you have found is actually inaccurate?" And you can do that for what do people think about AI, that's inaccurate, that everyone believes you could do that for domains, you can do all kinds of things.

**Lenny** (01:16:18):
I love it. Is there something you specifically look for there, or is it just depends on what you hear?

**Nikhyl Singhal** (01:16:25):
I'm always looking for people to break this sort of interview mindset. Everyone always prepares for interviews and then their entire conversation is predicting what you think you want me to say. And as a result, you can have high-quality people that you dismiss because they weren't genuine. There's no way to answer that question without being genuinely opinionated because it starts with, "What is the thing that you think I want to say here? And then tell me why it's inaccurate." So when I break that wall, I'm testing, is this person authentic? Because sometimes I'm dismissing them because they told me nothing new, but I don't want the interview process to penalize them. And this was my save question, but I can't use it now that I've told everyone.

**Lenny** (01:17:27):
It's going to be all over TikTok soon. Everyone's going to know this. Next question, what's a favorite recent product that you've discovered that you love?

**Nikhyl Singhal** (01:17:35):
The geeky answer in me is the Arc Browser, which I think probably a lot of folks are starting to use and your listeners. Part of the reason is, I think it's just great for folks that have hundreds of tabs, and if you work at a scaled organization, you just have lots of tabs. But I think it's also, as a product guy, I thought Chrome was pretty good. They've got gajillions of people using it and billions of installs. So at some point, you kind of come to the conclusion that this is probably good enough. And then you see a product obviously built with a much smaller team and you're like, "Huh, there actually is opportunities to innovate." And any time you see a innovation on something that's mature, as a product person, I think that's just fascinating. And I was just blown away at how they created something that's better than something I hold as a true set.

**Lenny** (01:18:33):
Yeah. We had Josh on the podcast, we talked about a lot of their philosophies. And on the tab thing, I think the key there is it closes your tabs after 24 hours unless you put them in a specific place, which I love because I was like, you think you would do that, but you don't. And then it's broke so beautiful, you wake up in the morning, everything's gone, but you can save stuff that you want. The other thing I'll mention with Arc, by the way, also huge fan, that's all I use, and I'm not an investor, just a fan, is the onboarding experience is the best onboarding experience I've seen. I was just like, I did it and I got a tweet about this. This is so good. And actually, if you go to that episode, there's a link to get past the wait list and just-

**Nikhyl Singhal** (01:19:11):
Oh, that's right. Yeah.

**Lenny** (01:19:12):
Yeah. You gave me many thousands of invites. Okay, keep going. What is something relatively minor you've changed in the way you develop products and your team that's had a big impact on the team's ability to execute?

**Nikhyl Singhal** (01:19:26):
A little bit of this is just because of scale, but oftentimes we think a lot about the products and the features and the decisions that we're working on, and then we think that meetings are a nuisance or a must-have necessary evil to be able to deliver. Sometimes I realize that at a scaled organization, the meeting operating system is as important as the products that we're building because it sort of speaks to how we scale and how we ensure we have the right degree of delegation, the right conversations, and then the right acceleration on the right decisions.

**Nikhyl Singhal** (01:20:11):
So what's interesting is every quarter, in my current teams, even in my past teams, I talk about our meetings like a product. We're on version seven in my team, and so we're like, "Hey, version seven, every 90 days, these are the meetings, these are the discussions, this is how we organize, these are the attendees, and then here's how we make decisions. This is the cadence of the week. This is when people can work from home, hybrid, whatever it might be." And then I take feedback two months in and then every three months we make another route.

**Nikhyl Singhal** (01:20:44):
What it finds is that people then can plan and they can make meeting time effective. And meeting time is such precious time. It's the most expensive time in a company. So when I was in a startup, I couldn't imagine doing this, but now this is like my bread and butter as a leader. It's the process part. And frankly, for new folks that are new in leadership positions in a new company, it's the one thing you can do when you have low context. When you don't know how the product works, you can look at things with fresh eyes and see inefficiencies when everyone that's been in the system can't see it. I'm a huge fan of rebooting meetings first. So process first, then people, then product, then strategy is sort of the notion I make, and this is this first thing I always do.

**Lenny** (01:21:29):
Final question, what is one thing every PM listening should do to help their career?

**Nikhyl Singhal** (01:21:35):
Ensure that the story you will tell about the work you're doing today is meaningful for your skip job. So if you sit down and you write down, "In six months, in 12 months, in 24 months, when I achieve or finish this role, here's the paragraph I'll write. Here's a problem I solved. Here's the skill I built. Here's the headwind I faced. Here's what I did to overcome it." Use I in the sentence, do not use we. We will do good things. You are who we are thinking about, your career. We're not looking for we. Master the story now. Understand the story. If the story sucks, you probably should be thinking through how to make the story not suck. But that to me is a very good career decision and I think everyone is building their story today. I want to know that story. I want that story to be incredibly compelling because whether you promote it or not, that story's compelling. You'll be promoted in career. And that's what we're here for.

**Lenny** (01:22:48):
Nikhyl, this is the first time we've ever met. I'm such a fan instantly. This might be my new favorite episode. I'm so excited for people to listen to this. There's so much value here. Two final questions before we wrap up. Where can folks find you online if they want to learn more? And also, talk about maybe various community, The Skip, and all that stuff that people can check out. And then how can listeners be useful to you?

**Nikhyl Singhal** (01:23:09):
I'm building this brand around The Skip because I'm so passionate. There's two outlets that people can easily connect. One is the podcast, which much like yourselves is available on Apple and Spotify and others. So I'd love for people to join my podcast and hear. What I'm now moving my podcast to is almost like coaching calls. Because I have so many of them, I'm saying like, "Hey, 30 minutes, let me walk you through a problem and hear how I'm thinking about it, whether that's a transition discussion or compensation discussion, et cetera." And then the other one is this sort of newsletter that I have on Substack, which is a bit of a mirror of the podcast. It's different forms of the same topic areas. So, would love for your listeners to connect with that.

**Nikhyl Singhal** (01:23:54):
I think as far as getting in touch with me, LinkedIn is where I spend most of my time professionally. So between Twitter and LinkedIn, my presence is relatively easy to find. And then how listeners can help me, I mean, one, you can build the most fulfilling career story and be your best, but also give back and pull others forward. Whether that's through your act three or whether that's just helping others, I mean, I think that would be the most fulfilling to me. I think feedback from your listeners to me on things they wish I would spend time talking about is incredibly empowering for my content because then I can deliver more meaningful content. It's very different from yours, but I think it's all around the arc of trying to help people gain forward and be more effective tech professionals. So I would love to hear from your listeners.

**Lenny** (01:24:48):
Just to make sure people know where to go to do this. For feedback, do you recommend LinkedIn?

**Nikhyl Singhal** (01:24:53):
Yeah, LinkedIn is the ideal, but you can also find me on Twitter if you are just trying to add a quick... If you're trying to follow me, follow me on LinkedIn. If you're looking for feedback, just tweet me.

**Lenny** (01:25:03):
And then for The Skip newsletter, what is the URL to go check that out?

**Nikhyl Singhal** (01:25:06):
It's theskip.substack.com.

**Lenny** (01:25:09):
Amazing. And you don't publish often, but each issue is incredibly valuable, so we'll definitely link to that all in the show notes. Nikhyl, thank you again so much for being here. I will let you go now. This was amazing.

**Nikhyl Singhal** (01:25:21):
Yeah, thank you, Lenny. Appreciate it.

**Lenny** (01:25:23):
Bye, everyone.

**Lenny** (01:25:25):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [17/19] Leveraging growth advisors, hiring well, mastering SEO, and honing your craft | Luc Levesque (Shopify, Meta, TripAdvisor)

**Luc Levesque** (00:00:00):
We talk about the 10X engineer and we don't really talk about the 10X growth advisor or 10X growth person, but the same dynamic applies. You could argue it applies even more because the right growth advisor can have literally company changing impact. Something I've experienced several times in hindsight when you're like, "Okay, here's the needle in the haystack." And then it's implemented and you can see hundreds of percentages, sometimes over a thousand percent lift when you get it right. It's one of those weird disciplines where the right person at the right time can literally say a sentence that changes the trajectory of your company. You can't say that for a lot of different disciplines, but this is one of them.

**Lenny** (00:00:36):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Luc Levesque. Luc is currently the chief growth officer at Shopify. Before this, he was recruited personally by Mark Zuckerberg to help grow Facebook Messenger, Instagram and WhatsApp. He's also VP of Growth and a GM at Tripadvisor. He's also been a growth advisor to companies like Twitter, Pinterest, Patreon, Thumbtack, and Canva.

**Lenny** (00:01:05):
**Luc Levesque** (00:03:34):
Thank you. Good to see you.

**Lenny** (00:03:36):
It's good to see you too. I want to start with a story that you shared once when we were hanging out in the past and something that I'll never forget, and it's about the time that you just joined Facebook and apparently you had some kind of big presentation you had to give to the entire company or the executive staff. And then I just love the way it kind of unfolded and it kind of gives you a glimpse into what it's like to work with Zuck and at Facebook. Can you share that story if that rings a bell?

**Luc Levesque** (00:04:00):
If remember the story, well, basically I had just started at Facebook about... I'll use those two interchangeably. I remember it as Facebook and I always will. I was three months in and was working on a new area for me. So I came in, started putting together our thoughts on a strategy and was asked to do a presentation in front of the company with Mark on the strategy. So I whipped up a draft strategy, put together some plots and plans, presented in front of the company and went well. And then every six months there's something called the [inaudible 00:04:32] Team Review of Facebook and basically product area leads will go in and present their strategy, how it's going. Again, I just joined three months before, so I walk in no idea what to expect. I am sitting at a table. You can kind of envision it's a big room, a really big room with a bunch of tables set up in a big square with a little microphone.

**Luc Levesque** (00:04:50):
So I sit in there, there's Mark and all the executives sitting on the other side. And I sit down and it's quiet for what felt like five minutes. I'm sure it was not, but it was quiet for a while, just sitting there waiting for what's going to happen now. And at some point Mark kind looks over, says, "Hey, we saw your presentation, saw your strategy. Now when are we going to start seeing results?" And that was my introduction to Facebook. It was kind of my introduction to working with Mark and was a pretty kind of intense thing to go through. Again, I just joined. The strategy was very much a draft at that point, but I think what it highlights is something that Facebook does really, really well, which you get very quickly when you join Facebook and it's why they're such an execution machine and can build a lot of great product. It's because they focus exclusively on that magic word, which is impact.

**Luc Levesque** (00:05:44):
And that was kind of my first introduction to working with Mark and just that laser focus on, "All right, got it. Now when are we going to start seeing impact and kind of moving from there?" So it's something that is very much in the culture there and something that is so important. It's something of course that we focus on a lot at Shopify, but it's that difference between, "I don't care how hard you've worked. I don't care what you're working on, what the activities are. What are the outcomes? What is the impact you're having?" I actually really love that word impact and focusing on it because it's vague enough that it covers off any work that is impactful towards the mission and it's precise enough to know what does that mean when you say, "Are you having impact? Or what is the impact we're having?" So it's a great way to approach things. That was my first experience there within a few months. And yeah, we jumped in and started focusing on having a lot of impact from there.

**Lenny** (00:06:36):
I love that story. There's a couple things there. One is, if I were in your shoes, I'd poop my pants sitting there for five minutes waiting for what do you guys-

**Luc Levesque** (00:06:45):
That did not happen. I had a report.

**Lenny** (00:06:47):
Okay. How did it go? How did you deal with it? Or I guess how did you respond?

**Luc Levesque** (00:06:51):
Well, we had, funny enough, already started having impact, so I was able to at least respond with, "Hey, we've kind of already started in a few ways" and walk through where we were having impact and just focus on the strategy, what our plans forward were and where we wanted to go from there. So I think that's how I responded.

**Lenny** (00:07:08):
Okay, great work. So something I've started doing actually on this podcast is I've started to keep a little Post-it of, here it is, of themes that continue to recur across companies that are most successful. And impact comes... It's number one on my Post-it here, is just impact comes up so often as something that the best companies continue to come back to and focus on and put a lot of emphasis on. I guess I don't know what the question is exactly, but is that just what you find in the work that you do with all the companies you work with? Just how important it's to come back to impact as maybe the primary thing?

**Luc Levesque** (00:07:42):
Yeah, I mean I think it's easy for a lot of leaders and companies to get caught up in how hard are people working, what did they do, and recognizing and rewarding activity. I mean, everybody wants to have impact. The companies that truly focus on that are the ones that break through and really make a lot of progress towards the mission. So that seems obvious I think when I say it out loud, but being in that culture and having it really ingrained in everything you do whether it's performance reviews or strategies or these reviews with the executive team, it all gravitates around impact. And I think it's that laser focus on it that matters so much. But I mean I've certainly seen it going other ways where it's more about working long hours. And certainly there's a correlation, to be clear, between working hard and impact, but I find it's just such a precise way to think about how people are performing or what you're doing in terms of is your strategy working? Is the direction you're moving in having the intended outcomes that you want? And yeah, I do think it's all about that.

**Luc Levesque** (00:08:46):
Being a growth leader where everything's so measurable, impact is something that can be very clearly measured and you know whether you have it or not. So the most important thing that we work on constantly is reviewing what's our strategy, what are we working on? Is that driving towards the top level north star outcome we want? Is that having the impact? And then basically doing everything around that singular north star. So it's very, very important. I think it's more profound than it might seem just from the outside. But if you've worked in different companies, you've probably experienced different versions of this too.

**Lenny** (00:09:20):
Yeah. I want to spend more time on this, but before we move on, you also have another Zuck story. Correct me if I'm wrong, but Zuck recruited you personally to join Facebook/Meta. Is that true? And then if true, what was that like to be recruited by Zuck personally?

**Luc Levesque** (00:09:35):
It was an interesting experience, very intense, but also one of the reasons for it was I was living in Canada and my family was there and I had some strong personal reasons why I couldn't leave Canada. But yeah, we had a lot of discussions with Mark. I won't get into the micro details of it, that's more Mark's story to tell than mine. But a few takeaways from going through that experience. As a leader, hiring is the most important thing as we all know. It's a craft and a skill that I'm always working on refining. I have my own playbook that I'm constantly tweaking, testing out different approaches, trying to find the best talent and assessing them and trying to close them and bringing them on board. So I learned a lot through that experience with Mark.

**Luc Levesque** (00:10:15):
A couple things that stood out were the first one would be that Mark really involved the entire executive team. It wasn't just me talking to recruiting or talent or HR or just Mark, it was the entire executive team. That's something that I think a lot of leaders don't take advantage of. I've seen leaders, I've certainly done this at times where you go it alone or you're working with recruiting, but the reality is all the leaders, all the execs in the company know how important it's to bring in talent and they're always more than happy to help. So that's something that I think more leaders should do is really recruit all of their peers and their leaders in the company to help close. And that's certainly something that happened when I was in discussions with Mark and Facebook about joining.

**Luc Levesque** (00:10:55):
The second one, which I had I suppose never experienced before, was that they made it very personal. I had these reasons why I couldn't leave. So initially I was excited by the opportunity, but I couldn't see myself moving to California for personal reasons. And through discussions, Mark basically involved my wife, involved my spouse in this, Andrea. We flew down, had dinner with him and Priscilla, his wife. Andrea had ended up meeting with many of the executives at Facebook and really talking through what was holding us back, why we couldn't come, potential options and ideas for how we could come down.

**Luc Levesque** (00:11:33):
But involving somebody's spouse and family I think is a really good idea because it's a very personal decision to change company. It involves more than just that person you're talking to, it involves the whole family. So that was something that I think is an important thing to have in your kind of playbook for hiring, is really think about the whole person's family and involve them if you can. In fact, Toby did this as well at Shopify. He flew down here with Fiona and we had breakfast with Andrea and them and reviewed a few offers when I joined Shopify.

**Luc Levesque** (00:12:03):
And then the third thing is just to be absolutely relentless and don't give up and don't let momentum drop. It took seven months for me to go from, "This is amazing, exciting, but there's no way I can make this work" to, "Okay, let's move to Palo Alto." And Mark, the execs, a variety of leaders there were in discussions for months and months and months and never letting the momentum die. That's something that I think is really important. No doesn't necessarily mean no, and in this case it definitely wasn't the case. I had the same experience with Toby at Shopify where we've been talking about working together for over 10 years now. And then finally the timing was right and I was able to join the company.

**Luc Levesque** (00:12:45):
So just be relentless, involve the family, involve the spouse if you can, and recruit some help from other executives in the company. Those were some of the things that stood out through my experience. But yeah, it was a pretty wild time in my life.

**Lenny** (00:13:00):
Relentless is actually another word. I wasn't necessarily I'm supposed to yet, but I feel like it's another trend to cross. The most impactful and successful founders is just this like, "I will not give up. I will keep at it."

**Luc Levesque** (00:13:09):
[inaudible 00:13:10].

**Lenny** (00:13:10):
And so that's a really interesting example of that in action. I was going to talk about this later, but maybe it's a good time to talk about it now, which is around hiring. So you talked about you have this playbook for how to hire. You mentioned to me that you kind of find that as you scale as a leader, hiring ends up being like the most important skill maybe, maybe one of the most important skills. I'd love to hear your take on just what you found about hiring as you've grown as a product leader.

**Luc Levesque** (00:13:33):
Well, I think you reach a point in your career where you realize that hiring is the skill you now need to become world-class at because you're not no longer doing the work yourself. You're still of course involved and doing some of the work and getting your hands dirty, but the bulk of your team's success now will be the quality of the hires you make and you truly need to be world-class at that. So yeah, I built this playbook out. I was in Canada in Ottawa when I sold that company, Tripadvisor, and really started growing my team and becoming more Leaning into leadership at the time through that experience.

**Luc Levesque** (00:14:07):
One of the benefits of being in Ottawa and kind of off the grid if you will, is it's a curse and a benefit as that you don't have a ton of people you can learn from. So it does mean you need to go to first principles and think things through from the ground up. It takes a little longer, but you come up with your own playbooks on how to do things. I think you've seen my blueprint, which is a good example of that where I have this blueprint I put together. When new people join the team, I show them my blueprint, which is basically a list of my quirks so we can really quickly align. That's something that just being in Ottawa and trying to figure out how to be a leader and avoid mistakes, I was like, "Wouldn't it be nice if you had a blueprint? When somebody joined, you can just tell them all of your quirks and you can just quickly calibrate on how it is to work together versus through awkward long discussions over the course of a year."

**Luc Levesque** (00:14:51):
My hiring playbook's a similar thing. I think of it in three different chapters, if you will. There's finding talent, assessing talent, and closing talent. In terms of finding talent, I do believe that the best predictor of future performance is past performance. So I'm looking for what I call signs of excellence. So I want to know the top people generally have done multiple amazing things in their life, repeated success, not just once. Maybe it was work related, maybe not work related. But generally speaking, if you think back to the stars you've worked with, they've done some amazing things. And that's why I always start when I interview or when I chat with people, I started talking about just trying to understand, "What has been your path? What have you done professionally and not professionally?" And generally, stars going to stand out. It's very rare that there's not something obvious that comes through.

**Luc Levesque** (00:15:39):
So for myself personally, I'm looking for kind of three different signs of excellence to tell me that it doesn't have to be three. The mental model I have is as you're talking to them, you're getting pluses and negatives. There's red flags you're hearing and there's really great things. And then at the end you can make an opinion of how good this person is.

**Luc Levesque** (00:15:56):
Another great sign of excellence, and this was just through reflecting on stars on the team and thinking what makes them unique, what about them. One of them is when somebody's boss leaves the company and then comes back to poach them, that is such a strong signal because if you think of what just happened, the leader who knows exactly how good this person you're talking to is, they have the most knowledge of the performance of this individual, they left the company. They've come back to poach them, putting their own reputation at risk by coming back depending on the situation. And they would never do that unless this person was really, really good.

**Luc Levesque** (00:16:37):
So you don't want to over pivot on one signal, you want to look at the full picture. But those are the types of things I look at to bring in top talent. And I've got this whole playbook, mistakes I've made that I've learned from, things to avoid. And over the years, yeah, I've put together this playbook that I try to follow and I'm always running little experiments to try to make it better.

**Lenny** (00:16:56):
Were going to that blueprint that you mentioned. A lot of which you're talking about is probably more relevant to senior executive type people because you're looking for... Or maybe not because you're looking for say three.

**Luc Levesque** (00:17:06):
[inaudible 00:17:06].

**Lenny** (00:17:06):
Okay. So people early in their career could also have three, say, moments of excellence?

**Luc Levesque** (00:17:12):
Yeah, I mean just thinking off the top, it depends on the type of person you're hiring, but are they a founder? Have they tried to do something? Did they win an award somewhere? Are they a gold medalist at something? Have they done something that others have not that shows grit, that shows drive, that shows the ability to succeed? And I've seen that you can apply that to any candidate you're hiring.

**Lenny** (00:17:36):
The implication there is, without that, they're probably not going to be stars, that there's a strong correlation between having signs of excellence and them performing really well in this role.

**Luc Levesque** (00:17:45):
Correct, exactly. Yeah, I mean I suppose it's possible, but it would be pretty rare that somebody would come in without some sign that they stand above the crowd. And again, I'm talking about you generally want to hire the top 1% of candidates. So when you're looking for the best of the best, you definitely are looking for those signals.

**Lenny** (00:18:01):
Awesome. Okay, so I'm going to bring us back on the agenda that I had for myself, which is I want to start with talking about advisorships and advising and growth advisors. You've been a growth advisor for a long time to some of the most amazing companies out there, Twitter, Pinterest, Patreon, Canva, Thumbtack. I'm sure there's others that you don't list that are more informal. Now you work at Shopify. And so what I think about here is a lot of founders often think about, "Should I bring on an advisor? What should I look for an advisor? I've heard stories of advisors being useless sometimes. People tell me I don't need advisors." So I guess the question here is just what's your take on when it makes sense to bring on and consider bringing on a growth advisor and what should people look for when they're exploring and talking to a potential growth advisor?

**Luc Levesque** (00:18:47):
A few thoughts. In terms of when, I don't think you can probably come into early. It's probably harder to find really good ones than it is to time it. But generally speaking, I would say you don't want to focus too much on growth until you have product market fit. So make sure you have a product that users love that's either showing strong signs of retention or has some good loop that you can see that you can start thinking about growth.

**Lenny** (00:19:08):
Let me follow on that thread real quick because I find some founders still want to have someone come help them with growth even though they know they don't have product market fit, even though this tip comes up every single time when I'm talking to growth person, like, "Wait till you have product market fit before doing growth stuff." So could you just add a little bit of why that's important while we're on that topic?

**Luc Levesque** (00:19:27):
Growth advice is generally always applicable. And if you can start thinking about how to build your product early, even if it's pre-product market fit, you're not going to do any damage, but you may be wasting some capital on an advisor or a growth person too early. The problem that I see is if you start growing a product that doesn't have product market fit, you're actually doing more damage than good because you have a product that is now being exposed to the market through growth levers and through optimization that is giving a bad experience with your product. And you want that product that you know is tight and you know has product market fit to start building the flywheel and start growing. You don't want it to be growing if it doesn't satisfy that need that you're trying to build out for. So I can see it having more damage than good because when somebody tries something, they're unlikely to try it again. And so that's the dangerous game you can get into. So you're better off with a good product that's satisfying a need and then growing from there.

**Luc Levesque** (00:20:20):
I will say to kind of play devil's advocate with myself and something that I've done actually in one of the products, I've built several consumer products and grown them, is that sometimes to know if you have a product, you need users to use it. So there's like some subtlety in here, but I would say if you are trying to get users in to start playing with it at scale, I mean try to focus in on a market that is maybe off the grid. Like pick some English-speaking country that's a bit off the grid that you can isolate your marketing to so you can start getting dozens or a couple hundred people per day coming in and giving you feedback.

