---
title: "Lenny's Podcast — 2023 Q3 合集"
date: "2023-01-01"
source: "Lenny's Podcast"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Podcast - 2023 Q3 (20 episodes)

This file contains 20 articles/episodes.

---

## [1/20] Building minimum lovable products, stories from WeWork and Airbnb, and thriving as a PM | Jiaona Zhang (Webflow, WeWork, Airbnb, Dropbox)

**Jiaona Zhang** (00:00:00):
I think it's really important to become really good at and also known for something. You could be known for shepherding like the most complex launches because you're just so good at quarterbacking. Working with go-to--market teams and cross-functional stakeholders that could be like your thing. You could be known for working on the most technically complex problems, find something that you can be really, really good at. And the reason I give that advice is because when you do that, you can crush the projects that you get because you're making a name for yourself, reputation, and then you are giving more responsibility. People tend to flock and give responsibility to the people that are known for being excellent at something.

**Lenny** (00:00:43):
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 JZ. JZ is senior vice president of product at Webflow. She's also a lecture at Stanford, teaching a course on product management. Before this, she was senior director of product management at WeWork, a longtime product leader at Airbnb, where I got to work with JZ for a number of years and she's also PM at Dropbox and at a gaming company called Pocket Gems.

**Lenny** (00:01:12):
In her conversation, we dig into the most common mistakes early product managers make in their career. Plus JZ's biggest product mistake. We cover the concept of minimal lovable products versus minimal viable products. We talk about JZ's unique frameworks for road mapping and prioritization and OKRs and her take on how to structure your first 90 days as a product leader at a new company, plus what she's learned from her wild year at WeWork. Also, the best advice she's ever gotten around product and leadership and the story of Airbnb Plus and where it went wrong.

**Jiaona Zhang** (00:04:24):
Thanks for having me. I'm so excited to be here.

**Lenny** (00:04:26):
It's 100% my pleasure. Amongst your many accomplishments, you teach product management at Stanford, which sounds very fancy. How long have you been doing this at this point?

**Jiaona Zhang** (00:04:37):
I think six years. Yeah.

**Lenny** (00:04:40):
Okay. So my question, the real question I want to ask about this is, in that time you've seen a lot of new PMs and you've seen these PMs succeed, you've seen some fail. What are the most common mistakes that you find new PMs make in this experience of helping new PMs get into the field?

**Jiaona Zhang** (00:04:56):
I think something that is really hard to untrain, but I think every human does it, is you jump to solutions. And so one of the biggest things I see, not just in my course but also just as a PM and some of the mistakes that you make as a PM is the idea of you get really attached to a solution, a way of implementing something that you can see in your head that you want to build.

**Jiaona Zhang** (00:05:16):
And so that's the first thing I really want to unteach in our course. And so a lot of people will literally come in, they'll be like, "I want to build X startup" or "I want to do this thing," or "I'm in blank school and I've been doing a lot of research on this particular area." And so untraining that and being like, "Hey, we're going to go out there. We are not going to think at all about the thing that you want to build, but instead we're going to be focused on users and people in the real world and their problems. And the first step is to understand their problems and then understand if there's an opportunity here as opposed to, 'Hey, you want to build X thing for Y person.'" So that's the biggest mistake that you really have to unteach and retrain thinking around.

**Lenny** (00:05:55):
Does a lot of this come from people want to get into product management because they think "Finally I'll have the power, finally I'll be able to tell people what to build, finally my ideas really going to matter?" Is that where a lot lobby comes from?

**Jiaona Zhang** (00:06:06):
I think there's a part of that. One of the first things I teach is you're not a CEO, you're, you're not here... You actually have very little true authority because you don't actually manage anyone. A lot of it is all through influence, and so that is also a piece where you have to kind of untrain that thinking. I do think a lot of people come into the product role thinking that I get to call the shots, I get to make the decisions, I get to decide what gets built. And really your job is not that. Your job is to understand here are the opportunities, and then you're kind of pulling together all the different possibilities and you're really editing. So I do think it comes from desire for a lot of people thinking that's what the product role is when it actually isn't.

**Lenny** (00:06:44):
So let's go to the other side of this question. We talked about what mistakes new PMs make. I'm curious, what's the biggest product mistake that you've made?

**Jiaona Zhang** (00:06:53):
Wow, that's a good one. It's so interesting. I feel like as product people, we're always making mistakes and we're always learning. Maybe I'll give an example from Airbnb since you and I were both there. And this one does stand out to me, we were working on this concept called Airbnb Plus. If you took a step back, what we were really trying to do is to be like, "Hey, not everyone trusts Airbnb in terms of... It's a platform. It's not like it's managed inventory, it's not a hotel. How do you go in and really make sure that all the Airbnbs are meeting the quality bar?" But I do think we were very solution-first, and I think we're also competitor afraid at the time. So it was during a time where there were managed marketplaces, there were the Sonders out there, and I think that as a company we're very much like "[inaudible 00:07:36] what are we going to do in the world of managed marketplaces?"

**Jiaona Zhang** (00:07:38):
And so we went really hard down the solution space. We essentially were like, "Let's go inspect our inventory, let's actually try to manage our inventory more." And really what we should have done is taken a step back and be like, "What's the real problem? The real problem is people want to know what they're getting themselves into. We need to represent the homes a lot better." And I think the other piece here that's really important is, what, as a company is your strategic strength and what's in your wheelhouse? So for example, Airbnb, we weren't that strong in operations. Again, we're this platform with this marketplace. And so if you don't have that muscle and then you're asking the company, the teams to essentially build it from the ground up, that's really, really difficult. Not to mention the unit economics, are the unit economics actually going to work even as you scale?

**Lenny** (00:08:22):
Yeah, I feel like Airbnb Plus is an untold story that somebody should tell and that could be its own podcast, I guess.

**Jiaona Zhang** (00:08:28):
You and I can tell it.

**Lenny** (00:08:30):
We could tell this could be Airbnb Plus The Hidden Story. As you said, the problem it was trying to solve was people don't really trust... They don't want to even consider Airbnb because it's like, "No, I don't want to stay in someone's home. I don't know what it'll be. It's unpredictable." And so as an outsider, it felt like a really clever approach. "We're going to vet them, we're going to make sure they're awesome. There's a minimum bar." And I guess this is the question is do you think it was just like "This is never possible because we'll never make money as a business doing this because we don't make that much per booking and investing time, resources, sending people pillows, all that stuff is ever going to be economical"? Or do you think there was a path that was just not executed well?

**Jiaona Zhang** (00:09:10):
I think there wasn't really a clear path. I think there was less of-

**Lenny** (00:09:10):
Yeah, that's my impression.

**Jiaona Zhang** (00:09:15):
Exactly. And it was more just like if you understood... Again, this is what my point around unit economics, there are things where I think you have magical thinking around unit economics. You're like, "When we get to the scale of X, it's all going to work out. We can make these things happen." I think you actually need to really make sure that unit economics work quite at the beginning. That is definitely one lesson. And I think the other thing is, and going back to spirit of what are you trying to achieve. If you're trying to achieve this idea of really knowing the quality of the place, and for a platform like Airbnb, the right way to go about doing is through our reviews, through our guest reviews, which are essentially free as opposed to literally sending out inspectors.

**Jiaona Zhang** (00:09:51):
And I think that the other things are if you can get signal on what are the things around quality that people care about, is it cleaning? Is it, "Hey, I'm locked out"? And I think that there are other solutions besides inspection that then get at that. So for example, it is actually cheaper to go send everyone a lockbox than to deploy an inspector and go look at your property. It is actually cheaper to maybe do a partnership with a bunch of cleaners in different local areas and then get that as part of the fee, as opposed to doing the inspection. So again, it's really about what are you really trying to achieve? What is the user problem in each of these areas and can you target that problem with the particular listing that you're looking at?

**Jiaona Zhang** (00:10:33):
And so I personally don't believe the unit economics ever would've really worked out. I think we should have known that or we should have dug into that more at the very beginning and then to get very tailored instead of one blunt instrument to solve it all, "Hey, we're going to go inspect." It's like what is the problem for this listing and what's the best solution to fix that problem?

**Lenny** (00:10:51):
There's a couple things that I think are important product leadership lessons here. One is Airbnb and Brian and many great leaders are famous for imagining the ideal situation, imagining the great end result and then working backwards. And often that leads to great results when you're being really ambitious and "I don't know how we're going to get there, we're just going to shoot big and hopefully we figure it out." Sometimes it works out. In this case it didn't work out. And what you're finding, maybe you even knew this early on, is just like there's no possible world where this could have worked in this approach. Is there anything you've learned about just when to think big and not even like "Forget it. We're going to figure it out. I know this seems impossible, but we're just going to try it anyway"? Do you have any kind of framework of when to think big, then just go for it? Versus, "Oh, let's just work out the math today," is this ever possible?

**Jiaona Zhang** (00:11:42):
I think it's really important for every company to be dreaming big. If you don't have a big vision, it's really hard for you to innovate, but you got to couple that really big vision with thoughtfulness around your execution. And so I think that one of the biggest tips I have is how do to be clear about the phase that you're in? So I think it's totally fine to be like, "Hey, we are going to try X for six months, three months, whatever it is, and we're explicitly going to go learn these types of things. We're going to learn why are people? Are there signals that we would that would indicate that again, the communication with host isn't great or this type of listing, if it's hosted by a person with multiple property?" I think there are factors we can be like, "Hey, we can learn this very explicit thing in a given period of time."

**Jiaona Zhang** (00:12:32):
And you can do what I call unscalable things in that prototyping phase, in that early phase to go learn those lessons. But you just have to be very, very clear with your team on what phase you're in. "Hey, we're in the learning phase and we explicitly are trying to learn these things" versus, "Hey, we have this really big vision and we're just going to go at it." That is not recommended in my mind. It's breaking it down into these smaller chunks. That I think gets you the balance of thinking really, really big, but also being able to be like, "Okay, we are still going to be able to say, 'Okay, this path is not going to work out. We ran at it for a short period of time. We got these learnings, now let's go down this other path.'"

**Lenny** (00:13:11):
Yeah, there's also some cost fallacy that kicks in of just like, "Oh, I spend so much time and money and resources on this thing. Let's just go a little bit longer. Let's just see if we give it another quarter, maybe it'll work out."

**Jiaona Zhang** (00:13:21):
You should articulate what success looks like and the milestones you want to hit in the small intervals that I talked about. So you don't get into this world where you're like, "Hey, I've gone for two years investing in this thing. Now we got to cut it." It's like, what is the quarter long milestone? Okay, what's the next quarter long milestone? And every single point, what is a go and no-go? And I think that really can help a team and a company say "It's okay. I invested a quarter in it, but I didn't invest two years."

**Lenny** (00:13:46):
The other important lesson here is about the importance of as a product leader pushing back and convincing leadership that you are wrong and this shouldn't happen. I remember talking to one of our colleagues, Mike Lewis, who was leading a different team with Airbnb, and he was just like, "Oh, I realized I'm the person that should be saying, 'No, we shouldn't do this now'" because he was the head of product for one of the new [inaudible 00:14:09]. And I know maybe in that situation it was impossible because Brian was very into this and everyone was like, "We need to do this thing."

**Lenny** (00:14:18):
I guess is there anything you've learned about how to push back on these sorts of things that the founder's really into when it makes sense to go along? Like "Cool, let's do it. Let's buy in." As a leader, you have to be excited and he needs to feel like, "Oh, JZ is really excited about this too. We got to try it." Even though maybe you feel like it's not going to work out. So I guess the question is when do you think it makes sense to try convince the founder, "No, this is the bad idea" versus like "Let's go for it"?

**Jiaona Zhang** (00:14:42):
I think first it comes down to your conviction. Do you actually have conviction that this is a bad idea or are you personally still learning? Right. I think if you're at the point, if you're like, "I have total conviction," then your job is to say, no, you really... If you do not, you're not doing your job. And then the question is what are the tips in how to convince someone who's very bought into an idea that that's not the right idea? And there what I would say is it's understanding the spirit of what they're trying to achieve. Being able to go back with, "Hey, I understand the spirit. The spirit is that we're trying to get people who previously didn't consider Airbnb before to come and use Airbnb, but the right way to do it is not this very time-intensive, cost-intensive way to inspect all these homes. The way to do it is to be much more granular in what we ask people when they upload their home and more checks in that. And that could be automated and through technology as opposed to through humans."

**Jiaona Zhang** (00:15:37):
It's coming back with actual options. It's like saying... And I think we did that a little bit to be honest, when we as a team evolve, we learn and we're like, "This isn't going to work." And I explicitly moved off the team and I was like, "I'm going to work on the review system. I'm going to continue to evolve this and make it better because that is the actual scalable way to do this as opposed to keep going at it in the very manual process."

**Jiaona Zhang** (00:15:59):
And so I think that the biggest tip I would have for people in this situation is really understand whether it's the founder or your manager or whoever it is, what is it that they're trying to accomplish for the user and for the business? Remind them of that, get aligned on that. And then come back with better options. A lot of these people, they're very smart and they're very motivated. They ultimately want to just do the right thing for their users. When you come back with a much better solution and you have the data and you have the thinking behind it's very rare that someone will be like, "I still want to go after this solution despite the fact that it's not working and you proposed a much better path forward."

**Lenny** (00:16:37):
And I think to touch on what you've already said is also make sure it's actually... There's a world where this could work. Do some math to figure out if this is a business that will actually make some money in the future.

**Jiaona Zhang** (00:16:49):
Totally.

**Lenny** (00:16:50):
Okay. I'm going to bounce around a little bit. I have a bunch of different questions around different topics. You popularized this concept of minimal lovable product versus this idea that everyone always comes back to, which is minimal viable product. Can you just talk about what is a minimal lovable product and then when does it make sense to go in that direction versus a traditional MVP?

**Jiaona Zhang** (00:17:10):
The reason I care so much about minimal lovable product is because I do think in a world where there are so many different options, it's hard to just feel like, "Hey, use this thing. It barely meets a quality bar." And so I think this idea of actually deeply understanding for the thing that you're working on, what is a lovable experience? What is the quality bar that resonates with your users? And again, especially in a world where there might be a lot of different options. Minimal lovable products is the new MVP. The new minimal viable product.

**Jiaona Zhang** (00:17:40):
So I think that's the real point, but at the end of the day, it does come back to what are the options that a user has and what are they trying to do? So there's a world where your quality bar, your "Quality bar," or let's call it your polished bar, can be a little bit lower because the reality is the thing that you're "Competing against" or you're replacing is literally a manual workflow. It's like spreadsheets. It's doing something in a super terrible way.

**Jiaona Zhang** (00:18:05):
So you want to get your product to market as quickly as possible, so it doesn't make sense for you to be like, "I'm going to build these 15 additional features." Because compared to what people are doing right now, your product without those 15 additional features is perfectly fine, perfectly usable, and perfectly quite honestly lovable. So it requires a lot of understanding of, again, your users and the space that you play in and the tolerance of your given user. So for example, a designer might have a lot higher of a bar of like "This is the kind of workflow I want, this is the kind of bar for my product." But again, someone sitting on the finance team or the IT team, their bar might be like, "Oh, I'm used to doing these 15 things and so your thing is just a lot better."

**Lenny** (00:18:53):
I'd love to go even one level deeper. Is there an example of something you've worked on that was minimal lovable product that you think about? Or is there something out there that's an example of here's maybe an example of a minimal lovable product versus MVP?

**Jiaona Zhang** (00:19:08):
Again, it's very hard. I think every product team, every product person struggles with this idea of what is the minimal viable. Even that concept itself is difficult and not to mention minimal lovable. I'll give a Webflow example. Very recently, so have been investing in a couple of new features, memberships and logic, new functionality for our users. And what we realized at the end of the day after investing in these areas, we were like, "Hey, we can get to minimal viable, but we don't know if we can actually get to minimal lovable in a way that our users really, really want. And so does it make sense for us to continue to go down this path of continues to chip away to get to minimal lovable when we are maybe hitting diminishing returns for our user base? Or does it actually make sense to release what we have but then encourage our ecosystem to contribute the lovable piece?"

**Jiaona Zhang** (00:19:56):
And again, it's not just like you put it out there and you hope, you have to have a very strong point of view of are we at minimal viable, are we at minimal lovable? Where in between are we? And so having that point of view and then being able to say, "Are we going to be able to meet it as a company? Are we going to rely on our ecosystem to help us meet it? What are we actually going to do?" And then even within the feature set, it's very much a how do we do some things well as opposed to do a little bit of everything? I think that is a big piece of minimal lovable, which is again... To me it's better to do five things instead of the 15 things in a really, really great way with a high degree of polish with a, "Oh, this really meets my need," versus trying to do everything and just doing a little bit of everything. And so every part of the experience feels a little bit clunky. It's not quite there.

**Jiaona Zhang** (00:20:45):
People I think would actually respect this idea of "You've given me minimal lovable in five areas as opposed to minimal viable in 15 areas."

**Lenny** (00:20:53):
Is there anything you've seen of just that makes something lovable? I don't know. I know it's not easy to define, but what are things you've seen that makes something lovable? Is it delightful features? Or is it what you're saying, which is just things are actually good, there's fewer things, but they're each really good?

**Jiaona Zhang** (00:21:08):
There's definitely this idea of the thing is just good. It has all. High quality, it's not janky, it doesn't feel weird. I'll give you a very small example again, just from Webflow, this idea of keyboard shortcuts, feels small, but that is a piece that creates a lot of love from user base who are power users. And then there's this concept of pixie dusts, and maybe I'll pull out of call it like design tool space and we'll talk about some of the other things, whether it's Dropbox or Airbnb, but you can just do a little bit of that extra pixie dusts. So an example from Airbnb when we're doing the mobile app revamp where like "There's like these basic table stakes, but if we actually added in templates and we made it so that these templates could be maybe pre-populated in certain ways from the content they already have," that is lovable, that is that extra little bit of pixie dust and spending the time to do that.

**Jiaona Zhang** (00:21:55):
Again, you can't pixie dust everything. At the end of the day, you basically have your time, your staffing and the scope of your project and something has to give. And so at the end of the day, you can't just keep investing, keep investing because it's going to push out your launch timeline, but can you pick a few different areas where you're like, "I'm going to scatter that pixie dust, I'm going to do a little bit more than what users are expecting"? And that creates that lovability.

**Lenny** (00:22:20):
Shifting to a different topic, I know you have strong opinions about road mapping and OKRs, improvisation, and I know that's a big topic, but let me just ask, what's the most common advice you give around how to roadmap well, do OKRs, prioritize and/or just, I don't know, common mantras or things you always come back to be successful in these areas?

**Jiaona Zhang** (00:22:40):
Road mapping prioritization are one bucket for me. And then OKRs is another. So I'll maybe give you my biggest tip in each one of these buckets.

**Jiaona Zhang** (00:22:46):
So for road mapping, my biggest thing that I tell my teams is "You're telling a story. So what I want from you is I want themes, I want a story. Why are these things the biggest things to invest in these levers, the biggest ones to pull?" And what I really don't want, what I think is a very common mistake from road mapping is people thinking a spreadsheet with a bunch of projects, the RICE framework, everything has an impact, a cost and an effort column filled out. They think that is prioritization and that is a roadmap. If you just do that right and then you present that to your team, they're off to the races.

**Jiaona Zhang** (00:23:26):
But what people, what humans really crave is like, "Why am I doing this body of work?" And I think it's also really, really important to have that really crisply articulated in your own head because ultimately what happens is you'll learn things as a product person. You'll be like, "Oh, I assumed this in the narrative in my head about my users or about my product area, and then I learned why and therefore my thinking changed." So instead of it being this massive spreadsheet where you're going in, you're tweaking all the values, what is the story that you're telling about your roadmap that these inputs can then go and influence?

**Jiaona Zhang** (00:23:59):
It could be like, "Hey, I just realized I didn't know before that we have a lot more power users on our," or "Maybe we have a lot more non-technical users." That input changes my roadmap and changes my themes in a pretty dramatic way. So skating at that level is really, really critical, I think for a roadmap as opposed to going down to the really granular details of the how. So that's the biggest thing on road mapping, which is like tell a story. What are your themes? Make it so that your team can come up with the actual how and the projects and all the little details, but really create that scaffolding for them to know what's important.

**Lenny** (00:24:33):
Can I ask a follow-up question on that?

**Jiaona Zhang** (00:24:35):
Totally, yeah.

**Lenny** (00:24:36):
It's easy to visualize the roadmap of a spreadsheet to help people visualize what you're suggesting there. What does that actual artifact look like? Is it a doc with maybe an ancillary spreadsheet of the actual prioritization? Is it a deck? How do you actually deliver this to you with like "JZ, here's our proposal for our team"?

**Jiaona Zhang** (00:24:55):
Yeah, I'm a big fan of docs and decks are obviously helpful if you're talking live, but I do think in a remote-first culture or lots of us are in hybrid remote cultures it's hard because decks typically require a voiceover. And so we have been doing a big push even on my teams where I'm like, "Write it down and document. Force yourself to write the pros because when you write the pros, you can actually add that level of granularity." So very much so the same way like "I'm a roadmap is a story. You're telling themes, you write a story in a notebook, you write a story on pages," and so a doc is definitely preferred. And even in the doc just being like, "Here's what we're trying to achieve, here are the big areas I want to invest in, here are my big themes." And then going into each of those themes and being like, "These are the big projects."

**Jiaona Zhang** (00:25:40):
And then linking out, again, not even to a spreadsheet, but linking out to the artifacts and the systems that your team actually uses. So if your team uses Jira, go ahead and link out to Jira because so often docs get out of... Or spreadsheets get out of date, because they're like a snapshot of whatever it is that you needed at that point in time. But instead you link out to the actual things that your teams are working out of, you can always be like, "These are the themes. I will edit these if I learn major things that would change my themes. And then let's go link out to the Jira where you can just see the snapshot of the roadmap at any given point in time."

**Lenny** (00:26:12):
Do you have a template or common structure you suggest to teams for laying out this story or is it just depends on the quarter, it depends on the year?

**Jiaona Zhang** (00:26:21):
I'll give a plug for a new thing coming out of Reforge, which is this concept of artifacts. And so we do have a lot of artifacts out there, so what's our general product development process? What are our templates for our specs? What are our templates for some of these things that we're talking about, a roadmap, like a broader roadmap instead of just a feature spec. So yes, we have a ton of those artifacts, are always evolving. I think every team takes it and tweaks it a little bit, but I'm a big believer of bringing those artifacts back and then sharing them across the team. And so product operations is also a function that we've invested in because it just really greases the wheels, gets all of our teams speaking the same language.

**Lenny** (00:26:57):
Awesome.

**Jiaona Zhang** (00:28:18):
There's so many parts to it, but I'll pick one. And there are many frameworks even beyond the one, but let's pick one for your question, which is I think it's really important to become really good at and also known for something. And what I mean by that is when you're known in your company for a particular thing.... I'll give you a couple examples. You could be known for shepherding the most complex launches because you're just so good at quarterbacking, working with go-to market teams and cross-functional stakeholders, that could be your thing. You could be known for working on the most technically complex problems. You could be known for working on things that are really regulatory complex. Find something that you can be really, really good at. And the reason I give that advice is because when you do that, you can crush the projects that you get. Because you're making a name for yourself, reputation, and then you are giving more responsibility. People tend to flock and give responsibility to the people that are known for being excellent at something.

**Lenny** (00:29:16):
Is there something you were known to be excellent at in the course of your career?

**Jiaona Zhang** (00:29:20):
I would say early on in my career, it was actually the fact that I had a strong analytics background. And so when I joined gaming, I came from consulting, I didn't have any CS background or design background, and so it was really creating a reputation around being very analytical, around being able to analyze the datasets of my game and then make decisions. I also learned as I was doing that I was actually really good at execution, and so being able to keep a lot of plates spinning and working on the largest studio and managing all the complex pieces of that, that was what I discovered. I didn't know this, but I discovered as I started working in the role.

**Jiaona Zhang** (00:29:58):
And so that was something I brought to Dropbox. When I joined Dropbox. It was like I knew that I could work with a lot of different teams and make sure that we hit a launch deadline, and so I would find myself trying to lean into that superpower and then when delivering upon that, getting more responsibility, "Hey, you just launched this really complex thing, this was a project that had to work across a lot of different platforms. We're using Griddle APIs." And it was a very, very small team and it had a very, very tight deadline.

**Jiaona Zhang** (00:30:29):
So when you're like, "I can do something like this," you end up getting more responsibility because people were like, "Oh, she was able to do something that was really hard with a small team," and so that's how you get more responsibility. But it has evolved in my career. I think that at the beginning of your career, you do want to lean into some of these pieces. It makes sense, but also even when you start to manage, it shifts dramatically. Being known as the best executor is not necessarily the thing that gives you and your team the most responsibility. So as I've grown my career, whether it's at Airbnb or WeWork or other places I flex into maybe a different... It's like taking your core strength but then flexing it and finding different ways to bring it to life.

**Lenny** (00:31:09):
Much of what I just heard is you just worked incredibly hard and just got shit done. And I think that's very, very important and often leads to a lot of success.

**Jiaona Zhang** (00:31:20):
PMs have to get shit done. Yeah, ultimately you're responsible for the outcome just no matter what happens.

**Lenny** (00:31:26):
Yeah. I like that. Be known for getting shit done and working really hard, and that's never going to serve you badly. I think that is just lasting advice for being successful as a PM. I realized that we were talking about your tips on prioritization, road mapping and then OKRs, and then I shifted topics and you never got to the OKR bucket. So let me come back to that.

**Jiaona Zhang** (00:31:47):
Yes. My biggest tip on OKRs is actually get really, really crisp on qualitatively. What would make you say "Yes, we did a great job"? And the reason I pushed so hard on that is because I see so many teams get really mucked down by OKRs. They're like, "Oh man, if I don't hit my OKR, I feel like I'm going to have a really bad reputation, or maybe I won't get promoted." You just get all this fear around OKRs. And so you see people, you see people sandbagging, you see people being hesitant to put in numbers until the very last second until they're super, super confident. And that results in ultimately a failure for your company to innovate and move quickly.

**Jiaona Zhang** (00:32:29):
And so what I really push on for OKRs is are you actually... What's the spirit... I think I asked this question maybe too much to my team, but what is the spirit of what you're trying to achieve and what would make you say, 'I really, really crushed it this past quarter'? And so it's less about I would rather have all the OKRs be red or yellow and we missed everything and we learned around why we missed it than everything to be green. In fact, when everything's green, you're like, "We definitely did not set ambitious enough OKRs." And so it really pushed a lot on what does it truly mean to crush it and be successful? What does it mean for our users? What does it mean for our business? What does that... For our users to feel X, can you describe that? Can you write that out? For our business to see this in terms of the revenue growth?

**Jiaona Zhang** (00:33:17):
And I think it's really hard because a lot of times, you get your data scientists, you get the PM themselves being like, "Oh man, I'm owning an input metric, not an output metric. And so I definitely can't sign up for that revenue target because I have an input metric." And all of those things are true, but if you don't do the homework of really drawing that line of being like, "This is the ultimate thing I want to do for the company and for my users," then a lot of times you end up hitting all your OKRs, but the company and your users at large are like, "I don't feel anything different." Your company doesn't look at the things that you've worked on and they don't say like "This is a smashing success." Your users are feeling no differently. And so that is the worst outcome in my head where your OKRs, you're almost like doing OKRs for the sake of OKRs, as opposed to letting them be a guide to delivering really great product to your end customer.

**Lenny** (00:34:09):
I like the idea of that, but imagine what often happens is you sign up for an ambitious OKR, you don't wait till the last second to commit to it and then ends up being red, and then you go into performance reviews and like, "Oh, Lenny didn't hit his OKRs. Look at this guy. His team is not doing great." How do you think about that as a product leader understanding if the team actually did well and the PM is performing well when they sign up for these really ambitious OKRs and their story's great and they're doing the right thing, but they fail?

**Jiaona Zhang** (00:34:37):
First of all, I think it's creating a culture where you are not punished for that. Because I definitely don't want a culture where it's like you took a risk and you failed and therefore your performance is impacted. I'd much rather people take risks than to be safe. So I think that's the first thing. That being said, you're also not doing a good job as a PM if you're like, "This is my super, super ambitious thing," and you're like, "I have no idea how to achieve it." Your job is to dream big and also have a plan to go tackle it. And so what I would expect the PM to be able to say is, "This is my North Star. I'm not going to be able to do that in a quarter, that just is unreasonable, but here are the five milestones," whatever number, some number of milestones "That it's going to take me to do quarter over quarter to achieve this really, really ambitious thing. And let me draw you that path. Here's the milestone all the way across, and this is the first one. This is why it's so meaningful."

**Jiaona Zhang** (00:35:24):
So I expect that combination where you're like, "I know where I'm going. It's really, really ambitious." And then you can then break it down. But again, I would much rather have someone shoot for the moon, even for someone to say like "This is the thing I really want to do. I don't know my path yet" than to be really, really safe. Because when you're safe, you're always going to be building something suboptimal. It's going to be suboptimal use of your resources as opposed to actually trying to figure out what the best swing that you can take is.

**Lenny** (00:35:50):
So it sounds like it comes back to the story of the roadmap and what they're trying to accomplish, and just as long as it feels like the story made sense, there's a path there. The team did their best, I think we know it was really ambitious. We kind of knew maybe they wouldn't get there. It sounds like that's kind of the thing you look for in a performance of the PM.

**Jiaona Zhang** (00:36:07):
Totally. Yeah.

**Lenny** (00:36:10):
Awesome. I mentioned WeWork and I want to spend a little time on WeWork. You were at WeWork for about a year, and I think it was in the middle of a lot of the craziness that went on at WeWork.

**Jiaona Zhang** (00:36:18):
It was. It was 2019, I feel like that year it was either headlines were either about Trump or about WeWork in the news.

**Lenny** (00:36:26):
That's tough. So what was that like being a PM leader at a company in that craziness? And is there a takeaway from that experience that helps you be a better product manager, a leader, person?

**Jiaona Zhang** (00:36:37):
Yeah, I learned a lot from my time there. I think the most important lesson I learned was really around... I think there's like a people leader management lesson, and then there's also just like a how do you build an org period. The people lesson I learned was just really around empathy. In fact, essentially what I was doing was I built a team. I spent the first six months of my time there actually growing my team a lot, and not just in the US but in Asia and in Europe. And then the second half of my time there was actually being like, "What do we do? If this is what's happening with WeWork, what are we actually going to do with all of these people who have come to WeWork to work?"

**Jiaona Zhang** (00:37:19):
And there was so many lessons there around leadership, around how do you think about people? How do you think about giving them the right transition plans? It was a lot of learning. And I think probably a lot of people, even right now through the macroeconomic downturn, they're learning that lesson in a really hard way. And so it was definitely something that I got a crash course on, I think early.

**Jiaona Zhang** (00:37:44):
And the second lesson really was around not over-hiring. And so I think that was huge, and I think I personally learned that lesson through my time there. And it's something that I'm very conscious of at any company that I go to. Just because laying off half your team is a terrible feeling. Literally having hired people and then having to let them go, it's not something you want to do. And so being really thoughtful around how do we not over-hire? How are we really clear about, again, these milestones of we got to get through these gates, we got to be able to show these types of results, and then we unlock hiring in X, Y, Z ways? That hygiene is really, really important.

**Lenny** (00:38:22):
Feels like this connects back to the Airbnb Plus story of "Let's just be really ambitious. We don't have any idea how we're going to get there, but we're just going to go for it, hire like crazy, scale, put a lot of investment in this thing and hopefully we'll figure it out."