**Luc Levesque** (00:20:58):
I've seen that work too. So I'd say wait till you have product market fit. If you do start growing your product early because you need that signal from people actually using it beyond just focus groups and friends or small numbers of people, try to do it off the grid in smaller markets that you can get kind of contain the growth and get what you're really trying to get, which is that signal on is it working or not.

**Lenny** (00:21:19):
Awesome. Okay, I threw us off track. Let's get back on track. So we're talking about when it makes sense to find a growth advisor and then what to look for and so on that you might want to work with.

**Luc Levesque** (00:21:27):
I mean, what makes a great growth advisor is somebody who really understands what to do but also why certain growth levers work. It's that kind of deep understanding of levers of onboarding or whatever area they're focusing on that really makes growth advisor stand out. So when you're looking for a growth advisor, you want to have those discussions to see like, "How much depth does this person have? Have they seen a playbook and they're just good at repeating the playbook or are they evolving, are they growing?" The best way to get to know that is to start really asking them questions about growth and growth advising and the certain things that they've done and why they think those have worked.

**Luc Levesque** (00:22:09):
This can be tricky if you don't yourself know growth. So I think one thing that I have not seen a lot of founders do that I would advise is if you have an advisor already... Because this applies to finding growth advisors, but it also applies to hiring good growth talent. So if you have somebody you know whether it's already an advisor or somebody who knows growth, you can solicit their help in trying to flesh out whether somebody you're trying to hire is of high talent. So if you have an advisor, you can make that one of their roles is vet out any new talent coming in. And if you're looking for an advisor, try to find somebody that you know and trust who can do that first pass. Because for somebody who knows growth that you trust, it's actually not a lot of work for them to vet out how talented someone else's. It's an easy ask to make and something that if you have that person in your network or that worked with you that you can leverage for.

**Luc Levesque** (00:23:01):
But I haven't seen that too often where founders kind of take advantage of people they know or existing growth advisors to help recruit and vet talent because it can be quite hard if you don't know the growth space to know if somebody's good or not.

**Lenny** (00:23:15):
That's a really interesting idea and it could be where you find someone that's too busy to work with you, but maybe you could just ask, "Hey, could you just easily help me vet people?" And it takes a lot less time.

**Luc Levesque** (00:23:26):
Yeah, I've never been asked that, which is, I mean I don't know if I'll start getting asked this now, but it does seem like that's a really simple way to add a ton of value. And as a founder, I mean even if you have to pay this person or whatever you have to do, but it's such an important hire to get right. We talk about the 10X engineer and we don't really talk about the 10X growth advisor or 10X growth person, but the same dynamic applies. You could argue it applies even more because the right growth advisor can have literally company changing impact where they're either building or helping to ideate or helping to implement a growth loop that literally changes the company. As we know, you need a great product and you need a great growth loop. And it's usually just one loop that you need to get right. Most companies have gotten to where they are just off of one really strong channel that they've just dominated, so it's important to get right.

**Lenny** (00:24:17):
Is there an example of that sort of impact that you've seen in your advisorship or other people's of just an impact from one conversation or a little bit of a help?

**Luc Levesque** (00:24:25):
Definitely. And I think what I would point to is the advantage of a growth advisor is it takes a long time to understand a channel. Certainly people have to know their stuff, they have to be very good at their craft, their growth craft, but also they have to be exposed to a large set of experiments or an environment where they've just seen what works and what doesn't. So no matter how good somebody is, if they haven't been exposed to an environment where there's a lot of experimentation, a lot of learning, it's very hard for them to internalize that. So once a growth advisor has that, it's takes years to learn it, but it literally can take seconds literally to communicate that. So I've worked with some companies that you've mentioned and certainly have had impact very quickly.

**Luc Levesque** (00:25:09):
I mean, one example would be a company that I worked with. Now, a public company. At the time, they weren't. On day one, walked in, they presented their strategy, their plans, their funnels and their landing pages. I could see very quickly that there was something they were doing that was a little off and I asked them, "Well, why are you doing it that way?" And they said, "Well, we think it just looks better that way." And I said, "Well, just do it this other way." I remember this because it was such a short conversation and then three weeks later we connected and I heard they had rolled it out and it was a large impact that they had from this one change. This has happened many times with the companies I've worked with, but it's a good example that once you know it, it's not hard to recognize it if you deeply understand it to give advice, but it takes a long time to get the base knowledge.

**Luc Levesque** (00:26:02):
So I don't do these too often anymore, but when I do advise, I take them very seriously. I focus exclusively on having impact. I think that's really important because like you say, there's a lot of advisors out there. Some of them are great, some of them different qualities, and you really want to make sure that if you are an advisor, you want to be in the camp of when this person comes in, they have a lot of impact and it takes time and focus and energy and alignment and there's a bunch of things we can talk about that that helps to drive that alignment. But having impact is the most important thing, whether you're an advisor or if you're hiring because it's one of those weird disciplines where the right person at the right time can literally say a sentence that changes the trajectory of your company. You can't say that for a lot of different disciplines, but this is one of them.

**Lenny** (00:26:49):
There's that word impact again,

**Luc Levesque** (00:26:51):
Impact. Impact.

**Lenny** (00:26:52):
The point you just made about how one conversation can have a ton of impact is a reminder of why sometimes the price of an advisor feels absurd where like, "For one hour it's like thousands of dollars," but it's because obviously they spent a decade learning a thing and one conversation is all of that work they put into it crystallized for you in the moment.

**Luc Levesque** (00:27:13):
Exactly. It's something I've experienced several times in hindsight when you're like, "Okay, here's the needle in the haystack" and then it's implemented and you can see hundreds of percentages, sometimes over a thousand percent lift when you get it right. It's exhilarating. It's great. I have something I used to say, which is, you want your impact to be so big there's a slide in the next board deck on try to explain what happened. That can happen when you are advising companies because you're able to share a very quickly insights. But one way to drive alignment is not everybody can do this, not all advisors do it this way, but I personally love just when I do these, which is not that frequent, just purely doing equity because I love the alignment in outcomes where the founder will be successful and you will be successful. So the incentives are really good to drive the right performance and the right outcomes that you want as a founder.

**Luc Levesque** (00:28:09):
So if you can do it, I would definitely advise founders to bring advisors in for equity if you can. I think the same applies for your internal growth team. You want to make sure that the teams are incentivized not on activities, on doing stuff, because there's a lot of stuff to be done in growth, but really driving the outcomes that you want. And equity's just a great way of saying, "Hey, we're in this together. We're on the same side of the table. Let's go grow this company."

**Lenny** (00:28:36):
I was actually about to ask you what kind of structure you recommend for an advisorship. Is there anything else you can share about just what you'd recommend a founder do in terms of compensation for an advisor?

**Luc Levesque** (00:28:45):
There's a couple things. I'm a big fan of equity because of the alignment of incentives. You should think about, without getting into too much detail of the actual structure of the deals, but think about how you vest the equity. The last thing you want is an advisor holding back on sharing knowledge. The ideal engagement would be an advisor comes in, delivers as much value as possible quickly, and then trains your team. And then maybe it's a one-year engagement and hopefully they've learned because the advisor has been incentivized to share as much as possible and to train the team as much as possible. And then ideally you don't need them anymore after. So there's something there about structuring equity vesting. I'm a big fan of vesting earlier rather than later. So think about in terms of structure you're vesting, commensurate with the value you want, which is very much front loaded.

**Luc Levesque** (00:29:35):
I'm also a big fan of three month cliffs. Something I've done, I always do actually, is listen, in the first three months you'll know both sides if it's working or not. And you want to de-risk that on both sides because it really should be seen as a partnership between the advisor and the founder. If the founder thinks you're not adding value in the first few months, I think they should just tear it up and both sides move on. It's not good for the founder to continue the deal and it's not good frankly for the advisor because they're not, for some reason, able to add value in that environment. So I love a three-month cliff at the beginning where if it's not working in the first three months, you tear up the deal and both parties walk away and de-risk the entire thing, and again, drives incentives in the right way where the advisor is 100% incentivized at as much value as fast as possible. And so that's another thing that I tend to do and I've done it for a long time.

**Lenny** (00:30:28):
That's a really good tip. Basically don't do it for a year if you're vesting for advisors, probably not even to a year, but yeah.

**Luc Levesque** (00:30:33):
There's a bunch of ways to do it. Honestly, it's hard enough to find growth advisors that have capacity, so you got to also say like, "What can you do that the advisor's comfortable with?" But yeah, I mean just to be candid, I think you want to structure in a way where you're not dependent on the advisor over time. They're adding a ton of value, they're helping teach the team, they're probably bouncing around because your company's changing, your team's changing, your leaders are changing. But over time, and that can be years, but it shouldn't be indefinite. You shouldn't need an advisor forever.

**Luc Levesque** (00:31:04):
I've seen a scenario where there's desire to keep the advisor on almost as insurance, like, "If something goes wrong, I just wanted to be able to pick up the phone." That can make sense. But I do think a good growth advisor is incentivized to share as much as possible, as fast as possible to have impact to train your team. And then whether you want to keep them on or not long term as an insurance policy or just to answer questions as things change, that should be a choice and not because, "If we lose the advisor. We're completely screwed." That would be a bad place for you to be in as a founder.

**Lenny** (00:31:35):
You said it's hard to find a good advisor, 100% agree. Any advice for people to help them find an advisor that might be the right fit?

**Luc Levesque** (00:31:43):
Yeah, I would say there's more of them these days than there were even just five years ago or 10 years ago. Depending on your situation, if you're a founder, I would start with your investors. I think VCs have an amazing network of advisors. I get, I don't know, a couple requests a week that I'm not taking right now. But that from my experience and what I've seen, that's probably especially the high end VCs, the very talented VCs will have this network. And frankly, it's a great partnership as an advisor for you to have. You can help the companies, you can help the VCs and it helps you. So everybody wins, just asking other founders that had good experience, much like hiring.

**Luc Levesque** (00:32:21):
The third advice I would give is to find companies that are world-class at what you're trying to grow, what channel or skill you're looking at, and then reach out and see if there's a way to help that way. That's actually how I got started. I was at Tripadvisor and a prominent VC reached out. One of the companies they were working with needed some help on SEO. I was still in Canada at the time, got connected with them, had a phone call, had a significant impact through that one phone call. And rather than joining as an advisor, I essentially helped them out pro bono in exchange for, "Hey, I want to get connected in the Valley." So I was in Canada, I wanted to start another company, I wanted to get connected. So through that tactic where they reached out to a company that was known to be world-class at SEO, I think that was really smart on this VC's part.

**Luc Levesque** (00:33:13):
And then maybe some advice to up and coming growth advisors would be that first one, I didn't take a single shred of equity or money and just tried to have as much impact as possible and to help out this company as much as possible and then make sure that I was able to get connected to other people that I wanted to meet in the Bay Area. And then kind of things snowballed from there.

**Lenny** (00:33:33):
I definitely want to chat about how to become a growth advisor because I think people listening here might be like, "Oh, that sounds pretty good. Someday maybe I'll become a growth advisor." But before we get to that, what are things that an advisor are best suited for versus finding someone full-time versus no one? What are the ideal kind of problem sets for an advisor versus say, full-time hire person?

**Luc Levesque** (00:33:57):
I would say your preference should always be to have somebody in-house. I'll start there because you want to have that as part of the culture. There's so much more that they can do when they're in-house. That being said, if you can't find somebody in-house, then bring on an advisor... Even if you bring on an advisor, some advice to founders would be you want to surround your team or at least one person that you've identified who's just a amazing world-class doer, even if they don't know growth, with a set of growth advisors so that they're learning, that's being put through the culture of the company and that knowledge stays inside of the company. So I'd say I would prefer to go internal, surround these people with great advisors and then take it from there. That would be how I approach it.

**Lenny** (00:34:41):
Okay. So two thoughts here. One is I feel like this podcast is becoming an interesting way to discover awesome growth advisors. I think over time I'm building this directory of who are awesome, smart growth people that are open to advising. So that could be an interesting opportunity to just look through the folks on this podcast and-

**Luc Levesque** (00:34:59):
Yep, there's some great people that have been on here. Definitely.

**Lenny** (00:35:02):
Totally working my way through all the amazing least smart growth people and product leaders. The other is I've noticed they're a lot of the best growth advisors have worked with the same sorts of companies. I find Miro comes up a lot, Canva comes up a lot, Pinterest. All these people that have worked with say Pinterest that I hear about are just awesome. Casey comes to mind, Melissa Tan who's coming out with a podcast, I think she worked with them. Dropbox. Anyway, so maybe one idea, see who these companies work with as advisors and that can maybe point you to people that are worth exploring.

**Luc Levesque** (00:35:34):
I mean, that's a good idea. It kind of goes back to something I mentioned earlier, which is companies that have a lot of traffic and that have a lot of users are a great learning ground for growth people and for advisors, because no matter how smart you are, you need the reps. You got to go to the growth gym and put in the reps, which is experiments. You've got to try things, things that are going to work, things that aren't going to work. There's a discipline of when something doesn't work, you can learn almost as much as when something works. But you need that traffic, you need that environment. And that's why certain companies have these great people coming out like Casey at Pinterest and other people that have been at these companies that have the traffic, have the culture to support it, to support growth. I don't think that's a coincidence why some of these companies have some great people coming from them.

**Lenny** (00:36:20):
The other tip I just thought about as you were talking is everyone's launching a Substack newsletter that is doing any sort of advising because there's a lot of power in building an audience and creating kind of awareness of what you do. So I wonder if another tip is search Substack's directory of newsletters for specific things you're dealing with, like say, go to PLG or sales and you might find someone there."

**Luc Levesque** (00:36:39):
I haven't done that, but that seems like a reasonable way to do it.

**Lenny** (00:36:42):
That's where we're all heading.

**Luc Levesque** (00:36:44):
I'm not saying that the people on Substack have this. But as advice to the people listening, is when you're vetting for a growth advisor or growth talent, don't just wait it on the public halo of somebody. That's a common mistake I've seen where maybe somebody's done presentations at a conference or somebody's done... I don't know, but their Twitter following is broad. They can be excellent. That's not a disqualifier immediately, but just make sure not to make the hire just exclusively on that. I've made that mistake a few times and it's a common one to get into. So make sure you're vetting properly, even if somebody with a large following on Substack or Twitter. That's I think an important thing to keep in mind.

**Lenny** (00:37:25):
1000% agree. I always say that the best product leader is the best growth. People don't have time to sit on Twitter and tweet and write newsletters. They're doing the job, working, building, growing, and maybe eventually they get out of that and start writing. But I 1000% agree, there's a lot of people-

**Luc Levesque** (00:37:40):
Well, not to disqualify all the people on Twitter.

**Lenny** (00:37:43):
Absolutely.

**Luc Levesque** (00:37:43):
Some of them are tweeting [inaudible 00:37:45], but my point is just don't over pivot on the halo. Just look at their past performance. What teams have they been on? What environment do they have? Do they really know growth? And sometimes they do, but I think it's a common mistake to say, "Oh yeah, they have a large following, let's hire this person." That's poorly.

**Lenny** (00:38:03):
1000% agree. Rarely does a celebrity hire that seems really genius on Twitter and Substack end up being as amazing as you think.

**Luc Levesque** (00:38:12):
Yeah, it does happen, but yeah.

**Lenny** (00:38:13):
It does happen. Absolutely. One last question around this topic. People listening might want to become growth advisors, I'd mentioned this earlier. Is there any other advice you want to share? Just like, "If you want to become a growth advisor someday, here's what you should think about."

**Luc Levesque** (00:38:26):
Yeah, I think the right mental model as a growth advisor is around the same one as an investor. So the most important thing an advisor can do aside from having impact and knowing their craft is picking which companies to work with, especially if you're working for equity. So I'll only speak to that, but you're basically putting in your time, you're picking likely a smaller number. You only have so many hours in the day of companies to work with and you want to make sure there's a likely exit in the future. So for me personally, I have a spreadsheet, like most big decisions that I make in my life. Over the years I've just added criteria and questions to ask myself about the company and then reflect on, "Okay, is this kind of checking all the boxes for a likely outcome?" Because you don't just need to be successful, you need to be successful and for the company to be successful and for there to be liquidity of that.

**Luc Levesque** (00:39:17):
So you need to put yourself in the shoes of an investor and look at it as an investment. That is arguably the most important thing because you can go and do a great job and then wait many years and potentially not see any reward for it. And I think that's the nice thing about the equity structure in that you're tied in the same incentives with the founder, which is just great in terms of any relationship to have the same incentives, but you want to make sure that there's a good likelihood of a decent outcome down the road.

**Luc Levesque** (00:39:49):
If I can throw another one in.

**Lenny** (00:39:49):
Yeah, absolutely.

**Luc Levesque** (00:39:50):
The other piece of advice I would give is it can take a long time for some of these companies to be successful. That's okay. You should expect that. In fact, you should just go in with that mindset. When I'm deciding to work with a company, I'm in there for 10 years and I know that and I say that. And I say, "I'm in. We're in this together if I choose to work with the company." But it does mean that the structure of the deal needs to reflect that. So you need to have a long tail at the end.

**Luc Levesque** (00:40:15):
So if you're taking options or RSUs and it's pure of the equity, make sure you have the time for that to happen. There would be nothing worse than putting your heart and soul having impact and then waiting, I don't know, a couple years and then your equity expires. So you make sure there's a long tail. I mean, it can literally take over 10 years for these companies to exit. And you should be okay with that. I think that's okay. You're taking some risks. They're taking some risk on you and that's a great partnership, but you'll just need the time for that. So advice to growth advisors, make sure to ask for a long tail so that you don't end up in a bad spot in the end. And that incentives, again, are perfectly aligned between the founder and the advisor.

**Lenny** (00:40:52):
**Luc Levesque** (00:42:55):
Yeah, I've been doing SEO for a really long time. It's a lot of fun and certainly being a supervisor was a great learning ground for that, that we were able to really innovate and try new things there. In terms of the playbook that we built out. That was a lot of fun, those years.

**Luc Levesque** (00:43:11):
Couple thoughts. The first one would be I do think there's an SEO play in any company. Maybe at a different extent, but Google is such a large funnel of existing demand for your product or your product area that there's usually an angle to get some SEO traffic there. So I do think it applies to most companies. I would say if you're an early product that the world's never seen, it's a brand new thing, there might be some creation, some demand creation you need to do, but most of the time there's existing demand in Google where you can harvest demand or there's queries that are related to your topic that you can start ranking for to start building brand awareness. So there's always some angle.

**Luc Levesque** (00:43:52):
And then I kind of divide websites or online products into two categories. There's the ones which are smaller sites, small number of pages, very targeted at your product and don't have this kind of loop of creating new pages automatically. Most eCommerce sites actually have would a number of pages around the products and about us, those types of pages. That's one type of sites. Let's say they have dozen pages. And then there's other ones with thousands, tens of thousands, hundreds of thousands, millions of pages which are either user generated content like Tripadvisor and Pinterest and others, or marketplaces like Thumbtack and other types of websites like that. Those are generally easier to see a huge amount of impact very quickly because there's such a large optimization surface and ideally it's growing and generating traffic automatically.

**Luc Levesque** (00:44:40):
I've always thought of LinkedIn as just such a great example of this where you have this viral loop where if you recall when it was just starting, everybody was getting these invites from LinkedIn. Those come and go. You get an invite, you register, you don't. That happens. But the byproduct is when people join, they create this beautiful lightning page, which is your profile that gets indexed. It's kind of like a viral loop feeding an SEO loop that continues to grow. So that's a good example of use generated content which kind of feeds on itself and grows. So there's those two categories. Going back to the first category, if you only have a small handful of pages, the way to think about that is you certainly want to optimize those pages, then you want to start creating content that speaks to your audience beyond that. So you need a content strategy, whether it's a blog or creating new parts of your site that address questions that your audience might have. But generally speaking, I think there's an SEO play in any company and there's just different tactics, strategies, and approaches to get there.

**Lenny** (00:45:40):
Awesome. I never thought of it that way, that there's kind of these two buckets. So the first bucket is like you don't have a ton of pages that naturally are generated as a part of your experience. And the second is you do. I guess in the second bucket I think of Reddit and Glassdoor and Quora, Tripadvisor, a great example, Pinterest. In the first bucket is the way to generate pages. Basically, it's editorially write content and have people write things for you. Is that generally the strategy?

**Luc Levesque** (00:46:07):
There's different ways of doing it, but a good content strategy is a kind of tried and true approach. Definitely.

**Lenny** (00:46:13):
And in that bucket of you don't naturally have a ton of pages, can you primarily grow through SEO? Or is SEO always going to be this minority channel and you have to find something else?

**Luc Levesque** (00:46:24):
No, it can be a big channel. This is also about creating content, but it's not your users creating the content. You have to go create the content and have some high quality answer to a question that's being asked on Google. I think one thing to keep in mind with SEO is entire industries are based off of single keywords. I remember when I was in the travel industry that literally companies were bought and sold based on one keyword rank. So it's not like, "Oh, it's a little bit of traffic." And I think this is a bit unintuitive with growth. A lot of people, they'll think of growth as linear or it's another channel, it's another thing. I mean, growth done right is exponential. It literally is company changing.

**Luc Levesque** (00:47:00):
When you're talking specifically about SEO, keep in mind the world is searching for that thing, targeted on that one keyword and likely you're clicking the number one search result. So getting that number one spot is not like, "Oh, that's a little bit of traffic." You can literally build an entire business around that first spot. So don't think that's... Well, maybe it is commonly known, I'm not sure, but it's definitely something that is non-obvious or intuitive I think to most people. And if you have an entire SEO team working on one keyword, I don't think that's crazy because a small number of keywords can define an entire industry or a business.

**Lenny** (00:47:37):
Is there an example of that sort of situation when keyword's building a massive company?

**Luc Levesque** (00:47:41):
Yeah, I mean there's a lot I'm sure. I can speak to my own company that I sold to Tripadvisor. It was called TravelPod. It was a travel blogging website where you can think WordPress, but for travel, which I started earlier. It was the first site to do that. I made the mistake of not knowing SEO or growth before I sold the company. And so that was a great learning for me. When I went in, this is a story where we're looking to acquire another site and I thought the product was pretty poor. I remember talking to the founder and thinking... He'd asked me if we'd want to acquire it, and, "The product's terrible. Why would I want to acquire that?" He's like, "Yeah, they're 10 times bigger than you." And, "What?" That was when I realized, "Okay, we've been building a great product and great engineering culture and it is important, but you really need to know this growth stuff." So that's actually the moment I shifted to, "All right, we have to really know these growth levers."

**Luc Levesque** (00:48:34):
In that space, the number one keyword was Travel Blog. And so owning that was a big deal and we did not own it. I think we ranked number two for a really long time. I can't remember if we got it in the end, but that's just one example where... And there was many, many travel businesses where I always loved looking at a business and trying to figure out, "What's their growth loop? How did they do that?" And it's not like, "Oh, it's a great business. It just grew." Most of the time it's price line crushed it at SEM. Facebook crushed it at a viral loop where you got tagged in a photo, you got an email and you had to go register because there's a photo of you somewhere you really want to see. Tripadvisor did a great job at SEO. In [inaudible 00:49:14], it's just one really strong channel that propelled the company forward. And in this case, it can literally come down to one keyword like we had at TravelPod.

**Lenny** (00:49:20):
So maybe it's a good time just to give a people a mental model of the different channels/loops that exist. So you've talked about SEO is one, paid search is one. What's the collection for people to think about? Usually as you said, one of the use is the primary source of growth for a company.