**Jiaona Zhang** (00:38:34):
I do think there was a little bit of that in the ethos of how WeWork was functioning, for sure. I think that what was really important for us to do was to be like, "We have this." Operationally, WeWork is really strong. In fact, I went to WeWork because having been at Airbnb, I was like, "I don't feel like we've dialed this operational muscle down," but I know from what I've seen and the way WeWork has expanded, that they're really, really excellent at the operations. But I think it was, again, we hired beyond our skis on the tech side. It's like we don't need a team of this size to go do the things that are needed for the product to feel really great. At the end of the day, it's about booking. And yes, there's technology that would accelerate that, but do we need it to be super platform aware? Do we need it to be super futuristic? That's actually not what people care about.

**Jiaona Zhang** (00:39:19):
So this all goes back to what are people's core desires in whatever product that they're using, whatever thing that your business is trying to serve them? And so really understanding that will help you have a sense of, "Hey, you can still be really ambitious." Again, in a hybrid world, it's like why have real dedicated office space? Every company could go through WeWork as opposed to this dedicated space. That's still a really good idea, that's still a really big vision and a relevant vision, but what's the key piece of that vision? The key piece of that vision is around inventory, and then you make that inventory management easier. You make all of these things easier, but that's not a technology play in the same way as it is an operational play. So just really understanding, again, you can still dream really big, but you don't have to dream big and hire big in all the things in order to have a very ambitious vision that you deliver to the market.

**Lenny** (00:40:13):
If you think back to WeWork, what was your favorite memory and what was your hardest, least happy memory if anything comes to mind?

**Jiaona Zhang** (00:40:23):
I think this idea dream really big. I think everyone who had joined WeWork, they were like, "We could do a lot here." The idea of really the physical space infusing technology. I just feel like the people at WeWork were dreamers in the best possible way. So that definitely... I feel like for every company that I've been at, it's really about, you join... I personally joined for the product, but I stayed for the people you joined because you're like, "I want to work on this mission. This product is really motivating." And then you really stay for the people. And the people at We WeWork were really great. So that was definitely my favorite memory.

**Jiaona Zhang** (00:40:58):
I think the hardest memory was, this gets a little bit personal, but I was actually in my first trimester when we were going through all of these layoffs and I basically was faced with a choice. It was like, "Hey, do I stay at WeWork? I would be guaranteed maternity leave." I was going to be moved onto this other team that was definitely going to stay. "Do I do that or do I actually..." And I think there just a last piece of... The thing I was wrestling with is I hired a lot of these people and I felt really responsible for the fact that I convinced them to come to this company that now was going through a lot of change.

**Jiaona Zhang** (00:41:33):
And I specifically remember someone when I hired them, we had a long conversation about their visa and in my head I was like, "I just don't feel right. Again, laying someone off. That's only going to have so many days to be able to go find their new role." And so the hardest moment, I actually remember this very vividly, "Am I going to take this new role or am I going to put myself on a layoff list essentially and give the role to someone else on the team?" When I really think about it, yes, I was pregnant, but I would have more time and more freedom to go find my next thing versus someone who I brought to the company who was on a visa.

**Jiaona Zhang** (00:42:09):
That to me just really stood out and goes back to this concept around leadership is so much about empathy and people as much as it's about understanding your market, your customers, and the strategy of your product.

**Lenny** (00:42:24):
Damn. What convinced you eventually to take off and try something different?

**Jiaona Zhang** (00:42:31):
I made the call of, in that particular case, I'd give the role to someone else. And then once I made that call, I was like, "I got to go find something. I know that this is my last day, so I have to go find something." And it was really interesting because I actually... I went through an interview process. I was in my second trimester and then ultimately I chose to join Webflow and I joined when I was literally at the beginning of my third trimester. So I had exactly 90 days before my first son was born.

**Lenny** (00:43:01):
That's a great segue to the question I was going to ask is around your 90-day plan that I know you put a lot of thought into how to think about the first 90 days, but before we get there, the movie on WeWork with Jared Leto, how similar to reality was that brought?

**Jiaona Zhang** (00:43:16):
I actually have not watched it. Parent life, you don't have any time. And I do think there's... I feel like if you ask people at Uber, if they've watched some of the [inaudible 00:43:26] they're like, "It's not for me." Same way why I haven't watched Silicon Valley. You're like, "It's a little too close to home."

**Lenny** (00:43:35):
It was quite a great movie and I really enjoyed it. I'm curious how close it was to real life. Okay, so then back to the 90-day questions. So I know you spent a lot of time thinking about your first 90 days at Webflow, you're pregnant as you described, and you have a perspective on just how to think about the first 90 days when you join a company. Can you just share what you've learned there, what you recommend there?

**Jiaona Zhang** (00:43:55):
Yeah, I do think the first 90 days, depending on your role is very different. But maybe I'll just talk a little bit about the first 90 days as a head of product. Because you're like, "Whoa." Or even just as a leader, how do you go in, how do you really absorb all the information and get all the context you need and then affect change? And I think what was unique about my first 90 days is it was time bound. It was literally something where you're like, "Sure, I'd love to absorb information for many months, but I just don't have the luxury of the time" and so-

**Lenny** (00:44:21):
Because you're going to go on mat leave right after?

**Jiaona Zhang** (00:44:23):
Because yeah, essentially I was going to go on mat leave.

**Lenny** (00:44:25):
Got it.

**Jiaona Zhang** (00:44:25):
That's right. And so the biggest things that I thought a lot about for my first 90 days was at the end of the day, yes, you have to really... The most important thing for anyone's for assigning days is to build context and to build context well. But what I had to think about a lot was, "How do I quickly build context probably faster than I would be given the luxury any other time in my life?" And so I thought a lot about who do I speak to at the company? How do I create even just a calendar of speaking to people? Yes, my leadership team, but also across a bunch of functions and then across a bunch of levels. So it was really important for me to even start talking to some of the engineers from the team, some of the engineers who had been there for the longest time to really understand, what's hard about our tech stack? What's going on? What's hard about your day to day?

**Jiaona Zhang** (00:45:15):
And so I actually took time to really think about, "I want to speak to all of these types of people at the company." And I packed my first couple weeks with a lot of those meetings. And so I think that was one piece, which is like how do you build context as quickly as possible? And my tip there is again, it's not just with your peers, it's not even just with your team, but to really think across all the different functions and then think about where you're going to get the most amount of information in that particular function. I think that was one piece of it.

**Jiaona Zhang** (00:45:43):
The other piece was I was like, "I'm going to be out." I was only out for two months, but I was like, "That's still a long period of time in the life of a startup." And so what it was really important to me was like, I did not go out having just listened and like "Great, I have the context, I'll see you in two months." But it was really important for me to actually have a plan in place before I went out for my team.

**Jiaona Zhang** (00:46:03):
And so there were pieces where I was like, "I want to first, again, get that lay of the land. I want to have enough of a strategic, 'Hey, these things make sense. Keep going, keep executing.' 'These things don't make sense, let's identify what those things are and let's actually start to do research around these things so that when I do come back, we have a body of work that we can look at and be like, "Okay, this information, this data is making us choose to go down the path." Or "This is a go or no-go decision. We can make that decision now where we couldn't make that decision before."'"

**Jiaona Zhang** (00:46:34):
So that was another big piece, which is getting all the strategic pieces in place, having a plan laid out and explicitly articulating in that plan, "Keep moving. These are things that we got to do a lot more research on." And then assigning people like, "Hey, you're going to do this research and then we're going to come back and talk about it in the two months that I was out." And I also took the time, I actually... Funny story, I think I literally had a board meeting the day before I went in for a checkup, and then in the checkup they're like, "You're in labor." And it was really important for me to do that because I was like, "For the things that I'm seeing, for the gaps that I'm seeing. I want everyone to be aware. I don't want to just be with one founder. I want the whole leadership team. I want all the founders, I want the board. I want everyone to be aware that."

**Jiaona Zhang** (00:47:14):
For example, engineering hiring was really, really important. And I was communicating, "Hey, we are just not staffed in a way where we can deliver some of the ambitious things that we want to do." And so explicitly calling those things out and creating awareness around them and then asking other executives to step in and be accountable, those were big pieces of what I wanted to achieve in my first 90 days.

**Lenny** (00:47:34):
So I take notes on this. So the first is just get context, figure out who you need to talk to. Is there a tip there of just how many people? Because you could do this infinitely, meet everyone eventually. How many people did you end up maybe scheduling meetings with?

**Jiaona Zhang** (00:47:47):
Definitely everyone on my direct team and definitely everyone on the leadership team, so call it those two combined were maybe, I don't know, like 20 or so people, 25 people. But then it was really about finding the people in the other functions. And to me, for any given function, it was really getting a read from, again, that leader, but also someone closer to the actual work. And so you look at the functions, whether it's product marketing or engineering, whatever it was. Back then I didn't have designs, like design. And really getting a couple of data points for each one of those functions. So if you add that up, that probably was like 40 to 50 conversations. But again, if you're doing them back to back and you're really synthesizing, you're actually getting a really good picture of what's going on.

**Lenny** (00:48:35):
And then the second bucket was identify things that need to be shifted, changed, flagged. I imagine there's also an element of trust and building trust. Was that a part of this, of how you thought about it? Or do you feel like as a product leader coming in that's less essential versus say an new PM joining it? A team as an IC?

**Jiaona Zhang** (00:48:53):
Trust is so important. Trust is everything. As a PM, the trust that your cross-functional partners have in you, the trust that the CEO has is you... It's huge. Trust is everything. And maybe here, I'll even talk about some of the mistakes I made in the first 90 days. I think I was so much like, "I only have 90 days. I got to go, go, go. We got to go." I was almost pushing too hard. I was pushing too hard for change. I think that's the tricky part that every product leader, especially if they're coming into a new role, has to figure out how do I gain trust and then take that trust and then push for change as opposed to push for change too quickly before I have that trust?

**Jiaona Zhang** (00:49:33):
So again, it was a personal learning and I think part of it was really driven by the time-bound nature of it, but hopefully not everyone has only 90 days. So if you take that learning into mind, it's really thinking about your trust as a bank. It's like you're putting money into your bank and then at some point you're going to take money out, you're going to use that social capital, you're going to use that trust to go push for things, push for change, but you have to be thoughtful about how full your piggy bank is and you don't want to be spending when you don't have the trust in the bank.

**Lenny** (00:50:06):
What were signs maybe looking back that you didn't necessarily have the trust that you thought you did or you should have had?

**Jiaona Zhang** (00:50:13):
I think something, a product like Webflow is a very complex product and there are so many pieces to it. It's very difficult to learn the product in the first 90 days, especially if I was also prioritizing all these conversations with the team. And so I think that again, without the time constraint, what I would recommend is to be like, "Hey, every product leader has to take the time to really go deep on the product." Given the complexity of Webflow and given the time-bound nature of when I had to go out, and given the fact I really also wanted to build that social context around what is working and not working from a function working together? Not just what the product is. What I wasn't able to do was spend enough time with the product to be able to have all of that in my back pocket to be able to be like, "Oh, I know how this, this and this works because I've literally used it a bunch."

**Jiaona Zhang** (00:51:06):
So you had to choose. And in my head I was like, "I would much rather understand how the team is functioning together." And the reality is the team was comprised of a lot of people with a lot of deep product context. So ultimately as all things in product, you know this Lenny, everything's a trade off. And so it's a trade off. And so you had to make the call of what you wanted to trade off. And the thing I traded off the most was that product context in my first 90 days. And again, it got me some things because I was able to have the time to go deep on the things I mentioned, but it didn't give me enough trust in the piggy bank around the actual product fundamentals or product, the actual thing we're building as opposed to the discipline.

**Lenny** (00:51:48):
So at this point you've worked at four legendary companies, Dropbox, Airbnb, WeWork, Webflow. If we were to just go through each one, what's just one lesson that you take away from each of these companies in terms of how it's informed either how you build product or lead people, anything along those lines?

**Jiaona Zhang** (00:52:06):
I'm going to actually give you my biggest thing across all four on the product side. And then on the people side. There are so many nuances also, and we could spend another two hours talking about each one of these. But I think just to impart my biggest high level learning. On the product side, it's about really understanding why people love you and not forgetting to invest deeply in that core concept and then building everything around that. And so I'll walk you through the different companies. So specifically for Dropbox, I think we did waste cycles where we would be like, "Oh, we see X happening in the market. Slack is really taking off. Why don't we build a Slack competitor? Or why don't we build chat?" And I think that it really missed this idea of, "Why do people love Dropbox and what do we need to do to continue investing in that so that remains true?" People love Dropbox for simplicity, for how delightful it is, how easy it is to use.

**Jiaona Zhang** (00:53:08):
I think we actually went for a period of time where we didn't invest enough in just performance of our client. How long it takes for the thing to sync is a big part of the experience of using Dropbox. And so I think that is a big, big learning where it's really understanding that would've shifted your investments into doing that performance work as opposed to chasing the competitive space. And I think going back to chasing the competitive space, it's this idea of what is your alpha? Again, why do people come to you? People come to Dropbox again for all the things I mentioned, but also ultimately we have your files. So if you're going and building a chat product, that's fine, but really the best chat experience or collaboration experience is going to be more around your files as opposed to around just the conversation. So I think really understanding that is a huge, huge learning.

**Jiaona Zhang** (00:54:01):
And I think that same lesson can be... It's very true for Airbnb. So at the end of the day, Airbnb is known for all the homes, the fact that these are homes that real people put on the platform. We spent some time talking about Airbnb Plus. When you are thinking "I got to go in and I got to manage the inventory and inspect it," you're almost like taking away from the thing that is what makes Air Airbnb special as opposed to leaning into it. We also spend a lot of time on experiences. We dabbled in transportation, we spent a bunch of times on other things. But if you really sat back and you're like, "What makes Air Airbnb special and how do you double down on your strength?" It's spending the time to make that experience of really understanding what's in a home so people don't go and get surprised. Making that onboarding journey for the host and then discovery journey and guest booking journey really, really great.

**Jiaona Zhang** (00:54:52):
So I think that that same lesson when applied to Airbnb, would've in my head changed the way we invested and I think we would've gotten more returns, as opposed to spreading ourselves and then having things that sort of work but then didn't quite work. And then again, same principle applies to WeWork, what is the thing that makes you really special? It's the inventory it. It's not actually like, "Oh, it's so amazing that I get to use this key card and this key card does 10 different things." That's not what makes the WeWork experience special. And so again, if you knew that you wouldn't spend all that time being like, "I'm going to really deeply invest in the tech team, I'm going to do all these interesting things." You'd be like, "I just need to make inventory management great. I need to make it so that the sales team, the operations team, they have the tools they need to go out and get the inventory on the platform." You wouldn't do all this other stuff that's just not the core.

**Jiaona Zhang** (00:55:44):
And then finally, even at Webflow, we are learning this lesson all the time where at the end of the day, people really love our designer. They love the fact that they can use it. It does so much for them, it's so powerful. And then you add our CMS and it's really powerful. You can design with data. So investing deeply there as opposed to spreading ourselves too thin is also a lesson. I think across so many companies this lesson around understand why people love you, double down on that and then whatever else you build around it... Because again, you don't want to also be like... You're not like a single product company, you're not like a one trick pony. You are going to invest in these multi products, but when you invest in a new product, really go back to, again, what's the core of our advantage and how can that be something we leverage in delivering a really great product experience for our users in X adjacent area or x add-on?

**Lenny** (00:56:34):
Final question before we get to a very exciting lightning round.

**Jiaona Zhang** (00:56:38):
Okay.

**Lenny** (00:56:38):
What is the best advice that you've gotten that has transformed or impacted the way you build product or hire or lead? Does anything come to mind?

**Jiaona Zhang** (00:56:48):
I can't remember where I explicitly got this advice, but I feel like I got it in multiple forms and it just really sat with me. It's this idea of asking for help. I do think about that a lot because I think there are so many times when you're like, "Oh, I'm the leader of X thing, everyone's looking to me like the [inaudible 00:57:04] stops in me. I need to have my act together. I can't be asking for help. If I'm asking for help, is everyone feel like I don't know what I'm doing?"

**Jiaona Zhang** (00:57:13):
And ever since I've been people managing, I've been pushing myself to be like, "I know it feels non-intuitive to go ask for help when everyone is looking to for you to give them advice, but if you don't ask for help, there's so many times where you're just going to be sitting there with your problems. Whatever you have in your mind is just not the global best thing and you have to go ask for help. You have to go ask for help from your partners, your peers, even your team, even being my team, I don't know. I really don't know. Here's the guidelines, here's how you might want to think about it, but I don't know the answer, you know the answer." Going out and getting mentorship. I think this idea of really being able to say, "Be honest about what you know and what you don't know and ask for help when you don't know something," that's probably the biggest thing that I hold as a core principle and just helps me build better products.

**Lenny** (00:58:03):
What's something that you've asked for help about recently as an example?

**Jiaona Zhang** (00:58:06):
So I'm working on our product strategy for the next three years. I'm thinking a lot about how do we really leverage AI to support all of our service providers and support all our users who come into Webflow and have a hard time sometimes learning how to use our product. And so I'm not an AI expert, so asking for help from the founders, from external folks, from engineers to be like, "What's happening?" Every single week I feel like LLMs are changing. What's possible in the world is changing. And so constantly asking for help to iterate on the strategy is a huge part of... It's happening every day for me and my job.

**Lenny** (00:58:40):
JZ, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Jiaona Zhang** (00:58:44):
All right, let's do it.

**Lenny** (00:58:46):
What are two or three books that you've most recommended to other people?

**Jiaona Zhang** (00:58:50):
I love the Design Sprint by Google. I also really Julie's book around managing people how to be a good manager. That one's really great. And so those are my more business side of the house books. And then we can also talk about fantasy stuff if you want. But-

**Lenny** (00:59:07):
Yeah, give us some recs there.

**Jiaona Zhang** (00:59:09):
I'm a big fan of Brandon Sanderson. He completed the Wheel of Time series on behalf of the [inaudible 00:59:14] author. He has the Mistborn series and so he's a great one. He actually has this... During the pandemic, he holed up and wrote a bunch of books and Vince was like, "I have a confession to make. I wrote four extra books." And the latest one is Tress by the Emerald Sea that I really love.

**Lenny** (00:59:32):
I saw the video of him sharing that news and he's just like, "I wrote a book during COVID" and then, "Okay, I wrote a second book and then, oh, I wrote a third book also" and it just keeps going.

**Jiaona Zhang** (00:59:43):
I think he was like, "I have a secret or I have a confession to make." And everyone was like, "Oh no, are you going to say that you have a ghost writer because you're so prolific?" And he's like, "Nope, I just wrote four more books."

**Lenny** (00:59:51):
What a beast. Next question on that topic a little bit. What's a favorite recent movie or a TV show that you watched? And I know you said you don't get to watch much, but anything come to mind?

**Jiaona Zhang** (01:00:01):
I feel like every night I'm watching Sesame Street like songs. We don't do TV, but we do do YouTube songs. I honestly don't have an answer to that other than we watch the Elmo song and the ABC song with my three year old.

**Lenny** (01:00:18):
There's been a lot of parenting advice on this podcast with my child coming soon. And so this is very on brand. Before we started this, you mentioned the painting behind you is referenced in like Arcane, it's connected to or the show Arcane, which I imagine-

**Jiaona Zhang** (01:00:31):
Yes. I'm a big fan. So painted this a long time ago before Jinx and Vi were a thing, and when Arcane was made, both my husband and I were like, "What? How did we predict this? This is amazing." So it's a good one.

**Lenny** (01:00:45):
There we go. Some adult content. What is a favorite interview question that you like to ask candidates?

**Jiaona Zhang** (01:00:53):
I do like to do behavioral questions, just really understanding when they've been in challenging situations, when they've been in ambiguous situations, how do they navigate ambiguity? Is a big one for me because at the end of the day, the PM job is really ambiguous. It's really hard to describe on a piece of paper all the things that you're going to encounter. So asking a lot of behavioral questions around that.

**Lenny** (01:01:14):
And is there anything specific you look for in their answer that tells you this is a good answer or not a good answer?

**Jiaona Zhang** (01:01:20):
Yeah. Good answers are people who put structure and a way forward through the ambiguity. That's what you look for. You want your PM to not just be like, "Oh no, we're swimming in ambiguity," but actually put a path forward. I think also looking for people who are seeking help, seeking those inputs as opposed to being like, "Yep, this is the way. This is very clear." Because again, the chances of whatever path you chart out for any product, for anything that you're doing is the right path from the first time that you do it, so rare. And so I want to see someone be able to get those inputs, be able to say, "This is the path, this is how I learned why I put this path together." And then going back to a lot of the stuff I think we touched upon in this podcast is like, what are the little milestones that make you say, "Hey, is this working? Is this not working?" And then make you either make a different decision. Seeing people do that really well is a big thing I look for.

**Lenny** (01:02:12):
Awesome. What is a favorite product you've recently discovered that you love?

**Jiaona Zhang** (01:02:17):
I love... It's not recent, but I do love the SNOO and it's very top of mind because I just graduated my second son from the SNOO and it was a little bit like, "Oh my gosh, no more rocking of the baby." But I do think it does a good job of actually doing the thing and I'm also giving parents peace of mind.

**Jiaona Zhang** (01:02:34):
The other thing I'm a big fan of, again, you'll see where my head's at, lots of child related things. Midjourney for your toddler is actually great because instead of it being absolute instant gratification of "I want to see a firetruck," and "Here you go, here's my phone." It's like, "Let's wait for Midjourney to create the firetruck." And specifically you can even tell Midjourney what you want. It could be like, "I would like it to be blue." He's obsessed with Jungle Book, "Wearing a fire hat next to a firetruck." And so you can actually create, and I do believe in the future, so much of what we are going to be doing as humans is literally what is the creative process? What's the idea? It's less about executing all the pieces of it, but it's so important to still be able to be like "This is the idea that I want to bring to life." And so I just think training that is huge.

**Lenny** (01:03:24):
Feels like you've just defined your three-year strategy for Webflow right there with AI.

**Lenny** (01:03:30):
Next question, what is something that you've changed in the way you build product that might be relatively minor that had a big impact in your team's ability to execute?

**Jiaona Zhang** (01:03:40):
There's so many different things that we've done at all the different companies. It really depends on the company. And what I mean by that is at a company like Webflow, where the tech stack is complex and where a given feature has so many different interactions, you're like "People depend on this workflow, this thing interacts with this thing. It's a whole platform." One of the biggest things we've been tweaking is like how do we do more of a tech spike at the beginning to be like, "Do we have a good sense of how difficult this is going to be? The unknowns? Can we get a little bit more detail on them so that we don't go down a path and be like, 'Oh, this doesn't make sense'?" So I feel like that that's a tweak in the process that has really made a big difference at a company like Webflow.

**Jiaona Zhang** (01:04:20):
But when I look back to other companies, again, that might not be your biggest problem. Another problem could be like, "Hey, it's just so difficult to work with cross-functional partners and doing a little tweak in the process where you bring them in a kickoff meeting." That might be the thing that just changes that dynamic of how you work with teams. So it's really... I don't know if there's one thing, but it's almost like every day I'm thinking about small tweaks and process to make all of us more efficient.

**Lenny** (01:04:44):
Final question, what is your number one pro-tip for using Webflow and being successful with Webflow?

**Jiaona Zhang** (01:04:49):
My number one pro-tip is there's a lot of stuff coming out that I'm very excited about. I do think Webflow has traditionally had a high learning curve, and it's because we're a pro tool, we're a professional tool. We do really amazing stuff, so much power that we deliver you, but with that power has come with it's hard to learn. And so one of the things that I'm really excited about pro-tip for using Webflow in the future is we're really going to bring the magic of Webflow University, the magic of AI, all together so that you can just use and learn Webflow so much faster, learn webflow in the context of what you're doing as opposed to going into a different tab and looking for the Webflow University stuff. It's going to be in context to the product, being able to actually take action directly, prompting Webflow to be able to do things for you. It's just going to be so much easier in the future to use the product. That's what I'm excited about. We're working on it and it will be out in the future.

**Lenny** (01:05:42):
Okay. No specific dates yet. Yeah, you could share, this sounds like breaking news of cool stuff coming.

**Jiaona Zhang** (01:05:47):
Some things are in alpha and [inaudible 01:05:49] beta, but we do want to be developing it with our users and really learning is this the power that you're looking for? Is this thing that's going to get you over the activation hump that you've struggled with in the past?

**Lenny** (01:06:00):
JZ, I think we've made a maximally lovable podcast episode. Thank you so much for being here. Two final questions. How can listeners find you online if they want to reach out and how can listeners be useful to you?

**Jiaona Zhang** (01:06:11):
I always love feedback, so if there's feedback on the podcast, send it my way. Or even just what would you want to learn? Send it my way. And the reason I ask that is because I'm actually working on a course, another course through Reforge, which is around managing your PM career. And so really just... I've talked to so many people advice around their career, but if you want to reach out and be like, "These are the problems that I'm facing," it would actually really help me as I am creating this course, which is going to launch in a couple of months. And so I'm excited to... Find me there if you want to chat more and send the problems that you're struggling with when it comes to your career, and that would help me refine my course.

**Lenny** (01:06:47):
And that's just reforge.com? There's no URL yet specifically for that course?

**Jiaona Zhang** (01:06:51):
Not yet, but it will come soon. And maybe what I'll do is I'll post it on my website, which is built in Webflow, so my full name dotcom.

**Lenny** (01:06:59):
Got it. JZ, thank you so much for being here, and thanks again.

**Jiaona Zhang** (01:07:03):
Thanks for having me.

**Lenny** (01:07:05):
Bye, everyone.

**Lenny** (01:07:08):
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.

**Lenny** (01:07:27):
See you in the next episode.

---

## [2/20] How to ask the right questions, project confidence, and win over skeptics | Paige Costello (Asana, Intercom, Intuit)

**Lenny** (00:00:00):
You're often the youngest person in the room. What have you learned about how to garner trust and win over skeptics?

**Paige Costello** (00:00:07):
The thing I would say is bring the insight. Know thy customer. Know thy market. Know thy competitors. Know thy numbers. Know thy product.

**Lenny** (00:00:15):
I'm curious, what you find most holds back new PMs?

**Paige Costello** (00:00:19):
Your brain is so accustomed to having a scarcity mindset as opposed to creating alternative options or seeing a different path. Effectively, there's this notion of, "How might the opposite be true?" The moment I challenged myself and said, "How might the opposite be true?" my shoulders dropped. I felt more relaxed. I was like, "Oh, yeah, I can do both. It will be fine."

**Lenny** (00:00:45):
**Paige Costello** (00:04:07):
Thanks, Lenny. Great to be here.

**Lenny** (00:04:08):
So you don't know this, and I've been telling you this, but I asked a bunch of people that you worked with and maybe currently work with for questions, suggestions of things to ask you. So this is going to be really fun.

**Paige Costello** (00:04:19):
Wonderful. Now, I want to know who you talked to, but we'll find out.

**Lenny** (00:04:23):
I'll tell you right now. Big thank you to Jackie Bavaro, Yasmin who's on your team, and Montgomery and Steve Morin who is currently at Asana.

**Paige Costello** (00:04:32):
Ooh, fun.

**Lenny** (00:04:33):
So thank you to all of those folks for giving me a bunch of great questions, suggestions.

**Paige Costello** (00:04:37):
Looking forward to it.

**Lenny** (00:04:38):
Maybe just to settle a context, can you just talk about... At Asana, what do you work with? What is your team? What do you work on, and what is your team responsible for broadly?

**Paige Costello** (00:04:45):
Yeah. Absolutely. So I lead the product organization that's responsible for our desktop, web, and mobile apps at Asana. The teams are composed of all the people in San Francisco and New York who are focused on creating clarity for individuals, teams, and organizations. Effectively, our goal is to help teams work together more efficiently and drive the outcomes they're going for. So you can think about the feature sets if you're an Asana user like goals, portfolios, projects, tasks, reporting, all of that. But really, we want to help people answer the question at work, "Who is doing what by when, and why?" So that notion of clarity of purpose, clarity of plan, progress, and responsibility are often so painful in people's work lives. When there is certainty there and clarity there, people can be much more efficient in getting the work done. So that's where my focus is every day. I'm a product leader for that group.

**Lenny** (00:05:44):
Cool. So, basically, like the core. When people think of Asana, it's all of that stuff is what it sounds like.

**Paige Costello** (00:05:49):
Yeah, yeah. There's another group that's focused on our process management, but a lot of the core work in project management, core is in my group, and then we have a growth and enterprise scale team.

**Lenny** (00:06:01):
You've been at Asana for about four years now, right?

**Paige Costello** (00:06:03):
Yes, four years this summer.

**Lenny** (00:06:04):
Cool. So something I'm always curious about companies that are at this scale is just the evolution they've gone through in terms of how they develop product, and so I'm curious, just in the time you've been there, how has the product development process at Asana changed, and maybe even simpler, what are some of the bigger changes that have been made to the way product is built at Asana over the years?

**Paige Costello** (00:06:26):
I would talk a little bit about how we set strategy and our planning process, and how that's changed in this time as well as how we actually ship product has changed in this time. On the planning front, we have really changed what altitudes we're planning at, the time horizon we're planning at. Some of the inputs have gotten a lot more precise and opinionated. So, for example, we have always had pillar plans and team plans, but maybe we didn't have an intermediary layer of an area perspective. Well, what's an area perspective? Well, as your organization grows, we've had to reorganize to create more agency and accountability close to teams that are focused on specific target customers and problems. So if you think about the way Asana is organized, we've got our R&D, the pillar structure, the areas within them, and then the working teams.

**Lenny** (00:07:23):
It might actually help if you even describe what is a pillar, what is an area in product development.

**Paige Costello** (00:07:27):
Yeah. Absolutely. So when I said I'm responsible for that core product pillar, that's one pillar, but then there's also the adoption and enterprise scale pillar and the workflow pillar. Within each of those, there are subgroups, and we call those areas. Each of those areas has a very specific target customer and problem space they're solving for. We've often also dialed up the clarity of the metric at that level. So while we have an R&D set of metrics, we have pillar metrics, we have area metrics, and then at the team level, there's often one or two that they're really driving forward. So you can think of it as a nested structure around our product strategy as well as how we measure success.

**Paige Costello** (00:08:14):
When I joined, we didn't have areas. We were organized around projects and around locations, and then we worked to make sure that the thinking was more durable and problem-focused so that our roadmaps were not about features, but were instead about what was most meaningful to tackle for our business growth. So that's a big thing that has changed is the altitude of planning and how that nests. Another thing that has changed is the time horizon. So, before, we planned annually primarily. Now, we plan every six months, but for a rolling 12 months. So we have higher confidence in the immediate half, lower confidence in the following half, but we just plan every 12 months, every six months because it gives our business more confidence in what's coming and a better opportunity to align our go-to-market and product planning.

**Lenny** (00:09:10):
Amazing. So I just actually was talking to one of the heads of product at Shopify, and they went through a similar transition where they used to plan yearly, and now they plan for the next six months. So it's interesting that I'm hearing this more and more, and you're saying that every six months, you revisit the plan for the next year. So it's an interesting hybrid of those two.

**Paige Costello** (00:09:30):
Yeah. Absolutely. I think the more you try to do things in a joined up way where you have a single target customer with sales and marketing, and you want to make sure that the impact of your releases hit their mark, the more it's important to reflect on it frequently and to be able to pivot quickly because our strategy, even when we think we have a two-year vision, something will change, and then we say, "Wow, we made so much faster progress on this than we thought, and we actually believe that there's a new opportunity or a new technology that we should be leveraging. Let's go bigger on that." So it reduces the feeling of churn and thrash. It makes us all more principled, and it helps us just make sure we're making the best use of our teams.

**Lenny** (00:10:20):
I like that it also admits you're not going to actually have a yearly plan, like everyone plans for year, and then halfway through, they're like, "No. Let's start rethinking everything again."

**Paige Costello** (00:10:30):
Yeah, yeah.

**Lenny** (00:10:30):
So I like that you're upfront about that.

**Paige Costello** (00:10:30):
Yeah.

**Lenny** (00:10:31):
Okay, and then within the plan, do you have quarterly plans and sprints? Is there anything more fine-grained with a detailed roadmap just while we're on the topic?

**Paige Costello** (00:10:38):
Yeah, not really. I mean, teams know approximately when are they expecting to do the work, but if you ask too much for a particular quarter, a particular week, or date, you will make strange choices about scope. So, really, we align on what success looks like, and the teams do their best job to ship as quickly as possibly, as iteratively as possibly, and we really encourage prototyping. So we added into our product process a notion that we might pivot or cut from stuff that we put on our roadmap because it felt like once it was on the roadmap, it had to be done, and that's just not smart.

**Lenny** (00:11:20):
Got it. So, essentially, there's a six-month roughly detailed plan of what each team is going to work on?

**Paige Costello** (00:11:25):
Yeah, yeah.

**Lenny** (00:11:25):
Got it. Interesting.

**Paige Costello** (00:11:26):
Yeah.

**Lenny** (00:11:26):
Maybe just a couple more things just to make them super concrete for folks that might be listening. What's an example of an area? What's an actual team that would be an area? Then, the other question I have just while I'm saying questions is, are there some metrics you could share of just what some of these teams might be gold on just as examples of how you think about metrics?

**Paige Costello** (00:11:45):
The area that came to mind when you asked about one of our areas is something called Coordinate, and their job is effectively making sure that the slice of Asana that helps teams work together is working effectively. So that's projects, and tasks, and the data that you might put into tasks, and all of the back and forth that is required when people use Asana for their core working team. Some of the metrics that they care about are like org paying weekly active users as well as really thinking about healthy project use. So we make sure that we understand what does good look like and what is a dynamic that we want to be creating in terms of people getting real value from using the product, and we build that into our metrics to have as a guardrail to ensure that we're not driving one metric at the expense of people really getting what they need out of Asana.

**Lenny** (00:12:41):
Just a couple more questions along these lines.

**Paige Costello** (00:12:44):
Yeah.

**Lenny** (00:12:44):
I'm nerd-sniped about process.

**Paige Costello** (00:12:46):
Yeah.

**Lenny** (00:12:46):
I think you use a process called the Double Diamond Process at Asana. Okay. Cool.

**Paige Costello** (00:12:49):
We do.

**Lenny** (00:12:50):
I've seen images of this in various places, but I don't know of any company that's actually using it as the process. Can you just describe what the Double Diamond Process is and how you use it?

**Paige Costello** (00:13:00):
So you might be familiar with lean startup concepts and Double Diamond as it relates to going broad, and then going narrow. So you go broad when you ask like, "What customer should I solve for?" and then you pick one, and then that's the narrowing. Then, you go broad, and you say, "What are the problems this customer has?" and you narrow, and you say, "This is the problem they have." Then, you go broad, and you say, "What solution should we do to this?" and then you go narrow, and you say, "This is the solution that we should start with." That process of going broad, and going narrow, and going broad, and going narrow forces people to get out of their opinion-driven lens because so often, we need to be curious quantitatively and qualitatively about what we're doing and why, and be more systematic and rigorous about getting there. It doesn't take long, but it just breaks the frame.

**Paige Costello** (00:13:56):
The Double Diamond Process that Asana effectively... Each of our typical reviews or artifacts sit at different inflection points on the Double Diamond. So we actually ask people to do a kickoff where they collect different information at different scale depending on the size of the problem and the ambiguity they're solving. Some people have already done enough customer selection and research that they're starting with, "What are the possible solutions to this problem?" and then they're bringing the spec, and that's the narrowing alongside design, et cetera. But it's really mapping our artifacts against this notion to make sure that the product thinking has that quality of decision-making. Yeah.

**Lenny** (00:14:44):
The way you described it is it was very customer-target-oriented. Is that that the actual framework? Is it around who to build this for, and then what to build, or is it more... It is. Okay. You're not ahead?

**Paige Costello** (00:14:44):
It is. Yeah.

**Lenny** (00:14:44):
Okay.

**Paige Costello** (00:14:56):
It's really important because then you also know what success looks like because if you pick your success metrics as using a feature, that's it. You're teaching to the test. It's not actually driving the outcome. So while our planning process is around effectively defining category and how we win, and making sure that customers receive certain benefits from using work management, the through line to the individual project that a team might be leading is they need to know who they're solving for and what it means to have that problem solved. So it always starts with enough customer insight such that we can creatively do what they're trying to do. I mean, really inventing on behalf of customers.

**Lenny** (00:15:44):
Can you maybe repeat if there's terms for each of those phases?

**Paige Costello** (00:15:49):
Yeah. Absolutely.

**Lenny** (00:15:49):
Then, is there an example of a feature or product that went through this that you could share? If nothing comes to mind, that's okay.

**Paige Costello** (00:15:55):
The inflection points are the kickoff, which is that going broad, and then customer and direction selection. So this is both the target as well as of the 10,000-foot views of how you might pursue solving this problem. Which path are you broadly going to take? Then, going broad within that path on different concepts, and then there's a design concept review. Then, the products spec. Then, the full experience review or design crit of the end-to-end experience and launch. So that launch review is often just, "Hey, here's the thing. Here's what we said. Here are the fast-follows." Most of the time, by that time, it's already been dogfooding internally for some time, and it's more of a formal, "Do we have the right metrics in place? Are we ready to ship?"

**Lenny** (00:16:52):
Awesome. Do these reviews happen in person, on Zoom, or asynchronous?

**Paige Costello** (00:16:56):
It depends. So it depends on the complexity of the work, and it depends how much we want to talk about it. A lot of our crits happen in person on the design side. A lot of spec reviews are more asynchronous, and then we'll say, "Depending on the number of questions people have, we call a meeting." Otherwise, we do mostly async, but it's a mix. It really depends on the complexity and ambiguity of the solution and how much people have questions about asynchronously beforehand.

**Lenny** (00:17:27):
I'm going to take a tangent with my questions here and talk about work from home policy at Asana. This is something that I've been wondering more and more about how it's changing because it feels like there's been a shift back to the office. So what is the current policy at Asana, and what's changed maybe over the past couple years?

**Paige Costello** (00:17:42):
Well, we were fully remote during the pandemic, and then we came back to the office in an office-centric hybrid format. So we're in the office Monday, Tuesday, Thursday, and then work from home mostly on Wednesdays and Fridays. That dynamic has been designed from the start. We wanted to make sure that we took advantage of what's great about working together as teams, and so it's been the standard. So I would say what's unique about maybe Asana is we knew we would do that from the very beginning instead of hemming and hawing about would we be a remote workplace or not, and what would that mean, and how would we come together, and how would we budget for it. We're like, "No, this is going to be an office-centric hybrid," because we wanted to create spaces for people to work together and move quickly.

**Paige Costello** (00:18:37):
It's been interesting watching people get back into the swing of things. Even though we knew, it didn't mean that on day one, people were great at being in the office. People were taking standups sitting down. Whereas before, you would walk through our office, and you could hear people at standup because there were standup chants, and people would be out on the floor. Now, people are more likely to do their standup in a room, and we're trying the next level of standing up during a standup, but it's... I'm sure it's a shared experience for other people who are working in offices to get used to using the whiteboards again, to get used to standing up during your meetings. It's bizarre that we could lose a muscle that we had that was so innate so quickly, and I think even in the last month, I would say, and it's in June of 2023, there's more vibrancy in the office, more conversation, more casual... someone eating alone at the cafeteria, and someone sitting down next to them. So it didn't happen overnight.

**Lenny** (00:19:45):
I've been seeing a lot of tweets of founders just being like, "Work from home has failed. It's time to go back at the office." I'm curious if that ends up rolling into more and more companies, or if it's just a few founders here and there.

**Paige Costello** (00:19:56):
I think it's a real thing for mental health. I do think that having social casual relationships as well as more opportunities to talk strategy with people you're not forced into a meeting room with has been super beneficial. I can say that just today, I was having lunch and sat down with my head of data science, and we had an impromptu chat about how we review our experiments and how to evaluate whether we had ROI on learning, not just the metrics. It was one of those things where if we had to schedule it, it might not have happened, and if it did happen, it would have been a couple weeks from now.

**Lenny** (00:20:36):
It feels like just coming into the office once or twice... or sorry, being at home once or twice a week is not that different from how things used to be where there was a day of no meetings and a lot of people stayed from home. So it feels like it's almost reverting back to that.

**Paige Costello** (00:20:47):
Exactly, and people are better at it than they used to be.

**Lenny** (00:20:47):
Right.

**Paige Costello** (00:20:50):
So I would say our remote days are more impactful than the days we're together where we're getting into the swing of things.

**Lenny** (00:20:56):
Yeah. I feel like as a PM, the only day I was productive and getting real deep work done was the No-Meeting Wednesday. It was at Airbnb.

**Paige Costello** (00:21:04):
Yes. I would encourage you to know your chronotype and to lock that time where you have the most head space to do that work. So, for me, it's mornings.

**Lenny** (00:21:12):
Say more on chronotype. What is that?

**Paige Costello** (00:21:15):
I'm a morning person, and so I try to make sure that I don't have any meetings before 10:00, sometimes before 11:00, and that's when I do my hardest task for the day.

**Lenny** (00:21:26):
I also just thought about standups while I was at Airbnb and how not only how much energy they brought, but almost too much energy sometimes where there's like another team doing a standup, and they're just laughing and clapping, and we're just like, "Shh, we're trying to work over here." I feel like we need more of that again.

**Paige Costello** (00:21:42):
Totally. Yep, yep.

**Lenny** (00:21:45):
Okay. So, moving in a slightly different direction, something I heard about you is that you're often the youngest person in the room, and you often lead people with decades more experience than you. I want to ask, what have you learned about how to garner trust and win over skeptics, especially when they're maybe more experienced or older, and especially in other functions, I don't know, execs or designers, engineers, what have you figured out there?

**Paige Costello** (00:22:13):
The thing I would say is bring the insight. Know thy customer. Know thy market. Know thy competitors. Know thy numbers. Know thy product. If you can be the person in the room who has watched customers use the product and has a point of view about why one tool is significantly better or worse in a given dimension, and you can do that with confidence and clarity, and you don't need to know the other person's functional domain, and you don't need the expertise in what they're experts at, you can bring insight that makes people curious, and trust you, and just immediately believe that there's an opportunity that you're not advocating for that just is true. But I think that's a really tricky and unique thing is not to pretend like you have more experience than you do, but to be willing to ask great questions, and then be curious enough that you're bringing insight to every meeting that people may or may not have, but you're always willing to share.

**Lenny** (00:23:21):
That's such a good answer because it's like there's not a trick to it. It's just do the work, spend the time to become the person that has answers that people value and obviously, that will respect you, value your opinion, want to hear from you.

**Paige Costello** (00:23:34):
Yeah. Yeah. Our former board member, Anne Raimondi, and now our head of business wrote an article on First Round that was really great about the trust equation, and it really resonated with me. I don't know if you've heard about it, but she said that trust is equal to credibility plus reliability, plus authenticity, divided by or over perception of self-interest. I think when you're met by someone who doesn't know you, doesn't know your work, your job is to create credibility, and that's where I said bringing the insight is where you can really tip the scales here. Reliability, this is all about your say-do ratio. Authenticity is just being vulnerable, being yourself, and then making sure that people know that you're not in it for some other outcome or cause that perception of self-interest really can change whether people... how much they trust you.

**Lenny** (00:24:46):
In terms of knowing the insight and knowing thy customer, putting the time, I imagine, is a big element of that. Is that how you do that, or is there anything else along those lines that's just like, "Here's how I get really good at this?"

**Paige Costello** (00:24:59):
When you take a new role, become best friends with a researcher, and spend time watching customers use the product firsthand because what they maybe report on or are trying to do a study about might be very different from what you observe, but you really just need that front row seat with customers, and so asking, "How do I actually set up time with customers? How do I compensate them? How do I read the tickets?" Whatever. It's amazing how little you have to do to quickly catch up to understanding who the organization is solving for well and poorly, and how people really use your product versus how your teams use your product, especially in organizations where there are heavy dogfooding cultures. It's really risky to become less sensitive to the needs and behaviors of customers because people think they are their customer, and it also becomes very navel-gazey. So I think the more you get out and break up how people are having conversations about what we should do and why, and what we shouldn't do and why, and it's not about your opinion, it's about asking questions, and then bringing insight can really change the nature of the conversation and build trust.

**Lenny** (00:26:18):
I love that. In terms of confidence, you talked about the importance of communicating these things confidently. Is there anything you've learned about how to be more confident? The managing part of it is like having the answer, but is there anything there that you maybe coach your PMs around or other folks of just like, "Here's how you communicate confidence?"

**Paige Costello** (00:26:36):
It's a great question. I think being brave and courageous in little moments is just what you have to do. You have to show up, and say it before you're ready to say it, and ask for forgiveness, and be vulnerable. I think when you're vulnerable, people actually trust you more than if you come with all of this armor and say, "I know this, and this is how we're going to do it." So real confidence is often conveyed by being willing to ask the question or to say, "I don't know what you mean by that. Can you say that again?" It's also just how you communicate, looking people in the eye, your body position, your body language.

**Paige Costello** (00:27:22):
So much of this, I think people forget about because it's really easy to be in a meeting, and looking at your computer, and going through Slack messages. So one of the best things you can do is if you're in a meeting, be in that meeting. Continually scan the faces of everyone in the room, see if someone has a question, pause at the beginning, and welcome people, and chit-chat while people land, and then close asking questions like, "Did I get all of that? Is there anything you would've expected to cover that we missed?" It's really about being open, and that conveys confidence more than being assertive and advocating 100% of the time.

**Lenny** (00:28:03):
**Paige Costello** (00:29:34):
I think the main thing is repetition. We're all students of repetition. If you see something done a few times, you're more likely to remember it and internalize it, and so it's also something that... a way that I learn, and so I think that's probably part of it. I remember hearing about a framework called the three Es: experience, exposure, and education. I think it was helpful for me to hear that as a way of growing your career or being more purposeful about your growth because I think when people are earlier in their careers, they tend to think, "Education, education, education," and then they started to think, "Experience, experience. How do I get the experience of being a manager? I need to read about it, and then be a manager." It's very linear.

**Paige Costello** (00:30:29):
Exposure was such an important one where I thought like, "Okay. So you're not in the driver's seat, but you're in the car, and you hear what's happening, and you're evaluating how this is... what the impact is." This goes back to being really present and analytical, and being a learner because if you can be a learner, not just in an education or experience context, but in an exposure context, you can really grow so much more quickly and in so many more directions than you will get from just what does your day entail from what work is directly required of you.

**Lenny** (00:31:12):
Is there an example of that happening either to you or you saw a manager leader do this, and you're like, "Oh, I get it now," or you doing that and it helped?

**Paige Costello** (00:31:18):
So I'll give two examples. I mean, the way I run my meetings are the kind of meetings I want to be a part of. So I try to make sure that I start with a clear agenda, and I move quickly, but give time for conversation and that it's not fully just sharing information, but debating where appropriate. I think knowing how to manage the conversation and courteously pausing people who are going on too long or taking the group in a different direction than was intended, and just think about the experience of everyone there, and create the experience that you hope that they're creating in the rooms that you're not a part of.

**Paige Costello** (00:32:08):
An example that I have in terms of experience is sometimes the experience is you doing the thing and getting that experience firsthand. Other times, you need an education, you need a mentor, you need a coach who will tell you what they're saying or give you advice. I was in a really high-stakes product review at Intuit, and at the end of it, everyone else had left, and the leader of the business unit as she was leaving the room said, "Always answer the question that they should have asked." "Always answer the question they should have asked."

**Paige Costello** (00:32:49):
I was pretty surprised by that advice because it was very profound in the moment because I think when you're a student and you are accustomed... If you're an achiever, you like to get As. You're probably going to hear a question and answer it. You're like, "One-to-one, one-to-one, one-to-one." But what I learned from that was that there's actually another altitude, another point of strategy when you're in a meeting or in a conversation to make sure that you're covering the more important point, the bigger picture, the alternative that the person asking the question maybe didn't see or consider. So I think the mix of experience, exposure, and education really helps you make sure that you're consciously moving forward on each of those fronts or finding people who can help you there.

**Lenny** (00:33:43):
I love that piece of advice, and it makes me want to ask, are there other pieces of advice that have been really impactful to you, or are there common pieces of advice you give to your team that just is a recurring theme of advice that maybe people even make fun of like, "Oh, Paige is always saying this?"

**Paige Costello** (00:33:59):
There are a few ways to think about advice, and my advice often meets some mark when it's for a particular person in a particular time in their career. So I would say advice I love giving to people who are early in their career is don't self-select because I think it's really easy to say, "I don't have the experience," or, "I'm not X, Y, Z enough," and not apply. So I really push people not to self-select, and I try to remind myself where that's appropriate to do the same thing. Other advice I often give is just think big, ship small. "Think big, ship small." What's the smallest thing you can do to do that thing? But let's not, because we're trying to ship all the time and in small chunks, start thinking in small ways because it's really easy to get a little too incremental, a little too wrapped around the axle around optimizing a metric and miss the bigger picture, and so think big ship small is another piece of product advice I give.

**Paige Costello** (00:35:02):
The last piece of advice that I would say that I like is more of a way of thinking. So this is a little abstract, but when employees join Asana, they get a book called The 15 Commitments of a Conscious Leader. It's led by the Conscious Leadership Group. They also get two-day training on some language and tools for how to effectively work with other people, and it's a really... For me at least, it was transformational because I learned some vocabulary and methods that I could share with my peers. One of the things that you learn is to be above or below the line, and something that is this concept of like, "Where are you? Are you above the line? Are you below the line?" If you're above the line, you're committed to learning. You're open and curious. Things are funny here, more playful. If you're below the line, you're committed to winning. You're committed to being right. Things are more black and white.

**Paige Costello** (00:36:10):
All of us have days where we're having a conversation and we're really in that below line space where it's like, "No, it just is this way. There's no two ways around it." That concept of understanding your personal head space, and then being mindful of how you're operating when you're in that place really was great advice for me and also recognizing where other people were when it related to decisions we were making or context. It also helped me think about rejecting false trade-offs and challenging like... Effectively, there's this notion of how might the opposite be true, and that's a piece of advice that I give myself like this morning.

**Paige Costello** (00:36:55):
I think it was yesterday, actually. I was like, "How am I going to do tomorrow? Tomorrow, I have to deliver the clarity pillar brief to the area leads and make sure they understand our stack ranked metrics, and they need to know exactly what our strategic priorities are and why, and they need nudges, and they need to be able to translate our voice of business and usability lists into those plans. I need to establish a perspective and make sure this is all written down and they really understand it, and I have a great conversation with them where I get open questions and they feel like they can really challenge my thinking. I also am having a podcast with Lenny in the afternoon. Ugh." Right?

**Paige Costello** (00:37:37):
At first, it was like, "This is just too much. I should try to move or cancel one of these." Then, I asked myself, "How might the opposite be true?" I was like, "I can do both." It was just enough to pop the balloon because sometimes your brain is so accustomed to having a scarcity mindset as opposed to creating alternative options or seeing a different path. The moment I challenged myself and said, "How might the opposite be true?" my shoulders dropped. I felt more relaxed. I was like, "Oh, yeah, I can do both. It will be fine. We'll have a great conversation. I'm ready to show up, and be curious, and really engage with you on the topics that you've found interesting, and we'll just do that. So, "How might the opposite be true?" has been a really helpful piece of advice or line of questioning that I use with myself to make sure that I'm not taking myself away.

**Lenny** (00:38:43):
Wow. What a fruitful question that ended up being. That was amazing. How does clarity pillars strategy go? Are people into it? Is it working?

**Paige Costello** (00:38:52):
Yeah. I'm pumped. It's a really interesting time to be a product leader, especially with all of the tech transform... Truly, the technological transformation on LLMs is astonishing, the pace of development, the ability of our teams to just ship quickly and ship really intelligent things. We're not in an operational "figure it out" land. We're not in a place where we're trying to decide how to do a better job and get it out to customers. We really have lots of interesting paths forward and are trying to make sure that we're on the cutting edge while really looking at like, "What does it mean to serve the companies and organizations that we want to serve with new ways of serving them?" So it was a really fun conversation, and I also had to be honest with people and say, "This is a 70% cut. 30% of this is missing or incorrect, and that's why I'm coming to you early." So I think it went really well, and it's the start of our 12-month rolling planning conversation.

**Lenny** (00:40:05):
Let me pull on this AI thread because it's clearly top of mind for a lot of people.

**Paige Costello** (00:40:08):
Yeah.

**Lenny** (00:40:09):
How do you think about splitting up investment in AI exploration within the product team? Are you like, "Hey, team. Everyone should be thinking about AI as part of their product," or is it there's a team where they're going to think about AI and LLM integrations and, "Everyone else, keep doing what you're doing?"

**Paige Costello** (00:40:24):
We've had an ML team for quite some time, making sure that we have test prioritization models and notification prioritization models, and are making our product less work for people to use. But when it came to the massive leap forward in LLMs recently, we staffed a team to really prototype quickly, and discover what was possible, and just apply hypotheses outside of the typical norms of how we work. So they went straight to prototyping instead of going through that Double Diamond I was explaining earlier. What that meant was that we were really quickly able to say, "Wow, this is just so much better than we imagined and would never have prioritized it because we thought it would take so much longer." Then, in other cases, "That sounded good in theory."

**Paige Costello** (00:41:18):
So skipping a lot of that to just really try it on for a size has been key, and then what we're doing is giving the teams with the most expertise in the customer problems. For example, status and progress reporting, the keys to that car and saying like, "Here's the starter. Here's the hypothesis. Here's how far we got with it. It's dogfooding. What do you want to do?" So we're able to nudge people without wasting time and build the skills locally within the teams that then move those experiences forward.

**Lenny** (00:41:50):
I want to come back to the coaching topic. I had a few questions there that I moved off of, but I feel like that's a rich area of exploration. You mentioned Intuit. You worked at Intuit. Intuit is famous for having a really good APM program and really good training for product managers. What did you take away from that experience that you bring with you to coaching or even I think there's an APM program at Asana, too?

**Paige Costello** (00:42:15):
Intuit had excellent training programs, the APM program and their manager training. So, on the PM front, the biggest thing that they taught was around customer centricity, and it really started with the founding of the company. For anyone who works at Intuit or has worked at Intuit, they know that there's this story about Scott Cook watching his wife balancing her checkbook at the kitchen table, and staring at it, and saying, "There's got to be a better way, a software." So it was very typical for the product training at Intuit to be all about like, "How do you actually watch customers using your product or just doing the things they do, collecting the artifacts, knowing the workarounds, and using that experience to build opportunities for surprise and insight that then you can capitalize and create products around?" They also are very specific about how they define durable advantage and think about, overall, the product process from a place of customer insight through to the market landscape. So the PM program there was absolutely super thoughtful, especially for taking someone who has never PMed into being a super skilled PM.

They also have a wonderful manager training program, and I think the biggest thing that I took away from their manager training was really on the feedback slide. So delivering feedback is something that I think everyone benefits from, but for managers, it's so much more critical because if you don't do it, and you don't say what you mean, and you don't do it in a way that it can be internalized and acted upon, you really don't set up your teammates, your teams for growth or success in their careers. So their program for helping you think about like, "Okay. I'm going to convey this feedback as situation, behavior, impact. The situation is on Tuesday in that meeting at 3:00. Behavior, you interrupted me while I was saying this thing. Impact, made me feel like you weren't listening to me or made me feel like your voice was more important than mine, or impact, blah, blah, blah."

**Paige Costello** (00:44:35):
It doesn't matter what the impact is because the way you've set it up is it's a subjective observation. It's not what the camera recorded, it's what you experienced. Therefore, it is true and valuable feedback, and it gets the conversation started such that you can then talk about next steps. That format and framing really helped me understand that delivering feedback isn't about being right or about getting the right information to the other person. It's about sharing the impact of different decisions that they're making. So, especially if you have to give feedback about, God forbid, what someone wears to the office, or how do you feel their work is, or how they're communicating or their body language, having an enough support where you can be really clear about what you're intending and the spirit behind that, but that it's formalized enough that people can really engage with it has been enormously helpful, and I still use it today.

**Lenny** (00:45:35):
It's interesting how some of the most impactful training is such soft skills.

**Paige Costello** (00:45:41):
So basic.

**Lenny** (00:45:43):
Basic. Yeah.

**Paige Costello** (00:45:43):
Yeah.

**Lenny** (00:45:44):
It's just how to give someone some feedback, but it's like, "Know how to prioritize, how to do a meeting, how to give a presentation."

**Paige Costello** (00:45:48):
No. Yeah.

**Lenny** (00:45:50):
It's like, "Here's how you give feedbacks."

**Paige Costello** (00:45:52):
Yep.

**Lenny** (00:45:53):
So you've worked with a lot of early product managers. I'm curious what you find most holds back new PMs and help them being successful in their career, and even on the flip side, what most helps new PMs be successful in terms of skills or behaviors, habits, things like that?

**Paige Costello** (00:46:11):
I would say this illusion that you have to be all-knowing and super confident sets you up to be in a place of advocacy instead of inquiry. So PMs who are newer in their careers or who are in a different space than they're accustomed to working really want to be pro really fast. What pro means is trying to cut that straight path, and that can reduce information and conversation that makes you smarter. So some of the challenges that some PMs face are feeling like they need to be the expert, they need to be the smartest person in the room, or God forbid, they think they're the smartest person in the room.

**Paige Costello** (00:46:56):
Then, what happens is they're really doing that customer, or product discovery, or spec in a little dark room. Then, they show up, and they say, "This is it. This is right. I know it's right, and let's do this as quickly as possible." Everyone else says, "Wait. What? I don't know. I have a question," or they don't, and they still have a question, which is even worse. So I would say something that really holds PMs back is not being collaborative from a place of true curiosity like performative collaboration where they're not in a room or want to do a review, but ultimately, they don't really want the questions or the feedback.

**Paige Costello** (00:47:40):
I think trying to make sure that you can be in a place of curiosity and openness because that will make your experience more successful is really important. Other people aren't always going to be right, but if you're present for it, you can ask clarifying questions. You can ask the question behind the question. You can hear the feedback, and then say, "Was that something that I must do, that I should do, or that I should consider?" You can actually develop a conversation that will move your relationship forward, and so I would say that's something that I think holds PMs back.

**Paige Costello** (00:48:17):
PMs tend to be so ambitious and career-centric. There are so many good things about that, but I would say don't let the sound of your wheels drive you crazy. If you're present in your job, and you actually have fun with it and solve the problems, people will come out of the woodwork, say, "You're great, and tell your boss you should be promoted." You don't need to ask for a promotion. Your outcomes should speak for themselves. Yes, you should have sponsors and people who advocate for you, but a lot of that just comes from that raw connection to the work and to your team.

**Lenny** (00:48:55):
Everyone I talked to about you is like, "Oh my god, I love Paige." I could see why, but I want to ask you a question. I imagine you've made some mistakes either with a product or your career. I'd love to hear a story of something that went wrong and what you learned from that experience. This might be the last question, depending where you take it.

**Paige Costello** (00:49:16):
I would say that all of the advice I've given so far is directly related to things I've learned the hard way. So, especially as an IC moving into a management role, you aren't supposed to have all the answers. You need to ask better questions. You need to be thoughtful about direction and agency. So I would say one of the missteps here is knowing how to give guidance or direction in a way that doesn't feel like micromanagement because what you're trying to do is to teach a repeatable pattern instead of giving a precise instruction that can be used once, and then disposed of.

**Paige Costello** (00:49:57):
So I think that's a pretty common manager path issue, but I think the faster you learn it, and observe it, and use techniques to manage it, the better. So, for example, I would go to my meetings with a stack of Post-Its, and I would write what I wish I was saying on Post-Its and see if someone else would say it first. Then, if by the end of the meeting, I had decided that I still had a Post-It or two that was worthwhile, I would say them. But you've got to police yourself because no one else will do it because no matter how accessible you think you are, other people know that you're the boss. They're not going to necessarily speak over you or challenge you directly.

**Paige Costello** (00:50:42):
Another challenge I had is I'm a very optimistic person, and I like to look on the bright side. I'm very positive, and I think depending on the culture you're working with or depending on your team, sometimes they need to hear what's really bad, and they need you to be really real, and they need you to tell them like it is. Something I realized was that I had an experience where I didn't realize that people didn't think I was being authentic because they thought something was bad, and I wasn't talking about it, but it wasn't because I didn't think it was bad or didn't see. It was just because my nature was to say, "Well, I'm not going to talk about bad things because we're doing the things we need to do." As long as the plan is good, I wasn't really highlighting all the problems I saw or really pushing on those head on with my team, and so they felt like they didn't know what I was seeing or if we were saying the same things. That was really an interesting experience. Yeah, there were just so many. Yeah.

**Lenny** (00:51:49):
With that second lesson, is there something you've changed in the way you lead and operate where you now found a way to communicate, "Here's wrong," in a way that's still maybe optimistic and productive?

**Paige Costello** (00:52:00):
I try to be more real with myself and others. I try to show up and say like, "Hey, this is incomplete." For example, even the thing I did this morning, the clarity brief. I said, "This is 70% finish. The 30% that I don't believe is there yet are these three things. I don't feel confident in this piece of it, and hopefully, we'll have more clarity by next week." So that's an example of just being as real with the small things as with the big things so that people can balance their perspective of you and your work, and the organization and the environment you're creating.

**Lenny** (00:52:40):
I'm curious how you think about your career going forward. How far out do you think where you want to be, and how do you plan out the future of Paige's career?

**Paige Costello** (00:52:50):
I try to be really intentional about staying as much as leaving a role. When I think about my career as a whole, I try to think about skills or experiences I want to have as opposed to roles, or companies, or specific problems. So something that I think about is... Effectively, I evaluate whether I'm in a healthy role and in a good setup by asking myself about my learning curve like, "Is the steepness of my learning curve doing me a favor here?" because sometimes you might love the organization, love the problem, and feel like you're just not learning, or learning fast enough, or being challenged.

**Paige Costello** (00:53:39):
That's something that I think is really important. So thinking about the learning curve, thinking about whether the environment is positively impacting your ability to grow your career and make an impact. So, environmentally, you might have not enough staffing or tooling, or have someone in the management team who is toxic, or have a peer who is blah, blah, blah, blah, blah. That stuff matters, and I think people don't talk about it or take it seriously enough that your environment should include people who are advocating for you, and it should just be a place where you feel you've got the right ingredients to set you up to do the good work.

**Paige Costello** (00:54:24):
Then, the third piece is really around just the problem, the problem your product is solving. Is it fun? Is it interesting? I often like to think about passions are made, not found because I think people... We do this with nine-year-olds. We say, "What do you want to be when you grow up?" They look cross-eyed, and they say, "An astronaut. Just getting a vet. I don't know." There's this moment of panic, and I would say that being comfortable, saying like, "Go try different things, and see if the problem is interesting to you and if the problem is fun or interesting to you." It doesn't mean it has to be sexy. It doesn't mean the company needs to have a brand name. It just has to be something that you're curious about so that you do a better job at your job. So I would say learning curve environment and problem are things that I use to assess like, "Am I still on the right path, or should I consider an alternative?" But when I think about my own career, I really think about skills and experiences as opposed to roles. So I would say that that's more my frame of reference because otherwise, I think I am living in the future and not enough trying to make the most out of the career I'm living right now.

**Lenny** (00:55:44):
Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Paige Costello** (00:55:49):
Yeah. Let's do it.