**Luc Levesque** (00:49:38):
Yeah, there's a variety of them. I think you have to look at where the intent is right now. It does change over time, but you have social channels like TikTok, Instagram. Influencers are a great area to engage with there. You have SEO, you have search. I think ChatGPT is another upcoming one that we might want to talk about a little bit where I do think we've never seen that kind of growth for search before and that's a platform that we have to start thinking about how do we optimize for it. Google just announced there are recent changes. They're going to be putting in an AI box at the top, the searchers also, how do you optimize in a world where it's not so much about optimizing for the platform, but teaching the AI what you do and why you're the best in the world at it. So that's another whole area that we could talk about, but that's a big channel I think that that's growing.

**Luc Levesque** (00:50:29):
Viral loops are always a powerful thing if you can get them to work. That's more about psychology and channel optimization, where you want people to be incentivized to share the product that you have with their friends and then to have their friends come back and register. So you can have one viral loop, you can have secondary viral loops, you can bolt viral loops on your existing products. There's different ways of doing this. And then just backing up. When I think about growth, I don't think about a specific... It's not growth equals SEO and Instagram. For me, growth equals whatever it takes to move the needle. So I get this question all the time, "How do you build a growth team? What does a growth team do?" And I say whatever it takes. That could be zero to one building a new product. It could be M&A, it could be SEO, it could be social, it could be onboarding.

**Luc Levesque** (00:51:15):
I think that's a better framework to look at. And then if you look at it through that lens, then partnerships easily folds into that where I've seen a lot of businesses get very big on just really clever partnerships, either strategic or broad kind of affiliate based partnerships. So there's a lot of channels. I definitely wouldn't restrict the scope of a growth team to just a small subset, but have a very wide funnel or at least strategy in terms of just test a lot of different things and go after the channels that work and pivot when it does, and then really lean into the one or two or three that really work because sometimes that's all it takes for business.

**Lenny** (00:51:50):
Well, you definitely nerd sniped me with the ChatGPT, so let's just spend some time there. I think this relates to just the general sense that SEO is always changing and it feels like this is an SEM I guess in this case too. And ChatGPT and Bard, I guess, is maybe the latest change. So what should we know there?

**Luc Levesque** (00:52:05):
Yeah, I think we're all still trying to figure it out. I was at Google IO last week or the week before. As soon as I saw the search result with the big box of AI, answers at the top, having done this for so long, I immediately knew the impact that I think is about to come. I've seen this play out in travel where Google acquired ITA and did flight search and hotel search. Generally, it's great for users and great for Google and the search engines, but makes it a little bit difficult for the publishers and the sites that are adding value to the ecosystem through being ranked in search results.

**Luc Levesque** (00:52:42):
So what we're about to see is basically Google, what they showed was a big box on top of the search results that answers the query directly. So if you think about that, that means that there's a lot of queries right now that users are clicking through down on the organic links and getting their answer there, which will be answered directly in the search result. We've seen this play out over the last five to 10 years where more and more answers are being shown at the top. Every time something changes, entire industries are disrupted or are changed. And I think that's going to happen again.

**Luc Levesque** (00:53:14):
So there's different types of keywords. There's transactional ones like e-commerce keywords with purchase intent. There's navigational ones where you're trying to get somewhere. And there's informational keywords, which is, "I have a question. I'm looking for an answer." It's pretty broad. It's a big area. I think that last category of keywords is particularly at risk. So if anybody listening to this is currently getting traffic on those, you should start thinking about what does that mean when things start changing. And I think the changes will be... We'll probably start seeing things shift to paid. You have to pay for that free traffic.

**Luc Levesque** (00:53:47):
The second one is there may just be a case where those keywords just don't get many clicks anymore. You might drop down to a very small number of clicks, if at all, because questions will get answered directly in the search results. So it's a big shift. We have to see how things land, but that's, I think over the next 12 to 24 months, if history repeats itself, we'll see that channel change. We've seen this play out in all the different channels. They kind of evolve generally. You can't blame the companies are doing what they have to do. ChatGPT is now 50% of my daily searches and not Google. So I think Google has to react and this is what we'll see. So from a growth perspective, definitely something to start to think about.

**Lenny** (00:54:25):
Super fascinating. I think about my newsletter and now Google suck it all up and just tell you all the answers. Great. Good news for me.

**Luc Levesque** (00:54:33):
[inaudible 00:54:34].

**Lenny** (00:54:39):
Yeah. Yeah. And change is great. Things don't-

**Luc Levesque** (00:54:41):
It's exciting. It's exciting. I'm just geeking out on growth a little bit, we haven't had a big platform change in a long time. So I'm like, "All right, cool. Let's go see what we can do here. How do you optimize this? How do you get listed if you can?" We're not sure where the placements will be, but that will be the new game.

**Lenny** (00:54:58):
Yeah, there's actually a lennybot.com that is a GPT bot trained on my content that there's a newsletter post about how it was all built so you could build your own. And so I think my new goal is going to have to convince people to go to lennybot.com instead of Google. Wish me luck.

**Luc Levesque** (00:55:15):
Hey, you got to lean into it. Yeah, we have a shop.ai, this great AI-based shopping engine. And I'll tell you, I bought so much on it. It's so good. The more you use these technologies, the more you realize how good they are. And that's something biggest coming. It's not just, "Oh yeah, there's another change." I was summarizing the Google change is to some people and originally was thinking this is the biggest change in the last 10 years. And then when I reflected on the last 10 years, I thought this is actually the biggest change since the inception of Google actually. I don't think we've seen something as profound as what's coming. And you really need to get ready for it.

**Lenny** (00:55:52):
Yeah, I've been using ChatGPT for helping me with interview questions actually, and once in a while there's like a really good one.

**Luc Levesque** (00:55:59):
Oh, that's cool.

**Lenny** (00:56:00):
So thank you ChatGPT, bringing me good things also. Maybe one more question along these lines around kind of connecting advisorship in SEO. Would you suggest when you're starting to think about SEO, starting to invest in SEO, you might be listening to this feeling like, "I got to think about SEO," does it make sense to bring on, say, SEO advisor like you? I know you're not available currently, but other folks like you or are an agency that is really good at this stuff or bring on someone full time? Do you have any kind of frameworks for thinking about which direction to go?

**Luc Levesque** (00:56:30):
It's hard for an agency or a pure advisor without internal help to do a really good job without internal talent at the center. So I would say I would start with just hire somebody internally and give them the mandate and incentivize them correctly to go and own this channel. Even if they don't know SEO, my advice would be get an engineer, get somebody who is just a relentless doer who wants to learn this and surround them with great advisors that I've just seen that work really well.

**Luc Levesque** (00:56:59):
There are some good agencies out there. Agencies will be working with multiple companies, so it's a little bit harder to get the same impact from an agency. It can work sometimes. But my preference is generally a last resort would be an agency. And I'd much rather have somebody who's internal who knows the business, who knows the keywords, who can have the knowledge internally inside the company permanently and help grow a team around them and have succession in place and a proper team so that you're not too dependent on this one person. But that would be my go-to. And then if you're really stuck, you can use agencies, but my default would be having somebody internal supplemented with agencies if you have to. Sorry, SEO is very specific. I mean, it's a very tight channel that knowing certain things about it can have a big impact. I think you do want people that have that experience that can bring that in from the outside to augmenting internal teams. It'll take a really long time to learn it.

**Lenny** (00:58:01):
Awesome. I was going to ask that. So you ideally want to find someone that's done it before that isn't just a relentless learner, but is that plus, has done SEO in the past?

**Luc Levesque** (00:58:08):
Oh, yeah. Ideally, you hire an amazing SEO person who can bring internal. Second would be somebody amazing who can get things done, surround them with advisors. And then in my stack rank, the third would be agencies.

**Lenny** (00:58:20):
Awesome. And then the other kind of common issue with SEOs, it takes a long time to show impact. Do you have just a rule of thumb of just give them this much time to see if they can make an impact?

**Luc Levesque** (00:58:29):
I'd say a few things. I'd say if you already have content and pages that are pretty good and getting a decent amount of traffic, it doesn't necessarily have to take a long time. So that would be my first reaction. It can take a long time. Generally, it takes a long time when you have to build new content. So the way to think about Google is it is going to take your content, it's going to show it to its users, people that are searching, and it's going to determine which piece of content is the best to ranked highly. It's not just about little tricks and links and keyword ratios. Those days are over. Those do matter, but it's not purely about that. And if you have a new piece of content, it takes time for Google to build enough trust to say, "Okay, I'm going to start showing this to users now" and then start collecting user feedback and then rank it appropriately. That can take some time.

**Luc Levesque** (00:59:14):
But if you have existing pages that are ranking eight and they're already on the first page, it doesn't always happen. But I've certainly seen it, in fact more common than not that you could have sometimes hundreds of percentages of lift very quickly. And it depends what you're starting with, is probably the right way to think about it. So if I'm trying to summarize it, I would say 12 months is probably max. If you can't see impact in 12 months, there's something wrong. If you have existing content, it could happen pretty early. It could happen on day one. Actually I've seen that happen. If you have to build new parts of the site, it can take months. I've seen that happen in companies I've worked with where I think it would be like a quarter, we had to wait till we saw a big lift. So it's somewhere between three to 12 months.

**Lenny** (01:00:05):
Awesome. That's really helpful. Okay, so final topic/final question. You've had a truly incredible career. You've worked with incredible companies, incredible leaders. I'm looking at your site here in a site window and you're like, here's a picture of you and Zuck. Here's a picture of you and Toby from Shopify, and there's more. I'm curious what you believe has been key to your success and your career success that you suggest listeners who want to have some measure of similar success do.

**Luc Levesque** (01:00:36):
It's probably a bunch of things we could talk about here. Yeah, this is the obvious thing is I think you've just got to love what you do. You got to work hard. You have to have impact. Certainly at the end of the day in growth, that's all that will matter. If I think back to specific things that I do though to pick one thing that's been very important for me throughout my journey is the art of self-reflection. And coaches. I've had coaches my whole career. But the macro theme is you're constantly iterating, experimenting, and becoming the best you can be in your career also as a dad and as a husband, and of course for your own personal health. But that reflection is so important. I've leveraged many, many different coaches over the years and now do a lot of self-reflection through a morning routine that I have and that I've been doing for quite some time that has been a big unlock for me.

**Luc Levesque** (01:01:32):
The biggest, most important part of that morning routine is dedicating an hour aside to really think about, "What's going well? What's not going well? What am I screwing up? Well, why am I screwing it up?" Which is often more important than, "What am I screwing up?" And of course, "What am I going to do about it?" But as long as you're learning and iterating every day, then you're just making constant progress towards your goals. It's something I do that I love doing. I love thinking. So I literally can just sit there and think for hours actually. I have a dashboard on all the areas that I'm focusing on with red, yellow, green, and just constantly revving on what am I working on improving, what am I doing, what experiments am I running and where am I doing well and where am I not doing well and how can I be better in all areas of my life, including being a leader. There's a lot of different things to it, but I think that's really important and something that I've learned over the years that is probably the most valuable to have as a skill.

**Lenny** (01:02:32):
I definitely want to spend more time on this. So you said you sit for an hour reflecting on what's going well, what's not going well. Is there more you can share about how you accomplish that, how you find time to do this for an hour?

**Luc Levesque** (01:02:43):
Yeah, it sounds crazy when you say it, but I do. So I wake up at 5:00. I work out. So I do cardio, I do some exercise. There's this great book called Spark, which is all around the neuroscience of exercise and I really learned a lot from that in terms of having this great morning routine that really boots you up. I kind of call it my bootloader. When I start in the day, if I go through my bootloader, I have just a much better day.

**Luc Levesque** (01:03:09):
So exercise, stretching, meditation, and then I do a cold plunge now. So I do a bunch of different things. But then I do some reading, but I do carve aside one hour where I go through... And this is probably important and it's where I've landed, but structured self reflections. That's why I have this dashboard. I have certain areas that I think about what's going well, what's not. I track all the experiments I'm writing. I'm just really passionate about if you're going to do something, try to do it as best as you can. This is a habit that has allowed me to sharpen my skills in certain areas.

**Lenny** (01:03:47):
What are some of these things you're working on? If you can share what's on this dashboard, how can people imagine what this might be?

**Luc Levesque** (01:03:53):
So there's a lot of personal stuff on it, but it literally is broken down between being a better friend, better husband, better dad, and then better leader. And so on the personal side, I've been known to work a lot of times. Balance is always hard to find. From being a dad and then thinking about how to be better there, I realized about six months ago that I've never actually asked for feedback on how I'm doing. So I asked my kids six months ago, I asked both of them independently, "What's one thing I can do to do more of or do less of to be a better dad?" And they were kind of caught off guard by it. My son's 15 and my other son is 12. And I said, "Take some time to think about it." And after about a month, my son came back and said, "Dad, I got one." He said, "I want to spend more time with you."

**Luc Levesque** (01:04:53):
So that was very helpful for me to hear. I'm big on routines and habits to make sure that things that you want to do are repeatable and it's not one-off things. So ever since that day, I've now have a daddy date if you want to call it. But every two weeks we do one-on-one time together with each of the boys. They get to pick what we do just so we have that consistent, whether it's dinner or play basketball in the front. But it's all about feedback. So that's one example on the personal side.

**Lenny** (01:05:27):
This reminds me of a tweet I just saw where someone said that the only people that are going to remember that you worked late for many nights is your kids.

**Luc Levesque** (01:05:37):
Wow. Wow. That's deep. I like that a lot.

**Lenny** (01:05:43):
As a soon to be parent, that's going to stick with me.

**Luc Levesque** (01:05:46):
Wow, I like that a lot. So it's tough, right? It's tough to balance it all out. It's very difficult because you want excel at everything you do in life. So that reflection helps, be it check-in as well of how am I doing in all these areas? And that I find the color coding is helpful for that too, of just doing a bit of a gut check and asking for that feedback.

**Lenny** (01:06:06):
So it also makes me think about, I was watching a Jeff Bezos interview and ask him what his morning routine was and he said that he just likes to putter around. he likes to just sit around, talk to his kids, read the newspaper. He doesn't book any meetings in the morning. He just finds he just needs a little flex time at the beginning.

**Luc Levesque** (01:06:22):
Totally. Before I became a dad, I read somewhere that one of the most impactful things you can do as a father is just be there for dinner every night. So I have been there for 15 years every single night. But it was a good reminder it's not enough. Having dinner is important with your family, but in our case there's more you can do. And just getting that feedback and doing some reprioritization is always important.

**Lenny** (01:06:46):
Speaking of dinners, and maybe just as a last question, I know you do this really interesting thing where you have dinners with interesting people. You just kind of invite them to your house. I don't know if interesting is the right way to describe it, but just kind of interesting people, prominent people. Can you just talk about what that is and what you think about and the benefits of doing something like that?

**Luc Levesque** (01:07:04):
I think interesting is the right way to think about it.

**Lenny** (01:07:05):
Okay.

**Luc Levesque** (01:07:07):
I started this when I was in Ottawa with a bunch of founders there. It's become one of my favorite things to do. Honestly, it's like the bright spot in my month that, I call them guilds. So the word guild is with the builders. That's how it originally started. So Guild Night is what I call it. The idea is basically all interesting people doing interesting things actually want to spend time with each other. That's why I'm actually surprised more people don't do this. But I'll basically have interesting people come, usually five or six. We'll sit around talking about specific topics. So I do one for consumer product, I do one for SEO, I do one for growth leaders and just have really smart, interesting people come and we'll talk about different topics that are relevant.

**Luc Levesque** (01:07:57):
Sometimes we'll pick a topic, so we'll have a group and then we'll say, "Hey, we want to talk about AI." So one of the advantages of being in the Bay Area is you can find three or four people that likely wrote some of the core code in Google or in AI, and then they'll join. People want to meet. People want to get together and have these conversations. So it's very exhilarating. I learn a ton. It's a lot of fun. I don't know why more people don't do it. And it's a bit of work to organize, but it's also just tactically been a great way to meet fascinating people. It's helped a lot for recruiting, for if you need a back channel. Now you know all these people that are in different industries. But business aside, they're very valuable business wise, but they're just a lot of fun and they've become some of my favorite things that I do.

**Luc Levesque** (01:08:43):
I'm really surprised why more people don't do it because I think especially now that everybody's remote and we're working from home, or most people are, it's more valued than ever. So it's something I'm looking forward to continuing and always actually through my morning reflection, thinking about what are new ones I can spin up who are interesting people that we want to break bread with. I do think it's important that it's done at your house. If anybody's thinking of starting this, you can do it at a restaurant, but there's something about being in your home or being in somebody's home, five or six people having a great conversation about a topic that's mutually interesting. I think everybody values it and it adds a lot of spice to life. I think it's really important.

**Lenny** (01:09:23):
Any other tactical tips for making one of these happen? So you do it at your home, you cater. How many people? How long? Anything else you want to share there?

**Luc Levesque** (01:09:31):
Yeah, so I think the most I've done is 10. That's a bit too much. Six seems to be perfect, six to eight, eight at the max. I do get a catered so you don't have to worry about cooking. The topic, something like a topic that it's common so that everybody can rally around. I do think it's important, like I mentioned, doing it at home. Usually we start around 6:00, we go till 9:00 or 10. It's just been a really good thing that I've learned over time is a really good thing to do to just make for a better life, frankly. Make richer life with some great friends.

**Lenny** (01:10:08):
And when we say cater, it's just ordering in basically, right? It's not that-

**Luc Levesque** (01:10:11):
Yeah, you can just DoorDash some food so you don't have to worry about cooking. I'm sure there's other things. I've never really deeply thought about it, but in terms of what are the specific things, I've evolved it over time, but I don't cook anyways, so it would be terrible if I cooked. So this is much easier to do it this way. And as long as you're inviting kind of interesting people, everybody's going to want to come and spend some time and bring some bread.

**Lenny** (01:10:33):
Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Luc Levesque** (01:10:39):
I think so.

**Lenny** (01:10:40):
I think you are. Well, question one. What are two or three books that you've recommended most to other people?

**Luc Levesque** (01:10:47):
**Luc Levesque** (01:11:33):
I've always been big on writing crisply and being very tight and not having three-page memos that you're sending off. Especially now that we're remote and we're all doing slack and email and different ways of messaging, how tightly you communicate, how crisp your communication is really important for frankly you getting your point across and also for the other person who's probably digesting a hundred of these messages. So this book is... It's a book on how to do that. It breaks down how to write crisply and the different parts of it. I've definitely seen improvements in the team since I've passed around. So that's a great book frankly for anybody, work or personal because we're writing so much and communication is so key. So that's the second one. The third one is a golden oldie. It's one that I've read many, many times and I recommend from a growth perspective. This one youlikely heard of, it's Influence by Cialdini.

**Lenny** (01:12:28):
I got it back on my bookshelf there.

**Luc Levesque** (01:12:30):
Yeah, it's a great book, and it's because it's really the underpinning of so many different product and growth principles that you can apply. So that's just a classic that is good to reread at least once a year. So those are three books.

**Lenny** (01:12:42):
I'm going to extend this a little bit. I'm going to add two books that are building on your two books, or the first two books, I guess. One is Peter Attia just wrote a book called Outlive. That is-

**Luc Levesque** (01:12:50):
I've got to read it.

**Lenny** (01:12:51):
Okay. And it's exactly the same kind of premise of just how important exercise is. I think there's a quote in there of just the only thing proven to help you live longer is exercise. And then Smart Brevity, there's another book that I'd recommend if people want more on though on this topic called Nobody Wants to Read Your Shit.

**Luc Levesque** (01:13:07):
[inaudible 01:13:08].

**Lenny** (01:13:08):
And it's by the guy that wrote the War of Art and Bagger Vance. I forget his name off the top of my head, but it's like, "Nobody wants to read your shit. Here's what you need to do for people to want to read anything you're writing."

**Luc Levesque** (01:13:23):
Yeah. We want to scan. We want to read. Yeah, that's great. I'll pick that one up. Nobody Wants to Read Your Shit.

**Lenny** (01:13:27):
Exactly. What a title.

**Luc Levesque** (01:13:29):
That's a great title.

**Lenny** (01:13:31):
All right, back on track. What is a favorite recent movie or TV show that you've really enjoyed?

**Luc Levesque** (01:13:36):
I don't watch TV much and I haven't really watched any movies in a while. But I do watch a lot of podcasts on YouTube. Andrew Huberman has got, of course, a great series. I've watched I think everyone he puts out, so I don't know if that counts, but that's-

**Lenny** (01:13:49):
Absolutely

**Luc Levesque** (01:13:50):
Okay. So I watched that. And then of course the All-In Podcast is always fun, so I make sure to watch those when they come out as well. A lot of fun and informative. So those are my two, I would say.

**Lenny** (01:14:01):
Great picks. What is a favorite interview question that you like to ask?

**Luc Levesque** (01:14:06):
Teach me something about growth that I don't already know. Because... and you could apply this to engineering product, any other area, because it really gives you a sense of what this person thinks is the top of the stack in terms of the smartest thing they know. Whether you know it or not is irrelevant. But sometimes you actually do end up learning some stuff. But it's my favorite question because you can really engage in a conversation around, "Okay, the thing you think is so unique that maybe you've come up with this learning yourself or you've created this tactic and then it gives you a sense of how much they know the craft." So that's my favorite question.

**Lenny** (01:14:42):
What is a favorite product that you've recently discovered that you just really love?

**Luc Levesque** (01:14:46):
I've got a cold plunge that I bought that I love. So it's called the Renew Cold Plunge. It's cold but super convenient and I do that every morning and I just love it.

**Lenny** (01:14:58):
Any advice for cold plunging? That sounds very painful and hard.

**Luc Levesque** (01:15:01):
I usually start going... I go in a hot tub to warm up, then I go in the cold plunges and back in the hot tub. That's an easy way to get started. But I will say I jumped in yesterday and today without going to hot tub. It was very painful, but I felt so much better after. So I might be changing up my approach, but I'm just kind of experimenting with different things. But that would be some advice. And then just go slow. Start it not too cold, and then slowly make it cold over time. But I think it's a pretty good thing to add in so far.

**Lenny** (01:15:31):
How long have you spent in the cold plunge?

**Luc Levesque** (01:15:33):
It varies. Right now I'm doing five minutes. Five minutes at, I think it's 53 degrees. So I've started at 60, slowly bringing it down. But you do have to go slow because I brought it down even further and kind of caught me off guard and got a little dizzy. So you got to find your sweet spot.

**Lenny** (01:15:53):
Damn. Very Huberman inspired. I imagine this-

**Luc Levesque** (01:15:57):
Definitely it was part of the source there.

**Lenny** (01:15:59):
I know people would hear a lot about cold plunges. I guess what have you seen as a benefit just while we're on this topic for people to seriously consider doing this?

**Luc Levesque** (01:16:06):
So a couple things. Mood afterwards is so much better. You get this great multi-hour boost from doing it. Especially like I mentioned, not doing warm before or waiting 10 minutes and waiting 10 minutes after before you warm up, after you get out, great mood boost. It also helps a lot with sleep. So if you do it at night, which is a little bit difficult, it helps a lot with sleep. Those are probably the two biggest things. And you do get to a point, I'm there now where I kind of look forward to it because you know how good you'll feel afterwards. So when I'm thinking about it, I know it's painful, it doesn't make it easier, but I do look forward to it now. It's a pretty cool thing.

**Lenny** (01:16:44):
Oh man. I got to get one now.

**Luc Levesque** (01:16:46):
Yeah. [inaudible 01:16:49].

**Lenny** (01:16:49):
Okay, two more questions. What's something relatively minor that you've changed in your product development process that has had a big impact on your team's ability to execute?