**Lenny** (00:55:51):
What are two or three books that you've recommended most to other people?

**Paige Costello** (00:55:54):
My go-to book recommendation for other PMs is inspired by Marty Cagan. I think it's a classic. The other books that I have enjoyed and recommended lately are The Blind Assassin by Margaret Atwood and The Alchemist by Paulo Coelho.

**Lenny** (00:56:11):
What is a favorite recent movie or TV show?

**Paige Costello** (00:56:14):
Ooh, I'm very much enjoying The Diplomat right now, and then TV show or movie. Let's see. I just watched the Fire of Love documentary, which is about a couple who study volcanoes, and that was a great change of pace.

**Lenny** (00:56:32):
I saw the trailer for that. I think I got to watch that, and I finished The Diplomat. It's awesome. It ends really well.

**Paige Costello** (00:56:37):
I'm not done. Don't spoil it.

**Lenny** (00:56:39):
But it's just good. I'm just saying it's good. That's not spoiling.

**Paige Costello** (00:56:39):
Okay.

**Lenny** (00:56:45):
Okay. Next question. What's a favorite interview question that you like to ask candidates?

**Paige Costello** (00:56:49):
The good news is I can tell you this and still keep asking it because the answer has always come up differently. So I like to ask, "Tell me about a time something went wrong. What was it? What did you do about it? Yada, yada." Effectively, the question gets that, "When the product failed," When something about the team didn't work," just things that go wrong because that's what happens when you're doing this work, and evaluating people's mindset, and the way they talk about it, and the way they relate to evaluating the situation. I think it's a great question. Really tells you a lot about how people think and how they perceive themselves when things are not working well.

**Lenny** (00:57:34):
What is a favorite product that you've recently discovered that you love?

**Paige Costello** (00:57:37):
I've been playing a lot with Poe.com lately. Yeah, just an opportunity to learn more about LLM capabilities in a firsthand way. It's been fun to create little bots. I'm playing with making a page bot. I can't say that the page bot could have had this conversation yet, but maybe next year at this time, you can have a conversation with the other me.

**Lenny** (00:58:07):
That's what the page bot would say if this was the page bot talking right now.

**Paige Costello** (00:58:10):
I would say though that the advice, bits and bobs, I gave you earlier are absolutely things that I've been thinking about feeding, but I think the page bot would probably say, "Ship it."

**Lenny** (00:58:25):
Poe. It's the Quora founder's LLM chat bot?

**Paige Costello** (00:58:30):
Yeah, and so you can try the different models. So you can do four, and you play five, and Claude, and a few others. Yeah.

**Lenny** (00:58:38):
There's also a lennybot.com for folks that haven't seen this. Actually, there's a whole post on my newsletter of how it was built, and you get a lennybot.com. It is trained on all of my newsletter posts, and I think... not yet podcasts, but someday it will have podcasts.

**Paige Costello** (00:58:55):
Ooh.

**Lenny** (00:58:55):
By the way, someone listening to this, we're looking for someone to maintain this bot and evolve it. So if you're really into this stuff and have done this sort of thing, please DM me on Twitter. I'm looking for someone to take over lennybot.com, make it more... Moving on. Enough about me. Next question. What is something relatively minor you've changed in your product development process that has had a big impact on your team's ability to execute?

**Paige Costello** (00:59:18):
One of the biggest ones is just, once again, being real about how many reviews and approvals it takes for something to get done and who's actually responsible for reviewing and approving work. So we got really aggressive about, functionally, who is in charge and at what level for a given review, and pushed to say to actually have limits on the number of people per meeting, on the number of sub-task reviews for a given body of work. What this did is it created a lot more agency and pace within given working teams. So what we did was we said, "We actually don't care. We don't want a daisy chain of approvals. We just want one person with whom the buck can stop with them, and they can be responsible for how the work moves forward such that the knowledge is known and we could have connected the dots more effectively than we do or did." So that's the logic there, and it really changed the pace and quality of our work.

**Lenny** (01:00:25):
I love that. Is there any more you could share, a number? What is the maximum? Is there anything that other people maybe can take as a-

**Paige Costello** (01:00:31):
Yeah. So no more than three reviews on a given piece of work where people are blocking one approver. If a meeting has more than 10 people on it, we ask the person hosting the meeting to kick out the other people and write better decision notes.

**Lenny** (01:00:49):
The three reviews is three meetings looking at the product as it's coming together, basically?

**Paige Costello** (01:00:54):
The three reviews are three people who are assigned a task to look at something, but only one person is blocking whether it moves to the next stage.

**Lenny** (01:01:03):
Got it. Informed people? Stakeholders?

**Paige Costello** (01:01:06):
Yeah.

**Lenny** (01:01:06):
Decision-makers? Okay. Great. Final question. You work at Asana. What is your favorite Asana pro tip?

**Paige Costello** (01:01:12):
I use Asana to run all my meetings and assign pre-reads. So I use the multi-assign feature in subtasks all the time where I make a task with a due date that says, "Read this thing by this date," and then I assign it to a team or a set of individuals like that really quickly. Then, when I'm in the meeting, I take notes live in a task, and then highlight parts of those notes, and convert them into subtasks so that none of the action items get lost.

**Lenny** (01:01:46):
Wow. You need to make a video or blog post about this. Not only is it using Asana to build Asana, it's using Asana to run teams within Asana.

**Paige Costello** (01:01:46):
Yeah. It definitely does that, but-

**Lenny** (01:01:57):
Asana all the way down.

**Paige Costello** (01:01:58):
People know who's responsible for what they want.

**Lenny** (01:02:01):
Amazing. Paige, you are awesome. Thank you so much for doing this. 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?

**Paige Costello** (01:02:10):
You can find me on LinkedIn and Twitter, Paige Costello, and on Twitter, @paigenow. Listeners, well, I'd love to hear how you think AI is going to shape the future of software for knowledge workers, but in particular, if you and your team use Asana, I'd love to know where you'd like to see AI playing a bigger role to drive efficiency alignment for your team. So, as you know, we offer a ton of goal management, work management pieces that help teams and orgs do their work together, and I'd love to hear from you about where you see the opportunity.

**Lenny** (01:02:49):
Awesome. Paige, again, thank you so much for being here.

**Paige Costello** (01:02:53):
My pleasure. Thanks for having me.

**Lenny** (01:02:55):
Bye, everyone.

**Lenny** (01:02:57):
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.

---

## [3/20] M&A, competition, pricing, and investing | Julia Schottenstein (dbt Labs)

**Julia Schottenstein** (00:00:00):
M&A is always about creating plan Bs. And the way I would think about it is for any one company, there's only ever two to three buyers that find what you're building to be extremely strategic. And the strategy that I would do in how do you get noticed is I would figure out the area that you bring a competitive advantage. And I would inflict pain on that potential buyer. Make it impossible for them to not notice you because that's when they're going to have their ears perk up and say, "Well, what's going on with this company?"

**Julia Schottenstein** (00:00:33):
The really important piece here is you want to do that in a way that's still friendly and open. I see a lot of founders get this wrong and they prematurely will shut down a conversation or they won't talk to an incumbent or a potential future buyer because they take too competitive of a stance. But that's a mistake because M&A is all about creating plan Bs and you don't want to shut that door down prematurely because you don't know if you can really go the distance and be an independent company. So you want to have optionality.

**Lenny** (00:01:04):
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 Julia Schottenstein. Julia is a product leader at dbt Labs where she leads the dbt Cloud product. She's also the co-host of the dbt Labs podcast called Analytics Engineering Podcast, a show about data trends that impact analytics engineers work. As you'll hear in this episode, Julia actually led the acquisition of a startup that I'm an investor in called Transform from the side of dbt Labs.

**Julia Schottenstein** (00:04:17):
Super excited to be here.

**Lenny** (00:04:19):
So you have a really interesting career path in that you went from VC into product management. Usually it's the other way around. Usually PMs become VCs and it's right to see this version of it. So I wanted to start with just a question of just how did that come to be?

**Julia Schottenstein** (00:04:34):
I do have an unusual background, but it doesn't surprise me that people who are interested in product are also interested in investing and vice versa. For me, I've always had three interests broadly and that's an interest in business, an interest in technology and an interest in markets. And I get to express those interests both in investing and in product, but just with different weights. So in product you go a lot deeper on the tech and markets is less of a focus, but you still get to do all three. So I have a unusual background and I used to be a professional investor at NEA. Spent all my time investing in early stage startups that built for technical audiences. So think dev tools, infra data companies.

**Julia Schottenstein** (00:05:22):
And in 2019 I first discovered dbt, which was an open source data transformation framework. And I got really very, very excited about dbt because when I talked to people that were using it, the way that they described their experience on dbt was like unlike anything I had heard before. It was much more of an identity for them than just a tool that they were using to get their job done. And that really struck me. And as I thought about what was happening in the market, there was a lot going on in 2019. The markets were changing quite a bit. Cloud data warehouses were starting to explode. This was the year where Snowflake went from a 4 billion company to a 12 billion company. And I thought to myself, if dbt worked, it could work in a really extraordinary way. And I naturally tried to spend all my time getting close to Tristan, who's the CEO and founder and I wanted to invest.

**Lenny** (00:06:24):
Okay. So at this point you're a spec at NEA, you're trying to invest in dbt and okay, keep going.

**Julia Schottenstein** (00:06:29):
Yeah. So I was very, very excited. I thought if this worked, it could work in a really extraordinary way and I spent all my time trying to get Tristan to like me so that I could invest in the company. And then in 2020, I finally got the call that I was waiting for. Tristan said, "We're going to raise some money." He had a term sheet from a firm that he liked. It was a good venture fund, but he also liked me and he wanted to give me a shot and I was super excited to get that message because this is my chance. And unfortunately I ended up losing that deal to Sequoia. It's a formidable partner.

**Lenny** (00:07:04):
Reasonable loss.

**Julia Schottenstein** (00:07:05):
I was just so convicted that if was going to be a special company that I asked to even put my personal money in and I asked to put a very irresponsible, irrational amount, nearly like 20% of my liquid net worth into dbt because I was so convinced that this was special. And sometimes when deals don't work out as an investor, you can create this narrative in your head like, "Good, I dodged a bullet or better off without them or screw them." But for me that was quite the opposite with dbt. I really felt like dbt was this runaway train and it was special and I wanted to jump on board. So a few months later I ended up calling Tristan and asked him if I could be a part of the company that built the product that I thought was so special. So that was my unique path into product and to dbt.

**Lenny** (00:08:02):
So you invested in dbt and then an opportunity opened up where you ended up working there?

**Julia Schottenstein** (00:08:08):
No, I think if I was able to invest I wouldn't be here. So I got no, the board ended up vetoing my personal investment, but it's okay because I ended up dedicating all of my personal time to building the company.

**Lenny** (00:08:23):
Awesome. Okay. So something you touched on there that was really interesting of what you saw about dbt that was so interesting and I think this is maybe a broader question of just in your time investing and finding a company like dbt early, what have you learned about just picking well, finding companies early especially? What are signs in your experience of just that this is going to be something really interesting that you might want to join? And this is more for people listening that are thinking about joining a company early on. What do you think they should look for?

**Julia Schottenstein** (00:08:52):
So the way I would look at joining an early stage company would be the same way I would evaluate investing in one. So there are four things that I care about when I'm looking at really early stage companies and it's people, market, product and distribution. And I'll touch on each of those four to say a little bit more about what specifically I'm looking at. So people, this is really the CEO, the founder of the company put simply do you trust this person to lead. And for me, Tristan had this really rare ability to paint a very compelling future of the industry and how dbt was going to be a part of making that vision a reality. But he also was really, really detailed in the day-to-day work of the analytics engineering work. And it was that range in scale that made me feel like this is a founder that's very rare and compelling.

**Julia Schottenstein** (00:09:42):
The next is markets. We touched on it a little bit, but what I'm looking for in markets it's like is it growing? Is there space for new entrant to make its mark? And when it came to dbt, it was an explosive time in cloud data warehouses and it was that chaos that was really the opportunity for dbt because they created some orderliness and structure to the way that people worked with their data in the cloud data warehouse. So that was very compelling. The next is product. Everyone who's listening hopefully either is interested in products or has a product background. So I won't say too much there, but can you talk to users or potential customers, are they building something that's really special, unique? Can you hear that, spark that enthusiasm and figure out if this is going to be special.

**Julia Schottenstein** (00:10:31):
And then the last, I think this is more important arguably than if they have a good product but is distribution, do they have an advantage on how are they going to get to market because that's really, really hard? And think about how they think about their competitive advantage on either the ecosystem or distribution and how they're going to ultimately sell the product. You're not going to get a 10 out of 10 on all four dimensions. So when you're joining a company, you also have the benefit of dedicating your time. So try to think if they're weaker on one dimension, what is it that you bring to the table or what are you special at that could potentially de-risk the success of the company

**Lenny** (00:11:11):
In terms of spark with a product. Right now on product market fit, now how do you know if you have product market fit? And a lot of it often comes down to there's a emotional reaction from someone you're talking to about the product you're building. There's like, "Holy shit, I want this now." Is there anything even more specific you've seen of just what is a sign that this, there's a spark that people are just really enthused? You talked about people made dbt part of their identity. Is there anything else there?

**Julia Schottenstein** (00:11:36):
Yeah. It's can they not stop talking about it and that's the chatter about a product, they want to share it with their teammates or to other people at different companies. That just top of mind love and wanting to share what they've found with others is really a great sign that you're onto something. And then that spark will help do a lot of the work on how do you get to market because your evangelists are really your users of people that love what you're building.

**Lenny** (00:12:06):
What about in terms of the distribution bucket? What are some examples of just really important, I don't know, unique or effective distribution strategies or I don't know, unfair advantages you've seen maybe with dbt, maybe other companies? What are some examples of that?

**Julia Schottenstein** (00:12:20):
So dbt had an ecosystem advantage and they were open source and this helped really dramatically for lots of people to have low barrier friction to just try it out and spread organically. They first got started with very horizontal. People could just get started without ever even talking to sales and think that was a competitive advantage. But not all companies need to be product led. Some companies are enterprise top-down sales. So in those situations think about does the team really know how to land a complex enterprise sale? Do they have a background in that particular space? Do they have a network of connections? Can be different depending on what the company is selling, but you either want to see a company that's really strong at enterprise or really strong at the bottoms up.

**Lenny** (00:13:11):
Okay, cool. So I want to shift a bit to talking about an area that you have a lot of experience in which a lot of people are also really interested in right now, which is M&A. I've invested in a lot of companies and maybe, I don't know, once a month I'm getting an email from a startup I've been investor in. There's just like, we're looking at maybe selling the company, things aren't working out the way we were hoping. And you've been on I think maybe all sides of the table of M&A transactions, including I think you led the acquisition of a company... I was an investor in the dbt acquired that I think is public company called Transform. So my question is just for founders who are currently thinking about M&A meaning acquisition essentially. What's your best advice for them for how to be most successful in M&A outcome for themselves?

**Julia Schottenstein** (00:13:57):
When it comes to acquisitions, the time to start thinking about an M&A strategy is hopefully when you don't need one. And the best strategy that I could give a founder is to have a really strong offense in building their company. And when founders start their businesses, they don't usually set out to start a company to sell it to another business. They start it to be an enduring independent standalone company. And if you have that path, then you'll have the upper hand in absolutely every single M&A conversation because you have a viable alternative, which is do nothing, stay the course, you don't have to sell. But of course that's not the case for most companies. Most companies don't have a viable path to being an independent company forever. So they have to think about M&A. So M&A is always about creating plan Bs.

**Julia Schottenstein** (00:14:49):
And the way I would think about it is for any one company, there's only ever two to three buyers that find what you're building to be extremely strategic. And the strategy that I would do and how do you get noticed is I would figure out the area that you bring a competitive advantage and I would inflict pain on that potential buyer. Make it impossible for them to not notice you because that's when they're going to have their ears perk up and say, "Well, what's going on with this company?" We just bought this company Transform. They are playing a really good playbook here.

**Julia Schottenstein** (00:15:25):
And the really important piece here is you want to do that in a way that's still friendly and open. I see a lot of founders get this wrong and they prematurely will shut down a conversation or they won't talk to an incumbent or a potential future buyer because they take too competitive of a stance. But that's a mistake because M&A is all about creating plan Bs and you don't want to shut that door down prematurely because you don't know if you can really go the distance and be an independent company. So you want to have optionality.

**Lenny** (00:15:54):
I love this term with pain on your potential acquirers. What are some examples of that? Who's done that well or what's an example of that interaction?

**Julia Schottenstein** (00:16:03):
Yeah. I mean I can share the transform stories of a company we just acquired, we announced it in February. So dbt Labs, we build transformations, that's our main product. And we were venturing into a new product area that we call the semantic layer. And to describe what that is quickly, it's allowing companies to define their business metrics and so that whenever anyone queries it, we always serve back consistent data on those business metrics and transform. They were a pure play company only in this metrics layer, semantic layer. And they had a really strong product.

**Julia Schottenstein** (00:16:41):
They had figured out some of the technical challenges and they had solved it early on. They had the benefit of having worked at Airbnb, which and Airbnb in the data world is famous for having a really successful semantic layer metrics layer called Minerva. And what we had at dbt Labs is really good distribution and ecosystem, but we were a little behind in bringing a product to market and we felt that pressure from Transform because they were doing such a great job at being vocal and loud about how their semantic layer solves these really hard technical problems.

**Julia Schottenstein** (00:17:20):
But they didn't have any distribution. So that was really tough for them and they were putting pressure, but they were still positioning their company as a partner to us because they wanted our community to be excited about what they were building and hopefully lure them over to use their product. So because they had positioned themselves as a friendly partner when really we were trying to compete for this similar use case, when it came time to do an acquisition, we were really excited because we knew their product was good and they had already done a lot of the work to make integrating with dbt possible and that helps us post acquisition do the integration much more easily.

**Lenny** (00:18:01):
How do you just think about either as a startup or even an incumbent about how to think about competition, how much emphasis, how much energy to put into thinking what competitors are doing and just how that informs your strategy?

**Julia Schottenstein** (00:18:15):
So we recently codified our philosophy when it comes to competition. And I'll give Nick Handel the founder of Transform who led this exercise at dbt Labs. But we really have three pillars when it comes to competition. So the first is hold true to our vision. We're really excited about the path and the journey that we're going on at dbt Labs and we don't want the distraction. So occasionally you'll have competitors maybe throw shade or throw stones, but most of that is just noise. If you have a lot of conviction that you're going in the right journey, you want to just keep your eyes straight ahead and run your best race and not be too distracted by what maybe some critics are saying.

**Julia Schottenstein** (00:19:00):
The second philosophy we have is really a grow the pie philosophy. So we want to work with our partners in our ecosystem to make the opportunity set even larger and we see that today. We mostly serve reporting and BI use cases, we're seeing lots of companies start to operationalize their data. Now with this big wave of ML, clean Transform data assets are being used to train machine learning models so that the pie continues to grow. Let's focus on that as our target and work with people to make the opportunity set really attractive and not try to slice it up too thinly.

**Julia Schottenstein** (00:19:37):
And then the last one is we want to lean into our strengths. So we have an ambition to be a platform company and we know what we're good at, but we also want to leave space for our ecosystem to offer solutions to our users that help them out. And we really want to foster an ecosystem where we can partner with lots of companies in the modern data stack. And generally speaking, when it comes to competition, we take a really long-term view and there are a few areas that we do want to hold our ground and that's in our transformation standard as well as our semantic standard because we believe those two are better served together for the user's sake. But for everything else, we really feel like we can work with our ecosystem and accomplish what we want to accomplish and also help them accomplish their goals too.

**Lenny** (00:20:27):
This might be a good time to just chat about dbt and the success the company has had. So many startups have tried to become a standard default layer of what's now called the modern data stack. And I don't know any startup doesn't use dbt or planning to use dbt. It's just a incredibly rare success story somewhere to snowflake where it's just like it's the default for building large data startups and most startups these days work with a lot of data. So my question is just like what do you think dbt did most right to win in this and continue to win?

**Julia Schottenstein** (00:21:01):
So I think dbt did a lot of things right, but I'll point out too that really stick out to me. And the first is just power and simplicity and the second is a commitment to being open. And I'll touch on what I mean by those two things. So when dbt was first getting started, you would hear a lot from companies, I don't understand, what's so special about dbt? We have a SQL templating tool at our company, we built one in-house. Like this is really straightforward and simple and it's true like dbt is really simple, but that is the power of it.

**Julia Schottenstein** (00:21:37):
So our founders, Tristan, Drew and Connor, they had a belief that the people who do data analysis work, that really work closely with their business stakeholders should also be the ones to contribute to creating clean data assets in production because that data prep work is a necessary prerequisite for any analysis that you do. So dbt was really this belief that if you know SQL, we want to invite you to do these workflows that were traditionally held by data engineers but you had to earn that. So dbt has this nice framework where it's harder to mess up, keeps data quality really high, but it is pretty simple to get started and learn and learn. And that was really the unlock in the industry. We were definitely solving a pain point at the right time.

**Julia Schottenstein** (00:22:26):
And then the second thing is this commitment to being open. So dbt is open source and that's the main guts of dbt where you write your business logic and it helps in a number of ways. Specifically it helps with flywheel, keep the flywheel running and also with network effects. And I'll explain what that looks like. So dbt is really easy to get started with at your company with reduced friction. We're building a product that people, so they talk about it, they want to share it both at their organization and with other companies. Other companies get started with dbt again with reduced friction.

**Julia Schottenstein** (00:23:05):
We now get to see this really diverse set of use cases for dbt across company sizes, across industries and it allows us to build a truly horizontal company. As our company grows, we get to invest back into our community and our product and the flywheel begins to spin faster. And then meanwhile we have a really large user base. So we have 20,000 companies using dbt every single week and that attracts partners to want to build for dbt and so they share best practices, build workflows, and now if you're a company and you've standardized on dbt, you've really unlocked an integrated modern data ecosystem that wasn't available for you before. So that has a flywheel and also benefits everyone that decides to be on the standard. So it's those two really important trends that made dbt so powerful today.

**Lenny** (00:24:02):
So what I'm hearing there is essentially the product was right for what people needed to solve. There's also a product led component, open source, free self-serve piece that people adopted, used and started working and then scaled and started paying for it. And then there's an alignment of the vision of where this was going and how it fit with how people wanted this to work for them. Is there anything else? Because a lot of startups do that and that all sounds really smart and good, but a lot of startups try to do those things and no one cares. Maybe their product isn't necessarily what people are looking for, maybe they don't get the right distribution. I don't know. Is there anything else that you think they did really well that helped them kickstart this to even be a thing? Is it timing that was really great? Is it specific influencers early on?

**Julia Schottenstein** (00:24:48):
Yeah. I think timing was really important with the success of dbt. That they were there when the cloud data warehouses were really exploding and growing in an enormous way. And dbt Labs started as Fishtown Analytics, a consulting firm. So they worked really, really closely and hands-on with all of their consulting partners to get the pain point and really solve firsthand challenges that they saw. I think that combination of being at the right place at the right time and also getting to work really closely with people's day-to-day problems created a really special experience.

**Lenny** (00:25:29):
I didn't know that. That's a really important element of the story is basically they were focused... How long did they do that Fishtown Analytics consultancy?

**Julia Schottenstein** (00:25:38):
Board consulting part of the business was almost two years.

**Lenny** (00:25:42):
Okay. So they basically spent two years solving this problem basically manually for people, and that's such a great way to understand real pain and figure out how to solve it.

**Julia Schottenstein** (00:25:53):
Totally.

**Lenny** (00:25:54):
Awesome. Okay, so that's a really interesting insight. Just spend a few years. It sounds like it was almost manually helping people transform their data using whatever tools already existed.

**Julia Schottenstein** (00:26:05):
Yeah. Well, they were building dbt and using dbt to help them do their jobs better and supporting their clients. And whenever they encountered paper cuts or friction or the workflow was taking longer than they expected, they would build that into dbt. And that really matured the experience of the product because the people who were building it, the founders were also day-to-day working with these customers or clients that had pain points.

**Lenny** (00:26:36):
That reminds me of a story you told me about how you made your eng team do some manual work of an algorithm involved in transformation. Can you share that?

**Julia Schottenstein** (00:26:47):
Okay. So I'm going to preface this story by sharing that I'm a huge math nerd and one of my favorite books on logic is called Girdle Escher Bach. And in this book there's a fun scene where there's an ant farm that bands together to do the work of a computer flipping bits from zero to one to solve logic gates. So this chapter of that book was really the inspiration for an exercise that I ran my team through. So about a year ago we were doing a big zero to one new project at dbt Labs and we were going to change the algorithm for how we built customers data transformation graphs. And I needed a way for the team to really internalize all of the changes that we were going to be making and I needed them to own it because otherwise they wouldn't be able to anticipate all of the edge cases and it wouldn't be quite as durable. You couldn't copy paste the algorithm.

**Julia Schottenstein** (00:27:41):
So I showed up to a team offsite with a spool of rope and sticky notes and I think my team looked at me crazy, went with two heads when I started to tie people up to create a graph. So each note of the graph was an engineer and the rope was the edges of the graph to connect them. And then we worked through the new algorithm extremely slowly, step by step. And it was a way that you couldn't leave that exercise without knowing exactly what was going on because everyone had a role to play.

**Julia Schottenstein** (00:28:16):
So I think a lot of times when you're starting something new, you get into a situation where a few people really understand it and they're running way ahead of the rest of the pack. But I needed a way for the whole team to go along for the journey. So I'm constantly trying to create these important moments or memorable moments for the team so that it's centered around our mission and they can have the ownership of taking the project and making it successful. So it was perhaps a overly creative or kooky way to spend the day, but it was really successful.

**Lenny** (00:28:49):
What was the actual algorithm you were trying to implement?

**Julia Schottenstein** (00:28:53):
We were trying to figure out how to make flipping the way that we run people's dags from an imperative way to a declarative way. So instead of running things left to when data arrived in your warehouse. You think about it as reverse, like what would need to happen to make your data SLAs be materialized in time.

**Lenny** (00:29:16):
Awesome. And sounds like the team found that valuable.

**Julia Schottenstein** (00:29:20):
Yeah.

**Lenny** (00:29:20):
Okay. Reminds me of a clip from this last season of Ted Lasso where they have used red strings and I won't get into it, but if you've seen it you will know what I'm talking about. I want to come back to your chatting about open source versus not open source. So some part of dbt was is open source and some isn't. I'm curious how the team decides what is open source and what should be open source, what isn't open source and what to charge for?

**Julia Schottenstein** (00:29:50):
We think about dbt open source. It's really the guts of the data transformation. It's where you describe your business logic. And then on the cloud side we build proprietary software that supercharges the development life cycle and the productionization of dbt at scale. So what we think about as leaving for our cloud offering is we deal with state, so stateful interactions and also any cross team or structural collaboration. We want to reserve that for our proprietary offering. And I think it's really important to have that distinction of what do you believe should be open source or what is the open standard that really matters? And ecosystem to us is really important. So it's important that that remains open source, but then we want to supercharge that experience with an open core model and build proprietary software that makes people much more successful at using dbt.

**Lenny** (00:30:48):
**Julia Schottenstein** (00:32:09):
Pricing and willingness to pay is such a hard conversation and lots of startups don't do this early enough in their company journey. Likely a side effect of zero interest rates where investors were happy funding GitHub stars and usage and companies never thought about how am I going to make revenue or make money, which is it's important. So for us at dbt Labs, I don't claim to be perfect at it, but we're trying to get a better muscle around it. And I always think about Madhavan who wrote this book Pricing Innovation. I know you've had him on the show before, but he shares that you don't get to decide if you're going to have a pricing or willingness to pay a conversation. You only get to decide what. So it's much better to have that conversation before you build the product than have it when your sales team's trying to sell something and people aren't excited about what you've built, aren't willing to pay for it.

**Julia Schottenstein** (00:33:04):
And at dbt Labs we have this value, it's one of our core values that says we are more concerned with value creation than value capture. And we really mean this. When we talk about what is the value of dbt Labs to our customers, they often talk about how it's either 20 to 35% as valuable as what they spend on their cloud data warehouse. But what we charge our customers is a very small fraction of that 20 to 35% and that's by design. And last year we did our first ever pricing change in the company history and you learn a tremendous amount when you have that event because you get to test the price elasticity by of your customers.

**Julia Schottenstein** (00:33:49):
And it's so important to learn that lesson while the company is still smaller or the stakes are lower because pricing just is always evolving. It's not a fixed thing, it gets more complex over time. So we have to think about it quite a bit because my team builds proprietary software for dbt cloud and when we lose a deal we most often lose it to dbt open source and we like it that way. We're happy to lose to ourselves, but we have to really think very deeply about what are people willing to pay for and what moves the needle for them and focus on that.

**Lenny** (00:34:26):
I'm so curious what that pricing process was like to figure out what to change. Is there anything you could share about just what that was for you or what are some just surprises that came out of that process or just like, "Wow, we didn't expect that in these conversations?"

**Julia Schottenstein** (00:34:42):
It's really like an all hands on deck conversation. Pricing is so cross-cutting because it's a finance discussion as well. You're modeling out things in spreadsheets and figuring out how that might impact the business. But you can't just solve these problems in spreadsheets. You have to go talk to customers, test the waters, understand where people's appetites are and sussing that out is really hard. And then of course there's a product piece to it too where you have to affect it and communicate it as well. So it was very cross-cutting. We learned a lot. We track our conversion rates really carefully. We track our turn rates very carefully and I think largely we were happy with the change that we made and we felt like one of the big things that we were trying to solve for was have our pricing catch up to how people valued the tool.

**Lenny** (00:35:40):
How many people did you end up talking to, who was doing these conversations and is there anything really important you learned about how to ask these questions and these sorts of leanness to pay conversations?

**Julia Schottenstein** (00:35:50):
So we talked to dozens. It was combination of product and product marketing, having the conversations and people aren't very willing to share explicitly what they will pay. But there's some tools that we use on relative value. People most think about what is the relative value of dbt in their cloud warehouse. And we also tried to employ some of the tactics that we tried to suss out what do people view as very inexpensive? What's a price point that's very cheap or a no-brainer? What price point is maybe fair or comfortable for them and what would be too expensive? And then we had all the data back to figure out where we landed.

**Lenny** (00:36:34):
I want to come back to M&A for a bit. I had a few more questions there and I moved on from that. So again, you've done a lot of work within the M&A realm. Something that I saw recently, and this connects to the fact that a lot of startups now are looking to get sold. This VC hunter walk, he's a founder of Home Brew Ventures, had this interesting blog post where he basically suggested you should actually think about being public about the fact that you're selling your company. Which is crazy because in the past you never want to come across as too selly. I don't want people to think I'm desperate. And his point is many startups are desperate right now and it's okay to be public about that. And then in theory creates more of a bidding situation where many people know versus keeping it secret and in closed rooms. So my question is just what do you think of that? Do you think that's effective strategy? Is it not?

**Julia Schottenstein** (00:37:28):
I think it's good advice. If you're in a Hail Mary situation where you're looking for a home or you need an exit for your business, it's better to be transparent and cast a wider net. And you're right, in previous times founders tried to be a little bit cute or obfuscate that they were evasive the situation that they were in because they wanted to drum up some competitive interest when there really wasn't any. But unfortunately in today's climate, too many companies are in that spot so it's impossible to hide it. So the better approach is just to be transparent and I see it pretty regularly and there's absolutely no shame in sending a note that says something like, "Hey, we're looking for an exit for our company X, Y, and Z didn't pan out as we expected. We built a really interesting product and we want to keep the team together. We're running a process. Are you interested?" Really just as simple as that.

**Lenny** (00:38:24):
I've seen a lot of companies put together these really detailed decks or even websites of just like, here's the team, here's what we built to be very promotional about it. Is that something you've seen? Is that something you'd recommend?

**Julia Schottenstein** (00:38:35):
Yeah. Usually in these situations people are acquiring the teams and so having your data room together, really the most important thing is these are the team members that are going to come along with the acquisition is the biggest motivator for why a buyer would get excited.

**Lenny** (00:38:52):
You made this point earlier that a lot of the seeds need to be planted early for you to have the best outcome. And this reminded me... So I had a startup local mine that we sold to Airbnb and I met Airbnb initially at a year before we actually started exploring the process at a random party at South by Southwest where I was, I actually have no memory of this party, but the head of product at Airbnb, Joe bought, remembered it and came back to us a year later and just like, "Hey, what are you guys up to? Maybe we could collaborate on some stuff," and that led to an acquisition. So I think that's just wanted to touch a ban on that point of just the power of, the way I thought about it is let a thousand flowers bloom, just like meet everyone. Get the word out that you're around and what you're doing so that in the future when someone has that problem they're like, "That company, maybe we should talk to them."

**Julia Schottenstein** (00:39:37):
Yeah, you want to make sure that the buyer knows who you are before the acquisition moment and hopefully that's because you've made an impact and they like what you're building. Maybe you've inflicted some pain on them. But yeah, certainly creating those connections well ahead of an exit event is important.

**Lenny** (00:39:58):
And specifically there it's meet people at your competitors potentially. For us, Airbnb was never even a potential company we would sell to because it had nothing to do with it but ended up making sense down the road. What's like the realm of the companies and people that you think people should think about meeting?

**Julia Schottenstein** (00:40:12):
If the company is buying a lot or they're active, they often have corp dev teams and so use that corp dev team to your advantage. It's their job to meet absolutely every company that could be potentially interested. So take that meeting, say you're not interested in an acquisition just yet, but push them to make an introduction to someone that could sponsor the deal. So usually that's someone in product or maybe a GM and use that as a starting point for maybe just a conversation, maybe something more like a partnership but get the corp dev team to work for you.

**Lenny** (00:40:50):
What if you're at the other end of the spectrum and you're in dire straits right now and you're just like, "Man, what do we do to potentially sell this company?" I know odds are not going to be great, but just what do you suggest folks do in terms of I guess finding connections to potential companies that might be acquirers?

**Julia Schottenstein** (00:41:07):
Yeah. I mean use your network. Usually your venture capitalist has a really big network and one of the things that I hear founders feeling the most nervous about is a duty to return the money to the investors. And maybe this is a unpopular thing to say on a podcast, but your investors understand that they're not making their money back. And what they want to do instead is have you end up at a really great company like an Airbnb because that will help them down the road. So it's all about the long game, but use your investors to help you find connections at different companies that could be buying and don't worry so much about disappointing them or being really realistic about where you are in your company journey.

**Lenny** (00:41:55):
To build on that, I'm just an angel investor, I'm not like the lead fund and they feel differently I imagine. But the last thing I want for a founders to get stuck at a company they hate and just so that they could return some money or have some outcome rather they just give up, move on. Life is short.

**Julia Schottenstein** (00:42:11):
Yeah. I think founders forget that it is so risky investing in early stage companies that 50% of portfolios investments don't return anything. And that's just part of the game and it's a very acceptable path where hey, we gave it our best shot. It didn't work out and moving on.

**Lenny** (00:42:36):
Which is tough a lot of times for founders that are told like it's all about grit and not giving up and don't quit. Sometimes you should quit.

**Julia Schottenstein** (00:42:43):
Gosh, yeah. I don't want to say that. I think being founders, it's an extremely lonely role sometimes and it is very hard to know what your next chapter will look like or what the journey will look like and sometimes you really are out of cash and you do have to find a home. But I hope that you can continue to fight and find a way forward.

**Lenny** (00:43:08):
Agreed. Specifically for people thinking about selling their company, are there any companies you think are good companies for people to look at right now that are actively acquiring or open to M&A?

**Julia Schottenstein** (00:43:19):
This is a tough one. I think a lot of companies are on the sidelines for a number of reasons. And they could be on the sidelines because they just did an acquisition and they're trying to digest or integrate that company. They could be on the sidelines because they're not growing headcount as much and M&A is often org chart gymnastics of folding the target companies headcount into your budget and plan and maybe just don't have a lot of space. Or probably more common right now is there's just a general uncertainty about the future. And in highly volatile markets people want to take care of their own and even the best M&A deals at a level of complexity that a lot of buyers are just not looking to take on right now.

**Julia Schottenstein** (00:44:07):
So there are a number of reasons why people might sit out, but what I would do if I were in a position of wanting to sell my company is I would come up with a buyer set of maybe a dozen and really there aren't more than a dozen companies that will find what you're doing to be a very good fit. Start with your buyer set and then start calling the list by looking at some of the criteria that might count people out. And then go have those conversations. And if you're in a Hail Mary situation, be very transparent about it. Maybe open up the buyer list. But if you still have some room, I would maybe focus on two to three partner or buyers and really play a different playbook, which is inflict pain. Make it really hard for them to not notice you but do it with a smile and be friendly at while you do that.

**Lenny** (00:44:57):
Sometimes with M&A discussions, there's a lot of subtlety to the way you communicate where you don't come out and be like, please we'd love to sell our company to you. Any advice on just the phrasing and how to approach it or do you think it's just, it's fine, just tell us we're looking to sell our company. Are you interested in being buyer?

**Julia Schottenstein** (00:45:15):
Yeah. I just wouldn't be too clever here. Everyone understands like I'm evaluating strategic alternatives. It means you're looking to sell your company and it depends. Do you have time? If you have time, yeah. Don't come out and say, "Hey, I'm for sale." That's not going to end up in a good outcome. But depends where you are in your company journey. If you have time, then don't talk about M&A at all. That's the last thing that you want to speak about. Instead, you're talking about maybe collaborating or partnerships. How do we work together? Knowledge sharing and M&A is a dirty word if you have a lot of runway and you're going to try to continue to pursue an independent path, but if you're out of time, you're out of time.

**Lenny** (00:46:08):
That's such good advice. I remember the term we used was we want to explore a strategic partnership and everyone's just like, I knows what you mean by that, but you just don't want to say it.

**Julia Schottenstein** (00:46:19):
Yeah. It's like everyone in the room's looking like yeah. Okay. Strategic partnership or a strategic alternative, it's like we all know these code words and we understand the situation you're in.

**Lenny** (00:46:31):
Yeah. When do you think M&A market might pick up again? I know it's impossible to predict. Do you have any sense?

**Julia Schottenstein** (00:46:37):
Yeah. I wish I had a magic ball. That'd be pretty sweet. I think what is happening though is we're far enough out from the peak of the markets. So the peak was really November of 2021. And why does that matter? Two things. One, founders are coming to terms with valuations that they maybe received at the highest of the market, are no longer going to hold in this market and companies are out of cash or maybe out of options. We'll be better assets entering the market soon. And at a certain point the opportunities will just be too great. That will incentivize a lot of the buyers that have been on the bench to start participating again in the M&A market. And I don't know exactly when that will be, but I think we're pretty close. I think we're pretty close.

**Lenny** (00:47:28):
And you mentioned a value that you have at dbt. I forget exactly what it was, but I'm curious what are the other values that you have at dbt, whatever you can share. Always curious what principles and values companies come down to help drive the way they think.

**Julia Schottenstein** (00:47:42):
The value that I shared is we are more concerned with value creation than value capture and that really drives everything that we do. We try to put a lot of good out into the world and it pays back slowly. The whole mission of dbt Labs is to help analytics engineers disseminate organizational knowledge through data. So we really believe also being participants of sharing that information and getting more people knowledgeable about all sorts of things.

**Julia Schottenstein** (00:48:13):
Transparency wins. We're a really transparent company. We share our board decks. We have lots of communication and participation in all of our Slacks. We're writing culture. We have hard conversations in the open. So that's another a big one. Transparency always wins. We are humble. We don't ever feel like we are successful. We come at this from a very humble space where we feel like we have to serve our community and our users and that really motivates us. And then another one is just work done well as its own end and it's really focusing on the journey and not the end destination.

**Lenny** (00:48:56):
Awesome. I want to do a post someday of just like, here's the values all these different successful companies have come to and see if there's any patterns. I'm actually doing a post right now on Snowflake and on Figma and what you touched on. There's such a connection and a thread of obsessing with your users and making sure they're happy at Figma. I forget exactly what it is, but it's just like in this article, it's going to come out tomorrow actually. So people get a sense of when we recorded this where they think of their company as software as a service where service is their number one goal. They actually provide service and software is just a way to do that. And then it's Snowflake. Their number one core value is put customers first and they talk a lot about how they just actually informs their prioritization all I think, and all their thinking. So it's interesting. That also comes up a lot in what you're talking about, which I think it's easy to say, but I think what actually separates companies that succeed is they actually put this into practice.

**Julia Schottenstein** (00:49:51):
It's really interesting too because a lot of the people who work at dbt Labs came from the community, so they feel this real ownership in making the experience an excellent one because they were so compelled to come join dbt Labs because the product changed the way that they work or changed their lives. So that commitment to the community and product experience is really, really strong.

**Lenny** (00:50:14):
This isn't another thread. Maybe we'll go down real quick. I'm working on a different post around Reddit and how to work with really opinionated users that strong opinions about changes to the product and the way they described it, these guys were there for five years working with the community on the product. Is that to your users, the product is their baby, basically. It's like they think it's theirs versus the companies. And I'm curious, having a really strong opinionated community, what it sounds like you also have, what have you learned about just working with them to build product that makes them happy and avoid revolts and really upsetness?

**Julia Schottenstein** (00:50:51):
It's hard as you grow. I think it's just a challenge cause our community gets bigger. You can't service everybody's needs. But I think what we've done is everyone is very deep in our own product. I think one of the cool stats is at dbt Labs we have over 30% of our employee headcount has contributed to our data transformation workflow. So that's across every discipline. It's in obviously product, obviously in our data team. Our marketing team also contributes to data transformation. And our engineering team will also contribute to our internal dbt analytics project and that sense of really understanding what the experience is like and then soliciting as much feedback as we possibly can. We have a dbt Slack community of 50,000 and all of our employees are in that Slack channel regularly and can feel when we mess up or we don't quite deliver an experience that we're proud of, you will just see dozens of people trying to jump on board and try to make it better.

**Lenny** (00:52:02):
Is there any other frameworks or just general processes that you found to be release useful in building awesome product running teams?

**Julia Schottenstein** (00:52:10):
I'm not a big framework person, but there's two sayings that I find myself repeating or I either to myself or to others. And it's worse is better and tech debt is a champagne problem. And what do I mean by that? It's really to help me combat this perfectionism because perfect doesn't exist and you should instead go with good enough because when you ship, that's the moment when you get to learn a lot from your users and you just can't anticipate it. You try very hard to understand exactly how people will use the product and get all the edges ironed out. But you can't until you ship. And I'll share an example. So my team helps support the dbt cloud scheduler and the initial version of the dbt cloud scheduler was pretty naive. We were a little embarrassed by it.

**Julia Schottenstein** (00:53:02):
It was a big old for loop over a big old jobs table. So we would look like is it time for this job to run? Okay. Yes, run this job. Okay. It's not time for this job to run next, continue on. Is it time? Yes, run this job. And it would just loop over and it's extremely naive and very simple, but it got the job done. And I try to remind the engineers, we would be so lucky to have tech debt because that means people are using the product. And now we've had to rebuild our scheduler several times over because we do have meaningful scale. We have 8,000 companies using our scheduler. We have to manage 10 million runs per month. But what we didn't need at launch was a distributed scheduler with coworkers and RabbitMQ. We just didn't need it because we had no users. So these two sayings that worse is better and tech debt is a champagne problem, just really reminds people like, let's ship, let's get it out into the user's hands and then we'll learn and iterate and it'll be a better experience for them.

**Lenny** (00:54:08):
That's a good segue to my last question. So weren't a PM before this role. You have strong experience in investing, investment banking business in general. I'm curious what you think product managers should maybe focus on more or learn more or lean into to become stronger product leaders based on the experience you've had moving into product.

**Julia Schottenstein** (00:54:30):
So I pull a lot on my experience or some of the things that I did was as an investor in my current role in product. And maybe I'll touch on what is the scale of a venture capitalist might be a little bit foreign for people, but venture capitalists, they spend all their day meeting lots of different companies, context switching. They have to know a little bit about quite a lot of different things. And they do this to refine their investment tastes or find their investor judgment. And they're also investing a lot in their network and connecting people, supporting people, and mining people for ideas that are way smarter than they are. So you do that all the time in Venture and I've brought a lot of those skills with me into product and it translates really well.

**Julia Schottenstein** (00:55:17):
The first is I still spend a lot of time investing in my network and I think it's an underrated way for a PM to spend their time. And I try to build a network of operators at other companies that are like dbt Labs that are growing nicely, maybe a little bit ahead of where we are. And I ask them questions, how did you navigate open source? How did you navigate pricing? How did you navigate acquisitions? And then I take the best ideas, figure out which ones I can apply and bring it back to dbt Labs. The second thing is I really think my special T or my superpower is that I'm a T-shaped generalist. So I know a little about a lot of things from finance to business to product. I have to go a lot deeper in product in the areas that I specialize in. That's where the tail of the tea comes in. But it's precisely because I've had a diverse background that makes me more effective when I'm trying to get things done within the organization. Because I have just more credible experiences that I can pull from.

**Julia Schottenstein** (00:56:18):
And then the last thing that I think maybe doesn't show up day to day in my product work, but in investing, you're constantly thinking about risk and the power laws, and we touched on this before, but most investments don't work out. You lose the dollars that you put in, but all the returns come from these rare events that make up for all the losses. You have to think about what are the uncapped upside opportunities in investing. And I think in product, you still have to do the same thing. If 50% of the things I worked on went to zero, we'd have a problem. But it encourages me to continue to make bets for the company that has the chance of bending the trajectory of our business.

**Lenny** (00:57:03):
We've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Julia Schottenstein** (00:57:07):
Yeah, let's do it.

**Lenny** (00:57:08):
What are two or three books that you've recommended most to other people?

**Julia Schottenstein** (00:57:12):
Okay. So two books that helped me learn a lot about myself. Range, it's a book about generalist and also Quiet, it's a book about introverts. And then I like a lot of biographies. So a few of my favorites are Snowball about Warren Buffet, Made in America, about Sam Walton and Leonardo da Vinci.

**Lenny** (00:57:31):
What is a favorite recent movie or TV show?

**Julia Schottenstein** (00:57:34):
So I almost watched a movie in preparation for this podcast, but I really don't watch things except in the holiday. During the holidays, I like Succession, but I have not seen the latest season.

**Lenny** (00:57:46):
Wow. You're in store for a treat. Favorite interview question you like to ask?

**Julia Schottenstein** (00:57:53):
When's the last time you had to teach yourself something new and how'd you do it? So I like to test for growth mindset and a thirst for learning. And then also why dbt Labs. I think a lot of people who come to dbt Labs have very authentic reasons why they're drawn to the company. And in moments where in things are tough, it's the answer to that question of why are you here, it's going to make all the difference.

**Lenny** (00:58:17):
And sounds like what you look for is just like an genuine enthusiasm.

**Julia Schottenstein** (00:58:21):
Yeah.

**Lenny** (00:58:22):
Awesome. What are some favorite products you recently discovered that you really like?

**Julia Schottenstein** (00:58:27):
I like Belly. It's a consumer social app that lets you find and discover restaurants and rate them with your friends. It's been a lot of fun looking at the New York City restaurant scene.

**Lenny** (00:58:37):
I've never heard of that. Awesome. What is something relatively minor you've changed in the way you all do? Product that has had a lot of impact?

**Julia Schottenstein** (00:58:42):
Do fewer things and try to single thread the team as much as possible.

**Lenny** (00:58:50):
And single thread meaning like one main priority, one goal?

**Julia Schottenstein** (00:58:53):
One mission. Yeah. We're all working rowing in the same direction.

**Lenny** (00:58:57):
Final question. You have a podcast, first of all, tell us what it's called, but second of all, what's a favorite podcast of yours other than this podcast and your podcast?

**Julia Schottenstein** (00:59:05):
Yeah. It's called the Analytics Engineering Podcast, so if you want to learn more about the data industry, I host it every other week with our CEO Tristan Handy. It's a lot of fun. Check it out. Other podcasts that I really like are In Depth, it's First Rounds podcast by Bretton. He interviews a lot of operators about how they do their very best work. And another podcast that I really like is the Logan Bartlett Show, which touches on timely trends in tech.

**Lenny** (00:59:34):
And In Depth I think Todd Jackson actually hosts a lot of the episodes too. Also, a huge fan of the podcast. Definitely check it out. And then say your podcast again and how can folks find it?

**Julia Schottenstein** (00:59:43):
It's called the Analytics Engineering Podcast.

**Lenny** (00:59:47):
And it's just in podcasting apps?

**Julia Schottenstein** (00:59:48):
Yes.

**Lenny** (00:59:49):
Amazing. Check it out. Julia, we've talked about inflicting pain and strategic partnerships and why worse is better. Thank you so much 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?

**Julia Schottenstein** (01:00:03):
You can find me on Twitter J_Schottenstein, and you can also find me in the dbt community Slack also, Julia Schottenstein. Send me a note, reach me there and I'd love to hear from you if you have data problems or we can help serve your needs better, would love to chat.

**Lenny** (01:00:22):
Thank you so much for being here, Julia.

**Julia Schottenstein** (01:00:24):
Awesome. Thanks Lenny.

**Lenny** (01:00:25):
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.

---

## [4/20] LinkedIn’s product evolution and the art of building complex systems | Hari Srinivasan (LinkedIn)

**Hari Srinivasan** (00:00:00):
It was March 2020 and we were just watching COVID hit. It was just this heartbreaking moment where in the feed you were seeing all these people, by no fault of their own, starting to post that they've lost their job. We started seeing in our data is you had some areas like maybe hospitality was really getting hit, but some areas like customer service that just couldn't hire enough. You'd think the marketplace would balance pretty quickly. You'd think, okay, maybe these people will start moving to other jobs, but it wasn't happening.

**Hari Srinivasan** (00:00:24):
A large reason behind this, people are used to looking for certain particular titles, and they didn't start realizing other people could do this job. We made a pretty big push in something we call skills-first hiring. This was the idea that we could translate people's experiences into a set of skills, and by that we could help them really start balancing the marketplace with a much different system. I think that the job market is rebalancing, but it's being done, the pathways are being done in a very different way that seems to be maybe a change that holds through these ups and downs. That'll be very interesting to see.

**Lenny** (00:00:57):
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 Hari Srinivasan. This episode has a hilarious story.

**Lenny** (00:01:11):
On Twitter, an account called The Curious PM tagged me with a request to have someone from LinkedIn come on the podcast and talk about how they operate and what they've learned about building products that serve so many different types of customers. I replied asking for any suggestions for who he thought I should specifically talk to, and he suggested Hari Srinivasan, by doing some research on LinkedIn. I reached out to Hari, told him about this tweet and he agreed. Here's the episode.

**Lenny** (00:01:39):
Hari's been at LinkedIn for eight-and-a-half years and he leads the Talent Solutions Product Team as VP of product, which is also LinkedIn's biggest business, and includes all of the hiring and learning products, which you'll hear about in this episode. In our chat, Hari shares what he's seeing change in the hiring market, what you can do to improve your odds of finding a job through LinkedIn, what he's learned about building and maintaining really complex systems like LinkedIn, tips for getting into product management, and some lessons from his own course on product management. Plus, we also talk about how LinkedIn has been able to become a real source of valuable content and a lot less cringe over the past couple years, which I've definitely noticed and I share in our chat.

**Hari Srinivasan** (00:05:06):
Thanks for having me. Been a big fan for a long time.

**Lenny** (00:05:09):
I really appreciate that. What a fun story behind this conversation. Let me just ask you, how did you feel when I cold-DMed on LinkedIn, asking you to be on this podcast because of a random tweet?

**Hari Srinivasan** (00:05:20):
I felt very honored. Again, I really have followed your work for a while. It's been really amazing to see what you've built, and I'm a huge fan of different builders. Also, it was a little bit of an honor that someone ... I know we're going to get into the story in a little bit. When you work on something, oftentimes jobs and learning, it's rare I think that it's in the influencer conversation. It's not necessarily something you or other people are properly experiencing on day-to-day. Sometimes, I don't know if we get to tell some of these stories, and I really appreciate you reaching out for that.

**Lenny** (00:05:50):
Yeah. Absolutely. I guess let me just give a big thank you to Jatin Rajvanshi, also known as The Curious PM, who tweeted about this concept and then is like, "Hey, talk to Hari about LinkedIn." Thank you, Jatin, for making this happen. It was all thanks to you. Usually, when this happens, someone tweets a recommendation of someone, they know each other. I'm like, "Eh, I don't know. This is some promotion of some other person." But you guys don't know each other, right?

**Hari Srinivasan** (00:06:15):
We don't, no. I'm looking forward to meeting you. Thank you, again, for putting in the word.

**Lenny** (00:06:20):
Absolutely. Also, thank you to Jatin for recommending a bunch of questions that I'm going to ask you.

**Hari Srinivasan** (00:06:26):
That I didn't know. Maybe I should've known. That I didn't know. Thanks, again, Jatin. It's very kind of you.

**Lenny** (00:06:32):
Yeah. Okay. Let's roll into some stuff. I actually want to start with LinkedIn as a platform broadly. I know you don't work on all parts of LinkedIn and don't necessarily know everything that's going on there, but something I've noticed that's pretty major is, it feels like LinkedIn's really made this move from being a very cringey place to post and spend time to, it's actually now interesting.

**Lenny** (00:06:55):
The feed that I see on LinkedIn is interesting. Oftentimes even more interesting than Twitter, which is crazy to say. Also, it's become the biggest source of traffic for my newsletter, more so than Twitter, which I never expected. My question is, as far as you know, what is it that y'all did right in the past couple years that has allowed for this shift to happen? Because this is very rare.

**Hari Srinivasan** (00:07:18):
Well, first, I'm glad you're having a good experience with it. That's really, really kind to here. First of all, it's very interesting you hit on it. Everything at LinkedIn is a very connected ecosystem. One of the things that we always think about is how the whole system fits together. I'm sure we'll get into it more and more about how we build at LinkedIn, but how you make decisions based on the very complicated ecosystem is actually not very difficult because we're all here to help people connect to economic opportunity. Every time there's a discussion, something I'm really, really proud about working here is, everyone knows how that decision is going to be made. It's all about how we're connecting people to economic opportunity.

**Hari Srinivasan** (00:07:55):
Now, it's funny. Just the other day, I was driving. I was in an Uber with the person who runs a feed. He's this guy, Kamesh, who's just phenomenal. We were just talking about this and one of the things he mentioned to me was, "If you think about what a feed is when it connects someone to opportunity, it's got to do a couple of things really, really well." We've done a ton of member surveys on this, a ton of thought behind it. The first is, as you make relationship connections across the way, that is a real way by which people get opportunity. They keep in touch with those people. They learn they might follow someone, and hopes in getting knowing them and getting that knowledge. We got to make sure that that content is getting to them.

**Hari Srinivasan** (00:08:29):
Then, when you think outside the network, we have to make sure that the things that people really want, which they keep saying are knowledge and advice and ability to get the real perspectives they need to get there, those are the things out of network they want. We've really, really been focused on driving those two systems. How does someone connect to opportunity both through the people and through the content that they actually want? As you know, when you do a feed, there's so many decisions that go into that complex system, so many decisions. But we've been really, really trying to make sure that we don't lose sight of that and start tuning all those knobs into that direction.

**Lenny** (00:09:04):
If we're trying to get even more specific with what has changed, clearly there's been a focus internally. Is that true? There's just like, "Hey, let's make this feed a lot more interesting"? Or is this just a never ending and then it's actually started to work investment as far as?

**Hari Srinivasan** (00:09:19):
Well, there's always been a focus on connecting people to opportunity. There's always been a focus on that. I think what's happened over time is we've gotten more and more clear with what our members really want, which is this ability to feel close to those relationships and the ability to really get that knowledge that they need. As we've gotten better and clear in that understanding and we've been able to dial the knobs in the right way, I hope it's landing in the right place. I don't think it's any place near declaring victory in any part of this product.

**Hari Srinivasan** (00:09:46):
I think one of the beauty of working with that vision of connecting people to opportunity, there is always some piece of friction. There is always something we could be doing better. I'm always hesitant to say we've ever hit that bar, and I know there's probably people who listen to you who probably maybe have not had that experience. I always encourage you to reach out and let us know ways we can do better. But I'm glad you're having an experience with it. And then to your point, I always feel that as long as we stay focused on that and each of our decisions start moving in that direction, hopefully the product will continue to deliver.

**Lenny** (00:10:14):
Do you know if there's any product changes that have most contributed to that feed becoming much more interesting?

**Hari Srinivasan** (00:10:21):
Well, there's a couple of things that I think are very special that we're working on and it's hard to say which is most, because a lot of these things obviously accumulate and compound over time. But certainly, there's a lot of machine learning and algorithms that go behind these systems. Many of them, as we start understanding that these are things that people get value by, it's about how do we make sure that we're giving people that interesting knowledge? As we've gotten crisper on what that means, I think we've been better able to build towards it.

**Hari Srinivasan** (00:10:50):
The other one, which is new, but I'm just particularly excited about, we're starting to do a lot of things which are gen AI-assisted. You basically can come in and get some prompts and people can bury their perspective on that. I think that combination, it's very early, but it's very exciting on how we might be able to help people unlock knowledge. There's almost a billion people now on the platform, knowledge of those billion people in a way that people can find and see.

**Lenny** (00:11:12):
Awesome. Again, I know this isn't the area you spend all your time on, but maybe one more question along these lines.

**Hari Srinivasan** (00:11:18):
Yeah, please.

**Lenny** (00:11:19):
Yeah. Do you have any sense of the kind of content that works best on LinkedIn in terms of the algorithm you talk about? The algorithm is probably one of the bigger impact things that have changed.

**Hari Srinivasan** (00:11:29):
If there's anything with knowledge or advice, I think that's what a lot of people are looking for. Every time we run these surveys, every time we talk to people on what they want, those are the things that really when you connect opportunity that people seek after in our system. You're a great example of that. You're able to give knowledge and advice in an area with a lot of depth. I think that maybe that's why you're having some of the success you're seeing on the platform, which is wonderful to see.

**Lenny** (00:11:53):
I think I'm actually not getting as much success as I could because I don't put in the time. I usually just post a simple thing with a link and I think I could be, if I really ... I just don't have time to do this of just like, post a lot more stuff within the actual post. I think that would do better.

**Hari Srinivasan** (00:12:09):
That actually makes me happy. My guess is what you want to be doing is learning and creating and not spending a lot of time managing. Maybe that's actually a good thing. It's actually another wonderful thing to hear.

**Lenny** (00:12:20):
Yeah, absolutely. Okay. Let's move to your sweet spot, which is the talent solution product? Is that what it's called?

**Hari Srinivasan** (00:12:29):
Yeah. It's basically any product on LinkedIn that helps you get a job or learn a skill. We have products for recruiters and hires, jobs. We have products for job seekers. We have LinkedIn Learning and then certainly, we run a pretty large creator ecosystem for instructors who post content into LinkedIn Learning.

**Lenny** (00:12:47):
Is it true that this is the biggest business within LinkedIn?

**Hari Srinivasan** (00:12:50):
It is a very big business between LinkedIn. It's certainly hopefully something that, again, if you go back to that vision of connecting people to opportunity, it's certainly something that I like to think is very, very core to that, how people get jobs and learn skills.

**Lenny** (00:13:04):
The feed gets all the glory and you guys are making all the money?

**Hari Srinivasan** (00:13:07):
I would not say that, but again, we joke about those things. It's so hard at LinkedIn to separate one product from the other. It's really the way we run. It's the way we think about the product. It's really the way we build. Let me just give you a super concrete example of that. Certainly, if you have someone coming in and looking at the feed, one thing we might do is suggest a job recommendation based on what they're looking for in that feed. Part of what we have to do is think about how someone who's looking at something in their interest might be driving their job-seeking experience as well.

**Hari Srinivasan** (00:13:38):
And then when they're looking for a job, it's very important that they know how they can actually get connected in that job. The relationship, the network you build are very much part of that flywheel that go into it. And then even as we start looking at this, you might be looking at a subject and then you want to go deeper on, and there's a course that comes into it as well. All of this to me is a very, very connected ecosystem on how those items work together in order to give people opportunity. We might think of it from the outset as very different things, but inside, even the way we operate and the way we think about it, it's a very, very connected ecosystem.

**Lenny** (00:14:15):
What are the components again of this part of the org?

**Hari Srinivasan** (00:14:18):
We think about it as two different marketplaces. There's a hiring marketplace, which is, how do we connect job seekers and recruiters and hiring managers? And then there's a learning marketplace, which is, how do you connect learners to instructors?

**Lenny** (00:14:29):
Got it. And then within hiring, are there subcomponents?

**Hari Srinivasan** (00:14:33):
Yeah. Again, we really think about it as a marketplace. We're generally organized around seekers and hires. There's a team that's working on a Recruiter, which is probably one of the more flagship products that LinkedIn has always been around, a team working on jobs, which is, if you ever post a job on LinkedIn, and then a team working to always help job seekers make sure they connect. And then on the other side for learners, instructors, the team working on LinkedIn Learning, which is one of the bigger enterprise learning products in the world. And then a team working to help instructors.

**Hari Srinivasan** (00:15:02):
Many people don't know this. We actually have two large film studios. We bring in instructors. We film a lot of content. One's in Europe and one's in Santa Barbara. It was all started with the Lynda acquisition. We have a large team of content creators and teams, everyone from makeup artists to script writers, that we get to use over there.

**Lenny** (00:15:22):
Wow. It's just marketplaces all the way down as you talk about this. Hiring marketplace, learning marketplace, the feed itself. Probably more I'm not thinking about.

**Hari Srinivasan** (00:15:31):
Yeah. It's very much the one model that we sometimes use internally as well is, how do we operate as marketplaces inside an ecosystem? I think it speaks to the complexity again of the product and hopefully somehow of how we might operate it.

**Lenny** (00:15:46):
I think with your vantage point at being at the center of hiring, a lot is changing within the hiring marketplace in the past, I don't know, year at this point, where it used to be very candidate-oriented, where they had all the power and they salaries were crazy. Everyone's bidding and trying to get people to join their company. Now, it's completely opposite. So many people looking, companies have all the power. I'm curious what you've seen, if that's roughly it, or what you're seeing basically in the hiring market these days.

**Hari Srinivasan** (00:16:15):
Yeah. Well, first of all, the balance that you're talking about, it is shifting in the sense that there are more seekers in the marketplace now and there are fewer open jobs in the marketplace. Of course, that changes how many applications you get for the job and how you have to look through. I think there's a model where people think it's drifting dramatically to exactly the way it was. I actually think some of the changes that occurred during the last couple of years are actually sticking around. Let me give you a couple examples of where things I think are really changing.

**Hari Srinivasan** (00:16:44):
The first thing that happened was, and maybe in my opinion, one of the big changes to the world that no one's really talking about it to my degree is the impact of it, but there's been a real move to skills-based hiring. For the longest time, and I'll give you actually a really concrete example, it was March 2020 and we were just watching COVID hit. It was just this heartbreaking moment where in the feed you were seeing all these people, by no fault of their own, starting to post that they've lost their job.