**Luc Levesque** (01:16:56):
One change that comes to mind is it's common to hear discussion around you need to experiment, you need to have rigor, you need to look at results, iterate based on those results. That's pretty much common knowledge is how all good companies that execute growth that do it. I think the subtlety is that experiments are great, but they can be slow. You have to look at the results. You have to analyze how things went. You have to learn what's going on. You have to build the experiment. So there's a cost to an experiment and not everything needs to be experimented. And that's not something that I generally hear growth teams talk about. It's usually, "Hey, we need to experiment."

**Luc Levesque** (01:17:40):
So one thing that we're definitely focused more on lately is this idea of sometimes you just need to YOLO it because it's a better product experience or you just kind of know it's going to work. And if you're YOLO-ing 40 things and three of them work and you can look at pre-post, you can look at holdouts, there's ways of making sure you don't cause major damage, but the speed can outweigh the cost and time it takes to do experiment. So that's one change we've recently implemented. That's been pretty impactful.

**Lenny** (01:18:09):
Final question. So we met actually a long time ago in Montreal, or maybe it was in Ottawa, in Canada somewhere. I think it was through an organization called C100 when I was starting my company back in the day. And so my question is, what is your favorite Canadian food?

**Luc Levesque** (01:18:24):
It's funny. My favorite Canadian food, I'm from Ottawa and there's a lot of shawarma, Lebanese shawarma everywhere. I know it's not traditionally Canadian, but Canada's so multicultural, so I'll make this count. I love a good shawarma and it's so hard to find a good shawarma in the Bay Area. We've still been looking here. But my favorite Canadian food or pseudo Canadian is shawarma. If I had to pick one purely Canadian food, and this is related to Montreal where we first met, it's got to be a Montreal smoked meat sandwich.

**Lenny** (01:18:58):
Excellent choices. You're making me very hungry. I'm going to go get some shawarma, buy me a cold plunge. Luc, this was amazing. We talked through everything I was hoping to talk through. Advisorships, SEO, hiring, building habits, cold plunges. Two final questions. Where can folks find you online if they want to reach out and learn more? And how can listeners be useful to you?

**Luc Levesque** (01:19:18):
You can find me online at luclevesque.com. So first name, last name.com. And how can they be useful to me? Listen, we're always looking to hire the best of the best. So if you want to work at an amazing company with an amazing team doing very impactful work and learn the craft of growth, please reach out. We're always looking to bring on amazing talent. So that would be the woodway.

**Lenny** (01:19:40):
Awesome. Luc, thank you again so much for being here.

**Luc Levesque** (01:19:43):
Thanks. It's great to chat.

**Lenny** (01:19:45):
Bye everyone.

**Lenny** (01:19:48):
Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [18/19] Building high-performing teams | Melissa Tan (Webflow, Dropbox, Canva)

**Melissa Tan** (00:00:00):
My aha moment of the value of first principles thinking was when I was at Dropbox. We would hire a ton of really smart people that had never done sales and had them do sales. There are a lot of disadvantages to that, but I do think it led to a ton of innovation. That's how we got our very innovative go-to market motions because a lot of those people then moved into different functions at the company. They had all this context on who the user was. They had talked to so many different users at that point. If you take people that are just super smart, they've never done it before, one advantage of that is they can innovate because I think they come in with, I don't know anything. Let me just figure this out.

**Lenny** (00:00:38):
Welcome to Lenny's podcast, where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Melissa Tan. Melissa was the longtime head of growth for Dropbox's B2B business. She's also their first growth product manager. Then she went on to do full-time advising for companies like Canva, Grammarly, Miro, and Ro, helping them with their growth strategy and helping them build their growth teams.

**Lenny** (00:01:03):
For the past two and a half years, she's been leading growth at Webflow. But hot off the presses as Melissa shares at the top of this podcast, she's going back to full-time advising life. So if you're looking for help with go-to market plans, growth strategy, building your growth team, aligning your sales, marketing and growth efforts, she's about to become available, so definitely reach out. In our conversation, we get deep into what it takes to build a high performing team and also how to build a high performing growth team, specifically.

**Melissa Tan** (00:04:14):
Thanks, Lenny. It's great to be here.

**Lenny** (00:04:16):
I'm excited to have you on. I hear there's a big development in your career that is going to be out by the time this podcast comes out where you're embarking on a new adventure. I'd love to hear more about it and for folks to understand what you're doing next.

**Melissa Tan** (00:04:30):
Over the last couple years I've been at Webflow building out the growth team there. I'm actually transitioning right now and I'm out right now and I'm going to go back into advising, which is something I was doing a lot of before Webflow working, having been fortunate enough to work with great companies like Canva, Grammarly, Miro, et cetera. And so that's one of my biggest passions is working with earlier stage companies once they found product market fit and helping them scale growth. And I'll be going back into advising.

**Lenny** (00:04:59):
Amazing. That's a huge news because I, there's like a small number of people like Melissa that is available at certain times to work with and this is going to be this window and I just want people to understand what kinds of areas do you think you're going to focus on for folks that may need help and may want to reach out?

**Melissa Tan** (00:05:17):
I've worked with companies across many different stages, so even in the early stage as companies are thinking about their go-to market strategy. Previously at Dropbox, I worked across sales. I also helped start their initial product growth and self-serve team for Dropbox business. I've also overseen pricing and packaging at Webflow. So a lot of companies initially as they're thinking about their go-to market strategy, should they be product led? Should they lean more into sales motion? What should the pricing and packaging look like? I've worked with earlier stage companies and then also post product market fit as companies are building out growth and they want to make sure to optimize the funnel across activation, monetization, engagement retention. I've also advised and helped growth teams, so kind of across stages focus on growth and go-to market.

**Lenny** (00:06:03):
I guess while we're on it, what's the best way to reach out as people are listening to this and they're like, "Oh my God, I want to get some help on this stuff."

**Melissa Tan** (00:06:09):
Definitely LinkedIn is a good place. I check my LinkedIn, so feel free to reach out there.

**Lenny** (00:06:15):
Great. So usually we got that covered at the end, but I think that was going to be helpful in case people were like, "Oh, I see what you can help us with." So building on that, I want to focus our conversation on two specific topics that I know that you're specially strong at. One is building high performance teams broadly, and then two is building high performance growth teams specifically. How does that sound as a focus of our conversation?

**Melissa Tan** (00:06:41):
Yeah, let's do it. Two topics I'm very passionate about. Let's do it.

**Lenny** (00:06:45):
So before we get into it too deeply, I want to first talk about Dropbox. So you're at Dropbox for four-ish years, something like that, doing a lot of their growth work and it was in the middle of a lot of their growth spurts and things like that. And when I think Dropbox and growth, there's kind of this dichotomy I think about. On the one hand, there's just these incredible growth loops that work, this referral program, this crazy word of mouth. There's just this explosive growth story of a product.

**Lenny** (00:07:11):
And then on the other hand, there's this B2B side that from an outsider just feels like that's something that didn't work for a long time. And then Box came around and did that really well, and I think Dropbox has done better since then, but it feels like this combination of really successful growth and then maybe less successful. So I'm curious, just looking back from your experience and from what you've heard, what do you think Dropbox did and what do you think they did wrong? And then just what are some learnings from that experience and watching Dropbox go through that?

**Melissa Tan** (00:07:40):
Yeah, it's a great question. And having been at Dropbox for close to five years, I did a lot of reflection while I was there. So I was there from 2013 to 2017, around 200 people. I think about a billion dollar valuation to essentially ... I think when I left we were 1,500 people and we're valued at 10 billion at the IPO. I think the things that Dropbox got right, one of them was definitely hiring. So when I think about 2013, Dropbox was actually known in the tech circles as a place that was very selective, very difficult to get into. You could have an amazing resume, and Dropbox was really selective about the type of people they brought in. So I think they looked for two main things. They looked for first principles thinkers, so not necessarily your experience, but how do you approach problems, how do you know the right questions to ask? And then create your own framework around that.

**Melissa Tan** (00:08:32):
Dropbox also hired for people that were just really humble, collaborative and team oriented. And the combination of those two things, people that were just first principle thinkers also just really collaborative to tons of innovation. And so when you think about freemium product led growth, even we created a high velocity sales motion there, there was just so much innovation because you had these folks that just knew how to solve problems and worked really well cross-functionally across product growth, sales, et cetera.

**Melissa Tan** (00:09:04):
And also, broadly speaking, the company just infused the topic of hiring and recruiting into the culture. It was something that as I was there, everyone knew we were all going to be spending a ton of time interviewing. We all were trained on how to sell Dropbox and how to sell the roles we were recruiting for too so that we could close top talent. So I think that's something we definitely got and I learned a ton about. The other thing was the importance of execution.

**Melissa Tan** (00:09:28):
So a lot of times at Dropbox we would try something and it didn't work the first time around and it was easy to be maybe say that just doesn't work for us, like growth. We actually had tried to do some growth experiments back in 2013 and they didn't find much traction, but what we found is the devil, I like to say the devils and the details and the devils and how you execute. And so coming back to how do we execute just a little bit differently and some of the learnings there where I think the first time we started growth, we could have been more user-centric and been a lot more hypothesis driven. We were following a lot of best practices that just didn't really apply to Dropbox.

**Melissa Tan** (00:10:04):
And so the way that you execute ends up really mattering. That was the second learning. The third is just focus. I think you alluded to this, I think the blessing and the curse of early success is that you can get pulled in so many different directions and Dropbox had a consumer business, a B2B business, and I think we could have clarified what is our point of view on what the overall motion should look like, how do we blend and think about the journey from consumer to B2B really early on, and I think a learning was that we just started our sales motion and our enterprise a little bit later than we should have and a lot of competition caught up to us.

**Melissa Tan** (00:10:44):
And then finally, I think the fourth one that I really believe in is how do you engage the whole company in thinking about go-to-market growth and revenue. Back in 2013, in tech growth was kind of like this dirty word and revenue was a dirty word, and so we were like, "Oh, a good product should sell itself. And it wasn't until our self-serve business started to slow down that we started our team because we realized there's a ton of opportunity in just optimizing the experience.

**Melissa Tan** (00:11:10):
And because we started a bit later, it always felt like growth was a layer on top of product. I think the best way to execute is just to have that be front and center from the start. What is our go-to market strategy? How are we thinking about monetization and having that infused into how you think about product development? And that's something both JZ who leads product at Webflow and myself been really intentional as we've thought of the collaboration across product and growth. So that was definitely a learning. So I guess the four things there are just the importance of hiring, execution. Think about your go-to market early on and then how do you engage the whole company on thinking about go-to market and growth.

**Lenny** (00:11:50):
You said Dropbox essentially there was a late investment in sales and there's a sense maybe product led growth's going to take us really far. And I imagine look at Jira and Atlassian, they're just all product led and that's amazing. I guess what's your current framework for when it makes sense to start leaning into sales and hiring a sales team for say a product led product that is working?

**Melissa Tan** (00:12:12):
It really comes down to the product because initially I think most companies are leaning heavier into sales or heavier into product-led. You're usually not doing both at the same time. And so a trend I've seen is starting product-led first and the signal is that is a good motion for you is if the product is really intuitive to onboard onto. There's a low learning curve so you don't need a human to onboard the user. Also, if there's a viral component to it, that is really what can take.

**Melissa Tan** (00:12:43):
Dropbox is massively viral. When I think also about Miro or Figma, those also are very viral products. Those have a kind of the DNA of product led. And initially I think when you have scale, you're getting a lot of signal on what is resonating with the user. Initially, you also don't have ... It takes a while to build out the features for enterprise. And so as you're building out the product-led motion, you have probably larger companies in your self-serve base and they are often knocking on your door.

**Melissa Tan** (00:13:15):
This happened at Dropbox being like, "I need you to build SSO for me. I need you to build all these enterprise grade features. It's not secure enough." And so you are also collecting the list of things you need to build on the enterprise side. And so I think it's typically looking like you might start product-led, then go enterprise. And then the other direction I've seen is some companies initially are just more conducive to an enterprise in sales motion. Potentially, you need to build custom things for these users. It's also not a bottom-up motion. Maybe the way you sell the product starts with the legal team or the finance team or some important stakeholder, but then a lot of companies now are trying to make that shift to make the product more accessible and go product led.

**Melissa Tan** (00:13:56):
And so then you're thinking about, okay, how do I make this product simpler to onboard onto? How do I think about reaching the end user at scale? And so I think it's basically first figuring out where do you start and then starting to invest in the area. And I guess maybe lastly, knowing how the whole picture fits together. There's a lot of companies that do consumer and B2B and I think the earlier you can figure out how they go together and what the paths and journeys look like, it just ends up being more seamless to the user and, yeah.

**Lenny** (00:14:30):
Awesome. Okay, so let me start to transition into talking about building awesome teams and high performing teams. And something that I know about you that I've heard from other people is that you have this reputation for being a person that people follow from company to company, which is the ultimate sign of, I don't know, retention and NPS and product market fit as a leader and a manager. So I'm just curious, what is it that you think you do that gets people to follow you from company to company?

**Melissa Tan** (00:14:57):
I've been really fortunate. I've worked with a few folks from my early Dropbox team that I've known for 10 years now, like a couple of times. In some case, three times. And I always feel so privileged that I get the opportunity to work with them again and they have that trust and confidence in me. I think what it is, and it took me time to develop this, is I have a very people focused approach to how I lead and manage. I really think the core of it is deeply caring about people, building that trust, investing in their career development, helping them figure out where they want to go in their career. I think for me it's very personal. I have been really fortunate to have great mentors and managers that helped me in those respects. And so it really started from just paying it forward and wanting to do the same thing for other people that were on my team. I think it just comes down to deeply caring and everything, all your actions follow through from there. So that's how I would describe that.

**Lenny** (00:15:55):
Some people may be hearing that and feel like there's this choice you have to make as a leader deeply care about the person or drive impact, focus on getting the work done. Do you find that those can coexist or is it this kind of two ends of a spectrum and maybe the question's just like how do you do both? How do you help people yes, achieve and drive impact while also feeling like you really care about them?

**Melissa Tan** (00:16:15):
I don't think that they're mutually exclusive of each other because I think the other thing that I really emphasize on my team is being very results oriented. So as a growth leader, for better or for worse, everything you do is very measurable. And so I actually think this is why a lot of folks on my team, something that they actually appreciate is knowing what success looks like and knowing how they'll be measured. And I actually create a very results-oriented culture on the team where it's clear what our goals are, we break it down into the individual levers, it's clear how success is measured for each individual.

**Melissa Tan** (00:16:54):
And so I don't think they are mutually exclusive. And then my role as a leader is also supporting their career growth, helping them meet those goals and giving them feedback along the way. So even though they might sound like two different things, I actually think they can coexist and for me, I actually really lean into both.

**Lenny** (00:17:15):
What's an example of caring deeply about someone and being that kind of leader? People may be listening and are like, "Oh yeah, I care a lot about my reports." But what are some examples of what that means to you that maybe would surprise people?

**Melissa Tan** (00:17:27):
I think an example from someone that they joined my team and I just early on thought that they weren't maybe moving quickly enough and they needed some more direction. And so really early into them joining the company, that was about two or three weeks in, I actually pulled them aside and I said, "Hey, we need to move a lot faster. This is where we need to get to by X. We're a growth team. We need to prove wins out early. This is how I think we should do it. Let's try to create a roadmap, a list of problems to solve, et cetera, hypotheses." And they don't have to be right, but just getting something out there, starting to line the whole team on what those are and then defining how we're going to measure success and know we're in the right path. We just need to get there as quickly as we can.

**Melissa Tan** (00:18:14):
And so I gave them that feedback and afterwards, ever since then they have been just on a tear and they actually have mentioned that in later conversations a year into working together that they were so grateful that I had that conversation with them and that I took the time to tell them those things. I think sometimes as a manager it can maybe, you want to avoid the uncomfortable conversations, but I actually think the more direct you can be but also saying this is my intention. My intention is to set you up for success. That goes really far and I think that's a great example of how do you deeply care about somebody and give them direct feedback and you're giving them direct feedback because you deeply care and you also believe that they can do things differently. I think the only reason you would give that feedback is because they can do things differently and you just want to help support them.

**Lenny** (00:19:10):
In that conversation. What is it that you did that made them feel like you really cared about them? Because when I hear you describe it's like you're just telling them, you're giving them feedback just like, "Hey, you need to do a lot better at this. We need to actually hit our goals." What was it that made them feel like, "Oh, she really wants me to succeed?"

**Melissa Tan** (00:19:22):
I think in that conversation what's important is also saying, "I believe you can do all these things and I'm doing this to support you." Or, "I'm sharing this feedback because I believe in you." Also saying that I'm here as support, as you are building that out, let me know what I can do to support you. We can jam on it together if it's helpful. Basically, I guess boil it down to one, restating your intention and why you are having that conversation to sharing that you are there to support them and offering your own help as well.

**Melissa Tan** (00:19:59):
Those I think are the things that go along well. And I think the third thing is as you give someone feedback, it should never sound like finger pointing or criticizing. It's really just, "Hey, this is what I observed, this is the impact that it had and here is a different way." And so keeping the feedback really about the work itself and the specific things that you think can be improved.

**Lenny** (00:20:28):
I know you're also a big fan of developing talent internally versus hiring experts from the outside and it's always this decision I think as a leader and as a company. How much do you invest in developing people knowing they can leave anytime, knowing that that's going to take all this time and work? What have you found from and just learned about the advantages maybe of spending time in developing people and helping them progress and just why is that something you find really important?

**Melissa Tan** (00:20:55):
I'll start with the why behind developing people. For me personally, it comes from like I'm personally passionate about it just because I feel that a lot of folks invested in me personally when I started out in the working world, I actually struggled quite a lot. I think making the transition from school where it's really clear what success looks like, you're just studying, getting good grades. To work where things are much more ambiguous was a really big transition for me and I really benefited from so many mentors that invested in me that I kept in touch with over the years that have also just helped me with my careers.

**Melissa Tan** (00:21:30):
Two that really stand out are from Dropbox, Oliver Jay who goes by OJ and GC Lionetti. So it really has come from a very personal place for me. Secondly, I think it's just makes a lot of sense as you're scaling a company that as you are growing, it just is a smoother transition that the folks on your team can grow with you. People will build institutional knowledge and people talk a lot about founder intuition and that intuition that founders just have. I actually think that extends to early employees too, that have built a ton of context on the user on how to get things done at the company. So the more that you develop talent within the company, the smoother transition is versus bringing someone from the outside where there's just a lot of different factors and there's risk there. And so it really comes from a personal place, but also it makes a lot of sense from just like de-risking the situation as you're scaling.

**Lenny** (00:22:27):
In my personal career I had the biggest inflection point and the most progress I made as a product manager was one manager who just did exactly what you're describing, where you invested really deeply in helping me become a better PM and it was not easy. It was just very critical of all the things I wasn't doing perfectly. And I always think about people don't sometimes have someone like that in their career. They don't have a manager like Melissa. Do you have any advice for people that are looking for someone like that or they're just like, "Man, I have no one around me that's really helping me develop?" What do you suggest they do?

**Melissa Tan** (00:22:58):
As you are looking for a job, I actually do think you should look to work with people that have that reputation and that you can see that interest that they enjoy mentoring people. They have a track record of developing people. Maybe they have brought other people they've worked with at the company from other companies. Those are good signals that that's something that that person cares about. And even in the interview process, kind of interviewing your manager too and understanding what is their management philosophy, how do they think about your career path in that role? Those are things I would look for.

**Melissa Tan** (00:23:32):
The second thing too is as you're interviewing, looking for a manager who especially your success will be tied to their success, this is actually what happened. I mean it's not like you need to be super strategic about that, but when I reflect back at times when I got closest to people was when I was one of the most critical people on their team and they really needed me to be successful and so they also just would spend a ton more time with me.

**Melissa Tan** (00:23:58):
So really looking for those opportunities and being really selective in the types of roles you're taking. I also think there have been times for me personally where I've built relationships with someone that wasn't my direct manager that worked at the same company. And this actually has happened a lot at other companies I've worked with where someone knows that it's a passion of mine to mentor people. And so they proactively reach out to me, ask me for advice, ask me, "Hey, can we set up a monthly recurring sync?"

**Melissa Tan** (00:24:25):
And so I also think you can look for other people at the company that you work with. And then finally the other thing is looking for external advisors. I actually, in my advising end up mentoring a lot of the people that I work with too. It just organically ends up happening. And so I would say summarize that as just look for the people that you think have this passion, build that relationship with them. And ideally I think you actually build the strongest when you are working together. You just learn so much about each other, but if you don't have that set up, I think there's other ways to just proactively look for mentorship and guidance.

**Lenny** (00:25:00):
Any tips on the questions? Maybe to ask a manager to help them get to this, if any come to mind and also when you're looking for someone to help you, anything specific you think that people should look for that maybe they may not be thinking about?

**Melissa Tan** (00:25:13):
On the questions to ask when you're interviewing for a role, I would actually ask things like I'd love to get a sense for how you think about ... I mean I think you can flat out ask, I'd like to get a sense of how you think about managing folks on your team, how you think about developing talent on your team and seeing what their responses to that. I would also ask how are you thinking about the career path for this role? And if the person has not thought about it at all or doesn't ask you, "Well, what is important to you?" I think those are some signals that it's maybe not where this person tends to spend their time thinking. And then I would also ask other people on the panel that are not going to be your manager but that work with this person, especially if you happen to talk to people that they manage, how is this person as a manager? And that ends up being also very insightful.

**Melissa Tan** (00:26:08):
The questions I would ask if you're looking for someone external, I always find that that relationship is best the more organic it could be. I think Cheryl Sandberg had wrote this in her book Lean She basically writes about how some people will go, "Will you be my mentor?" And I've got that question too, and it's just a lot of pressure to get asked that question really early in and you don't really know the person. And so the more it can be organic where you talk to somebody, you have actual advice that you want, some people will just reach out to me that I haven't worked with in a long time and like, "Hey, I'm thinking about a career decision or I'm in this tricky situation at work, can we talk?" And I just give them advice and they will reach out to me for advice occasionally.

**Melissa Tan** (00:26:57):
It doesn't have to be a recurring thing that you have to just nurture that relationship. I think that is a way to do it. Or if you are working with somebody and you want to set up some type of monthly thing, I think you asked for that as well. The only thing is I would just be respectful of the time. So if you don't have anything to talk about that month or anything like that, I'm just always willing to help people. It doesn't mean we have to be frequently in touch. And so I think it's also less about being frequently in touch and it's just going and reaching out when you actually have a problem. People that want to help others are just going to, if they have the time, they'll say yes.

**Lenny** (00:27:30):
Tim Ferriss talks about that too. He is like, "Never ask someone to be your mentor." As you said, that's a scary proposition. You're committing to something, it's pressure versus just like, "Hey, can we just meet and can I just get some advice? And then maybe after you do that, can we meet next month also?" And just help it grow organically.

**Melissa Tan** (00:27:48):
Yeah, definitely.

**Lenny** (00:27:50):
I want to talk about how you develop talent and what you've learned there. But before that, I wanted to zoom out maybe first and talk about ingredients of high performance teams. So before I ask that question, can you just list the companies you work with, some of the companies you've worked with?

**Melissa Tan** (00:28:03):
I guess I've mentioned Dropbox. So Dropbox was my first high growth tech startup. And then after Dropbox I did a lot of advising. So I got to work with Typeform in Barcelona and then someone at Typeform introduced me to Canva. So I met Canva when they were still about 200 people in their early growth journey. Have worked with Grammarly, Miro and then I joined Webflow. And so have been fortunate to be part of a ton of, I guess what I would think are high performing teams.

**Lenny** (00:28:33):
100%. That's an incredible roster. So here's the question. What are some of the most common ingredients you've seen across these teams, which from an outsider's perspective seem quite high performing?