**Hari Srinivasan** (00:17:09):
We started seeing in our data is you had some areas like maybe hospitality was really getting hit, but some areas like customer service that just couldn't hire enough. You'd think the marketplace would balance pretty quickly. You'd think, okay, maybe these people will start moving to other jobs, but it wasn't happening. A large reason behind this, people are used to looking for certain particular titles, and they didn't start realizing other people could do this job.

**Hari Srinivasan** (00:17:31):
We made a pretty big push in something we call skills-first hiring. This was the idea that we could translate people's experiences into a set of skills, and by that we could help them really start balancing the marketplace with a much different system. But instead of saying, "I need to have this talent," you can say, "I need someone who can do negotiation, and I need someone who can really help me understand how to deescalate a customer situation."

**Hari Srinivasan** (00:17:54):
You find a lot of people in hospitality have about 70% of the skills you need for customer service and of course, you could train off the rest. We started seeing the skills-first hiring really start taking off. At this point, roughly 47% of our recruiters will come in, explicitly use skills when they start looking for candidates. That's a pretty big change that we're actually seeing hold. I know it's early in some of these changes, but it's a change where I think people are still continuing to start looking at skills.

**Hari Srinivasan** (00:18:20):
Another one was this concept of, there's a lot more people who are starting to look for jobs by values. They were saying, "Look, most job sites work by you come in and you look for a job and a title, and that's how you navigate the world." We started realizing a lot of people wanted to come in and instead of look at it like that, they may say, "Look, I really want a job. This aligned with my purpose." Or even by an interest, I may want something in AI. We started launching collections in the way to filter in these things. We're still seeing some of that usage today.

**Hari Srinivasan** (00:18:47):
I think that the job market is rebalancing, but it's being done, the pathways are being done in a very different way that seems to be maybe a change that holds through these ups and downs. That'll be very interesting to see.

**Lenny** (00:18:58):
What's interesting is it's not like this would change on its own. You're the biggest jobs marketplace in the world, right?

**Hari Srinivasan** (00:19:08):
We have a lot of professional jobs on our platform and a lot of professional seekers.

**Lenny** (00:19:11):
Hopefully, mysterious. I imagine it is. I don't know. I guess Indeed might be a competitor, but okay, let's say it's one of the bigger job markets. You influenced the way jobs are sought and posted and how people find jobs; so in a sense, designing. Sounds like basically, there was an internal decision. Let's focus on the skills approach. What's cool about that is that changes the way hiring happens in the world.

**Hari Srinivasan** (00:19:33):
It's one of the things that I think is so interesting about building products today is, it has to clearly be something people want. If we had just said we're going to go like this, and every hire was like, "I don't want to do this," or every job seeker said, "I don't care about it," I don't think anything would click. We also have to be receptive enough to amplify that signal and allow it to work through a system so that it could actually be easy to use.

**Hari Srinivasan** (00:19:56):
I don't think we said that, "Hey, we got to go and do this value-based thing." I think we started feeling it and hearing it from members and then as we adapted, these things start amplifying as they come through. I do think that's hopefully something that I think about a lot is, let's just make sure that we keep a pulse on what people want and we make sure that we can get that through a system at a pretty fast pace. Because then, we will hopefully continue to be a place where people want to go look for jobs and make hires.

**Lenny** (00:20:25):
What I was thinking about as you were just chatting is this open to work feature that LinkedIn has. I remember days before that existed and people used to just like jury-rig, "Hey, I'm hiring," or, "I'm looking for a job." There's always this sense that if you're open to work, you're not as good. Because why would you be amazing and open to work and not hired? I'm curious if you were even part of this experience. Just, what was it like to come up with that approach to how to communicate that you're open to work?

**Hari Srinivasan** (00:20:51):
It's been through phases and I think those phases really reflect on the perception of how it's changed. In the beginning it was, you could say you're open to work, but it was a secret signal to recruiters if you will. That certainly still exists, but now we said you could more publicly say it and maybe it'd be a feed post. And then we started launching it. Actually it was around COVID when a lot of the stigmas of unemployment changed dramatically, because everyone started understanding you're in this different situation. We started putting it the frame and that's the more iconic way I think people associate with now.

**Hari Srinivasan** (00:21:22):
It's funny. Just this week, we tried something new and I feel like it's almost the same journey. There are many customers as you can imagine, that have LinkedIn Learning and LinkedIn Learning is typically an enterprise product. It works across your employee base. We're trying to do Open to Internal Work where you can say, "I'm actually at the point where I may want the next play internally in my role," and an internal recruiter can see you. As you can imagine, I would actually even maybe argue more stigma about being concerned about upsetting your manager. Certainly, there's different cultures and companies about this.

**Hari Srinivasan** (00:21:52):
I have a feeling in sometimes we like to think five, 10 years out, I think it's going to go on the same journey. That's one hunch I have, that there'll also be an employment-driven way internally for people to find their next play. It'll be interesting to see how it plays out, but already you can feel a little bit of that tension right when we launched it and knowing. Let's see how this goes.

**Lenny** (00:22:13):
You were talking about how hiring is changing. I'm curious how PM hiring specifically is changing. A lot of people listening to this podcast are product managers. Is there anything unique you're noticing there?

**Hari Srinivasan** (00:22:22):
Maybe a couple stats that could be very helpful. If you're having a hard time finding a PM role, let's start with this, you're probably not alone. We publish it. You can go to Economic Graph data. This is all public. We publish this. But if you look at tech, it's down about 50% year-over-year. We look at hires over total population on LinkedIn. You can go to Economic Graphs and you can see how it compares trends industry. We don't look at the functional data as much, but the PM data seems to be trending just slightly even maybe below software engineers and data as well, which is maybe a comp for this. I know not everything is perfect industry to function cuts.

**Hari Srinivasan** (00:22:56):
It is a difficult place, but I'll give you a couple tips because I imagine that may be helpful for a couple of the listeners. It's certainly one of the larger inbounds of things I get. The first is, in those markets, you do want to make sure that the more you can do to form relationships and say that this is what you can do, which is always helpful. Now, I know that not everyone has relationships, but you can always try to develop those at different places and across LinkedIn as well. But that's one thing I would really, really start to look for.

**Hari Srinivasan** (00:23:24):
The second thing I would really do is we have launched the way now to come in and signal obviously that you are interested in a role. We have those open to work capabilities, but then each job has a set of skills that they're looking for under it, like we talked about in skills-first hiring. Against each skill, you can actually add different kinds of credentials. I would really encourage people to add work products if that's something that they're actually building. You can add different kinds of recommendations or other things they can associate with that skill. Those credentials against it I think are becoming much more interesting for people to say, "Oh, this is someone I'm actually looking for."

**Hari Srinivasan** (00:23:55):
And then the third thing I would really encourage PMs to start looking through is, this is probably more personal than anything in data, but every PM job is different. If you have experience in that industry and you're able to show that you have experience in that industry or some kind of understanding of it, I think that's a way to separate. I'd really start zoning in on roles where you might see if you don't have the functional experience, the industry experience. I think that would go a long way as how to help you differentiate from yes, what's probably more candidates, or more applications going into each role.

**Lenny** (00:24:30):
When you say industry experience, what's an example of that?

**Hari Srinivasan** (00:24:32):
Imagine that you are applying for a PM role, but that particular software is in, I don't know, automotive tech. If you happen to have worked in automotive before, have a knowledge about cars, that's a very helpful way to get in. I think if you're able to show that you can show an industry knowledge and an understanding of it, I think it's a real nice way to think about how to position yourself against some of the other candidates.

**Lenny** (00:24:55):
What else can that person looking for a job do to improve their chances of a recruiter basically finding them? I feel like that's probably the best tactical thing they can do because a lot of LinkedIn is recruiters reaching out and finding you.

**Hari Srinivasan** (00:25:08):
There's two things that anyone who's hiring is always going to look for. They're going to look for your skills and capabilities and they're going to look for your intent and interest in the role. A lot of our products and the pathways we try to do are making those things simpler. Maybe we'll just start with interest and we'll move back to skills in a minute. A couple of things we've launched recently, and I think they are symbolic of other ways you can connect. If you go to a company page and you're looking at the company, and I think they have to opt into this in some degree, look, you can say you're interested in that company even though they don't have roles. When the next role comes up, they'll have a signal that this person is actually very interested in this role.

**Hari Srinivasan** (00:25:42):
That's an easy way to signify from an early stage that you have interest in them. That way, when they open up a role, as you can imagine, they start looking through, they'll have a spotlight on recruiter and they can click out on it and come through. Certainly, you can go into open work and say that this is something that I'm open to work right now, and you can signify to the whole population that this is an area that you want to go for as well. I would encourage both of those in some ways. If you're looking for a role, be open about it and tell the companies that you're looking for it. Those are really high signals of intent.

**Hari Srinivasan** (00:26:09):
The other thing you can do on LinkedIn is you can actually go through when you say open to work and you can specify particular kinds of jobs and things you're looking for. I think that more detailed intent helps make sure you're showing it to the right place.

**Hari Srinivasan** (00:26:21):
On the skill side, we talked about it a little bit, but I do think there's a big change. When you were just looking at title, I think you only had one way to really prove that you had the skills. You had to have that title, which is very hard to break in. In a world where you're looking at skills, you can go through and say, "Look, I can do these things and you could put evidence behind it." I'd really encourage people to do that. If you just go to any job post, you can see the skills, you can say add and you can see all the evidence and how you can add it. I would really encourage people to do that because when people are in recruiter and they're looking for skills, profiles pop up and you can scroll over a skill and you can actually see all those evidences.

**Hari Srinivasan** (00:26:56):
Basically, a recruiter could say, "Oh, this is why I'd recommend you to this hiring manager." I think you will find that that's hopefully a very useful way of doing it.

**Lenny** (00:27:05):
I'm going to lob this question like a fishing line, to see if it catches anything. And if not, we'll move on. Are there any stats that you've seen of just like if you do X, Y, Z, your chances of getting hired or getting people reaching out just go significantly higher?

**Hari Srinivasan** (00:27:20):
Open to work certainly has a high signal to noise. As you can imagine, when someone's looking to fill a role, that's one they want. We are early in company commitments, but we are seeing some signal there that we got to move through it. Skills has a pretty high signal as well, when you're able to come through and show and demonstrate your skills. We're seeing some correlation to basically people getting a role.

**Hari Srinivasan** (00:27:41):
And then the final one that is harder for us to look through, but it's certainly important. I do think we show the hiring manager on a lot of the roles. We show these people through. It's harder for us to trace that because of the way the outcomes work, but I would really encourage people to look through that and see if you can get in front of those people.

**Lenny** (00:27:58):
Is there a max seniority that you find works effectively on LinkedIn to find a job? I imagine CPOs aren't finding jobs on LinkedIn. If I'm looking for a job, do you have a rule of thumb of, if you're at this level, maybe you're not going to have a lot of luck? If you're below the-

**Hari Srinivasan** (00:28:15):
We certainly have CPO jobs that are posted, but the difference often is job posts versus recruiting. More and more senior roles are often recruited. We find that people will use LinkedIn in order to connect to a CPO and many people who are senior will say, "Oh, I got a message on LinkedIn and that led to this," or they made a long-term recruiting contact. But it may not happen through you finding a job and hitting the application button.

**Lenny** (00:28:38):
Let's talk about LinkedIn as a company to work in, the culture maybe for a bit. You told me that you have a story about your first product review when you joined LinkedIn and how that was wild. Can you just tell that story? I haven't heard this yet.

**Hari Srinivasan** (00:28:51):
Yeah. I came through a small acquisition that they made of our company, and I thought it was such a telling moment in this first product review. I went in and as you can imagine when you join a company, there's a lot of advice on how you should make that product work. I didn't know anything. I'd never been a PM. I remember taking a lot of that advice and putting together a presentation and just getting destroyed during that review. I think Jeff was the head of product and CEO at that point. In a very kind way, it was basically like, "Wait, this doesn't make any sense."

**Hari Srinivasan** (00:29:23):
I just remember driving home and calling my wife and like, "I think I might be fired." I'm not sure if I was fired, but he was very kind about it. He's like, "Just come back and exit." I think five, four weeks. I remembered at that point I was like, if you're going to go in and you know you only have one shot, just do something you believe in and make sure it works. We started from that point and we worked backwards from there in this concept of, "Hey, I do believe that the most important thing is connecting to opportunity and we should really understand how to do that. Let's just start from there." It went very well.

**Hari Srinivasan** (00:29:50):
To me, it was another way of you're in these large systems, you're in these large companies, you're in these large ... I think LinkedIn is very special because no matter what it is, it's got a very good North Star. It was a moment for me to really hammer that home, that as long as you get that North Star ahead of you, you're going to be just fine. I never worked at a place like that before, and I think a lot of times people wonder. You can imagine. The way we're talking about, we certainly have an engagement ecosystem. We have the hiring business and we have a marketing solutions business. We have a big premium business.

**Hari Srinivasan** (00:30:24):
You can imagine when you're trying to make decisions across that, it could get very, very complicated. I think when people ask me to describe LinkedIn, I often start with that story because I feel like it helps cut through how decisions are made and what is seen as success here.

**Lenny** (00:30:39):
Just to clarify, so that North star is that phrase that you used of just connecting people to economic opportunity?

**Hari Srinivasan** (00:30:45):
That's it. That's it. I know it sounds bigger than it seems, but I can probably ... Time example again. You can understand when someone's driving on it. Having been here for a little bit now, you can understand when someone knows that and when someone doesn't. It's a hard thing to lose track of.

**Lenny** (00:31:00):
Yeah. It does sound vague and a nice, fuzzy, warm thing that people can say. What you're saying is that it's actually brought up in meetings constantly and product reviews. You're saying in this product review, everything changed when you came at it from that one perspective?

**Hari Srinivasan** (00:31:16):
Yeah. My first product here was the profile. You can make a profile that does a lot of different things, as you can imagine. You could think about how identity could be used in many different phases and what you should prioritize and not. But if you can explain why this is the thing that you should do that would help someone really do what they want to do, maybe it's have an incredible podcast and send that out there, maybe it's helping someone connect to a job. But if you can understand intent and how this is unblocked and why you want to prioritize that item, all of a sudden the world gets a lot simpler.

**Lenny** (00:31:51):
How does that actually get operationalized at a company? Is it just the leaders remind people of that? It's painted on the walls? How is that a thing that people come back to over and over?

**Hari Srinivasan** (00:32:01):
I do think it's a lot of repeat, repeat, repeat. I do think that's it. I do think the culture has a pretty high immune system now in the sense that when you aren't operating by that, people can see it and they operate against it. I think when Jeff was CEO, and Ryan, they are just exceptional at continuously repeating that. It's been so consistent for so long that I think it's just the DNA now. I do think it's exceptional. I think it's exceptional leadership, and I've learned so much from watching it and how it gets operated.

**Lenny** (00:32:34):
Is there a metric associated with that when people use it in a way of like, no, that's not actually what we mean? Is there some way of making it even more concrete in goals, metrics, ways to understand if people are actually achieving that?

**Hari Srinivasan** (00:32:46):
Yeah. Totally. I think at the next level of operation, what we think about is, when we run these marketplaces throughout this ecosystem that connect people to opportunity, what are the outputs that they measure? I'll just give you mine for example. We think a lot about number of hires, converting hires. How many people did we match? Which is a real tangible way of looking at opportunity.

**Hari Srinivasan** (00:33:04):
And then number of people who learned a skill, which is usually in this world measured more by time than anything if you learn. Spend time for X amount of minutes. We do that skill because oftentimes skills don't have a direct outcome as you can measure to go through. We basically look at those things more than any other to say how successful that we are operating that marketplace.

**Lenny** (00:33:22):
Got it. Those make total sense to me.

**Hari Srinivasan** (00:33:24):
Yeah.

**Lenny** (00:33:24):
Are there other core values of LinkedIn that are public that you can share?

**Hari Srinivasan** (00:33:28):
You can Google them too and so they're very, very public, but probably the one that I think is most important to talk about in this world is, there's this concept of members first. I think anytime you run an ecosystem as complex as we do and you think about it, even if you're trying to connect people to opportunity, there's two people, how are you going to decide right now who needs it?

**Hari Srinivasan** (00:33:49):
I think having clarity on which piece of the ecosystem is going to be where the focus is, it helps us make sure we establish a relationship of trust first, make sure to understand who's getting access to data, make sure we understand how decisions are being made. I always love that as a principle that we've stuck by.

**Lenny** (00:34:05):
Yeah, I see it on the page here. We put members first.

**Hari Srinivasan** (00:34:10):
Story checks out is what you're telling me.

**Lenny** (00:34:11):
Checks out. Checks out. What's interesting is the connecting people to opportunity, economic opportunity is not one of these values. It seems like it's even broader. They should at the company basically.

**Hari Srinivasan** (00:34:21):
The company, yeah.

**Lenny** (00:34:23):
**Hari Srinivasan** (00:35:55):
It's a fantastic question. I just openly think first of all, just career-wise, I've always been drawn to that. We talk about product as a whole. We always talk about it as a whole, but there's many different things you can build, many different types of things. And then we go, maybe there's hardware and software consumer goods. I actually try to think about products by their complexity curve a lot.

**Hari Srinivasan** (00:36:17):
I think that the skills you need to manage a complicated ecosystem versus maybe the skills you need to design something that's less interconnected are quite different. I will get to the details maybe of what I mean in a minute, but I do think LinkedIn's a particularly complicated place. And I do think that the skillsets that you think through and you try to manage in a complicated ecosystem are quite different. Maybe some tactics that can help if it's something along those lines.

**Lenny** (00:36:42):
Yeah, let's do it.

**Hari Srinivasan** (00:36:43):
One of the things that I often think about is this concept of cause and effect. If you have non-interconnected things, it's actually quite easy not to have to think about that. You made something people love. I wrote a children's book not too long ago and it was fun. It was awesome to write. Once it was done, it was done, and it was out there and it was able to go. That's a little bit different than here. If you make a change, like open to work, all of a sudden you're thinking through the perception of someone on the other side. What is that going to do? Are they going to use the platform less or more? You're thinking about customers. What are they going to do with that data? Are they going to, to your point, perceive someone in a different way or not?

**Hari Srinivasan** (00:37:21):
You have to think through second and third and maybe even fourth effects and manage that as you go through. I think that is something we really pride ourselves on is, how do we start thinking through these different things, and how do we start measuring them as we go? That is one.

**Hari Srinivasan** (00:37:35):
The second thing I actually think is it does lead to your point a lot. You need a different kind of decision-making mechanism because there's a lot more ties in the ecosystem, a lot of people who just need a way to break it. We've put in things like we have something called RAPID, which is a really easy way to know who the decision-maker is. Just, you line up who's a recommender, who has to agree, who's a decision-maker. We have something called a five-day escalation rule, which makes sure that those items are in. I think you lead a lot more of those fuse, I don't know what they're called, fuse limits, or just systems in place in order to manage that complexity so that things get done. I think that those processes are actually really, really important to make sure that the ecosystem can run.

**Lenny** (00:38:10):
Let's talk about these two processes. RAPID, and what was the other one? Five-day-

**Hari Srinivasan** (00:38:14):
Yeah, five-day alignment. They've both been around LinkedIn for a little bit, but they're great. The RAPID is just a question of oftentimes to your point, if you're running two, three marketplaces, several different business model here, there's a question of who has the decision? Who can make the decision in this situation? Making sure that you have a single person's name with the decision and that person is ... That is really, really important because it gets the clarity real fast.

**Hari Srinivasan** (00:38:36):
It's more of a personal rule, but one thing I love to say is, if you had three back and forths in an email, you got to pick up the phone. And if you've been on the phone for 20 minutes, it's time to just write that decision-maker and go. That way, you can make sure the concept of an hour, you should be able to get a decision. It doesn't always operate like that. I'm sure there's many PMs on LinkedIn who are operating here maybe, who may have some feedback from me on that, but that's the intent behind it.

**Hari Srinivasan** (00:38:58):
And then a five-day alignment is, you should hold your managers accountable. That in five days if someone has something that they haven't been able to escalate and solve, that's probably then on the next level of person. But as you run that ecosystem and there's so much complexity around it, I think you need some of those processes in place in order to start answering some of those tiebreakers, if you will.

**Lenny** (00:39:17):
Ooh, I like that five-day rule. Basically puts the clock on a manager to get to unblock, basically?

**Hari Srinivasan** (00:39:23):
Yeah. Yeah.

**Lenny** (00:39:25):
With RAPID, I don't know if I totally understand. Is that an acronym for something? Or is it just-

**Hari Srinivasan** (00:39:29):
It is.

**Lenny** (00:39:29):
... make decisions rapidly?

**Hari Srinivasan** (00:39:31):
No, that's a great question. The D stands for decisions, but the R is for who's recommending it. The A, who has to agree. The I is for other people who may be able to be putting in an input. It's basically a list of people who need to be in the decision chain.

**Lenny** (00:39:44):
Got it.

**Hari Srinivasan** (00:39:45):
I would argue the most important thing is to have a single name on that decision line, because that usually makes sure that you can get a decision very quickly.

**Lenny** (00:39:51):
Are there any other really common frameworks or processes along these lines at LinkedIn that you find really helpful?

**Hari Srinivasan** (00:39:56):
The third thing is just in how we think about talent, especially in the product organization. I often really do try to suss out during interviews or in how we promote people, just their ability to see systems. Because again, I do think it's a different skillset and a different capability of how we map those things out on a complexity curve. Oftentimes, I think those talent systems will ... those who are able to see the whole, make decisions at the whole, that's rare actually.

**Hari Srinivasan** (00:40:24):
I think most talent systems are, "Hey, how did your division grow or your product grow, your era grow?" We've tried our best to understand that it's not just about that. You want accountability in the ecosystem of course, but how well does this person work across? I think as we've created telemetry around that or organizational understanding of that, how we've understood ourselves, just, "Hey, this is the skillset that's really important here," I think that's quite rare in driving that kind of complexity system as well.

**Lenny** (00:40:52):
One more question along these lines.

**Hari Srinivasan** (00:40:53):
Yeah.

**Lenny** (00:40:54):
You've been at LinkedIn for a long time. It feels like historically, LinkedIn as a product team, the external impression was it's very optimizey-oriented and everyone there is just micro-optimizing all the little features of LinkedIn. Everyone I've worked with from LinkedIn, they're just really good at just optimizing things.

**Lenny** (00:41:16):
It feels like a lot of new stuff is happening with LinkedIn these days and I'm curious if that's been a real intentional shift of let's not focus so much on making emails work better and all the click-through rates of everything and more just, let's innovate more, let's do some bigger bets.

**Hari Srinivasan** (00:41:34):
I do think there's two things to acknowledge. First, there's an incredible growth team, and I think a lot of people that go on from LinkedIn in incredible roles are growth. I think there's an influencer change that a lot of people you meet might be growth-oriented. The second thing is, especially when LinkedIn started, and like you said, I've been here a little bit of time, but growing the network is probably a very, very important thing to get the scale out. I think a lot of things people interacted with at first were maybe more growth mechanisms than other systems.

**Hari Srinivasan** (00:42:02):
I do think there's always been, at least for the last several years, an underlining line that value is what's going to carry this ecosystem, and value is ultimately what makes the day. To your point, I like to think that they may not be the most, I don't know, the glittery items, but I'm really proud of what we've done with skills. I think that's one of those invisible systems that no one really knows. Like, oh my gosh, that's a huge disruption if people can now get ... That's a huge language that people have created. That's a huge way that people have changed.

**Hari Srinivasan** (00:42:32):
We're really proud of what we've done with values. Even open to work and commitments, these are major social systems that we've wired through. I'm really proud of what we've done with LinkedIn Learning. I would argue it's one of the bigger creator systems in the world. It's these incredible instructors and the ability to take someone who teaches, maybe is not great on camera, and move them to the studio and give them that capability and take their voice out there.

**Hari Srinivasan** (00:42:55):
I think there's a lot of different things we've done that maybe because they're more invisible, if you will, or they're hidden in a marketplace that necessarily maybe a lot of the influencer voices may not actually need an access every day, I don't know if they get as much visibility. But I like to think that's been part of the DNA for a while and we've been really thinking through it.

**Lenny** (00:43:17):
Let's actually talk about LinkedIn Learning. I know this is a big passion of yours. You have your own course within this that I want to talk about. But broadly, just what is LinkedIn Learning, just so people understand? Because I don't know if a lot of people know this exists within LinkedIn.

**Hari Srinivasan** (00:43:29):
Great question. LinkedIn Learning is basically a way to learn professional skills. We entered the business in 2015 and the thesis was, we think about it as a marketplace again. You have seekers and job and oftentimes, seekers may not have all the skills in order to get the job. We're moving now towards the skills model, but without question, this other second-order impact. I don't think any of us wanted to, if you will, uberize the world. I don't think any of us wanted to make everyone there. We wanted to make sure everyone had the skills in order to learn the skills, in order to get there. Getting the learning business was really, really important for the vision and the mission. Basically, the idea was that we'd have ways to teach people skills that was very much tailored to professionals.

**Hari Srinivasan** (00:44:12):
Now, that was the vision. The way the mechanism works is, we go and get the best instructors in the world. We will bring them into a film studio. We will do it at home or in a way that makes the content extremely ... We help write the scripts, we obviously have incredible graphic, in a way that makes a teacher and someone who's an expert who may not always have the capability or the time to go and make their own online course and get them in the studio and go from there. And then the vast majority of people will probably have access to it through their company. The vast majority of the usage and the business runs through enterprise and is a large enterprise learning product.

**Lenny** (00:44:47):
Awesome. Yeah. I'm just as a, I don't know, armchair quarterback strategy person, I could see where this came from of we're trying to help people connect to economic opportunity, find jobs. How do we help them? Oh, they don't have the skill? Let's help them build the skills. Makes a lot of sense. Okay. Within this, you have your own course on product management.

**Hari Srinivasan** (00:45:05):
Well, it's funny. I'd been thinking about a course for a while, but largely it was this concept of, I wanted to make sure I tried our own product and I understood the instructor pain point. But it's a very scary experience. It's like first, I don't know if I had anything to teach. My own concerns about that. But about four or five years ago, one of the things we started at PM internally was product university. We had our own internal university, which was basically we got some survey, we sent it out. I think everyone told us, well, it's literally the most negative one was people said, "I don't have the skills to do my job."

**Hari Srinivasan** (00:45:40):
I remember looking around and I'm like, "Well, it's pretty obvious. We hired a bunch of people, there's no PM degree, and we've done nothing." What we started doing is internally creating a product university. It was a bootcamp coming in. We tried to get from different models and one of the things we really learned was, you can't teach this just through frameworks. You needed to have a series of case studies. You need to have a real series examples. But luckily, we had a bunch of things we'd done at LinkedIn, so we started putting a curriculum against that. And then just recently, a few of us got together and we filmed the actual course for it. It's basically taking our product university bootcamp and opening it up to the world.

**Lenny** (00:46:14):
You opened up some of your internal use cases as a part of this course?

**Hari Srinivasan** (00:46:17):
We do. Yeah.

**Lenny** (00:46:18):
That's awesome. I always say that one of the things you don't realize you have as an advantage working at a bigger company is access to tons of strategy documents and vision documents and stories of this. Because once you're out, no one's going to be able to share those with you because they're so private. I don't have access to any of these anymore. That's a really cool perk if you're working at a company like LinkedIn.

**Hari Srinivasan** (00:46:39):
Thanks. Yeah.

**Lenny** (00:46:40):
Question about your course. What are some of your biggest lessons that you teach? Can you just give a preview of some of the tidbits that you might learn in this course of yours?

**Hari Srinivasan** (00:46:48):
Well, again, a lot of it is case studies and use cases in the same way we teach it here, but a couple of things that we do talk through. When we started doing our own product university, we realized a couple big pain points that people hit. The first was, it's actually really hard to know how to validate and what the bar is for a new idea in any organization. I think it's really hard to say that. We provide a lot of framework. Simple things from, "Hey, you got to prove to the world why there's duct tape in here." There's someone actually physically going out and trying to do it.

**Hari Srinivasan** (00:47:19):
How you can prioritize a list of ideas against a pain point, like how to make a simple expression, and how to look through what's an acute pain point and what's a wide range of people use, how we'd expect data in order to be used in order to validate this. Tools you could use to say if this is a good idea or a bad idea. More importantly tools to make sure you've went through the process and how you can communicate it. That's one framework set that we talked through.

**Hari Srinivasan** (00:47:42):
The other is a lot about Damian, who leads our growth team. He comes in and he starts talking a lot about thinking in loops. How do you make sure that when you're building something you can have the fuel in order to cascade and grow? I think just the framework of doing that, how you measure that, how you monitor that, is also something that at least when I was starting and doing my startup, it was quite something I wish I had had access to. Those are maybe two good examples of frameworks and tools that we come through.

**Hari Srinivasan** (00:48:09):
And then of course, trying to overlay that with real cases. Not always successful ones, of course, too. We talk about a lot of the failures we've had and where we probably went wrong if we had to diagnose them in postmortem.

**Lenny** (00:48:19):
A lot of the people listening to this are people that want to get into product management and aren't PMs yet. I imagine you get asked this a lot, how do I get into product management? What is your advice that you often give?

**Hari Srinivasan** (00:48:29):
Yeah. Well, let's start with how we look at the world, which is this idea of skills. We have a diagram that I think about, which is skills are on a triangle. You might have heard this one before. I don't know if you have. Skills are on a triangle, and I think you need three different skills to be a great PM. You need to be a Steven Spielberg type creator. Something around data science and the ability to really look at data and see patterns and then see the future. And then especially get more senior. I think it's a lot of general management. You have to basically be able to shine and innovate across the team, understand the budget, understand how companies differently work.

**Hari Srinivasan** (00:49:01):
I've actually never seen a great PM who's in the center of it. I find the great PMs live on the edges. There's always someone who's this exceptional data scientist and the ability to maybe be a great GM and lead and inspire, or maybe someone who's so creative, who can lead a team in a different way. I think that one thing I would really, really encourage people to do is understand where they fit on that graph and gravitate towards those kinds of roles. Because a lot of times, I think what people do is they think they have to make up for the other pieces of that graph, and it leads them to a path where maybe they're not playing to their strengths. That's one thing I always encourage people.

**Hari Srinivasan** (00:49:38):
The other thing I would say, and I know it's a little bit of luck in how this works, but I think about my journey, one thing I've really found was really helpful is, I was on the first team that did a hybrid SUV in the US. At the time, it was the Hybrid Escape at Ford. I came from the Midwest and it was one of those products where people would really drive out for hundreds of miles and see, and really a community gravitated around because it was a very special product. Being able to work on something that people loved, really loved early on, and see what that felt like and look like and that success was, it created a bar for what I would hope my products could do. It would.

**Hari Srinivasan** (00:50:17):
If you're able to get into something that people really love and feel that and experience that, and really understand what that looks like and what it takes to get there, I think that's actually been a really valuable lesson throughout my career because you can understand the whole path on the way up. I look back at that as really something that I would hope other people if they can do it. I know you're making world decisions on many different criteria, but try to find something people love and really experience what that feels like.

**Lenny** (00:50:40):
To build on that, with PMs that work for you and work with you, when they're looking to get better and build their skills, other than go take some courses on LinkedIn Learning, what do you often recommend they do to help become stronger and better at their job?

**Hari Srinivasan** (00:50:56):
First, it is that feeling of, you got to own your product and you got to speak up and say this is where I want to drive it. Because a lot of times I think people are scared to do that, or worried about doing that, or don't feel that's their actual role. One, it's extreme clarity on hey this is your role. It's to own this and take this to the next level. When you start molding the clay, people want to come and help. When you start building something cool, people are like, "Oh." They're gravitated to it. But until you can start doing that, that's really tough. One, it's letting people know that's what's expected of them.

**Hari Srinivasan** (00:51:26):
And then two, I would tell people to just build. As crazy as it sounds, I spend a lot of my time on the side, just trying to build different things. Try different clay, think through different ideas. I think that is a really important skill to have, to just being able to say, "Okay, I'm going to start with a blank sheet and make some art," or whatever it is you want to do. I encourage people to do that because it's a muscle, like anything else. It can atrophy. I really do think no matter what the heart of PM, in is that ability to be a builder, and you do got to make sure you can keep doing it.

**Lenny** (00:51:57):
Yeah. That's actually a great segue to where I was going to go next, which is, you say you build and you like to build stuff, but you're legitimately building a lot of stuff. You have the site, mindofhari.com, where you share all these side projects. Can you just talk about what's going on there and some of the stuff that you've built?

**Hari Srinivasan** (00:52:12):
Yeah. Arguably, the only thing I've ever been good at in my life is just building things and creating things. I get a lot of energy from it. Yeah, I have a site. It's called Mind of Hari because it is really whatever's top of mind. I try to do my best to completely separate it from business. I know there's always a draw as a good PM to say, is there a business here? But I try to keep it as art. It's completely art and it's what I want to build. I take on new subjects. I have two little kids and it's fun to ... One of them was a book me and my oldest wrote, and it was a set of bedtime stories we did. And then one day I was like, "Hey, we should just make this a notebook." And we did it. I think it's got about half-a-million readers now. It's been fun to see it take some life and go through.

**Hari Srinivasan** (00:52:57):
We made a board game recently that I know Stanford Design School or some professors there have been using, and it was called Parallel Universe. It's, how do you have a card and then be able to see maybe the card says there's no windows in this world anymore, and then what would happen in that world? You got to list 10 different things that would happen. That ability to think ahead, the fun sci-fi stuff. I make healthy gummy bears. I just try to take something completely new and have that. I don't know, it's probably one of the more fun moments in this world where you can sit there and just create something and have some new clay. Yeah, that is what that website is about.

**Lenny** (00:53:34):
Wait, so you made actual gummy bears?

**Hari Srinivasan** (00:53:36):
Yeah, we are doing something with gummy bears. Lenny, I know you're expecting a new addition. Congratulations, again. But one of the things I found when I had kids is, no matter what I was trying to do, there was candy and sugar everywhere like any Halloween, any birthday party, et cetera. You can't get rid of it because it was just hard to do. So we were like, hey, we're going to sit down and make our own gummy bear. What I found is, this is just a fun tidbit for your readers, if you open a Twizzler or one of those, about 80% of what's in there is sugar because they're optimizing for shelf life. They're optimizing for what's in the store.

**Hari Srinivasan** (00:54:07):
What we were able to do is basically create a gummy bear. About 40% of it is sugar. It's just got five ingredients. Honey is the sweetener because I don't want to give my kids some alternative sweeteners. But we have a small commercial kitchen and we produce some gummy bears. If you ever want to try them, to any of your followers, I'm happy to send some gummy bears and hopefully you can check them out.

**Lenny** (00:54:27):
Wait, is there a way to buy them somewhere?

**Hari Srinivasan** (00:54:29):
Well, you can go to Mind of Hari. We stock them seasonally. One of the things that we found out is there is different laws on how they can be shipped, and obviously we're not optimizing for long storage. But they'll be on Mind of Hari. You can always reach out to me and I'll find you and tell you which farmer's market we're at or whatever and you can come swing by.

**Lenny** (00:54:48):
Well, I don't see it on Mind of Hari, so maybe by the time this comes out, put it on here. Or if you're trying to-

**Hari Srinivasan** (00:54:53):
Put it on there?

**Lenny** (00:54:54):
Yeah.

**Hari Srinivasan** (00:54:54):
Yeah, it's on the homepage. And then when they're stock, we put them in the shop.

**Lenny** (00:54:57):
Okay. That means they're out of stock? All right, we're going to sell you out. Let's get all your gummy bears. With that, we've reached our very exciting lightning round. Are you ready?

**Hari Srinivasan** (00:55:06):
Yeah, let's do it.

**Lenny** (00:55:07):
What are two or three books you've recommended most to other people?

**Hari Srinivasan** (00:55:11):
The first one is called Thinking in Systems. It's the one I give the team every now and then. It's just a really good book about how I think sometimes people see systems. Can we talk about it? It could be abstract. I think it goes into real detail on how people can intervene at various parts and how to take actions at different systems. I really enjoy that book.

**Hari Srinivasan** (00:55:31):
Not directly maybe a book I recommend, but a book that I just read that I thought was phenomenal, just to give it to readers if they want something good, it's called Tomorrow, and Tomorrow, and Tomorrow. It was recommending by a friend. Have you read it? You read it?

**Lenny** (00:55:41):
Yeah. I honestly didn't love it, but I liked it a lot.

**Hari Srinivasan** (00:55:45):
For some reason, I've been-

**Lenny** (00:55:47):
It was sweet.

**Hari Srinivasan** (00:55:47):
I thought it was very well done and there's a couple chapters I reflected on. I just finished it. I thought it was well done. That's one that I'll throw out there.

**Lenny** (00:55:54):
Yeah, it was very sweet. I feel like it got hyped too much for me. I'm like, okay.

**Hari Srinivasan** (00:55:54):
Oh, I didn't actually know it got-

**Lenny** (00:55:54):
I think that's the key.

**Hari Srinivasan** (00:56:01):
... much publicity. Okay, that's it. The third one that I just downloaded because I finished it, I'm actually going to open up my audiobook and tell you because I'm about, I don't know, an hour into and I'm really enjoying it, it is An Immense World. I don't know if you've read that one yet. It is about animals and how animals have different senses out there. It goes through a set of different animals and how they see the world.

**Hari Srinivasan** (00:56:24):
Just one of those reminders that we're so limited sometimes in our own perception and how dogs, for instance, they can breathe in and take in sense even when they're breathing out. It's like vision almost, and it's just phenomenal to me just to think about all the things they're probably sensing as my dog and I are going on our walk.

**Lenny** (00:56:42):
I've learned dogs shoot air out of their nose first before they smell, to clear things out.

**Hari Srinivasan** (00:56:48):
Isn't that wild? They can probably see so much more of what happened in the history of a little walk than we're able to just because of that.

**Lenny** (00:56:57):
Incredible. Next question. What is a favorite recent movie or TV show?

**Hari Srinivasan** (00:57:03):
One thing we try to do is watch TV as a family. It brings us together a little bit. We are doing Star Wars with the kids, which is for the first time, which has been a really enjoyable experience, just being able to witness it through them. And then we've been going a little bit back in time. We watched ET. It's fun. It jogs your memory. These are phenomenal movies that we go through. I think your question is on recent TV shows that probably came out more recently.

**Lenny** (00:57:27):
Those work just as well.

**Hari Srinivasan** (00:57:28):
Yeah. The other one I did like, it's not a TV show but I ... God, what was it called? It was that podcast that came out. Case 63 I think it was called? Anyways, I hope that's the right name of it. But it was a sci-fi podcast. It was like 10-minute shorts. The premise of it is someone comes from the future and there's a little bit of speculative fiction and is at a psychologist. It's just a phenomenal piece. I'll have to get you the real name. Maybe I can get it for you after for the show notes or whatever.

**Lenny** (00:57:56):
Yeah, we'll edit your words and add that-

**Hari Srinivasan** (00:57:59):
Yeah, exactly.

**Lenny** (00:57:59):
... whatever's in the show notes, that's the one you meant. What is a favorite interview question you like to ask?

**Hari Srinivasan** (00:58:06):
I do like to ask people what the most complex thing they ever built was. I just love to understand mostly, what do they gravitate to? Is there something you gravitate to? And two, are they able to simplify it? I think those are two really important skills.

**Lenny** (00:58:19):
What is it that you look for in their answer that tells you it was a good answer?

**Hari Srinivasan** (00:58:23):
Both of those things. First, did they take on something that was super complex, really, really hard? Because I think there's only a particular group of people who gravitate to those kinds of problems. I do think more and more openly. I think that's a lot of, in my opinion, the ways the world is going to get better by the things that are really, really hard to solve. Intimacy doesn't scale. When you think about how people are going to feel more connected, it's going to be a lot more difficult to solve. When you think about healthcare, it's going to be very, very difficult to solve. Education is a very difficult interconnected space. I think people who gravitate to that, know those problems are hard, have a very special gift. It's hard to replicate that passion. So one, did you do that?

**Hari Srinivasan** (00:59:06):
And then two, I think people who really understand systems are able to, somehow this is truly, especially people probably way smarter than me, they're able to simplify it. They're able to explain it and say, "This is how I looked at it, but here's how I modeled it. Here's the lovers and how I went after it." Even if it's nonlinear, they're able to say, "This is how the cause and effects works." I'm really looking for once you did it, did you really understand and were you able to crack it? Or at least, did you understand why you weren't able to crack it? I usually find this to be also the most rewarding conversations.

**Lenny** (00:59:35):
Awesome. Thanks for sharing all that.

**Hari Srinivasan** (00:59:36):
Yeah.

**Lenny** (00:59:37):
Next question. What is a favorite recent product that you've discovered that you love?

**Hari Srinivasan** (00:59:42):
I'll give you one more dad one. My youngest just hates brushing his teeth. Just was like, it was always a thing. I should actually find the name of the toothbrush, but you can just Google or Amazon this and you'll figure it out. Basically, it's like it was this Baby Shark toothbrush, but it's a game. You play that game for two minutes and you can try to pick up different prizes, you brush your teeth.

**Hari Srinivasan** (01:00:02):
What I loved about it, because I think it's what all great products do, it turns a moment of annoyance to a moment of joy. It went not even just like you solved a pain point. It was an unreasonable experience of like now he loves it. It was just so well done. It's like 10 bucks, and it was 10 bucks extremely well spent. So much delight. Whoever made that toothbrush, thank you.

**Lenny** (01:00:23):
Damn. Is it playing Baby Shark? I hope not.

**Hari Srinivasan** (01:00:26):
Well, it can. It has that feature. It has that capability, but it is a small price to pay for me to get out to enjoy.

**Lenny** (01:00:35):
Good times. 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?

**Hari Srinivasan** (01:00:44):
I do like to change things relatively. Every quarter or six months, sit down and say, what can we get better at? The two areas I find myself innovating, if you will, innovating or tweaking the most, one is around planning. I think every company struggles with this. You get bigger, it probably becomes a more different ... especially when we talked about the complexity of the ecosystem. We started this thing where just basically we call it orange and red priorities. Which is, then a lot of times what people do is, teams will plan bottom-up.

**Hari Srinivasan** (01:01:12):
They'll come into a manager or a leader and then the leader may shift things around or say, this is what ... I think we've really started shifting it in a different way. We said, these are the big rocks we got to get done. We're going to get those things done first. We're going to be upfront and honest with you, and these are the things and these are price. And then you can plan from there. I think it's relieved a lot of the progress. I think there's an honesty that comes within and that's been a big change.

**Hari Srinivasan** (01:01:34):
The others just are the way we review products. That's always been a thing. My read is, when we keep our product review process live too long, it gets a little institutionalized and people start making long documents and stuff. You always have to change that every quarter. Basically, I think it always comes down to the same thing, which is, how do you get their problem statement quickly? And then how do you design from there? But the lever that we basically put in place for that was to really shorten the time.

**Hari Srinivasan** (01:02:00):
I'm trying this thing, I don't know if it's going to work. But could we get to 15-minute reviews basically instead of an hour and see if that alleviates some of this? I'll let you know how it goes when we chat up next, but I'm very curious to see if this is going to be a different kind of system where we might be able to get to clarity quicker, or realize we're not at clarity and then break and come back.

**Lenny** (01:02:21):
Reminds me of a tweet I think I just saw. Maybe it was an Instagram post of teams that do stand-ups while doing a plank, to keep the meeting really short.

**Hari Srinivasan** (01:02:29):
That's interesting.

**Lenny** (01:02:30):
Could be the next one.

**Hari Srinivasan** (01:02:30):
I haven't tried that one yet, but it might be something we try next.

**Lenny** (01:02:34):
Last question. You've been at LinkedIn for a long time. I imagine you use LinkedIn a lot. Is there just a pro tip that you can share of how to be more successful with LinkedIn, find more value in LinkedIn, enjoy it more?

**Hari Srinivasan** (01:02:47):
The first is, I do think certainly there's ways, and the majority of ways that skills work is we infer skills. But I think that there is a skills section on the profile. I think a lot of people ignore it because they don't realize that there's value in it. That's changing, but I'm not sure if it's changing for everybody. I would pay more attention to skills as we get more into the skills-first stuff.

**Hari Srinivasan** (01:03:05):
The second thing I would probably do, I don't know if it's that hidden, but I would check out LinkedIn Learning. I do think LinkedIn Learning is a gem. I think because it's sold largely through enterprises, a lot of people miss it. I would hope you check it out. But more importantly, tell me areas that we could get better on there as well. I hope that people will find value there.

**Lenny** (01:03:22):
What's the best way to find out about LinkedIn Learning? They just Google LinkedIn Learning and they'll find the-

**Hari Srinivasan** (01:03:26):
Yeah. Or go to LinkedIn/learning. Yeah.

**Lenny** (01:03:30):
Linkedin.com/learning? Okay. Great. Hari, I feel like we've opened the Mind of Hari up on this podcast. I appreciate you 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?

**Hari Srinivasan** (01:03:42):
Well, you can find me on LinkedIn. That's an easy one. I do really, really, really appreciate product feedback. I promise you I take it well, for those listening. And two, going back to the heart of this conversation around complexity, it is really hard to know sometimes what everyone's experience is because you're living in a very abstracted ecosystem. The more you could just say, hey, this is working or not, and the intentions are coming from a good place, and if you have a moment and you're not having a great experience, or you are having a great experience, you could write it. I really would appreciate to hear your perspective.

**Lenny** (01:04:15):
Amazing. Hari, thank you so much for being here.

**Hari Srinivasan** (01:04:18):
Thanks, Lenny. It's great meeting you.

**Lenny** (01:04:20):
You, too. Bye, everyone.

**Lenny** (01:04:23):
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.

---

## [5/20] The 10 traits of great PMs, how AI will impact your product, and Slack’s product development process | Noah Weiss (Slack, Foursquare, Google)

**Noah Weiss** (00:00:00):
We have this mental metaphor that we talk a lot about, getting to the next hill. The actual wording is "Take bigger boulder bets." I think teams can often get lost crawling up that hill, not realizing that there's a huge, incredibly beautiful range behind it where we've over time freighted new teams from scratch that incubated in a new area before the areas mature.

**Noah Weiss** (00:00:19):
We did that with a lot of these native audiovisual products like huddles and clips really in the pandemic because our customers were demanding it from us. I think in the AI space, we're trying to hear from customers, what do you wish Slack could do if it had these new superpowers? Let's incubate a couple teams or prototype, give them space to run and pilot and then get something to launch that's amazing. Blows people away. That's the formula that we've seen.

**Lenny** (00:00:45):
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 Noah Weiss. Noah is chief product officer at Slack where he spent the last seven years. Prior to that he was head of product at Foursquare, which is near and dear to my heart as you'll hear at the top of this episode. Prior to that, he was a PM at Google and at Fog Creek Software.

**Lenny** (00:01:10):
In our conversation we cover the 10 traits of great product managers, how to work effectively with strongly opinionated and product-minded founders, what Noah has learned about working effectively with AI in your product over his last 15 years at Google and Foursquare and now Slack. We talk about a process called Complaint Storms that helps Slack build better product. Plus, what he is learned from Slack's self-service business plateauing back in 2019 and how they turned it around and what they took away from that experience.

**Lenny** (00:01:38):
**Noah Weiss** (00:04:25):
Thank you for having me. I'm excited to finally get to join and been a longtime listener.

**Lenny** (00:04:29):
I feel the same way in reverse. I've been really excited that you're finally on the podcast. I don't know if you know this, but this is actually going to be the last podcast I'm recording before I go on pat leave. This is going to play while I'm on break. Coincidentally, you're actually just returning from pat leave is what I just learned.

**Noah Weiss** (00:04:46):
Yeah.

**Lenny** (00:04:48):
Let me ask you a question. What advice do you have for someone about to enter the beginning of baby life from someone that is exiting that and going back to work?

**Noah Weiss** (00:04:55):
First off, I mean obviously congratulations, you're about to go on. A rollercoaster of emotion, sleep and everything else. I literally went back to work two days ago. I think my, maybe, advice about being a new parent is better than my advice about being at PM right now. Here are the three ... My wife and I wind up coming up with three maxims that we want to be using throughout the first two months to keep ourselves grounded.

**Noah Weiss** (00:05:19):
First one, I would say a little bit better every day. No matter how many books you read and how much money ouster you consume, there's nothing like actually doing it. It's a physical thing being a new parent. Getting a little bit better every day, giving yourself permission to be like that didn't go great and that's okay. That's number one.

**Noah Weiss** (00:05:39):
Number two, don't over extrapolate from the early days. The fourth trimester is a real thing. These babies come out. They're not fully baked. They can't even support their own heads. If you try to extrapolate everything, the next 18 years are going to be the first 18 days, it's going to be sobering. Keep that perspective. They develop so much every week, part of the fun.

**Noah Weiss** (00:06:03):
Then the third thing, which I got advice from this from a good friend is like you got to fully get into it as a parent. There's nothing that replaces. Actually, you got to change the diapers. You got to do the feeds. When they're up, even though they can't talk, you got to talk to them. You got to listen to what they're saying and just be fully present near the moment.

**Noah Weiss** (00:06:24):
I realized for myself, and then basically at full digital detox. You saw how long it took for me to reply to your emails. I was like, "Throw the devices away. Just fully with our daughter, [inaudible 00:06:34], and our family." I feel like it was so much more rewarding. I felt really connected with her now after these couple months. It's a crazy time. You're going to really love it. It's going to drive you mad at that times as well. That's all of it.

**Lenny** (00:06:47):
All right. We're going to be pivoting this podcast into a parenting podcast. This is awesome advice. I wrote everything you just said on this little post-it as you're talking. I'm going to put that up in our nursery and see how it all goes. One thing that's tough about my career path in this weird life is I don't get a nice pat leave, paid pat leave from a big company.

**Lenny** (00:07:06):
I've actually been working on stacking guest post and podcast ahead of my leave so that I can actually, as exactly as you said, just get fully into it.

**Noah Weiss** (00:07:14):
Smart.

**Lenny** (00:07:16):
Yeah. I have awesome guest posts coming. All these podcasts are backlogged, so I'm hoping it all works out.

**Noah Weiss** (00:07:21):
That's a smart way to do it. Yeah.

**Lenny** (00:07:23):
On a totally different topic, you're ahead of product at Foursquare. I don't know if you know this. I actually built a startup on Foursquare's API. It's a company called Localmind. For folks that don't know about it, the way it worked is basically let you talk to someone, checked in on Foursquare anywhere in the world if you're thinking about going there.

**Lenny** (00:07:39):
You could be like, "Hey, is this bar fun right now? What's happening there?" Before you actually show up. We ended up selling the company to Airbnb. Ended up not being a big problem for enough people and that's how I ended up at Airbnb. But it was quite magical and API was amazing. I guess I just want to say thank you for building an awesome product and awesome API.

**Noah Weiss** (00:07:58):
Thank you for being a developer on top of the ecosystem. I mean it's interesting with Foursquare. I will talk about this I'm sure later. I feel like I have more lessons learned and more scar tissue from the crazy up and down of ... I don't know what. It was 2010 to 2015 roughly. I think there's something actually where you learn more from the things that don't fully work out or don't quite achieve what you wanted to achieve.

**Noah Weiss** (00:08:27):
You actually have a feedback loop where you get a lot of negative signal about like, "Okay. That didn't work. That didn't work. What can I actually learn, take away from that?" It's still great. I still love using Foursquare. I think we got caught in the death star of Instagram's ascent back in 2012, 2013. But I hope a product like that exists forever in the future and I'm glad you got to build the company, landed Airbnb through it. It's a great story.

**Lenny** (00:08:52):
Looking back at Foursquare, do you think there was a path to building a massive consumer app type business or is that just never going to work out? I know they went in direction of B2B data business. I guess was there a path or was it just like, "No. That was never going to work out?"

**Noah Weiss** (00:09:09):
It's tricky. I mean I'm not going to do 30-minute post, because I probably bore everyone. But it's not about this. We've all thought about this a lot on the early team there. I think the biggest probably lesson learned, frankly, is that we were really close with the Instagram folks early on. They were big developers on our platform. They used the Foursquare API before they were bought by Facebook.

**Noah Weiss** (00:09:28):
I think in hindsight we were a little bit mistaken to believe that the idea that the atomic unit would be a person talking about a place that they're at and you have to have a physical place to tie it to versus a person sharing a moment or an experience that they're having in the world. Sometimes that might have a place connected to it.

**Noah Weiss** (00:09:47):
I think that one change in framer on what you would say a customer actually wanted to do, that probably was the thing that took this away on the social side. I think on the more local discovery side, it's actually what people wind up be using the product much more for over time getting personalized recommendations and getting tips when you go to a place and all the push notifications.

**Noah Weiss** (00:10:10):
Again, it was hard to stay ahead, I think specifically of Google, because they had billion plus Google Maps users distributed on Android and iOS. Even though they might only take a couple years, eventually they would wind up replicating a lot of the functionality and then I think it was hard to regain that momentum. Much of this stuff is luck and timing and just coincidences of history.

**Noah Weiss** (00:10:37):
I think there was a path. I think in the end we lost their social sales and then Google was able to catch up on the utility side. Now the company's built a really valuable B2B API company which offers a story. I mean Slack is in some ways a pivot, obviously, from a consumer company to a B2B company. But that that's my mini postmortem, what could have been with Foursquare.

**Lenny** (00:11:00):
It's interesting how many consumer companies pivot to B2B because it turns out that's where the money ends up being.

**Noah Weiss** (00:11:06):
Yeah. I think the feedback to you get from our people willing to pay for the product that you're building is so much faster than can I build a large-scale consumer business and when they hope to have enough reach to then slap ads onto it. That's a much more of a try to hit a home run and hope it works out. But you don't really know if you're doing it along the way. Yeah. I think B2B is a easier to have a more incremental, successfully business than pure consumer.

**Lenny** (00:11:34):
Okay. Speaking of Foursquare, Dennis Crowley was the CEO and founder, a very strong product-minded founder. I know you've worked with a number of very strong product-minded founders including Stewart Butterfield, Dennis, obviously we just talked about, maybe others. I'm curious what you've learned as a product leader working with very opinionated founders.

**Lenny** (00:11:56):
I think this is interesting not just as a product leader working with very product-minded CEOs, but also as a first PM at a startup you're often put in this tough spot of just the founders just telling you what to do and you have to go build it versus having a lot of say in agency. I'm curious what you've learned about working and being successful in that position, which is often really hard.

**Noah Weiss** (00:12:14):
I would say to folks in general, if you're joining company and the CEO does the role that is your functional area of expertise, it's probably the area where you'll learn the most because they're hopefully world class at it. But also, one will you'll be the most frustrated at times because you're going to feel like you have less agency. You should just know that going into it.

**Noah Weiss** (00:12:33):
If you go to company to run by a former marketer and you're in marketing, they'll probably want to have a lot of say and influence over that. I think just going into knowing that is good. Looking back, I would say probably two main things stand out of what's really worked with both Dennis and Stewart, not just for me but I think for the teams that work with him as well.

**Noah Weiss** (00:12:52):
The first is, I think as much as possible, I think maybe we'll talk about this a little bit later as well, is getting to the point where you have alignment on the principles for what it means to build a great product of that company. Not just about if the intuition and tasting gut, but how do you distill that to principles that become the language of the company so that everybody else can start thinking through a similar frame or similar lens when you're designing a product.

**Noah Weiss** (00:13:17):
Because otherwise it can feel a little bit Goldilocks every time a team builds something, they take it to the CEO. CEO is like, "No, not quite right. Again, no, not exactly that." Then you don't have the language to actually have a more constructive review. Then doing that at the little strategy as well. I think the product founder CEO is always going to be the holder of the vision for the company. I'm sure at Airbnb. I imagine Brian was very much like that as well.

**Lenny** (00:13:40):
Absolutely.

**Noah Weiss** (00:13:41):
I think it's actually great to say, "Okay. The overall vision for the company, is it the responsibility of any one team to have everyone buy into that vision, but then to have space for teams to be able to actually do creative work, do explorations because you know that it's aligned with that high level vision."

**Noah Weiss** (00:13:57):
If you can get that alignment and you can get those principles as the common language of what creative software looks like, I think you can have a really good working relationship. Then the other bit I would just say is I think when to involve the founder CEO in a project is really important. The short version I think that works the best is almost like a U-curve where the X-axis is time and the Y-axis is level of involvement.

**Noah Weiss** (00:14:22):
I think you want to get the founder CEO really involved early on, especially if it's a big new project, to make sure that there's strategic buy-in that you agree on the principle strategy and approaching you agree on the goals and the anti-goals, getting that to then the team can run and explore. Then I think at the very end you want them to really be bought in that did you build something that's up to the quality ... the company?

**Noah Weiss** (00:14:43):
Is this something that's going to customers, literally taste the soup. What's missing in it? I think at most companies that have a maniacally customer-focused founder, if you don't do that last step, it's going to be much more painful after you launch because they weren't part of that co-creation of the team. I think that formula winds up working pretty well if you throw in that alignment on principles and envision.

**Lenny** (00:15:08):
That usually sounds nice in theory, but I often imagine you get to that final step and the founder is like, "What the hell is this? This is not at all what I was hoping it be." Is there an example of that, that comes to mind where you maybe went through that and then it's just like, "No. That did not work out the way we expected" and if not, no problem.

**Noah Weiss** (00:15:26):
Yeah. I mean I think that does happen. The ship is maybe ... the end of the year is the level of engagement and often that last level of engagement, that's where there's actually the most rapid refinement that you're doing. I think what's important there is that hopefully you're refining in code and you're not still at static design mocks because using the software is so different than looking at what the software will visually appear.

**Noah Weiss** (00:15:51):
I think what we would wind up doing with Stewart at Slack, for example, is we would get the entire development team, engineers design product, user research and Stewart together in a room and we almost do a bug bash together. The idea was like, "We're doing it all together. We're trying to make the best product possible, making great softwares really messy and we're all trying to clean up the mess together."

**Noah Weiss** (00:16:15):
Sometimes you might find things like, "Okay. This entry point really isn't working, maybe we have to move this entry point. That's maybe a bigger change." But I think often what you'd find is just all those bits of polish and refinement and doing the little delightful things that might otherwise be missing to raise that craft bar and doing a real collective way so it doesn't just feel like the team says. "We want to ship." The founder says, "No, it's not ready."

**Noah Weiss** (00:16:38):
Ideally as a group you're saying, We want to get it to a bar that's going to delight our users and here's the gap from where we are today to what we want to shift." I think that mentality winds up being a lot more constructive, but that's not always easy to do.

**Lenny** (00:16:54):
You talked about creating these principles, which is an awesome approach of just creating guardrails for the team so they think the way the founder and the head of product think. What are some examples of principles you have and had early on maybe at Foursquare or Slack?

**Noah Weiss** (00:17:07):
I mean Slack I think is where we enshrined them much more because we scaled the org so much, more that we needed principles. I think for us, they were really about unpacking just the mission, which for Slack is making people's working lives simpler, more pleasant, more productive. That's the mission of the company. The question is how does software help do that? That's what the principles or their answer.

**Noah Weiss** (00:17:31):
For us, we've got five, four principles. They've largely stayed the same. Some of the language has changed over the last couple of years. But at least for the last four or five years we've had these. The first is be a great host, which is all about that level of craft, the relentlessly saving people's steps. If you're, let's say, a host at Airbnb, it's like putting clean towels on the bed. No one has to wonder "Are these for me?" That type of foresight.

**Lenny** (00:17:57):
That's actually a value at Airbnb. Exactly.

**Noah Weiss** (00:17:59):
Oh, really?

**Lenny** (00:18:00):
It's actually be a host at Airbnb is one of the four core values.

**Noah Weiss** (00:18:03):
Right. Maybe we borrowed that or someone was inspired by it. But be a great host. It sounded aspirational. I love that.

**Lenny** (00:18:09):
Yeah. Yeah. It's a little bigger.

**Noah Weiss** (00:18:11):
There's a famous user design book called Don't Make Me Think, which we sold the title of for our next principle. That's really just about as people building the software, you know how it works so well. You care about all the nuances and intricacies and you really want your users to love it as much as you do. But often actually, that owner's delusion that someone else will care as much about the software that you built as you do, prevents you from actually making something that's simple, comprehensible, understandable.

**Noah Weiss** (00:18:43):
One of the core tenets of Slack is pretty complex under the surface, is how do we actually make people not have to think, how do we not reinvent the wheel if there's existing design patterns to use, how do we actually wind up designing for people who come from many different backgrounds and we cater to their needs in ways that don't make them have to customize it too much?

**Noah Weiss** (00:19:03):
There's a saying we also have, which is more clicks can often be okay. You'll often have in optimization experimentation circles like, "Oh, every click, remove it." But I actually think in a lot of software when it's not transactional, helping people understand what they're doing, giving them confidence, helping them have trust in the steps, we've seen that that can actually be a better experience. That's another example of don't make it stressful, help people chill out when they're using this offer. That's the idea beyond that one.

**Lenny** (00:19:32):
Shifting a little bit. I know you guys have been working on a bunch of AI stuff at Slack. I believe you've been working on AI related stuff for many years. I think at Google you worked on a lot of AI related products. I feel like a lot of people are just getting into this and trying to figure out, "How do we integrate AI and ML and LLMs into our product and how do we not just waste our time chasing things?"

**Lenny** (00:19:55):
I want to ask you just in your time working with AI over the many years you've been doing it and share a little bit about what you've been doing there. What are some things you've learned about how to be actually effective and build valuable products and not just fall for the shiny object issue and trap?

**Noah Weiss** (00:20:11):
I mean, it's almost 15 years ago now that I was working at Google in search on what later became called the knowledge graph. This idea of building a canonical repository of information of people, places, things in the world and relationships between them. Back then, it was a lot of the same ideas, but obviously the techniques. I have got a lot more mature.

**Noah Weiss** (00:20:33):
We used natural language processing to extract all this information from the web and try to build this database of facts. An idea then was could you take queries, people have like, "What are the tallest fountains in Europe or what of the most popular beaches in Southern California?" Be able to actually give answers not just 10 blue links.

**Noah Weiss** (00:20:53):
I think the thing that's really changed, it's super exciting in the last 6, 12 months with LMs and chat GPT and everything else is the idea that now you can take not just knowledge about the world but actually have natural language generation where suddenly the computer can talk back to you in a way that feels extremely human. Then the creative applications of that are pretty massive and exciting.

**Noah Weiss** (00:21:19):
That's, I guess, the lineage there. I think from over the years back at Google at Foursquare, we did a lot of personalization and recommendations at Slack we have search and ML that's coming infused throughout the product. I think a couple things come out as ... I guess the principles that we've used over the years, back then at Google, one of the big ones, was that the promise of the UI has to match the quality of the underlying data, which is to say ... I think this is actually one of the failings of the various LMs right now is they all appear supremely confident even when they're completely hallucinating.

**Noah Weiss** (00:21:53):
I think that's going to be something that people are going to have to work on a lot, which is to figure out how to be not so faultless, to acknowledge when you're not sure, because otherwise, it undermines the trust people have in the system. Using a lot of transparency about where the data comes from so people can actually build credibility and the tools is really important.

**Noah Weiss** (00:22:11):
Then I think making sure that as you're designing the products that you have virtuous cycles that are naturally part of the product experience where you can get training data as a byproduct of people naturally using the software and then can make the model that you're building behind the scenes smarter, more accurate, more predictive.