**Melissa Tan** (00:28:46):
I think it first starts with the team having a really clear goals. They need to know what success looks like. And often I think that's for growth teams in particular, it's always really clear, "Hey, we need to hit certain metrics. We have certain goals for the quarter and for the year." And then also having a mission. So the mission's all about the why, right? So an example at Webflow is we have our growth team gold on ultimately the North Star is ARR, Annual Recurring Revenue. And then you break it down into the levers that drive ARR, the leading indicator, so that could be activation rates, the number of customers you bring in, et cetera. And so each team has really clear goals. And then we have our mission. The why. Our mission, the why we do it is we want to build these delightful experiences for our users. We want to support them on their journey on the product.

**Melissa Tan** (00:29:35):
And the reason why the what is monetization is that's just a good signal that people find your product valuable, especially if they're consistently paying you and they're retaining. And then the other thing that I think is important is culture. So how are you going to do these things? When thinking about culture, obviously it depends on the function and the culture you want to set there. For me personally, the type of culture I try to set for the team is one around being really results oriented.

**Melissa Tan** (00:30:03):
So something that someone on my team was saying the other day is you always make it really clear that we're going to be measured on impact and that's like how we are ultimately measured as a team. And so really creating that results oriented team. Also, a team that's very team first and collaborative. I think when you have very clear goals, when it's very results-oriented, you could potentially be in a situation where people feel they're competing against each other and you just don't want that. You actually want folks on the team to help each other out to share learnings.

**Melissa Tan** (00:30:33):
I think that's what ends up being like a situation where one plus one equals three. You're not locally optimizing but you're thinking broader about the team and thinking beyond yourself. The third thing is really this ownership mentality. Something I directly saw at Dropbox is when we were a smaller company, everyone just felt a lot more ownership in accountability because there's just nobody else. You're wearing five different hats. You have to do it.

**Melissa Tan** (00:30:57):
As you scale, it's really easy to suddenly feel like that ownership is diluted. And so something I always try to keep in the team, it's a feeling that we're owners and that really proactive mindset of how am I going to solve this problem? I'm blocked by this team, what am I going to do about it? And just being people that have strong sense of agency. And then lastly having fun. I think that especially in high pressured environments, easy to get stressed and all that stuff. And at the end of the day, this is very personal me, but the more fun you can have, the better everything is. And so just making sure you're infusing fun along the way and you're not taking things too seriously.

**Lenny** (00:31:38):
So I was taking notes as you were talking and there's kind of these four items just to summarize. One is creating a culture of impact and performance. Two is being team first and making about the team versus the person. Three is creating a sense of ownership and making people feel like they're owners and then having fun, which I love. A question I have there is say within the ownership bucket of creating a sense of ownership, what do you actually do to create that sense amongst the team?

**Melissa Tan** (00:32:04):
I think it first starts with defining the scope that everyone is going to own and drive. So as you are setting up the team, it's important that each person on the team has scope that they can run independently and that they are excited to own and drive. So one example here is as I was leaving Dropbox, the finance team looked at our metrics and saw that each growth PM was bringing over a million in AR per year just from all the experiments.

**Lenny** (00:32:31):
Holy moly.

**Melissa Tan** (00:32:31):
Yeah. And so that's quite a lot of impact. And being a finance team, they said logically we should just double the team. If each person brings in more than a million, if we want to double the AR, let's just double the team. And so I actually pushed back significantly though. I thought to myself, "If we double the team, what is everyone on the team going to own and drive? Is it like we split up different parts of the website, different parts of the product 1:00 PM owns just like the checkout flow.

**Melissa Tan** (00:32:57):
I didn't think that was going to be interesting enough for the team and going to help us recruit people that were excited to solve such small parts of the growth problem. And so really thinking about how do you carve out scope and if you are a growth team, maybe thinking about splitting up by problems to solve that are really meaty by areas of the funnel like activation, monetization, et cetera. So first starting out with carving out good scope. And then the second thing is just infusing a culture of thinking like an owner. This infusing of the culture, I think it comes out in a few ways. One is, and this is really common in growth. Growth is so cross-functional that you often will end up feeling like you're blocked by other teams.

**Melissa Tan** (00:33:38):
Let's say we want to run an experiment on this part of the product, maybe it's a core PM that kind of owns that service area that doesn't want to drive that thing or let's say or blocked by a bottleneck on designer engineering. It's something where I think if you're thinking an owner, you are not feeling easily disempowered because you can't do something and instead you're thinking, "What is everything I can do and did I exhaust all the options?"

**Melissa Tan** (00:34:05):
And then finally it's leading by example. I try to also show to my team that I'm always thinking like an owner and then I'm always trying to do everything I can. And finally as a leader, thinking like an owner also means taking responsibility for your team. And so if things don't go right in my team, I'm the first one to say that ultimately I'm responsible and it's a failure or oversight on my side. And so that is what I think an ownership mentality is. It's just really thinking about the scope, creating that culture and then as a leader it's just seeing yourself as ultimately being accountable.

**Lenny** (00:34:37):
Awesome. And this connects to something else I wanted to pull the thread on, which is the team first bucket. I think about Meta, not to throw them under the bus or anything, but I feel like everyone I know at Meta their performance review is very tied to their impact. It's very impact driven and that leads to people needing to drive impact themselves. I drove this impact and they look at how much did you contribute to that impact versus other people on your team. And it creates some challenges I think for people. How do you create that feeling of team first, even though your performance as you talked about is so tied to here's your success metric, here's what success means for you, for the team, how do you make it feel team first versus like, I need to do this myself?

**Melissa Tan** (00:35:17):
There's definitely a delicate balance here. It comes down to the way that I think the manager leads the team and sets the tone. And so for me, I always make it clear that even though results are important, it's a team sport. And so I often find that I am encouraging the team to work together. So again, as a leader, you have context in everything happening. So sometimes I know 1:00 PM is working on something or even a PM outside our team is working on something and I try to actually fill in context if I think someone on my team could contribute. And I encourage that action even though it doesn't maybe feed into impact on the thing they're driving. So it really comes down to the culture that you set and what you encourage the team to do. I also think the more that you can see that you actually benefit from helping each other out, the better it is.

**Melissa Tan** (00:36:15):
And finally, I think again, leading by example, because I actually am very team first, I'm often actually helping other teams and doing things that might not ultimately benefit or be part of my scope. A good example here is I was actually driving pricing and packaging at Webflow for a very long time just because no one at the company was driving it and it was a huge opportunity area and I actually was doing it for enterprise pricing too. And so even though I am overseeing self-serve, I was actually supporting enterprise pricing and packaging. And so I also showed to my team, "Hey, I'm also doing all these things to help the company." And I think that is what helps set that tone and that culture.

**Lenny** (00:36:55):
How do you then avoid doing too much work? I think there's also this challenge of people being too good at too many things and then they end up doing so many things and then they burn out. Do you have any rules of thumb or lessons there?

**Melissa Tan** (00:37:06):
I think for me it's been a learning journey too. I've actually gotten feedback on that very thing for my team that Melissa sometimes taking on too much or trying to do too much. And so I think it's a delicate balance. If we're talking about that person individually, you have to know what your limits are and you also can do things in spurts, but it's important to know ultimately what you can take on. Also I find that putting a specific timeline like, "Hey, I'm going to do this thing for a quarter, but after that we really need to find somebody else to do it." Or hand it off is really helpful. It's definitely a delicate balance. I do think it's a great question because I think that's a common thing people early in their careers struggle with, which is they could lose focus because they're trying to help everybody.

**Melissa Tan** (00:37:49):
That was actually a problem I had when I first joined Dropbox is I was the only sales ops person, so I was just helping every sales leader with their metrics and very focused. And so it is a little bit of trial and error. I think the most important thing is to not be so overly focused on just what you're doing and try to help others, but then knowing that there are certain things that just can't drop. And if you start to see things that are starting to drop that you're ultimately responsible for, that's a signal that you're taking on too much.

**Lenny** (00:38:18):
**Melissa Tan** (00:39:42):
In terms of developing talent, I think of this as stages of the life cycle of your relationship, right? So I think at first actually starts is a very meta as a growth person starts with when you hire somebody, really making sure you're finding somebody that is a good fit for the role. It's a good mutual fit. I also tend to look for folks that have a growth mindset.

**Melissa Tan** (00:40:06):
There're people that are wanting to learn. They're looking for feedback. They take feedback well. And then after that they join the company, and as a manager, my job is to help set them up for success. So how do I ramp them up as quickly as possible, connect them to the right people, the company? How do I also make sure it's clear what success looks like in their first 90 days? And then how do I help them secure early wins essentially?

**Melissa Tan** (00:40:32):
So I often will suggest, "Hey, you should do this presentation. It's a great way to get visibility early in your journey here." Here are some things where there's low hanging fruit or even rotting fruit that you should take on into secure early wins. Then in your journey, I think it's a lot about just giving feedback along the way, making sure you give visibility. One recent hack I have is having folks on the team create looms that they can share with different leaders at Webflow. It's hard to sometimes get visibility and get live meeting calendars, but if you create a five or 10 minute-loom on something you did. That's just a great way to get visibility.

**Melissa Tan** (00:41:10):
And then finally, I think it's that lifelong relationship actually. So I'm still in touch with a lot of people that I've managed and I've helped them. Whether it's looking for their new job or they have career advice, I always make myself available. And so it's actually that lifelong journey of just developing that person. And at some point it's not even developing that person, but it's having a friendship with somebody. And I feel like I've learned a ton from people that I have managed. And so it ends up being this really great thing where you initially started working together but you now know each other so well. And I think that's even how I've developed as a manager is just getting feedback from my team.

**Lenny** (00:41:51):
This all comes back to something you mentioned a couple of times earlier, just caring a lot about the person that you work with. Your approach also reminds me of this book, Radical Candor. I imagine you're a fan and that's kind of the way you think about it.

**Melissa Tan** (00:42:03):
Yeah, definitely. Interestingly enough, Kim Scott was at Dropbox for a short period of time, so when I joined Dropbox, she was actually on my interview panel and we overlapped for three months and she actually workshopped that book with our team before she published it. And that always resonated with me. And I remember her saying you have to ... I forget the exact words, but it's essentially be direct but deeply care.

**Lenny** (00:42:30):
Yeah. Care deeply, but something directly challenged directly. Something like that.

**Melissa Tan** (00:42:36):
Yeah, care deeply but challenge directly and that has always been something that is something I try to infuse and has really inspired me as leader.

**Lenny** (00:42:43):
Awesome. We're going to link to that book if folks don't know about it. I love it. You talked about hiring PMs and how that is important in building high performing teams. So let's spend a little time there, maybe just two questions all throughout and you can approach them however you want. One is just what do you look for when you're hiring product managers? You've hired a lot of PMs. You've managed a lot of PMs over the years. What do you look for, especially things that maybe other people don't focus on enough, and then just what is your interview process? What do you find is most helpful for interviewing process-wise?

**Melissa Tan** (00:43:13):
In terms of what I look for, I think there's this kind of known list of things that you probably want to look for, for a PM that I probably are not going to ... I'm say anything groundbreaking here, but obviously communication skills, the ability to manage stakeholders and work well cross-functionally. The things that I lean especially heavy on in my interview process is this concept of first principles thinking or strong critical thinking. So usually there's some live problem solving component to my interview process where I really lean more heavily into how would you approach X problem? And then I dig into the Y and try to understand why would they approach it this way, see what questions they're asking and just see how they approach problem solving.

**Melissa Tan** (00:43:55):
And then the other thing that I look for that I mentioned is that growth mindset. So really seeing how does this person take feedback. And so I'll actually sometimes give feedback to candidates through the process. Something that I do that I learned a few years ago that was super helpful, so I always have a presentation component to the interview process that checks for prepared thinking communication. And I recommend a prep call between the two of us before that presentation. And I actually will give feedback on the presentation.

**Melissa Tan** (00:44:26):
And what this gives me signal is what is it actually going to be like to work together? And then I see how they incorporate it into the final product and that is always really interesting and sometimes it's the biggest signal to what it's going to be like to work with this person.

**Lenny** (00:44:39):
Okay, this is great. I want to spend a little time here. So what is the actual sequence that you recommend or you use for interviewing? There's a presentation, there's a rep call but also is kind of involved in that.

**Melissa Tan** (00:44:49):
Usually hiring manager screen, and I actually do the live problem solving at this screen. I actually think it weeds out the most people. And there's actually two things I do here. One is a live problem solving. How would you approach X? So let's say I'm hiring for pricing at Webflow, I would ask, "How would you approach pricing?" I sometimes would say, "Hey, do you have your laptop? Can you pull up our pricing page? Curious to get your thoughts, what would you want to change?" That was a trick I learned at Dropbox where we would actually pull up the Dropbox website and be like, "Hey, what'd you want to test here? Why?" And you get a ton of signal on how they approach the problem, how they think.

**Melissa Tan** (00:45:25):
I ask why a bunch. And then the next screen is talking to more folks at the team that test for different competencies. And depending on what you're hiring for, we just have each person focused on a different competency. And it also depends on the roles. So some roles are more technical, some require working more closely with different stakeholders, so you want to make sure you can test those things. And then the final round is the presentation and then also maybe a conversation on other areas.

**Melissa Tan** (00:45:52):
We want that kind of come through the interview process. We want to dig in further. The presentation is usually thinking through how you'd approach, your collecting all this information on the company or the problem throughout the interview process. And so it culminates in what do you think this should look like or maybe what would you want to do in your first 90 days? It depends on the role, but it's usually some type of presentation about the problem you would be working on at the company.

**Melissa Tan** (00:46:18):
Before that, we have that preparation call with me where often candidates will have questions like, "Oh, I need to know this data," or "I'm curious about X." And so it's really just a call to help them. And then at this stage too, they'll often have the actual draft of the presentation and so we'll go through it together and I'll actually be like, "Hey, I think you should lean in heavier here. How would you think about this?" I'll even say for example, at Webflow I'll be like, "We're thinking about X, Y, Z thing just so you know. And maybe incorporating that into your presentation would be really helpful.

**Melissa Tan** (00:46:50):
And so that's where I get a lot of signal of what is it going to be like to work with this person on a presentation? And then I'll see in the presentation whether they incorporate it or not or how they did. And sometimes I've seen candidates that didn't incorporate any of it and I kind of am like, "Okay, this is probably not a fit." And actually I think that other thing about that call is it helps just set the candidate up for success. It's actually quite a lot of work to create a presentation. The more we can help them by giving them information, making sure they can be successful, it's helpful. And I think guess lastly, it gives them a taste of what it's like to work with me.

**Lenny** (00:47:26):
I've never heard of that step before. That is really interesting. They actually give them feedback before they present. I imagine they're like, "What the hell is going on here?" I thought I was trying to show them what I can do, not like they're going to help me do a great job. That is really interesting. Maybe two very logistical questions there. How much time do you give them to work on this presentation? And then two, you said that you asked some questions related to the actual problem solving versus a theoretical problem. So those are the two questions, I guess.

**Melissa Tan** (00:47:52):
Typically we will schedule it about a week in advance. They have a week. The tricky thing here is obviously it's a big ask to ask someone to create a presentation. And so if it's one week that's long enough to create it, but it's short enough that you don't spend tons of time. The other thing is just making it clear, don't exceed more than X number of slides. In Webflow's case we've done, don't exceed more than 30 slides. And that's like quite a lot. We do not expect you to do 30 slides. And then the other thing I make sure to emphasize is it's really about wanting to know how you'd approach it. So don't worry about the slides, be able to talk to it and have what you need to talk to it because we're actually just looking for the substance. And so that's how much time we give them and it's usually a 30-minute presentation with 15-minute Q&A.

**Melissa Tan** (00:48:42):
The second part of your question was, so in terms of picking the topic, so there's a few ways to think about it. I know some folks will be like, "Oh, we have candidates present on something they've worked with in the past." I've tried that form and it's really difficult because I found that candidates even sometimes spend tons of time sharing the context of that company. And then also it doesn't really give a sense of, because as you're interviewing from a role, you're getting a ton of context on the actual company and the problem. And so it also is testing for how much did they pick up along the way. Also, would they like working on this area once they join? So there are some candidates that sometimes are concerned about the amount of time they would spend on it or say, "This is going to be a big lift."

**Melissa Tan** (00:49:30):
And definitely mindful of that. I think the main thing though is it is actually in the candidate's best interest to kind of understand what they're going to work on and start to understand,

**Melissa Tan** (00:49:40):
For example, there are some candidates that have gone through the far through process and haven't worked in the Webflow product very much. And I always think that's an interesting flag because if you aren't in the product a lot, you're not going to get good context on whether you like it or not. And so I actually think it's almost even in the best interest of the candidate to go much deeper.

**Lenny** (00:49:59):
I could spend another hour talking about interview strategy, but I want to make sure we have time for the growth team stuff. So let's transition to that. And my first question here is you've worked with a lot of different teams, a lot of different companies on helping them figure out their growth strategy, hiring their growth teams, just kind of figuring out growth. I'm curious what the most common pitfalls and mistakes you've seen across companies trying to figure out growth and build growth teams.

**Melissa Tan** (00:50:26):
One of the most common pitfalls I'd say is not having, and I've alluded to this, not having a sense of the big picture from the start and not being strategic about what your go-to market strategy is going to be. Also, what is your pricing and packaging going to look like? So I wrote actually an article for the YC blog a few years ago with Abby [inaudible 00:50:48] who was on my team at Dropbox about this because I felt like even at Dropbox, I mean it's a great thing. We were haphazardly finding amazing things. We had a freemium consumer product. Then we realized people wanted a Teams product, so we built a Teams product, but we never created that whole blueprint of what should it look like and what are the different connection points across consumer business? What should our model look like? I've also seen companies that maybe weren't intentional enough about pricing from the start, and so thinking about what is the value metric?

**Melissa Tan** (00:51:20):
And then they've already have massive scale and then they're rethinking their pricing. That's actually quite a big headache to actually think about, okay, how do we grandfather users? How do we bring the legacy customers onto our new pricing? And so thinking about your pricing from the start is important thing might go to market from the start is important. The other thing I have seen a lot is just like, again, this goes back to learning from Dropbox is the execution folks taking a class or reading a lot about growth and trying to do the same thing and not really actually starting from first let's look at our data. Let's talk to our customers. What do we think are the biggest hypotheses? And starting your experiments based on your own data and right-sizing the experiment.

**Melissa Tan** (00:52:10):
I think sometimes teams are experimenting on things that are too small, that aren't going to move the needle because they heard it was really successful company X, but that company X might be a Dropbox where every 0.5% improvement in conversion makes a difference, but if you're early stage doesn't matter and you need to actually think bigger. The other thing is the opposite problem, redoing a whole thing but not having a hypothesis, this was an early mistake I made at Dropbox where I redid the checkout page to something that I thought was better UX, but then I changed so many different components that even when it failed, it was unclear why it failed. So really distilling it to hypotheses.

**Melissa Tan** (00:52:48):
And then the last thing I would say is figuring out what I call the flying formation of how the different growth teams will work with other companies. And again, I alluded to this, but growth shouldn't feel like it's a layer on top. And a lot of the things that are tricky early on is figuring out how you work with other teams. I think the best or the ideal way to work is to have growth infuse in the company. And so an example here is often the growth team is going to be potentially the closest to the user.

**Melissa Tan** (00:53:21):
They're going to get a lot of feedback. They're going to hear directly from the user. As a growth team, I think one of the big values that we can have is actually giving that feedback back to other teams at the company. And so even as a growth team, can we help inform the product roadmap? Also on the reverse, thinking about as PMs, how can PMs be more growth oriented as well?

**Lenny** (00:53:44):
I like this term flying formation. I've never heard of this before. What is that exactly again? Is that just how growth is integrated within the company?

**Melissa Tan** (00:53:51):
Yeah, I guess flying formation essentially, I don't know where it comes from. I guess maybe it's a military term or something. Your finger.

**Lenny** (00:53:59):
I can say that. Yeah, like the Blue Angels

**Melissa Tan** (00:54:00):
Work together?

**Lenny** (00:54:01):
Yeah.

**Melissa Tan** (00:54:02):
Yeah. I think of flying formation as how do we work together across teams. You also can think of it as a DACI too, driver accountable, contribute informed. I think sometimes when you don't know how you're going to work together, you end up stepping over each other's toes. You're unclear. Who was the decision maker here? Who did we need to work with? At what point in the journey? And so the flying formation, what I think it is, is part of it is a DACI of what are the different roles?

**Lenny** (00:54:32):
Can you define that actually? Because a lot of people probably won't know that term.

**Melissa Tan** (00:54:36):
A DACI is a framework to think about the different roles on the team on a project or an area. So D stands for Driver. This is the person driving the project. A is Accountable, this is the person that's ultimately accountable and is often the final decision maker if there's any open questions. C is Contributor, these are all the different teams that are going to contribute. And then I is informed. These are the people that need to be informed, but they're not directly contributing. They're not a decision maker and part of the project.

**Melissa Tan** (00:55:08):
And so it's a nice simple framework for when you are working across teams and it needs to be clear who is in what role. And the area that tends to be the most confusing can be the accountable and who the decision maker is. It can be easy to have lots of teams and then it's unclear how do we get to a decision ultimately and who should make that decision. And that person should often be the person that has the most context or is ultimately responsible.

**Melissa Tan** (00:55:33):
And so I think the flying formation has this DACI. I often also put operating rhythms in it, so it's clear what is happening at what point. And so we created a flying formation when we were first starting the growth team at Webflow and we were trying to figure out how does product growth work with product, how does product growth work with growth marketing? What are the different cadences that each team has? And so very tactically we put a doc together to say, okay, product growth is accountable for all the metrics downstream of signups. Growth marketing is accountable for signups. They're also driving or have goals around CAC, their customer acquisition costs, and these are the different metrics everyone owns.

**Melissa Tan** (00:56:14):
We have a weekly meeting where we look at the metrics together. We also will do updates around the room to talk about initiatives and identify areas we want to work with. And then we also think through quarterly planning where we're each identifying projects that we're driving. There's some projects that we might also work on together. And so it's essentially that meeting cadence that you're going to have the operating rhythms. That's essentially how I think about a flying formation.

**Lenny** (00:56:40):
I love it. That would make a great blog post. By the way, if you're looking for something to write an example of your actual client formation Webflow, I think people would love that.

**Melissa Tan** (00:56:48):
Yeah.

**Lenny** (00:56:48):
One kind of tangent that I wanted to touch on is there's this trend of product teams owning revenue. Elena talked about this on a recent podcast. You have a perspective on should product growth teams own revenue and have revenue numbers as their goals or not?

**Melissa Tan** (00:57:04):
Yeah, really it depends on the company and what product growth is driving. I've always, in the companies I was at and actually even the companies I advise, the product growth team owns revenue, so it's not always the case. I've actually seen revenue owned by marketing. So marketing makes sense if it's more top of funnel growth. I've also seen it, this is an interesting one, by finance actually. This is usually early in the company.

**Melissa Tan** (00:57:31):
So early at Canva, it was owned by finance and that's because finance had a view on everything happening in the business and would actually be maybe advising other teams on, "Hey, our conversion rates could improve, we need to do X." Or we're not driving signups and customers efficiently, but over time it doesn't really sit in finance. That has evolved and then now sits under the person that is driving product growth in product. So I have seen it more often than not being owned by product. Our team at Dropbox moved a ton actually. We started marketing. We actually then report into the revenue org with sales, and then we finally moved into product because we realized so much of our revenue was that product growth motion happening in the product that we felt it was important that that product team owned revenue.

**Lenny** (00:58:20):
A lot of the things you're talking about are based in how growth starts at a company. I imagine one of the most common questions you get is, how do I start to invest in growth? How do I hire my first growth person? How do I build a team around them? It's one of the most common questions I get. So let's spend a little time here. What is your advice to founders that are just starting to think about building their initial growth team and how to approach that to look for initially and kind of think about that longer term?

**Melissa Tan** (00:58:44):
I get this question a lot as well. I'd say initially when a company's starting out, the goal is getting to product market fit and figuring out who their ideal customer profile is, like their ICP. And at this point, I think everyone at the company should be thinking about growth. They're finding their first few design partners that they will co-create the product with. They're figuring out who is their product resonating with, who is maybe also the decision maker in purchasing the product. And they're figuring out, do we want kind of a bottom up product led motion? Are we going to lean more heavily into sales? Are we going to do both?

**Melissa Tan** (00:59:18):
After you reach product market fit and you're starting to get your first few customers, the first growth per person I see more often than not isn't someone driving acquisition. You need to find your first a thousand or thousands of customers and you need to do it at scale. And so if that is the focus of the company, typically what I would recommend is somebody that they don't need to be an expert, but ideally they understand maybe one or two channels well and that they're the channels that you have hypothesis, you will find traction in.

**Melissa Tan** (00:59:50):
And I see this person a little bit like a portfolio manager, right? Because you're trying to figure out ... Usually companies don't have many channels that are split evenly. They find one or two that really work and make up like it's 80/20 rule. It makes us up 80% of where the signups are coming from and this portfolio manager is testing different things out. Even you could leverage agencies. There are a lot of agencies out there for SEO, for paid marketing, et cetera, but they are smart enough to define, is this working? How do I do it at scale? You also want to make sure it's quality signups that are actually monetizable.

**Melissa Tan** (01:00:24):
And so that is a role typically if you're hiring an acquisition of that first growth person. And then the other two areas to focus early on, but I don't think you need a dedicated person for are activation. You want to make sure as you're pouring leads into the top of funnel, you're activating users. And here I don't think you actually need to do AB testing. Your volume isn't probably going to be strong enough. I think even just finding five individuals that are part of your target audience, just doing user testing, set up a Zoom, watch them onboard onto the product and have them talk out loud. You'll fight a lot and you can also just take best practices of onboarding checklists, et cetera. So activation and then I've said this a lot, but pricing and packaging, really thinking about pricing, but I don't think that needs to be a dedicated person.

**Lenny** (01:01:06):
What kind of profile have you found to be most successful for this sort of person? Some people will look for like, I want to hire Melissa and let's just go big. The best person I can find and have them own this versus someone that's just new from school that's going to figure it out and I guess they're somewhere in the middle. What do you find that's best for that first hire?

**Melissa Tan** (01:01:26):
It really depends on the current makeup of the team. How much do the founders themselves or the current team, how much of an interest do they have in growth? If they have an interest in growth and it's more about finding someone to execute, I think it's finding someone that's a bit earlier in their career potentially that is just a strong first principles thinker. I think there's hit or miss on, I'm a former consultant, so I used to always say find a former consultant. I do think there can be hit or miss and there is some value in folks that actually understand acquisition and have done it before and so maybe have figured out certain channels.

**Melissa Tan** (01:02:04):
So I think you either go for someone that's done acquisition before, maybe they're a little bit early in their career, so they have this great growth mindset, but make sure they're a first principles thinker. The other option is find just a really smart person early in their career, have them take up Reforge class, have them soak up everything, and then the other option of hiring someone more experienced. I think it really depends on if you want that person to take on a lot more and be almost part of your founding team. And do you want to find someone that is going to join your leadership team?

**Melissa Tan** (01:02:38):
The other option I guess is you could also just bring on an advisor and that advisor is someone that's not full time. It can even guide if you hire someone that's a bit earlier, guide that person and that is a really good combination. And so it really depends on the context, who's also on the current team and who you want to bring into. Are you looking for an actual leader that's going to scale with the company or are you not ready quite yet for that?

**Lenny** (01:03:03):
What about in terms of their skillset? I imagine if you're kind of feeling like paid growth is going to be your main acquisition channel, you probably want to find someone that's really good at that versus it might be a virality, product led growth stuff, then you want to find maybe a product range of person. How much weight do you put into that skillset in that first hire?

**Melissa Tan** (01:03:24):
I actually think it's less about expertise in skillset, if that makes sense. And more there a ability to, again, I think of it like a portfolio manager. So this is more on the growth marketing side and bringing in acquisition. They are managing a portfolio and they're trying to figure out what works. I actually think you need to find someone that's analytical for this role, but that also understands things like who is the user? They're really creative in finding the user. And so it's actually looking for attributes but not expertise.

**Melissa Tan** (01:03:58):
I actually think the more expertise someone has, the more it actually can lead to a false precision and then thinking they know what they're going to do. And especially, I don't think you actually need paid marketing expertise until much later when you're starting to think about incrementality or you're managing all these campaigns. I actually think the expertise is more important later. And then similarly on product growth, I actually think product growth is not higher till much later. A lot of early stage companies don't even have a product manager until later. And so I find that a growth product person isn't until much later down the road.

**Lenny** (01:04:36):
Just a couple more questions. One is, you mentioned that it sometimes makes sense to bring on an advisor. I know sometimes companies have a bad time with advisors that just don't provide much value and they're giving equity. Other times it's transformative. Some of the stories you've shared, when is it appropriate to hire an advisor and is there any, I guess advice for what to look for in a growth advisor at this early stage, especially?

**Melissa Tan** (01:05:00):
I would add an advisor if there is probably a knowledge gap on the team is I would say. And their advisors come in so many different forms too, and everyone does it slightly differently. For some folks, it's a monthly call for other times, especially when I'm full-time advising, I'll have weekly calls. I'll even join some team meetings. I'll look at mocks. And so everyone does it slightly differently. And so I think it depends on what you're looking for. I would definitely say that even getting to know the individual and making sure you're on the same page on what you're looking for and what the goals are. And then what I've done in the past too is initially set up a shorter engagement, like a quarter long engagement and then decide if you want to go longer.

**Melissa Tan** (01:05:47):
And I also think it's fine to, let's say you have an advisor agreement, you're not getting value to basically part ways. If it's not, you're not finding value. I think every advisor wants to make sure they're adding value. So I definitely think to summarize, being really explicit on what advice you're looking for and making sure you're on the same page of what you want. And then also set up a try before you buy if you want to do a quarter long engagement first. And knowing you can always part ways if it's not a fit even before that period of time.

**Lenny** (01:06:20):
Last question before we get to a very exciting lightning round. You've brought up this concept of first principles thinking. I'm curious how you measure that and how you get a sense of, is this person strong at first principles thinking?

**Melissa Tan** (01:06:34):
It's definitely a word I use a lot. First principles thinking, I think of it as you are not using a set framework and set formula, but you're creating your own based on the context that you're getting. And so when I think about first principles thinking often it is knowing what questions to ask so that you can start forming a mental model. And then it is actually starting to form that mental model and then knowing to evolve it and knowing when it's not working and really coming from a place of curiosity of is this really working? This is something that I'm known for on my team as well, which is I ask tons of questions, but it doesn't come from a place of wanting to show that I'm asking good questions or anything that comes from a place of trying to solve the problem and making sure that we're always solving the problem at hand, making sure we're doing the right things.

**Melissa Tan** (01:07:28):
If there's new information, do we actually still want to do it this way? And so I think first principles thinking is often about asking questions and then creating your own framework. That's how I would define it. And it's maybe another way to describe it is critical thinking. It's like you're able to think very critically, and I think it's important to, at least for me, create a culture where that's okay. I think the moment you have a culture where people aren't asking questions aren't constantly revisiting their work, that's when you're not maybe pushing yourself to do your best work. And I think it also just creates a fun environment where we're like, "Oh yeah, why are we doing this?" And really leading with your curiosity.

**Lenny** (01:08:06):
Is there an example of a person or moment or question that comes to mind of this is an epitome of a first principles thinker moment or question or a way of approaching something?

**Melissa Tan** (01:08:17):
My aha moment of the value of first principles thinking was when I was at Dropbox and we had the most unconventional people on our initial sales team. Dropbox was known for this. We would hire a ton of really smart people that had never done sales and had them do sales. There were a lot of disadvantages to that, I think. We were figuring a lot of things out. Maybe we should have split, had a few people that knew sales better and a combo of both. But I do think it led to a ton of innovation. Even I actually started on the sales team, this is a fun fact. I used to answer the 1-800 number at Dropbox, and if you go to Dropbox's website, you see a chat level. I used to also do that role, and so I think that what we got from that was that's how we got our very innovative go-to-market motions.

**Melissa Tan** (01:09:03):
That also gave a ton of people, 'cause a lot of those people then moved into different functions at the company. They had all this context on who the user was. They had talked to so many different users at that point, and that's actually what helped me a lot when I moved into growth is I had all that context and I learned from that going back to first principles thinking that if you take people that are just super smart, they've never done it before, one advantage of that is they can innovate because I think they come in with, "I don't know anything. Let me just figure this out." Versus someone that think they know all the answers, limits you into what you are going to do. And so my aha moment was really at Dropbox seeing so many times people that had never done these things and then seeing so much innovation come as a result of that.

**Lenny** (01:09:51):
That is an awesome story. Is there anything else you wanted to share or touch on before we get to or very exciting lightning round?

**Melissa Tan** (01:09:58):
I think that's it. I wanted to make sure, I know I talked a lot about developing people, so thank all the people that have helped develop me in my career and then especially thank all the folks that I've worked with and my team, especially the team at Webflow and particularly wanted to make sure to thank [Xing Lin 01:10:14], Rory Davidson and [Jo Wang01:10:16] who joined me from previous companies to Webflow.

**Lenny** (01:10:20):
Shoutouts. Well, with that, Melissa, we have reached our very exciting lightning ground. I've got six questions for you. Are you ready?

**Melissa Tan** (01:10:27):
Yes.

**Lenny** (01:10:28):
What are two or three books that you've recommended most to other people?

**Melissa Tan** (01:10:32):
The first one is Leaders Eat Last. I really like that leadership book by Simon Sinek. Also two non-career related books is The Untethered Soul. It really has taught me a lot about being present and then also the Four Agreements, which is a very short and easy read, but good principles to live by.

**Lenny** (01:10:52):
What is a favorite recent movie or TV show?

**Melissa Tan** (01:10:55):
This one isn't super recent, but Winning Time on HBO. It's about the LA Lakers during the '80s and the Showtime era. I'm originally from LA and grew up a Lakers fan, so it's a fun watch for me and a nice escape.

**Lenny** (01:11:09):
You'll love a new movie I just watched last night called Air, which is about how Nike got Michael Jordan signed. And it's similar vibes to that show.

**Melissa Tan** (01:11:18):
Yes, yes. I actually just watched that recently too.

**Lenny** (01:11:20):
Okay. Great.

**Melissa Tan** (01:11:20):
That's a good one too. Yeah, I've watched all those basketball.

**Lenny** (01:11:23):
Oh man. I also grew up in LA. Also a huge Laker fan from-

**Melissa Tan** (01:11:26):
Oh, nice.

**Lenny** (01:11:27):
From before. Next question, what's a favorite interview question you like to ask?

**Melissa Tan** (01:11:33):
For me, it's not a question, but it's that stage of preparing before the presentation and getting a sense for what it's like to work with each other. I think that has been one of the best ways for me to get signal.

**Lenny** (01:11:45):
Can you say more on that?

**Melissa Tan** (01:11:46):
Yes. So it's essentially that prep call before I ask them to do a presentation and going through the presentation together and working together on refining it.

**Lenny** (01:11:57):
Awesome. We already talked about that, so we'll move on. What is a favorite product you've recently discovered that you love?

**Melissa Tan** (01:12:04):
I feel like everyone's saying this, but ChatGPT. I feel like it has really changed everything. There's so many interesting ways to use it. My team at Webflow right now is also starting to think about incorporating AI into the product, and so yeah, I just think that is ... Yeah, so many things you can do with it.

**Lenny** (01:12:22):
What is something relatively minor that you've changed in your product development process that has had a big impact on the way that your team executes?

**Melissa Tan** (01:12:30):
This one here is what I also spoke about for earlier, which is, I mean, thinking through your DACI. It sounds so simple, but I do think a lot of times teams are thinking through how do they work with other teams? Who is driving? Who is the decision maker? And so having a DACI, I have found is really helpful.

**Lenny** (01:12:52):
Final question, you've been at Webflow for a number of years. What is a favorite pro tip for using Webflow?

**Melissa Tan** (01:12:57):
Yeah, I actually have two if that's okay.

**Lenny** (01:12:59):
That's good. Even better [inaudible 01:13:01].

**Melissa Tan** (01:13:01):
Yeah, yeah. So one is thing that I've often heard from folks is it's hard to learn Webflow. And so basically watching our university videos, which is where we teach Webflow while also building the designer, and we actually now enable to have the videos in the product, so you can do them side by side. And then the other one is our Figma to Webflow plugin, which is you can take a Figma design and then convert it to Webflow, which is a great hack if you already have a design in Figma.

**Lenny** (01:13:32):
Wow, I did not know that existed. That is a really smart idea and feature. Melissa, I could see why people follow you from company to company. I feel like the companies that are going to get to work with you in this new stage of your life are also very lucky. Thank you for being here. Two final questions. Where can folks find you online if they want to reach out? And how can listeners be useful to you?

**Melissa Tan** (01:13:51):
Folks can find me on LinkedIn, also on Twitter, Melissamtan, and then how can listeners be helpful to me? I mean, I love jamming on things, growth, thinking about leadership and managing, so if any of this resonates, reach out. I'd love to have a discussion and yeah.

**Lenny** (01:14:08):
Amazing. Melissa, again, thank you for being here.

**Melissa Tan** (01:14:11):
Yes, thanks so much, Lenny. This was fun.

**Lenny** (01:14:14):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [19/19] Lessons from scaling Ramp | Sri Batchu (Ramp, Instacart, Opendoor)

**Sri Batchu** (00:00:00):
I do think there's actually a general path that most B2B companies take and should take. My view is you start off with founder-led sales, the early team needs to know how to actually sell. Then you hire your first couple of salespeople, then you start some very low cost targeted marketing efforts. So whether it's content, community, small scale events, and then PR, after all of that is when you start paid and brand effort and then SEO probably start around the same time that you start paid marketing efforts. The reason for the progression the way I've described it is the channels get more expensive as you go farther along and they get more effective as you understand more about your customers.

**Lenny** (00:00:43):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard one experiences building and growing today's most successful products. Today my guest is Sri Batchu. Sri was VP of Ops at Opendoor, then head of growth at Instacart, and currently he's the head of growth at Ramp, which as you'll hear at the top of the episode, is the fastest growing SaaS business and the fastest growing FinTech business in history. They hit a hundred million dollar yearly run rate in two years, which is absurd, and in the last year grew 4X during a period where most companies barely grew at all. I recently did a newsletter post on how Ramp builds product with their VP of product, Geoff Charles. And in this episode, we zeroed in on Ramp's approach to growth. We chat about what Ramp did in the early days to kickstart growth, how they mostly grow these days, how their growth team is structured, their prioritization framework plus their north star metrics.

**Lenny** (00:01:37):
**Sri Batchu** (00:04:12):
Thank you, Lenny. Thanks for having me. I'm a huge fan and I've been following the podcast and the newsletter. So excited to be on here.

**Lenny** (00:04:18):
Really appreciate that. So let's talk about Ramp. So Ramp where you lead growth is apparently one of the fastest growing products in history. I believe it's the fastest growing SaaS product and business and also the fastest growing FinTech business. So first of all, is that generally true and correct?

**Sri Batchu** (00:04:38):
Yeah, I mean I'm sure you know of Packy and he's done a great analysis where he shared this work and compared us to a bunch of other companies and when he released this a year ago, we were the fastest growing company to a hundred million dollars of annualized revenue at the time. I don't know if there's been others since, but certainly not in the FinTech category as far as I know.

**Lenny** (00:04:58):
Okay. So you said the fastest growing to a hundred million. I think it took two years to get to a hundred million and run rate, right?

**Sri Batchu** (00:05:03):
Exactly.

**Lenny** (00:05:03):
That's insane because rarely is there all of this money sitting around for a company to just come in and accumulate and grab from people and provide that amount of value. So that's an insane stat. Maybe another question along these lines, is there any other just stats you could share, but just the scale of Ramp or just the speed that Ramp has grown?

**Sri Batchu** (00:05:23):
We publicly disclosed that last year we grew Forex on top of that, very sizable based from the year prior and Okta actually released some recent stats on fastest growing software companies among SMB and mid-market and Ramp was by far the fastest growing despite the fact that a bunch of others on the list were materially smaller. The company's still very lean for the amount of growth. We're under 500 people roughly today at that scale and that's definitely have a much higher revenue per employee than some of our other competitors and others in the space. And yeah, I mean we've got a very thoughtful and smart finance team that I've worked with actually closely our old head of strategic finance at Instacart and they set ambitious goals for us on growth and I'm happy to say we've consistently beat those ambitious goals over the last 16 months or 18 months since I've joined.

**Lenny** (00:06:16):
Which is especially challenging in this environment. So it's extra meaningful. Okay, so here's the big question I want to start off with. I know you weren't there at the beginning of Ramp's journey, but from what you know, what do you think the team did early on to seed this level of growth and success other than just building an awesome product that people really love? And if that's the answer, that's fine, but usually that's part of it. I'm curious just like is there some clever unique tactics that they used to help create that incredible growth from the beginning?

**Sri Batchu** (00:06:49):
I think you're certainly right on the product side. Obviously you've recently written about Ramp's product engine with Geoff and that there's been incredible product market fit because of the product team that deeply understood the customer experience and I think that's certainly helped initial word of mouth. One thing that I did want to point out that Ramp did that was interesting is obviously Eric and Karim, the co-founders of Ramp, were previous founders of another company that they had a successful exit on.

**Sri Batchu** (00:07:15):
So they had a strong reputation as founders and came in with the right set of experience to build Ramp and one of the things that they did is what I call cap table as a growth strategy where they did a great job of getting a large number of early stage founders and other influential operators and advisors onto the cap table at the company. And many of our initial customers were these companies that were on the cap table or the founders were on the cap table for. And Ramp today is actually not majority startups or tech companies anymore. The vast majority of our customers are mid-market and enterprise. That's where our revenue comes from. But there's a lot of love among the tech founder community because of the early days, both the product quality as well as all of these investors that Ramp got.

**Lenny** (00:08:08):
Wow. I have not heard of this strategy before and I didn't know this was actually a big part of the initial story. So is there examples of folks that they had on their cap table that are examples of folks that helped them grow initially like this?

**Sri Batchu** (00:08:20):
One example that I can think of is Eight Sleep founder, he's been very close to the Ramp team, same with the Pod founder and then a bunch of VC firms that are investors in the company are also customers of the company.

**Lenny** (00:08:32):
Do you know if the strategy there was VCs who connect them to small companies that would use Ramp or is it directly founders of companies that would immediately use Ramp?

**Sri Batchu** (00:08:43):
Yeah, I'll say it was more founders and executives of customers that can use Ramp. Certainly we have a fantastic group of very sophisticated investors who have made introductions to Ramp as well and that helped. But I will say that is not as big of a channel as one might expect because companies have their own decision making frameworks for selecting a product like Ramp and the investor opinion and recommendation matters, but turns out it doesn't matter maybe as much as another customer who's actually used the product that they know or are actually experiencing the product.

**Lenny** (00:09:17):
Amazing, awesome tactic. I've not heard of that before. In terms of growth, how much of growth of early Ramp was new customers versus expansion within existing customers? Because what's cool about credit card is people spend more, you make more money because you're taking a piece of that. So roughly how much of the growth insanity over the first couple of years was from expansion within existing customers?

**Sri Batchu** (00:09:39):
Obviously many of our early customers have grown quite a bit and our whole strategy is to save companies time and money so they can redeploy that in other ways for their own growth or other objectives. And we obviously are growing our product suite as well like BillPay, Flex, et cetera, where our customers can spend more money on Ramp and get more value out of Ramp. Having said all of that, what's interesting is that the vast majority of our growth back then and even to this day is via new customer acquisition. It's just we are adding so many more customers that the growth of our customers while strong and important part of our growth lever is not nearly as material as you might think.

**Lenny** (00:10:21):
Okay, awesome. So that's a good segue to the next question I had, which is if you're going to create a pie chart of how Ramp grows and ideally if you could even share early on and then now, how does that pie chart look? What are the slices of that pie and then what are the rough percentages of where growth comes from for Ramp?

**Sri Batchu** (00:10:37):
Rather than going into the specifics, one thing I'll say about the growth system today is if you were to look at what percentage of our business comes from outbound sales, paid marketing, field, and then a bunch of other channels and then you compare it against industry benchmarks, I think the secret sauce of Ramp is not that we've found a channel that's unique and that we've over-invested or under-invested. I don't think our distribution would be not that far off from looking at other companies at our size and stage.

**Sri Batchu** (00:11:10):
I think what we've done differently is we've really focused on making all of those investments very much driven by technology and data. And so one example that I'll give you is that our sales teams are actually incredibly efficient by any metric that we look at and we obviously benchmark them. And the reason for that is because we actually have a growth engineering team that's dedicated to supporting that efficiency but including adjusting third party data and using AI to automate much of their workflow, et cetera. And we've been doing this well before AI has become the buzzword for a lot of folks, but this is something we've had this team for almost two years now that that's been working on sales automation and data to just make our sales teams more efficient. That's just one example, but we've got similar types of mandates for every channel that we invest in and thinking about how do we inform this better customer and prospect data and how do we automate and technologize it so that we can build that competitive mode for each channel.

**Lenny** (00:12:13):
I'd love to learn more about this growth eng team that works with sales. How is that structured maybe as the first question and then just what are their goals? How do you measure their progress and success?

**Sri Batchu** (00:12:24):
A lot of companies do it differently. I think what works really well with Ramp is that we have the same shared goal, which is the pipeline driven and the payback period of the channel. It's unique to Ramp where the engineers feel ownership of the quota. They're not owning product metrics or what have you, they're obviously of course interim and input metrics that are important, but they really do feel accountable for the pipeline driven and the efficiency driven by that team. And I think that naturally allows them bottom up to come with the right projects that they think will have maximal impact on efficiency and top line.

**Lenny** (00:13:04):
So what are the sorts of things they do for a sales team? Is it like they help them prioritize leads or is it they help craft their messaging? Which parts are maybe most important?

**Sri Batchu** (00:13:15):
All of the above, helping find the right prospects, sending them the right messaging as well as prioritizing responses and drafting potential responses for the team as well.

**Lenny** (00:13:26):
Fascinating. How much impact have you seen that has on sales?

**Sri Batchu** (00:13:30):
It's incredibly helpful to our sales team and it's one of our most efficient channels as I've mentioned. So I think that there is something unique about our ability to bring technology to every channel.

**Lenny** (00:13:41):
Super interesting. Maybe on that topic, can you just talk about how your growth team is structured at Ramp? What are the kind of sub-teams and how do you think about?

**Sri Batchu** (00:13:50):
We've got an organization today that might evolve and if we get to that topic we can talk about it, but historically the way we've been organized is we've got channel based teams that are deploying spend in a given channel. So we've got a paid marketing team, a lifecycle CRM team, we've got a field marketing team, et cetera. And then we've got a product engineering team that is supporting growth and sales and helping each of these channels be more effective that's dedicated to growth. And then separate from that, we've got a small kind of what I call an innovation or skunk work type of team that works on cross-channel. Just things that don't neatly fit into a box that we think could be cool or fun to try to just do more experimentation that is cross-channel, cross-team.

**Lenny** (00:14:37):
Definitely sounds like the most fun team. What are some of the things they've done or work on in the skunk works team?

**Sri Batchu** (00:14:42):
They've done testing of new channels that don't necessarily fit into very... And that includes new online platforms. They've done some interesting stuff on TikTok and Reddit and other places, things like that. They've focused on referrals and how to make that a more delightful experience for the customers, first party events, things like that. Things that are often smaller scale and if they work we can invest more and make them larger scale later.

**Lenny** (00:15:16):
I love it. So the teams roughly is there's a paid growth team that just works on paid growth optimization, lifecycle CRM team basically it's like emails I imagine is a big part of that.

**Sri Batchu** (00:15:26):
Yeah, exactly.

**Lenny** (00:15:27):
Then there's a field sales support team and then there's the sales team, kind of eng sales team that you talked about and then I also imagine there's like a self-serve.

**Sri Batchu** (00:15:37):
Yeah, exactly. There's a self-serve activation eng team as well. And then of course there's SEO and website and bound lead channel management team.

**Lenny** (00:15:47):
And then this awesome skunk works team. I love it. Okay, so shifting a little bit, something that comes across often and consistently with Ramp, and this came across very clearly in the post that I did on how Ramp builds product with Geoff is velocity and how important velocity is at Ramp. There's this awesome quote that I'll read here from Keith Rabois who I think led many of the rounds of Ramp. He started Founders Fund, famous investor. He said that, "Ramp's product velocity is absolutely unprecedented in my 21 years working with technology businesses." So here's my question to you. Can you just talk about what that actually looks like and feels like working inside Ramp with this intense velocity?

**Sri Batchu** (00:16:30):
Yeah, it is a great question and Keith is amazing and then probably one of the smartest investors that I've ever had a good fortune of working with both here as well as at Opendoor, and I'll say he's absolutely right about that. And what you see internally is what I'll say is razor-sharp focus on reducing cycle time and bias to action and how do we reduce cycle time. I think it's basically the core of it culturally to me is getting people to think about smaller units of time for decision making. It seems obvious but I think you really have to reinforce it culturally. So one thing that Eric, our CEO, does, which I don't know if you've heard externally, is we have days.ramp.com where we can see how many days it's been since the founding of Ramp internally and it's day 1,529 at Ramp. He has that number of days at every board meeting, at every all hands.

**Sri Batchu** (00:17:28):
It's just to remind people that we don't work in years, quarters, weeks, we work in days. Each day matters and so never put out something tomorrow that you know can get done today. And that bias to action really permeates not just in the product teams but everywhere. So our growth team, which as I've just described, is extremely cross-functional, a lot of marketing folks and other expertise on the team, but we work a lot like a product team, we work on two-week sprints, we cross-prioritize across these teams and we work all together rather than in separate silos within the growth team.

**Lenny** (00:18:08):
So I pulled up the site you just mentioned, days.ramp.com, and not only is it days since launch, which is 1,529 when I'm looking at it, there's a many decimal points that are counting up. 1,529.43453142. Oh my god. Okay. Is that a new addition, the decimal points?

**Sri Batchu** (00:18:29):
No, I think that's always been there. It's just amping it up, how much time is passing. It could be stressful at times, but I think that the mitigating factor is that it's been able, as you know, A players want to work with A players attract A players and retain A players, and Ramp has done a really great job of hiring people that are fantastic that can work in this environment well and are motivated by the success and the winning from this sort of culture.

**Lenny** (00:18:58):
Yeah, I was actually talking to Eric about it for another piece I'm working on and he was showing me some early board decks in every deck as you said has day 544 of Ramp. So it's very real what you're talking about. Is there anything else that just as someone that came into Ramp from other traditional companies that also move really fast, Instacart and Opendoor, that is just like holy moly, this is velocity? You talked about a few things but is there anything just like holy shit?

**Sri Batchu** (00:19:26):
You can see the cycle time thing in terms of responsiveness from everybody at Ramp and I think typically what you tend to see is as companies get bigger, they evolve off of Slack to email and everything just moves a little bit slower and there's process and then there's obviously a lot of good parts of that but Ramp, what I noticed when I joined and true to this day is how quickly people will respond on Slack and jump on things and even if they don't complete it, there's very clear action item on who the owner will be and what the deadline will be even if it's not. And that to me was always very impressive just about... And I think it's one of those things we build in public, so everything is very visible so you can see how this is working across teams and I'm glad that we've been able to maintain that culture even as we've gotten much bigger.

**Lenny** (00:20:21):
There's two effects of that I imagine. One is how do you stay in the flow and get work done if you're just expected to constantly respond? How does that actually work?

**Sri Batchu** (00:20:31):
I don't think the expectation is necessarily that one constantly responds, but it is something that I have seen people are good at. And so I think one of the things that, again, not like a novel productivity tool, but something that Ramp does do is just trying to think about focus time and response times and using calendar blocking to really effectively manage your time that way. And then doing calendar audits of yourself as well as of your team to say, okay, what are your highest priorities for this week, this day, this month? And how does your calendar reflect your priorities? Because in many ways you ship your calendar and so thinking about how are you spending your time and then blocking your time accordingly.

**Lenny** (00:21:15):
And is this mostly a cultural just this is how we operate or is there a principles or sorts of processes that are set up to help people do those sorts of things?

**Sri Batchu** (00:21:24):
Yeah, it's cultural in terms of how we operate, but we also have templates. Our people team has a template on how to do a calendar audit properly and things like that. So we've tried to create some learning materials as well for folks that are new to get into the flow of way of working.

**Lenny** (00:21:45):
Awesome. Okay, so then the other elephant in the room with talking about working really fast and hard and responding really quickly is work-life balance and burnout and things like that. One thing I'll say is I believe in working really hard and working long hours as a important ingredient to success. I know there's been a bit of a backlash against that and just like, no, you shouldn't work really hard, you can be successful without doing that. I don't think that's true. So with that said, I guess what have you learned and what do you think Ramp has learned about how to find that balance and not just-

**Sri Batchu** (00:22:17):
Yeah. I completely agree with you. I do think, especially earlier in your career, hard work is so important both for learning but also impact and it's a tough balance that a lot of successful companies struggle with. I think my biggest learnings is it's, A, some of it is like self-selection, right? You're hiring people that are excited about doing this work and this way of working, but at least I tend to find the people that I've worked with that are highly successful, ours are not the problem. It's really autonomy, flexibility, and mission alignment and the general happiness they get from their work. And so that's what I try to focus on, which is not the hours that someone's put in, but quality of the work and the impact. And I think a big part of the push to having great results and working hard is really being grateful and appreciating the team when they do push themselves and celebrating wins.

**Sri Batchu** (00:23:23):
And I think we could always be doing a better job, but I think we've historically done a great job at that, at celebrating wins big and small. And I think part of the culture of building in public and open internally helps with that. So people are always sharing their wins. And then it's a very one funny stat that I don't know if other companies track is we track engagement during all hands on the Zoom to see what percentage people participate. And it's usually close to a hundred percent, like people are talking, the entire company is talking on the Zoom chat because they're excited about the wins that their friends and colleagues are shipping and the things that we're talking about in the audience.

**Lenny** (00:24:05):
How do you actually track engagement? Someone sitting there watching who's in the chat?

**Sri Batchu** (00:24:08):
No, it must be some tool our IT team can do it. It can say what percentage of participants chatted or something like that.

**Lenny** (00:24:15):
I see. So it's not like who's looking at the screen, it's like who's talking in the chat?

**Sri Batchu** (00:24:18):
Yeah, exactly. Or reacting in the chat, et cetera.

**Lenny** (00:24:21):
That's awesome. And it's not like you must engage, it's more just like are we delivering the content.

**Sri Batchu** (00:24:26):
No. And by the way, this is probably the first time I'm sharing this. I don't think brand employees necessarily know this. I don't think we've actually shared this. I just heard it from our IT person recently and I thought that was a fun stat.

**Lenny** (00:24:38):
I love that because it's more just like are we providing value to people or are they actually excited and interested in this sort of thing? I was going to add onto your point about how working hard and working long hours can be seen as this like, "Oh, this sucks. I wish I was at home watching Netflix," but I find that the most fulfilling parts of my career or where I was just working insanely hard for a long time, as long as that work was meaningful, exactly like you said, it was something that mattered and came out and shipped and people were excited about it and if it wasn't like, "Oh, that was a waste of my life." So that super resonates.

**Sri Batchu** (00:25:09):
Yeah.

**Lenny** (00:25:10):
I want to come back to growth for a moment. I had a couple more questions I wanted to ask here. You talked about some of these teams that you have around ways you're driving growth. Is there an area you think you're going to be investing more in over time or that you feel is working better? I know there's trade secrets here that you don't want to share necessarily, but just anything that you feel is people are maybe under-appreciating or under-investing in that you think you might invest in more?

**Sri Batchu** (00:25:34):
What I'll say on that front is, look, we, like everybody else, are always focused on driving more efficiency in our growth engine. There are some channels that, and we have a diversified portfolio of bets, right? One thing that's interesting about the world of growth today is I think historically people that used to run growth were folks that had a marketing or a product background. And what you're seeing these days I think are more folks like me who actually come from an investor and analytics background to lead growth teams because growth has become more and more about a diversified portfolio of bets at a reasonable ROI and building a system that's designed around experimentation and data-oriented.

**Sri Batchu** (00:26:22):
So the reason I say all of that is our goal is to over time, of course, make all of our channels more efficient, but also allocate more to channels that are more efficient as long as they're scalable. And so the more that we can push customer awareness via owned and earned media, the better for us. And so we've got a few different strategies on that front, but we're also working on making our other channels more efficient by the day.

**Lenny** (00:26:54):
So mysterious, but I appreciate you sharing what you can. The point about the portfolio of bets is interesting because if you think about it, most companies initially grow from one. You talked about growth engines, that's the same term I use. Usually there's just one thing that helps you grow initially like SEO or word of mouth or maybe paid. And then eventually every single company basically ends up doing all the growth channels and then has a team dedicated to just keep optimizing SEO, keep optimizing referrals. So I think that's a very typical path. And then it's exactly said, how do we make each of these as efficient as possible?

**Sri Batchu** (00:27:28):
Yeah.

**Lenny** (00:27:29):
Maybe as another last question around Ramp's growth. Is there any other just really surprising, interesting, really effective tactics that helped Ramp grow over time?

**Sri Batchu** (00:27:41):
I think one thing that's been interesting is Ramp's ability to leverage PR as a growth machine. And as you've seen, we've got a fantastic PR and comms team and we get a lot of deserved good press through that. And one thing that's been interesting is our fundraising also as a growth strategy not obviously explicitly we've got very clear goals for our fundraising, but what we have seen is anytime that we've been fundraising and we've been using that as an effective way of creating a market moment, it's driven actually a non-trivial amount of top funnel for us.

**Lenny** (00:28:22):
People always talk about PR being like, people over overinvest in PR, they think PR is going to be this magical growth lever, but it actually works sometimes and in my opinion, you have to have something really interesting for it to work and obviously you guys do, the company's growing like crazy, which is innately an interesting story. The founders are really important and rarely is funding like an event anymore for most companies. So I mean this says a lot that people care about your funding.

**Sri Batchu** (00:28:51):
What you say it is exactly right is you have to be thoughtful about your PR moments. Everybody wants to announce things about themselves that's not necessarily interesting for the press or for an audience. And so thinking about how do you compile enough value to the general audience. So our fundraising announcements usually also have some additional color on something unique about the business that we share to provide more value to readers.

**Lenny** (00:29:20):
And then there's also newsletter people like me and Packy you mentioned who wrote about Ramp because it's also just so interesting. What's your sense of that versus traditional PR? There's this, I don't know, big debate of just traditional media's no longer relevant. All these other people will go through newsletters and podcasts and things like that. What's your sense there?

**Sri Batchu** (00:29:38):
It's what are the audiences that you get with each of these tactics. And so we do both obviously get some earned coverage in these newsletters and other tactics and we pay for some and we advertise in other cases. And what we tend to find is these are great reach, but they tend to work very well for actually hiring. It improves Ramp's reputation as a company for recruiting and hiring, which helps and they help with certain audience of customers, which is typically tech founders and folks close to the tech ecosystem. But as I mentioned, the vast majority of the world is not startups and the majority of Ramp's customers are no longer tech and startups. And so as we're thinking about ways to grow. I think channels like these are one piece of the equation, but I think traditional PR will remain another really important piece because they just target a different audience.

**Lenny** (00:30:38):
As you're talking, I'm watching the days count up on the days that Ramp page still and stressing me out. I feel like keeping you from doing work to keep growing Ramp, but let's keep going. I'm going to close this tab. You talked about growth engines. I'm curious what you've learned about building a growth engine in a company. And another way to put it is just a repeatable scalable growth process, whether it's at Ramp or Opendoor, Instacart,

**Sri Batchu** (00:31:03):
People talk a lot about what should the right design of the team be or profiles of people on the team, et cetera. And I'm happy to talk about what are the right profiles of people. I think that's an important conversation. But I think design of the team, people often... I think it's a red herring about team structure and team design and what's the right one, et cetera. I think most of that is irrelevant. What actually matters is culture and rituals and cadences rather than the team itself.

**Sri Batchu** (00:31:35):
And so what a great growth engine and a great growth team is one that where you set the culture, set very simple north star metrics, usually one, at most two. And you've created a culture of defining hypotheses that are data driven and a culture where that can be executed quickly and have an MVP mentality for product and non-product projects where people can fail and learn quickly and iterate quickly. So I think that part of it is more important than the specific people or their functions in many ways to me, especially when you're starting to build a growth engine. It's like can you build a set of people that can generate new ideas and evaluate them effectively and move quickly is really what you're trying to design for.

**Lenny** (00:32:29):
Let's unpack some of this because this is great. So in terms of north star metrics, what are some examples in your experience of good north star metrics? Revenue is obviously a very common one, but often it is too high level. Do you have a sense of what a good north star metric is?

**Sri Batchu** (00:32:43):
I like having two. One is something around volume and growth and you want that to be, A, very motivating and intuitive for people to understand and also, B, something that the growth teams can directly impact, right? Revenue is, for better or worse, more important to the company, but also much farther down the line of whether or not the growth team can impact that. And so at Instacart, for example, our north star metric for growth was monthly active orders. And that's what we all rallied around and looked at every day, how are now doing? And then obviously we had a large growth in consumer engineering team at Instacart, 300 plus people. And so there are people working on every single corner of the app and outside of the app on acquisition to drive growth. And it's like some of the stuff is minutia, right? It's making the checkout flow slightly better or faster or something like that.

**Sri Batchu** (00:33:42):
So that's a good example. It's like, okay, well, so we're going to goal that team on MAO, how are they going to move monthly active orders by making the checkout flow slightly better? Maybe they can have an impact or maybe not. And so one of the things that we did is the actual local team has their own metric that they can directly influence. You want to actually hold people accountable for things that they can influence. And then we created via the finance and data team, a translation layer for every team's metric into MAO.

**Sri Batchu** (00:34:13):
It would be like if you got one extra weekly order because of your checkout flow from the same customer, it would have point X impact on the company's MAO and then you would just roll up all project plans as well as project impact back into this singular MAO metric. And the other benefit of doing something like that is that it also helps you cross-prioritize much easier. Should we add more engineering to this team? Should we add more budget to that team? It's like, okay, well what's the MAO map? Where is there a more MAO per dollar or per engineer being built? And it just really helped us unify and move together.

**Lenny** (00:34:52):
I have questions about this. This is great. By the way, why is it monthly active orders versus just monthly orders? How can you be an inactive order?

**Sri Batchu** (00:35:00):
Sorry, orderer.

**Lenny** (00:35:02):
Oh, okay.

**Sri Batchu** (00:35:03):
So monthly active users basically is what it is, but we call them orders because users can just log in and not order, right.

**Lenny** (00:35:08):
Got it.

**Sri Batchu** (00:35:09):
You're actually ordering on the platform.

**Lenny** (00:35:11):
Yeah, I think there was this backlash against users at Facebook. I think it's monthly active people and so I get it. Okay, understood. Interesting. So you find that instead of sub-teams having a different metric that we just know is good. That's one of the variables in the formula of monthly active orders. You actually have a translation that converts that specific metric moving to the north star metric.

**Sri Batchu** (00:35:36):
The team on their day-to-day for their sprints, whatever are looking at their own metric. But for the purpose of planning and resource allocation and reporting, we would use the translation layers to actually just look at everything on a MAO basis.

**Lenny** (00:35:49):
Knowing those sorts of formulas are often not perfect, how much weight do you put into that formula specifically?

**Sri Batchu** (00:35:56):
Yeah. And I think in general the planning process is not perfect. You can have a financial plan in Excel and the reality can diverge quite a bit. The only thing you can be certain of is that you're not going to accomplish exactly the plan. So we did a couple of things to that. One is setting a culture of we know this isn't perfect, this is like 70/30, 80/20, it's to guide. So we wouldn't use the translation factor to make a marginal decision if something is five or 10% off.

**Sri Batchu** (00:36:29):
Those are done based on judgment because at the end of the day, regardless of what metric framework you use, marginal decisions are marginal for a reason. They're really hard things to decide. And so the framework helped with just reducing the cognitive overload of decision making to only those that are marginal. So the ones that are obvious that are going to have big impact becomes clear even if the measurement framework isn't perfect. And so that's what we use. And the other thing that we just had as cadence is we would actually update all of the translations every six months for the new planning cycle based on new information that we knew on how moving X impacts MAO.

**Lenny** (00:37:10):
Just to make it even more real, what are some examples of those lower level metrics? Is it increased conversion of sign up by X percent?

**Sri Batchu** (00:37:17):
Any number of things. It would be actually load time of the app on open. There's a team that's trying to make that faster or more efficient because we know that that impacts whether or not the person actually ends up ordering if it takes five seconds to load versus two seconds to load. And so the full customer experience were all segregated into different teams that were optimizing just like how long does it take to open, number of searches that a user does on the app. We know the people... And number of items that are put into cart, like amount of time from cart to check out, things like that we literally just map out any user's journey throughout the app and have separate engineering teams that are focused on that.

**Lenny** (00:38:04):
And there's essentially some kind of regression analysis that tells you here's load times impact on MAOs.

**Sri Batchu** (00:38:10):
Exactly. And the other thing that we did is just so we would've these translation factors, but we could also just see what the cumulative impact of all of the work is that Facebook did this too, which is just long-term holdouts for each surface area. So the checkout experience team that I've been talking about a lot for some reason would have their own holdout. And so we could see what the cumulative impact of monthly active orders on the people that got last half's experience versus this half's experience on the holdout. And that would make it very clear. So regression is one way to do it. And then basically effective A/B test, but was a small holdout.

**Lenny** (00:38:46):
Is there a holdout for the performance team where someone just has a really slow version of Instacart?

**Sri Batchu** (00:38:51):
I wonder actually, but there's holdout for almost everything. There's a holdout for ads, for example. So there are some lucky Instacart users out there that are not getting ads and they've never gotten ads because they've always been part of Instacart's advertising holding.

**Lenny** (00:39:08):
That'll be a great revenue boost whenever they want to kill that holdout.

**Sri Batchu** (00:39:13):
Can you imagine was a conversation internally on should there be a permanent holdout? Should it be last year's experience? How should we think about, especially because it's such a important driver of modernization?

**Lenny** (00:39:24):
**Sri Batchu** (00:40:44):
I think it depends on the size of the company. I think this actually becomes much more important as companies get bigger because there's more teams to prioritize and more resources to cross-allocate. And having a common currency makes that a lot easier. And so we do something similar at Ramp as well where we have translation factors for all of the various things that the teams are doing that translate back to the north star for Ramp.

**Lenny** (00:41:07):
Cool. And then are you up for sharing the Ramp's north star metric or do you want to keep that part?

**Sri Batchu** (00:41:12):
Yeah, I mean I can tell you what we used to do in the recent past we're evolving some things and in the recent past it was for the growth team, the north star was dollars of SQL pipeline. So anything anybody did, we would try to estimate the impact into what would be the dollars of sales qualified lead pipeline generated for Ramp. So if the website team wanted to change language on the card's landing page, their direct impact would be conversion rate of email submission or something like that would be what they would be optimizing for. And then we would have, okay, what does two bips of conversion rate mean for dollars of SQL pipeline? A lot or not a lot? And depending on that, it's like, "All right, don't waste your time doing that project. Let's do something else instead." So that just helps us score and prioritize efforts.

**Lenny** (00:42:03):
Here's a fun story. I actually tried to sign up for Ramp when I was starting this newsletter and business and it didn't let me because I had a Gmail-

**Sri Batchu** (00:42:09):
For Gmail, yeah.

**Lenny** (00:42:13):
So I moved on and that would've been such a huge revenue opportunity. I'm just joking.

**Sri Batchu** (00:42:18):
I know, I know. And I'm glad you brought that up because we are obviously aware of it and we are working on something for users that have put in a personal email address. in terms of how to reengage that.

**Lenny** (00:42:30):
You're about to 5X growth because I had no other domain at that point. Now I have Lenny's newsletter and stuff, so it's like, "Shit, I'm stuck."

**Sri Batchu** (00:42:39):
By the way, for anybody else that has that problem, they can just reach out to me, we'll figure it out. The reason we don't allow personal emails is because it's just typically very low in tech users that are coming to the website that are putting in personal emails.

**Lenny** (00:42:51):
Makes sense. I totally get it. I was not offended. I just like, all right. I had no way around it. That's the problem. So I like that you guys are adding some path around it and you're saying email you or reach out to you.

**Sri Batchu** (00:43:02):
You can find me on Twitter or email me. I'm just as sribatchu@ramp.

**Lenny** (00:43:06):
All right. You're going to have the most sales leads of any person at Ramp when this comes up. Okay. One other thing I wanted to touch on is success metrics. You talked about one of the keys to success and this repeatable growth engine is clear success metrics. Is there any just learnings and tips you have for people when they're thinking about success metrics?

**Sri Batchu** (00:43:26):
Finding the right success metric, there usually should be two. There should be one on volume and another one on efficiency. And we can talk about what are good efficiency metrics and what are good volume metrics. On volume, I think the right success metric has a couple things that are important. One is there's a clear linkage to value creation for the business. So if I move this metric that will drive revenue and which will drive equity value for the business or whatever it is that this particular. Metrics and for Facebook it was MAU, for Instacart, it was effectively monthly active orders, and it's something that we know is important that will really drive the value for the business, but it needs to have the other component of it, which is it's very intuitive for all of the people working internally to the company.

**Sri Batchu** (00:44:17):
And it's also clear, if they're working on some minutiae, how that can impact and actually move the main metric. So it's usually you have to find something that's somewhere in between, not too far, too lag, towards revenue and value creation, but also not something that's actually translatable to the efforts of various teams.

**Lenny** (00:44:39):
Is there an example of a good success metric that just comes to mind to make this a little bit concrete for people?

**Sri Batchu** (00:44:44):
It just depends on what goal at any given time is. Sometimes you're trying to drive more users, sometimes you're trying to drive more engagement and you can reorient the company on what you're trying to do as the north star for growth during that period of time. So users, obviously we've talked about as a good one. For engagement, I've often found what really helps is, and you've done actually really good benchmarking at some point, the escape velocity metric for growth for a company, I think.

**Sri Batchu** (00:45:15):
I don't think you phrased it that way, but that's [inaudible 00:45:18] for a given user, which is what does it take for somebody to become an engaged and active user or customer of a platform? And at Facebook, it was 10 friends the first seven days. At Instacart, it was three orders in the first month. And at Ramp, for our activation, I mean it's very specific to Ramp, but we've got four events that the customer needs to do in the first 30 days. And if they do that, they have a high likelihood of being activated and successful. So our activation team focuses on that.

**Lenny** (00:45:49):
The framework you just described reminds me Gibson Biddle has this really simple framework of gem where you can basically prioritize one of three things, growth, engagement, or monetization. And his advice is always just all of them are great, just make sure you're all aligned on which one matters most at the time.

**Sri Batchu** (00:46:06):
Yeah. And it is very similar to, we used to have this at Opendoor, and I think DoorDash also uses a similar framework, which is speed, quality, and cost. All three are important, but it's very hard to optimize all three at the same time. So you need to have a particular prioritization. And I think growth teams can also use that as, okay, I think the way I about the growth team's journey is step one is build a system that can move fast and then work on improving the quality and then work on optimization of cost after. So you pick which phase you're on because you can't do all three at the same time, whether it's growth, engagement, monetization, or just the other way of framing on it.

**Lenny** (00:46:49):
Speaking of metrics, I have this note here that you're a big fan of payback period for measuring investment ROI versus CAC. Can you talk about why that is?

**Sri Batchu** (00:47:02):
Yeah. CAC obviously gets thrown around a lot and a lot of people are like, "Okay, you have to be reducing your CAC, CAC, CAC, CAC." There's a fundamental flaw to it which obviously is that you're focusing on cost and not the value derived. And so when you focus on CAC and reducing CAC, what tends to happen is you actually might be doing something very damaging where you're succeeding in reducing CAC, but you're actually bringing in customers that are less valuable because those are the ones that you're able to attract with a lower CAC. And so reframing it away from CAC towards LTV is helpful and that's better. So thinking about for better customers that are bigger, we want to spend more. So you might think, okay, well, LTV to CAC might be a better way of looking at that. I think the challenge with LTV to CAC especially for a lot of, even Ramp, it's only four years old, is it's really hard to predict LTV.

**Sri Batchu** (00:47:57):
It's like a DCF, it's extremely assumption laden and it's hard to know what the final value will be. And especially if you think your churn is low and your LTV is very high, you might end up spending a lot of money because you're like, "Oh, my LTV to CAC is great." And then a year or two into the business, you realize actually your churn is higher than you thought. Your initial customers aren't representative of your long-term retention and all of a sudden you've destroyed a lot of value by looking at LTV to CAC, which is why I'm a big, big fan of payback period and actually being really thoughtful about that using contribution margin, not revenue or gross margin, like how long of contribution margin from this customer does it take to payback their cost? And setting this obviously is typically a mandate from the executive and board level on what is the payback period that we're comfortable with, and then just orienting everybody towards driving that blended payback period down as much as possible.

**Lenny** (00:48:56):
For folks that aren't familiar with the concept of payback period or contribution margin, could you just briefly describe what those mean for listeners?

**Sri Batchu** (00:49:01):
Yeah, so contribution margin is basically the profit that you make on a given customer after you take into account all of the variable costs. So including the cost of production as well as any other variable costs to serve that customer. So that might include support and other things that scale with your revenue. And then payback period is literally just how many months of that profit would it take to pay for? Let's say it costs you $5,000 to acquire this customer and your estimated profit per month on the customer is 500. That is a 10-month payback period. So as I say that, I'm sure you've heard, you still have to make assumptions for payback period, but at least they're more based in recency and you can evaluate them more quickly.

**Lenny** (00:49:49):
Awesome. Thank you for doing that. Just a couple more questions around growth specifically. So there's a lot of ways to grow through the history of a company. You can invest in SEO, you can invest in paid and sales and referrals and influencer marketing, brand marketing, billboards, all these things. Do you have an opinion on how to sequence these sorts of bets for a company, especially in B2B?

**Sri Batchu** (00:50:10):
Of course, a lot depends on who your customers are, what your unique value propositions are and how competitive the space that you're in. But I do think there's actually a general path that most B2B companies take and should take frankly, which is my view is you start off with founder-led sales, like the early team needs to know how to actually sell, then you hire your first couple of salespeople, then you start some very low cost targeted marketing efforts. So whether it's like content, community, small scale events, and then PR. After all of that is when you start paid and brand efforts. And then SEO probably start around the same time that you start paid marketing efforts.

**Sri Batchu** (00:50:56):
The reason for the progression the way I've described it is the channels get more expensive as you go farther along and they get more effective as you understand more about your customers and they're more scalable as well as you go farther along the list that I've described. And so that's the intention behind sequencing in that way. SEO is a bit unique. The reason I recommend it later rather than earlier, even though it's not necessarily that expensive, is just take some time to build. And without domain authority or backlinking or any media presence, you can end up just flailing with SEO, creating content and not getting any actual traction for a long time. So there's usually a good inflection point for your company to double down on SEO efforts. And it's somewhat a little bit later than some of the other times.

**Lenny** (00:51:43):
This touches on a great line that you have around experimentation where you talk about how you don't want to just fail fast with an experiment. You want to fail conclusively, if that's the word. Is that right? And then can you talk about that?

**Sri Batchu** (00:51:57):
Yeah, I talk a lot about that with my teams both here and other places, which is we celebrate failure. Growth experiments in my history are typically 30%-ish success rate. So the vast majority of things that you try don't work. And so you want to create a culture where people aren't afraid to take risks and aren't afraid to fail. And for me, failure is not that you didn't drive revenue, failure is not learning. So it's really important that you learn when you fail. And so we celebrate failure as long as you're learning and you can only learn if you've designed the right test and you failed conclusively because otherwise, I think many of us have been in situations where there's intuition that something might work and it doesn't work, and then you end up doing it over and over for years because every time a new executive or somebody else has the same idea, you try it again and it's because you haven't been able to design the test to fail conclusively, and it's hard to do.

**Sri Batchu** (00:53:00):
But at the end of the day, there's only two ways to make an experiment successful. Either you have a very large M or have a very significant treatment, which is what you're doing in the experiment itself. And in B2B, you don't usually have the luxury of large M, which you do in consumer. Facebook can get stats taken in two hours. A B2B company could take two years to get the same number of touch points. And so to counteract that, I recommend people just trying to maximize the treatment effect, which is if you have a hypothesis that you're testing, just throw all of the possible tactics and resources that you think would move that needle because you can always cost rationalize later if it works.

**Sri Batchu** (00:53:49):
And so just maximize the treatment effect. And if with all of that it didn't work, then you can say, "Hey, we're not going to try this again because we literally did try everything that we could to test this hypothesis." And if it doesn't work in the best version and it's expensive as it is, this is not worth spending more time on. But if it does work, great, then you do another version of the test with half the tactics or whichever tactics you think work better or worse and you optimize over time.

**Lenny** (00:54:17):
Is there an example you could share when you did that?

**Sri Batchu** (00:54:19):
I mean, account based marketing is something that is very common in enterprise software where you've selected certain customers that you think are high priority and you're saying, "I want to touch them in as many nuanced ways possible to see if that drives conversion." And this is something I've seen tried many times where people do it, but they do it halfway where they're like, "Okay, tried these three things. Conversion of the control group wasn't higher. And so we think this is not going to work."

**Sri Batchu** (00:55:00):
And then a new go-to market executive comes and they have to do it again. They have to do it again. They have to do it again. It's a very common one wherever this happens. And so when we did it at Ramp, we did exactly what I just described, which is let's really be thoughtful about the experiment design, both in terms of maximizing the number of people as well as maximizing the number of ways and types of ways that we're effectively touching these target customers to show the value one way or the other.

**Lenny** (00:55:31):
So what it sounds like is the hypothesis isn't like this email will have a big impact on conversion. It's like this strategy of coming after customers is what we're testing.

**Sri Batchu** (00:55:43):
That's the example there. And I think for example, this kind of framework is more important for cross-functional, larger scale, bigger tests rather than an email modification. But we could even use it on a micro example, like an email modification where you are like, okay, I think this particular email is underperforming because it's not talking to this part of the customer's pain point or journey or what have you. And the simplest test would be, okay, let me make some tweaks to the text and edit that, and that could be the end of that test.

**Sri Batchu** (00:56:24):
And if that doesn't work, you're like, "Oh, maybe those weren't the right text edits. Let me do a different text edits or whatever." And that's fine, that's low cost. It's not the end of the world for you to be wrong there. But an alternative that you could do is like, oh, what are all of the things that I could change about this email in the same test? Is it the trigger of the email? Is it the text content of the email? Is it additional personalization? Is it the design of the email? Trying to think of what are all of the various levers that you think could be wrong and put them all together to test your hypothesis of this touchpoint is wrong and how do I improve that.

**Lenny** (00:57:02):
Well, obviously the downside of that is if it doesn't work, you don't know if it's like, oh, maybe it was this thing could have worked in the subject-

**Sri Batchu** (00:57:08):
Yeah. So there's always trade-offs on this. But what you're hoping is you've done a complete refresh where you did all the things that you thought were intuitive that should work. And if it doesn't work, then you're like, "Okay, maybe my hypothesis is wrong." But you're right. There's always going to be a challenge if maybe the execution is wrong and I did too many things potentially in that case.

**Lenny** (00:57:29):
How does that go with the velocity culture? Is it just do those things real fast even though it's not like micro optimize, it's like go bigger but do them fast?

**Sri Batchu** (00:57:39):
Yeah. Yeah. So that's why I think it's important to frame where this matters. And so I think I'm less worried about failing conclusively for things that you can fail really, really fast and just redo, right? Things like website conversion, email, et cetera. I'm more worried about that for things that take a while to plan and cost money, et cetera.

**Lenny** (00:58:05):
Got it. Okay. Great. Maybe one last question around growth specifically. What are some of your favorite tools for the growth team, either internally, whatever you can share, or externally that just allow you to operate efficiently and effectively?

**Sri Batchu** (00:58:19):
A couple of things that we've used, I mean, one simple thing is for sprint planning, actually, we use Airtable because the planning process and the scoring is so much more analytical and the translation layer. So we've got a template on how we do our sprint planning and how we translate the various impact metrics into the common currency, which I enjoy, but I don't see it has to be Airtable. It's just some form of organization that works well for that. In terms of a very tactical growth tool that we've enjoyed recently is we used this company called Mutiny, which is also around customer, which is a tool for website copy, personalization. So they hook up with our third party data sources that we pay for, and based on what we know about the customer as they're landing on our page, we can personalize, copy, and design based on that. And that's had material impact and allowed us to scale website experimentation.

**Lenny** (00:59:18):
Amazing. And then are there internal tools you've built to help with experimentation or I don't know, sharing data, dashboard? I don't know, is there anything else that's just like, wow, this really helps us move fast?

**Sri Batchu** (00:59:27):
Eric, our CEO, has publicly talked about this. I think we as a company are very thoughtful about what we build in-house versus what we buy externally. I think a lot of engineering teams are often excited about building things in-house where there's off the shelf products that could basically work externally. And Ramp has historically been good at not falling into that trap. And we use third party tools for a lot of our growth and experimentation for things that are not proprietary, strategic, et cetera, obviously. Some of the automation stuff that we've talked about, we've built all of that in-house in terms of prospecting, lead scoring, and how we talk to our customers. But for the most part, we use external tools. Instacart and Opendoor were not like that. We built our own internal experiment tracking systems, A/B testing frameworks and all of that in-house.

**Lenny** (01:00:25):
That's what I would've guessed about Ramp that it's with speed, you got to not build stuff you don't have to build. So that makes a lot of sense. Okay. Maybe one last topic to talk about. I want to talk about hiring. You have some really interesting approaches to how to think about hiring. One is I think you have a really interesting strategy for how to find the best companies and also the best people at each of those companies to go after if you're hiring for specific role. Can you talk about how you think about that?

**Sri Batchu** (01:00:51):
Gokul on Twitter has talked about some of those, which is there's two ways to go about hiring great people. One way is basically a very thoughtful and tactical network search where let's say you're hiring for a head of SEO, you go ask your network of who is the best SEO person you know, get introduction to each of those folks, and then ask them who the best person that they know is. And you have a mapping of where are the best SEO teams and why. If you can't get one of those people, 20, 30 people on your target list, you go down the list of, okay, what is the next best person? And you typically want to limit it to companies that are one to two stages of growth after you. So you want somebody that has seen your stage of growth and beyond at a company that has a reputation for craft and the field that you're looking for. So that's a very classic way of doing that, and I think that works really well for people and companies that are really well-connected.

**Sri Batchu** (01:01:56):
So there's another approach that I've actually used successfully is much more kind of data driven and external and not as network based, which is you can often look up data. [inaudible 01:02:14] is a lot of it is somewhat public, right? So you can look up information on which companies might be doing well. So for example, I'll just pick like if you're looking for great email marketing folks like CRM marketing lead or something like that, you can actually look up on similar web, what percentage of traffic shows up via email to companies websites. So you've got your target list of companies that are one or two stage beyond you that you respect as general companies. And you can go and see, okay, which ones of these are actually really effective at driving web traffic or app traffic or app downloads via their email. And then go try to source from those teams and companies. And I think people under-utilize that even though it's very intuitive, it's just not something that occurs to people to do.

**Lenny** (01:03:03):
I love that. I've not heard that tip right there. The first piece, Google definitely recommends this, and I think the core part of that is the core theme here is find the companies that are the best at the thing you're trying to hire for, and then figure out who at the company is the best once you start talking to people. I love it. Another strong opinion that I think you have is around paying people and how much to pay the best. Can you talk about that?

**Sri Batchu** (01:03:30):
Yeah, I think there's a lot of conversation around compensation is very much focused on equality and narrowing the gap and bands for compensation. And I think personally, I know it's a bit of a spicy take maybe, but I think it's the exact opposite direction of the conversation that companies should be having about compensation, which is I strongly, strongly believe that small teams of successful people can drive a lot more impact than larger teams of mediocre people.

**Sri Batchu** (01:04:05):
And so I strongly believe you have to design a system where you're able to reward 10X operators with 10X the comp. You certainly see that at the executive level. So if you look at the same executive at different companies at similar stages, the comp can be widely different based for a variety of reasons. But one of them is the perception of performance and potential by the management team. And I think people need to be thinking about how to do that across more levels, which is if you can do that, and if you do that well, I think you're able to differentially hire and retain the best talent. And that'll be a great competitive advantage for companies that can do that well.

**Lenny** (01:04:48):
And do you think about this within a team pay the best people the most, or is it more only hire these 10X people and then pay everyone the most?

**Sri Batchu** (01:04:58):
People think of the talent density of your company as dependent on hiring. And that's obviously true. It's an important part of the ecosystem and the first part, but it's equally dependent on retention and performance management. A lot of companies can be good at hiring, but hiring has pretty high rate of false positive. Interview is the worst, best way to hire somebody. And then there's lots of ways you can make the interviewing process better, make it more interactive, make it more effective, but at the end of the day, you still don't know about someone until you really work closely with the new team, with the new mandate at your company.

**Sri Batchu** (01:05:40):
So I think it's not about necessarily hiring [inaudible 01:05:44] operators, obviously you're looking for that, but it's also about investing in people that are doing really well and accelerating their growth and rewards based on impact once they're there and as well as managing out people directly that didn't work out. And I typically think it's almost never when I've had to part ways with people is because someone's a bad actor. It's almost always that it just wasn't the right fit for whatever reason, for their skillset, for their life goals or whatever it may be. And it just wasn't a fit for that role. And I think a lot of companies are hesitant to make those changes, and I think that's how they bring their talent bar down, frankly.

**Lenny** (01:06:28):
Absolutely agree. Sri, is there anything else that you wanted to touch on before we get to our very exciting lightning round?

**Sri Batchu** (01:06:35):
I don't know how many people will use this. I'm still surprised when new folks come to me and it's like I need to write, by the way, a document of how do you work with me? Because I know it's a lot of people have been talking about, I think [inaudible 01:06:51] Johnson's talked about it too, but I say that my love languages are spreadsheets and frameworks. And one very simple one that I've always liked that sometimes people surprised to hear, but it's most consultants know is what we call MECE, mutually exclusive, collectively exhausted set of things. So whenever you're trying to attack a problem and trying to brainstorm solutions or what have you, I really like to remind the teams to think about MECE because when you think about that and evaluate your set of solutions with that framework in mind, I think you tend to find that you've catch more potential solutions and also you'll feel comfortable that you've been comprehensive in your solution development. So anyway, just a little thing for people that are earlier in their careers to not forget.

**Lenny** (01:07:46):
So let's make it a little bigger than a little thing. So MECE, mutually exclusive, collectively exhaustive. Is there an example of what that may look like and or visualize for people to think about what this means in practice?

**Sri Batchu** (01:08:00):
Yeah. I mean, I'll give it really dumb example, but that will make the point hopefully. It's like, okay, our profitability or our revenue growth has slowed down is the problem that you're trying to solve. And so okay, you start with, okay, what does this mean? You've got revenue per user has gone down, or customer has gone down, or number of customers have slowed down. Okay, that's step one of the MECE framework. Then it's like, okay, where does the revenue come from? What are all the various products that revenue could be coming from? Has it changed on any one of them? And then customers, why have customers gone down? Is it new customer acquisition? Is it activation of customers that have signed up? Is it retention? And just breaking that problem. So at each layer you've collectively exhausted all of the possible ways that this problem could have arrived. And just having that framework whenever you approach every problem will prevent you from missing something important. And also just more generally give you an others' confidence that you're being comprehensive in your solution development.

**Lenny** (01:09:11):
Got it. So one way to think about this in this specific case is just make a formula of all of the variables that play into the question you're trying to answer.

**Sri Batchu** (01:09:19):
Yeah, exactly.

**Lenny** (01:09:20):
Awesome. Well, Sri, with that, we've reached our very exciting lightning round. Are you ready?

**Sri Batchu** (01:09:26):
Yeah, let's do it.

**Lenny** (01:09:28):
What are two or three books that you've recommended most to other people?

**Sri Batchu** (01:09:32):
I tend to find most business books can be decks, but one that I really like actually is Never Split The Difference by Chris Voss. It's a negotiation book, find it super helpful for negotiation, but also for a lot of business decision making generally, to be honest, and life. And then I'm a big fan of sci-fi short stories, so anything by Ted Chiang or Ken Liu, I highly recommend.

**Lenny** (01:09:57):
I love those both. On the first one I'm actually in the process of listening to it on audio and every time I'm in a place where I can negotiate something, I never remember anything that I've learned. Is there one thing that you've taken away from that book that stuck with you of like I use this?

**Sri Batchu** (01:10:11):
I think that the core of the book really is about listening behind the problem of negotiation and what is the person really asking for. So his example of if you're always trying to split things evenly, you'll end up with one brown shoe, one black shoe, where neither of you are happy. And so rather than thinking about BATNA and ZOPA and all the other business school frameworks on negotiation, I think focus on deep down what does this other person want and how can I change the conversation about that rather than the thing that we're arguing over.

**Lenny** (01:10:47):
Awesome. Great. Next question. What's a favorite recent movie or TV show?

**Sri Batchu** (01:10:51):
I mean, obviously it won the Oscar, but I really enjoyed Everything Everywhere All at Once. I thought it was such a wonderful story and really I think it's one of those... It's funny. The movie can also be, I think, everything because there are just so many different reads that you can get about that. It's about family, it's about immigration, it's about love. There's a lot of really interesting themes explored via one movie.

**Lenny** (01:11:19):
What's a favorite interview question you like to ask?

**Sri Batchu** (01:11:21):
I was going to say, oh, I like to ask other people.

**Lenny** (01:11:24):
You like to ask. What did you think I was going to ask?

**Sri Batchu** (01:11:26):
Oh, I thought what was my favorite interview question that you've asked or others have asked?

**Lenny** (01:11:30):
Oh, I got to clarify this. Both are acceptable answers.

**Sri Batchu** (01:11:37):
I was going to cheat on that one and say the one that you asked me right before, because I'm a big fan of actually movies and TV shows and people rarely ask about that interviews like this, but favorite interview that I'd like to ask candidates actually is what's something that you're really bad at but you still do and why?

**Lenny** (01:11:58):
What do you look for in their answer when you ask them?

**Sri Batchu** (01:12:01):
Yeah, a lot of people actually struggle with that question and can't answer anything that they do that they're bad at, which is a little bit of a yellow flag, which means that they're only used to doing things that they're successful at and they haven't cultivated interests that are not correlated to their own success at doing something. And they haven't taken the time to do that. And folks like that are going to run at the first sign of trouble and be like, "Oh, I'm not successful at this, so I'm going to move on." And what I really want to see is people that show examples of things that they're not successful at that they do for other motivations and goals and interests. And so if you can tell me a compelling story like that, it's usually a winning answer so to speak.

**Lenny** (01:12:43):
What is a favorite product or two that you've recently discovered that you love?

**Sri Batchu** (01:12:46):
Carrie mentioned Eight Sleep once in this call. I love my Eight Sleep. I'm a big fan and they're Ramp customers as well. And so that's been a great pandemic purchase. So I guess maybe not as recent. And then maybe another one is Fellow coffee, their kettles I think just designed so beautifully. I don't drink coffee, I drink tea, but I use my Fellow kettle for tea, and I think it's just a delightful product to use.

**Lenny** (01:13:15):
I got a Fellow kettle from my tea also, and I found that the flow of the water was too slow and it's just standing here pouring this pour over.

**Sri Batchu** (01:13:24):
Yeah. Yeah. So they do have a non-pour over kettle, which is what I have, which makes it easier.

**Lenny** (01:13:29):
Okay. My mistake. Next question. What is something relatively minor you've changed in your product development process that you found to have a big impact on your ability to execute?

**Sri Batchu** (01:13:42):
Yeah, I mean, I don't know if this is minor or not, but one of the things that on the growth side, we used to have separate sprint planning for the product team, for the marketing teams, and each team had their own planning cycles. And one of the things that we did is we brought them all together into one. So the lifecycle marketers joined the product activation team sprint cycles, and so their projects and work are very tightly aligned and work in the same pace and system as the rest of the product team. And that's had tremendous impact in our ability to work together.

**Lenny** (01:14:19):
Final question, Ramp is all about helping people save money. I'm curious if you have any tips on just saving money.

**Sri Batchu** (01:14:26):
I mean, it seems obvious, and I think I feel like negotiation's already been the theme of this lightning round, but everything is negotiable when it comes to contracts. People think contracts are standardized for software and usually not. People are trying to sell you something they're trying to grow too. They have their quotas to meet, they have their goals to hit. So I mean, Ramp obviously has a service for this if you wanted to scale these Ramps, but you can do this on your own. Always try to negotiate, be mindful of quarter ends for salespeople. And so if you can push something out till near the end of the quarter, you can ask for, "Hey, I'll sign it by the end of the month if you give me a 10% discount," will often work. So there's tips like that you can do, but remember that you can always negotiate.

**Sri Batchu** (01:15:10):
And then the second one is, I would say is just hire slower. I'm a big believer in, and Geoff talks about this too in your other interview, hiring based on slope rather than intercept, I think will work well for you and only hiring when people and teams are really stretched. I think this will serve you well both on cost and on impact. There'll be plenty of scope for the people that you hire, and as I said, I'm a big believer in small teams accomplishing more like Ramp being like a fraction of the size of some of our competitors with similar orders of revenue.

**Lenny** (01:15:47):
Sure. We've covered velocity, growth, hiring. So many topics, everything I was hoping we touch on. Two final questions, where can folks find you if they want to reach out and learn more and how can listeners be useful to you?

**Sri Batchu** (01:15:59):
Yeah, I'm a big fan of the fun place of the cesspool of Twitter, so I have a public Twitter account that you can DM me. My DMs are open, it's just my name's sri_batchu. And in terms of listeners can be useful, honestly, I think I really enjoy meeting like-minded folks, and as I may have mentioned in other places, Ramp is growing incredibly well and we're constantly looking to hire and we're still hiring. So if you know best in class growth in marketing folks that they can recommend that we hire at Ramp, I'd love to hear.

**Lenny** (01:16:40):
And I think the URL is ramp.com/careers. I just pulled it up.

**Sri Batchu** (01:16:43):
Yep, that's it. Thank you.

**Lenny** (01:16:47):
All right, Sri, well thank you again so much for being here and for sharing so much.

**Sri Batchu** (01:16:49):
Yeah, of course. Thank you.

**Lenny** (01:16:52):
Bye, everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

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