**Noah Weiss** (00:22:29):
A classic example of that would be Netflix back in the day, their rating system, they actually have a feedback loop from their customers then make the system better at predicting. I think people you are still trying to figure out what does that look like in this world in LLMs?

**Lenny** (00:22:42):
Something I hope that you're all building at Slack is a way to ask a bot questions based on all the conversations in the Slack. I've been looking for that product for a while now.

**Noah Weiss** (00:22:51):
I can safely say we have a lot of prototypes internally where we are playing with this. I think it is actually funny as a aside in one of the original Slack, I don't know, product vision decks back in 2014. There was our whole strategy, there's four parts. Then part number four, which was a joke at the time, was then do magic AI stuff on top.

**Noah Weiss** (00:23:13):
We didn't even know what the state of AI would be. By the time hopefully companies have their collective knowledge in Slack and now we're finally at the period where the magic AI stuff seems finally pretty amazing, pretty magical. Yeah. We're doing a lot of prototyping internally and also trying to work with the ecosystem around as well, because there's so many companies doing amazing work in this space.

**Noah Weiss** (00:23:33):
That if you work at a company where you have so much knowledge in your Slack channel repository that you can suddenly get amazing leaps in productivity to help you better do your job because that knowledge is in Slack, but it's sometimes hard to reach and I think these technologies can make that possible.

**Lenny** (00:23:50):
This reminds me of something Gustav, the CPO and CTO and co-president of Spotify share that they always have a deck and a vision of just a play button within Spotify, you just play and all magic happens and it's the best music and thing exactly what you want to hear and just how that isn't actually possible and it's still not possible. Exactly to your point, you have to really think about how does it act? How close is it to the reality? If it's not actually there, he was saying how like, "We'll pick two songs that are correct at a 10 just because we don't really know exactly what you want to hear right now."

**Lenny** (00:24:23):
There's no point in trying to design that right now because that's not actually going to be delivering on the promise.

**Noah Weiss** (00:24:27):
Right. Yeah. I love that. Our version of that has always been that you open up Slack and suddenly instead of having to read through dozens of channels or find these mentions that magically Slack could just tell you in order that you would care about a summary of all the interesting things that have happened and then let you dig in if you want to your very own personal chief of staff who knew everything that you cared about and read everything that you could read.

**Noah Weiss** (00:24:52):
I don't think that's going to quite be possible anytime soon. But I think Spotify heading towards that north star you wind up developing. I hope a lot of really compelling projects experiences along the way.

**Lenny** (00:25:02):
Yeah, man. The more I think about it, the more amazing opportunities exist in Slack. It's all text. It's amazing. Okay. There's a lot of cool stuff coming I imagine.

**Noah Weiss** (00:25:10):
Yes.

**Lenny** (00:25:10):
I can't wait.

**Noah Weiss** (00:25:11):
Yes.

**Lenny** (00:25:12):
On that topic, how do you think about creating teams within Slack and AI specifically? Are you recommending each team think about how AI can make their stuff better or are you dedicating, "Here's the AI team and they're going to work on stuff" and you guys just keep ship what you're shipping and keep moving your metrics?

**Noah Weiss** (00:25:29):
I mean the unfair answer is a hybrid of the two, which is to say we have a central machine learning and search team. But a lot of people have expertise in this field to build infrastructure that everybody can use. What we've done is because the space is evolving so quickly, literally every month, the capabilities are evolving, the risks and tradeoffs are evolving a ton.

**Noah Weiss** (00:25:52):
What we want to do is actually spin up a couple different teams that are focused on prototyping, using that common infrastructure but in specific directions that are all a little bit different. We've got a common ML, let's say in search team and now we have a bunch of teams that are working in parallel and different customer problems that we're trying to solve using that shared infrastructure.

**Noah Weiss** (00:26:17):
I think this isn't the steady state. I think over time, what it'll probably look like is that all the existing product areas, as soon as we know more of the shape of what the technology is capable of will just have AI capabilities as part of their roadmaps. Just like every product team is responsible for their own mobile roadmap. They don't outsource it to someone else.

**Noah Weiss** (00:26:37):
But I think today when things are moving so quickly, you actually want a little bit of a more ad hoc, flexible approach to move quickly and that's what we're doing.

**Lenny** (00:26:49):
That's what I've been hearing from everyone I've been asking this question. The search ranking team is always seems to be the center of all this and then it's a few experiments here and there. That's an interesting pattern I've been noticing.

**Noah Weiss** (00:26:58):
Good to know.

**Lenny** (00:27:00):
I heard that you have a process internally called Complaint-Storms. I'd love to understand what that is.

**Noah Weiss** (00:27:05):
It something that started. I want to say back in end of 2019, maybe early 2020. The idea a little bit was how do we help as a team look at the software that we build with fresh eyes, because we've been set at Slack for a long time. Slack maybe more than almost any other company maybe like Figma is probably similar. I was listening to the podcast just earlier today where if you work on Figma, you work on Slack.

**Noah Weiss** (00:27:30):
You also live in Slack and you live in Figma all day so you can become more of a power user than anyone else on earth. What we were realizing, especially for people trying to build Slack for the next million customers, the people who have never used Slack before, it was becoming increasingly hard to have empathy for what their usage of Slack would look like. How would they look at it in a more critical way? How would they care less than we cared?

**Noah Weiss** (00:27:56):
What we started doing with these complaints storms and idea was really simple, which is we'd get a team together often Stewart myself would also join and we'd actually start off with other products first in adjacent spaces and we'd say, "Okay. As a group we're going to go through the customer journey from the moment you land on the website through, let's say it's a workplace product, getting your first account going, getting the first couple of users on board, getting to the point of value.

**Noah Weiss** (00:28:21):
We're going to do it on one screen. Someone's going to project and then people are going to fill in every issue, everything that's confusing, every pain point, not bones, but ways in which if you didn't care about the software, you don't work on it, what would actually confuse you? What would stop you in your tracks?

**Noah Weiss** (00:28:38):
From that you went generating a bunch of amazing inspiration by looking at someone else's product in a really critical way for things you might want to try in your own product. Once you get to that, then it becomes easier to actually do with your own software, but it is a little painful obviously. Same with watching usability tests to look at your own baby in a way that is, "Okay. I'm trying to find all the words. I'm trying to find all the problems."

**Noah Weiss** (00:29:03):
But that's one up being a pretty great source. Whenever a team I think either gets stuck or feels like they reach a dead end in a direction is doing complaint-storms about the product area that they're in or using adjacent products just to get inspiration. Then I think it unlocks a lot more creative views than the problem space.

**Lenny** (00:29:23):
It's similar to a process that I learned Stripe has called friction logging. But I love the nuance here of starting with someone else's product because I could totally see how that makes you feel better looking at your product in real life. It's not like we suck. It's okay, everyone's has so much opportunity.

**Noah Weiss** (00:29:38):
Exactly. Yeah. I've heard that from Stripe, too. I think gets a similar place. I think it's the doing it ... I think the byproduct is that you also get calibration on product pace, product quality, and as a team you develop that together. Again, similar to the principles, it's like how do you get these things that are hard to actually feel collectively on the same page about and how do you calibrate? It's another good way to do it.

**Lenny** (00:30:01):
I'm imagining some PMs might be hearing this and wonder, "Okay. Great. Now the founders and the execs have all these things that they want us to fix. I have goals to hit. I got a roadmap. How do you think about prioritizing things that come up in these sorts of sessions for the team and how do they mix and match versus all the other stuff that you want to do? Or is it just like they don't actually have a huge roadmap and this is a way to inform the roadmap?

**Noah Weiss** (00:30:23):
No. I mean, more broadly, I think the way that we think about, or us to think about our roadmap for any feature team at Slack is that it's a portfolio and it's meant to be a portfolio that's diversified a couple different ways. I think one is you want to diversify things that are meant to be new capabilities versus making the thing you've already built a little bit better every day. Similar to parenting.

**Noah Weiss** (00:30:47):
Are there things that are meant to be risky that you aren't sure are going to work but might have a lot of upside versus things that are known bets. Then I think often you're balancing are you doing things that are meant to have impact that you're already very confident in versus things that are meant to learn about a new possibility space.

**Noah Weiss** (00:31:05):
I think for most teams, this stuff usually wind up tactically filling up that bucket of, "Let's make the existing product a little bit better every day for users." At Slack we have this thing we call customer Love Sprints, which is an interesting way team to figure out how to get this on their roadmap is it's hard to allocate that work throughout the quarter.

**Noah Weiss** (00:31:26):
What we'll wind up doing often is have a team do a two-week customer love sprint, almost like a hackathon, but with that burndown list of what we think is the lowest effort, highest impact changes that we can make to generate more love from our customers and whatever that feature areas. Then people just sprint for two weeks, design product engineering, and then you have a bunch of things that you celebrate.

**Noah Weiss** (00:31:48):
At the end, the goal is to ship all of them. This isn't hacks that you throw away. That's how we end up prioritizing it off in that work is actually making it this really fun total change of pace throughout the quarter to not do big feature work that may take months, but to do all these small delightful things that customers are going to love at the end. That's the other way that we figure out how to balance it in.

**Lenny** (00:32:11):
I love that. How often do you do these sorts of customer Love Sprints?

**Noah Weiss** (00:32:14):
I would think teams that work on very user facing products do it at least once a quarter. I think other teams that work on maybe less user facing might do it maybe twice a year. But quarterly is a pretty healthy cadence.

**Lenny** (00:32:26):
Wow. I didn't know about that. That connects to ... Slack has always been a very delightful product. I remember early on the animations were so awesome, the little twirly, I don't know, pounds hashtag thing. It feels like Slack has always invested in delight. How do you operationalize that? Is it these customer Love Sprints? Is there something else that's just like we need to allocate some percentage, just make things really fun even though it's not going to move any metric?

**Noah Weiss** (00:32:51):
I would say it's a little bit good DNA of the company, honestly, which is that for co-founders trying to build a massive online role playing game for many years that was called Glitch and their background was all in building delightful, playful experiences. Glitch didn't work out. But, yeah, there's a whole long backstory. But the short version is a tool they had built internally that they then wound up spitting out a company from which became Slack.

**Noah Weiss** (00:33:18):
I think that DNA we're trying to build a consumer grade experience that just happens to be for work is really ingrained in the company. It's also a big part of how we hire. I would say certainly the majority of PMs designers and engineers who joined Slack had never worked at an enterprise software company before. It's not like most people had worked at Oracle or SAP, it's most people had worked at consumer companies or game companies.

**Noah Weiss** (00:33:44):
They bring that focus in the spirit and then I would say the last bit beyond kind of the principles and the complaints-storms and the customer love is that we have this amazing team that we call the CET team, the Customer Experience Team. They're in some ways the team that is doing our scale at Foursquare is most often in touch with our customers.

**Noah Weiss** (00:34:02):
From the very early days people used to do CE shifts if you worked in products so that you can actually figure out what's frustrating, what's confusing. We have a really great pipeline for getting the insights from the CE team of what are the obstacles, the pain points, the most frequent complaints into the hands of the product teams to be able to prioritize, to figure out, yeah, not all these are going to move a given metric. They might not achieve something for the business.

**Noah Weiss** (00:34:28):
But collectively, I think the way that Slack thinks about competition is we obsess it about customers. We build something they'll love enough to tell their coworkers and the rest takes care of itself.

**Lenny** (00:34:41):
Speaking of competition, something I wanted to ask you a bit about. Early on Slack was competing against this product called HipChat and that's actually what I used at our startup and we love HipChat. It was so hilarious, just these memes everywhere and their billboards are amazing. But then Slack ate their lunch later on. I'm just thinking out loud, discord feels like that was the big threat and how Microsoft Teams obviously.

**Lenny** (00:35:03):
I'm curious just how you think about competition and even just what you've learned about working in a space where there's a lot of competition and thinking about that long-term and even short-term.

**Noah Weiss** (00:35:12):
Yeah. I mean each of those is an interesting mini lesson learned about those. I think the through line for all of them I would say is still the max that we have in trailing, which is we're customer obsessed but competitor aware. I think it's a little bit different. I think some companies are like ... I don't know, Uber for example, I think was notorious competitor obsessed and they tried to delete customers when they could.

**Noah Weiss** (00:35:35):
I think HipChat. I don't think Slack sought out to kill HipChat. At Foursquare we used ... I think it was called Campfire back in the day for the 37 singles people. It was a whole generation of those products. I think Slack came along and I think they had a couple of innovations. One was they had a great mobile experience that synced across every client. Search actually worked and then they brought a lot of the best parts of consumer messaging into the workplace like the emoji and reactions and all those bits.

**Noah Weiss** (00:36:04):
I think it turns out that if you're 10X better on a couple of those axes, then you can see a huge change in behavior. I think that's what happened with that move from the HipChat Campfire to Slack world. Discords interesting. I mean we keep aware of Discord. But it is so much more focused on the consumer. Originally, it was [inaudible 00:36:23] out for community space. I think at Slack the lesson I would have, I think we learned in a good way is we've always really been focused on groups of people who are trying to do work together.

**Noah Weiss** (00:36:33):
That winds up being a completely different audience to build for than communities. I think that focus has been really helpful and I think Discord's amazing and many people love it and the people who use Discord certainly use it in very different way than people who use Slack at work.

**Noah Weiss** (00:36:49):
I think Microsoft obviously has become over time the biggest competitor there. I think the origin of Teams really was a defensive move for them to protect Office because Office is an incredible, very profitable monopoly in the productivity space. I think when they built Teams it was more of a covering their flank versus Slack on the ascent.

**Noah Weiss** (00:37:10):
I think as Teams has evolved over time, it's become much more of a video conferencing product that competes with Zoom and Google Meet. The people who use Teams use it completely different than Slack where you live and breathe and channels and work and workflows all day long.

**Noah Weiss** (00:37:25):
I think what we've seen there too is that a lot of our customers, they happily use both. Most Fortune 500 companies have either a subscription or a Google Workplace subscription and all of those customers who use those also use Slack. We like to say that Slack is this connected tissue that makes all the rest of your tools that much better.

**Noah Weiss** (00:37:44):
I think there we've taken very much an open ecosystem and platform approach and we've just been focused on how do we keep building the best version of what Slack can be as a new category of software for our customers and staying aware of our competitors, but really obsessed on what are the new ways that we can delight our users as the years go by.

**Lenny** (00:38:04):
Slack is a big-ish company within now let's say a big company. But it feels like you still are launching really interesting stuff, you launch huddles, clips, there's this AI stuff coming, sounds like. I'm curious what you have done at Slack to enable these sorts of zero to one bets and what you've seen is important to allow for innovation along those lines.

**Noah Weiss** (00:38:26):
I think maybe we're all a little self-delusional, because I think everyone who works at Slack likes to think that we're still at a small startup. I think keeping that spirit alive, honestly culturally has been a big part of it. I think going back to the principles early on, one of the ones that we did talk about, literally one of the actual wording is take bigger boulder bets.

**Noah Weiss** (00:38:43):
The idea there is that it's really easy to fall into the trap of just constant incrementalism. The concept, it's like a feature team and you have like a KPI and you feel like your whole life is measured by that similar KPI going up 1% a quarter and then you lose sight of what's beyond the horizon. We have this mental metaphor that we talk a lot about getting to the next hill.

**Noah Weiss** (00:39:07):
The idea is that if you're in a mountain range and you're maybe in the little valley, you can see what's right in front of you. But you have no idea how tall the mountains are behind. I think teams can often get lost crawling up that hill, not realizing that there's a huge, incredibly beautiful range behind it.

**Noah Weiss** (00:39:26):
Take bigger boulder bets. Get to the next hill to see what the horizon wants around you. That's how we think about it strategically. Then I think structurally the way we've approached it is that we've over time freighted new teams from scratch that incubated in a new area before the area mature. We did that with a lot of these native audiovisual products like huddles and clips really in the pandemic because our customers were demanding it from us.

**Noah Weiss** (00:39:49):
They were like, "We love living in Slack all day. But we feel disconnected from our teammates when we can't be in the same physical place. What can you do to help us?" That's where that came from. I think in the AI space now, it's a similar thing, which is what we're trying to hear from customers. What do you wish Slack could do if it had these new superpowers? Let's incubate a couple teams, a prototype there and then figure out what can get to real product market fit.

**Noah Weiss** (00:40:14):
I think when we have those teams, I think it's important to just give them space to run, to give them ... get a gel free card for maybe the normal process of, "Okay. Our planning quarterly reviews" and make it feel something that is the pace of learning is what matters. How fast are you prototyping, how fast are you learning from users and then getting to do that publicly and pilot and then get something to launch that's amazing, blows people away. That's the formula that we've seen.

**Lenny** (00:40:43):
**Noah Weiss** (00:41:56):
One of the things that we do, which is always a little bit funny, I mean, it's more of a emotional thing rather than a practical thing is that at all hands we'll often wind up taking specific tweets that people had about the product and Twitter. People say the craziest thing sometimes. Sometimes they're really heartwarming like customer love, but often it's just the meanest, most frustrating complaints that people have.

**Noah Weiss** (00:42:21):
It's honestly meant for us to just have a pulse on, we're at people actually saying and feeling in the wild and not thinking too seriously, but keeping that sense of ... I think that the distance you have from your users as your user base gets more and more diverse and larger I think can make it harder to actually develop the product because you're not designing for yourself anymore.

**Noah Weiss** (00:42:41):
I think all the ways that we help keep people grounded in what are actual users actually saying. That's one big way. The other that reminded me of which is actually probably better, maybe delete that last one because it's kind of boring.

**Lenny** (00:42:55):
No. It's great. We're not deleting nothing.

**Noah Weiss** (00:42:57):
Fine. Usability. I'm a big believer in you want to be data-informed, but you don't want to be so data-driven that you actually don't have a pulse of what real people feel when they're using your product. We're really big into user research, not as it gives you the answer, but it helps at least pose a lot of questions for you when you watch how someone actually uses the software.

**Noah Weiss** (00:43:21):
Historically, it's really hard to get PMs, let alone engineers actually attend user research sessions. What we wound up doing, especially in the pandemic when we first went remote, is now you can dial into usability sessions and to make it really attractive for the team, what we would do is have people live in a thread, write their real time thoughts of ... so painful, how they use that, or I can't believe they missed that, or, oh, that gave me this idea from seeing how they were doing that to do this other thing.

**Noah Weiss** (00:43:50):
Then you wind up having the PMs, the engineers, designers and the user researcher all in one Slack thread live, responding, reacting to usability session. Then suddenly that thread becomes actually the best source of truth for the research report that then gets written up.

**Noah Weiss** (00:44:06):
But I think most importantly, it gets the team almost like the complaint-storms, but actually watching someone else do it in the shoes of an actual human being trying to use the thing that you thought was so brilliant and yet has all these flaws. It's humbling. It's filled with humor and also it's I think really constructive for the teams to do it that way.

**Lenny** (00:44:27):
I was going to ask where they actually share these thoughts. In Slack makes a lot of sense.

**Noah Weiss** (00:44:31):
Yeah. I mean it turns into a report at some point, but literally just link back to the original thread and then you have 100 people's reaction as the report is ongoing.

**Lenny** (00:44:41):
If only there was a AI tool to summarize all of your thoughts.

**Noah Weiss** (00:44:45):
We've got a prototype for that. Hopefully it'll work well enough that actually be useful for customers, too.

**Lenny** (00:44:51):
You tweeted once about how ... I think maybe around the time you joined Slack around 2019 that the self-service business of Slack basically plateaued and it wasn't clear why. I'm curious just what that period was like and how did you get to the bottom of what was going on and turn things around.

**Noah Weiss** (00:45:09):
Yeah. It was actually a couple years after I joined, but it was a point where I was focused on the self-service business because we had this period with Slack where I would say maybe 2014 to 2017 where it was almost all self-service and it was just growing like gangbusters. Then we started spinning up the sales team and an enterprise team. We started focusing mostly on that.

**Noah Weiss** (00:45:30):
I think we saw the team that was working on, but it was primarily the company's focus was all driving enterprise deals, getting to that next level of maturity. Then in 2019, I think we started to see that when we looked beneath the surface, the fundamentals of the self-service business weren't looking as healthy as they used to be.

**Noah Weiss** (00:45:50):
I think the biggest thing as we dug into it was a little bit to what we were talking about earlier with the motivation and complaints terms is it was getting harder to understand what the next generation of Slack customers really wanted from the product. Whether you're thinking about this as crossing the chasm or moving from kind of early adopters to the needs, the more majority or later adopters, I think we're at that point where not every technologically sophisticated company on earth was using Slack, but most were, and we were getting into a market that customers just had different needs. They had different levels of sophistication.

**Noah Weiss** (00:46:24):
We did a lot of user research. We looked at all these cohort curves, which you can imagine suddenly they're like, "Huh, they're not as healthy as they used to be like. What's going on?" I think we got a bunch of insights from it. But I think really what we want to change about how we were operating was instead of to continue to try to optimize the things that had worked over the last couple years, we said, "Okay. Let's throw the whole roadmap away and instead let's come up with a bunch of hypotheses about what could be new levers that could actually help based on the insights that we now have about the next set of customers."

**Noah Weiss** (00:46:56):
"We're going to try to quickly learn which of these levers are real and which of these are just totally off the mark." We had to say for the next six months, we're probably not going to drive any impact at all. It's only going to be about learning. But at the end of that, hopefully we wind up finding a couple different levers that had years of room run and that's what wound up happening.

**Noah Weiss** (00:47:19):
We wound up doubling the rate of our new pay customer growth in the year and a couple years after that and accelerating the self-service business. I think it really came from stepping back, being humble, not feeling like we deserve to have every company on earth sign up and then figuring out how to optimize for learning. In the long term you could get the impact.

**Noah Weiss** (00:47:39):
But knowing that for the next couple quarters we're going to sacrifice impact for the sake of learning. I think that was a good muscle to build, but it was definitely not easy to do at the time.

**Lenny** (00:47:49):
Well, the story begs the question, what are the levers that worked? Whatever you can share.

**Noah Weiss** (00:47:53):
One of the big things that we wound up focusing on is what we talk about is comprehension, desirability. The fundamental challenge I think for new users or new teams using your product once you get past the kind of tech early adopters is do they comprehend what this thing is for? Do they understand how it works? Then desirability is why should they care? Most people at work are not like," Hey. You know what I want to do today is start using an entirely new tool and convince all my coworkers to get on board.

**Noah Weiss** (00:48:22):
That is not part of your job. Your job has goals and measurements and everything else. Really ... understanding that. How do you push on that in that new user experience? It sounds maybe a little ludicrous, but Slack always has a free product. Obviously, there's a free tier that you can use, but we had never actually figured out a trial strategy where we actually gave you a taste of the paid product.

**Noah Weiss** (00:48:44):
Either we're on the free tier or we get to pay for the paid tier. And that wound up being one of, I think the Ripest veins is figuring out how to give people a taste of the full premium Slack experience so that they would never want to go back and doing that in a variety of different points in the customer journey. Then I'd say the other biggest thing I would call the one out is we really need to figure out a new north star metric for motivating the teams across Slack.

**Noah Weiss** (00:49:09):
At that point in time, we basically had paid customers and then we had creative teams, which is the very, very beginning, very, very end of the journey. We did a lot of quantitative research and data science and wound up coming up with this new metric we call successful teams, which is a little bit ... I feel a lot of companies have this Facebook, I'm lucky number seven or whatever it was.

**Noah Weiss** (00:49:28):
Where what we found was that if you could get five people using Slack, the majority of the work week to just communicate at all, that would be a successful team there were going to be 400% more likely to upgrade over the next six months. That seems like a very low bar, five people to use Slack throughout the work week, not even every day. But it turns out that if you could get that level of critical mass the rest would take care of itself.

**Noah Weiss** (00:49:54):
We wound up motivating not just the team that was focused on self-service but all these other feature teams across the company to drive more new successful teams, knowing that if we can move that which is much earlier in the funnel but not a top of funnel metric, then it would actually drive upgrades and paid customers and thus revenue long-term. That was a huge turning point for how we rally product teams around somebody to actually drive that self-service business.

**Lenny** (00:50:22):
Man, this feels like its own podcast. Just to analyze the things you learned down this journey, and there's so many takeaways here. One is just the importance of an activation metric that is predictive of retention sales. It sounds like you landed on five people in a company like DAU basically for a week, something like that. That's awesome.

**Lenny** (00:50:40):
Then the other interesting takeaway here is I'm actually doing a bunch of interviews with founders of the most successful B2B companies and interestingly, not all, maybe half are like, "I still don't think we have product market fit. They're at a billion dollars valuation growing crazy." They're like, I feel like I have product market fit with the current users but I don't with the people I want next.

**Noah Weiss** (00:51:08):
That's exactly right. I think that's exactly right. I think of product market fit is almost like you keep stacking these S-curves where you get product market fit in a small group and then you suddenly reach exponential growth because you can crack that coal group, that type of audience, but then you start declining because you start hitting the ceiling of, we've got in, I don't know what it might be every development team in the US to be using this product.

**Noah Weiss** (00:51:30):
Then you jump up to the next S-curve, which is like how do we get technology savvy teams that aren't developers or how do we get people who are in large eventerprises who are outside the US. Each become new curves that you have to build product market fit for. I think it's just all a huge exercise in being self-critical, being humble, not presuming that you've cracked this thing forever and keeping kind of a very beginner's mindset of what does the next audience need. "

**Noah Weiss** (00:51:58):
Your previous audience. Didn't need it all.

**Lenny** (00:52:01):
If you think about the pie chart of what you had to change to make it work, how much of it was it messaging, positioning, onboarding, optimization versus product features?

**Noah Weiss** (00:52:10):
I would say maybe 60-40 in the sense of the early journey. I mean not just obviously positioning messaging, but the entire experience of unboxing Slack if you will with your team. We called it the day one journey, but extended to really kind of day 30 in reality and it's a single player and multiplayer experience. It is really complex.

**Noah Weiss** (00:52:33):
But then I think what we realized was you can make that incredible, but if fundamental parts of the product were missing that would make it comprehensible to the next audience, then you're going to have problems. It sounds maybe impossible to remember, but Slack used to not have wizzywig message composition.

**Noah Weiss** (00:52:53):
You used to have to use mar, down. Making that wizzywig was a huge boost making mobile work offline so it worked no matter where you were in the world was another big one. All the things about configuring your sidebar notification so that as you scale it you should just Slack it and become overwhelming. Those are some of the foundational product investments that we wound up making so that next generation of Slack customers could get value and not be overwhelmed or daunted by it.

**Lenny** (00:53:22):
Maybe one last question along these lines, people look at Slack as maybe the first major product-led growth success story and they always look at Slack of like, "Oh, we just want to grow Slack. Let's see what they did." For people that are studying Slack's journey and success, what do you think Slack did right early on that maybe people don't recognize or don't appreciate enough that founders today should be thinking about more so versus just like let's just make a freemium product.

**Noah Weiss** (00:53:48):
Right. I mean, I think, maybe the most telling thing is when Slack started, certainly when I joined still, I don't think a word or acronym product-led growth existed. It wasn't like we were really good at taking this playbook and applying it. I think it was more that whole term of art became a thing as maybe many other freemium SaaS products took off.

**Noah Weiss** (00:54:13):
Not to be repetitive. But I think the core of it really was building a product that customers loved enough that they would put their own social capital on the line to get their coworkers on board 5 to 50 people." At the time the biggest company I imagined using Slack was 50 people because I don't know how this is going to work beyond that, maybe it'll become pandemonium. Obviously, that was the initial, I think real, real strong product market fit.

**Noah Weiss** (00:55:11):
But the other bit which then was what powered the enterprise business was teams of 5 to 50 people who worked at larger companies. I think what wound up happening was that you would have teams that was independently at a company like IBM or Disney or Capital One or whoever it might be, or Comcast discovering Slack using it for themselves because they thought it would just make their working lives simpler, more pleasant, more productive, and maybe not even know that anyone else at the company was using Slack.

**Noah Weiss** (00:55:39):
Then by the time we then scaled our enterprise sales team, I mean, truly the exercise initially was just take customer domain, sort by number of active users and call them in the order of that which is, "Hey, by the way, you have a couple thousand people actually using Slack at your company. Do you want to think about a broader deployment or controls or analytics?"

**Noah Weiss** (00:55:59):
I think that was it. That's consumer great experience that customers love enough to get their coworkers on and pay for themselves. Then at enterprise companies like having a bunch of different flowers sprouting so that eventually you could roll up an enterprise-wide deal and then was all the tactics. But I think that that was where it started.

**Lenny** (00:56:20):
The way you described it at the beginning of make a product that people want to share with their colleagues reminds me of a ... I was just listening to an interview with Seth Godin who's this marketing legend. I think he has a new book. He is on every podcast. He had this really great quote that the products that win are ones that you want to tell your friends about.

**Lenny** (00:56:37):
It's a really simple concept. Basically, it's like it's word of mouth is how you have to win. But I think that's so true and every successful company I talk to ends up being like, "We just want to build something people want to share with their friends," even if it's growing in some other way, SEO paid feels like that's always at the root of it is you just want to tell your friends about it because you love it. Slack I think is a great example of that.

**Noah Weiss** (00:56:58):
I think that's true. I mean obviously, there are categories of enterprise software that isn't true for in security or ...

**Lenny** (00:57:05):
But even that I think if it's an awesome security product you're like, "Hey, you got to check out this century or whatever or sneak."

**Noah Weiss** (00:57:13):
Yeah. Good friends with Vanta's CEO Christina. I feel like they run those stories where whoever would've thought that a compliance company would be something that people raved about to their other startup friends, like, "Oh, my God. You don't want to deal with SOC's compliance? You got in Vanta. It's amazing."

**Noah Weiss** (00:57:29):
Yeah. Maybe that is true. I think especially in this day and age where all the marketing acquisition channels have been so saturated, people optimizing so much, I think it's really hard to scale a big enough business if you don't have some amount of word of mouth and customer love driven growth. I think it's hard to scale it on like, "We're going to just play the cat game and in hopes that the numbers work out."

**Lenny** (00:57:51):
I remember Slack rolling out at Airbnb and all the designers getting so excited about it, creating their channels and everyone's just like, "What the hell are they doing as this thing?" Then it did exactly what you're describing just spread. Everyone's just like, "Whoa, this is cool." They're all telling each other that how useful it is to them and spread like crazy.

**Noah Weiss** (00:58:07):
I love that.

**Lenny** (00:58:09):
Is there anything else on Slack that you think would be interesting to share in terms of what makes it a successful product team, product business before I move on to another topic?

**Noah Weiss** (00:58:20):
The other thing I think is maybe a little bit interesting in terms of how we develop product and it's really different and it's changed over time, which is that obviously the easiest person to build for is yourself and the next easiest is people who look almost exactly like you or have similar preferences and sophistication. I think in the early days of Slack, that's basically what we did.

**Noah Weiss** (00:58:41):
I mean it was really just trying to build for small technologically savvy teams in terms of you could build a pretty big business making a great product for them. Over the years, obviously, that's changed. One of the things I think that we've done, which has worked really well, one obviously is we've figured out how to do experimentation in a SaaS product, which is not always obvious because the metrics are much longer term than you land at a checkout page and then you hit Checkout.

**Noah Weiss** (00:59:07):
But I think the other thing is we figured out how to scale up getting real customers using Slack in the wilds for new functionality. We have this really robust program that we call our pilot program where we have, I don't know, probably thousands of different customers that have all signed different agreements now where we can actually roll out to progressively larger user bases, because Slack is a multiplayer product.

**Noah Weiss** (00:59:30):
You often have to roll out real net new functionality to a whole company or whole team because otherwise you can't use huddles by yourself, for example. Then we have a really great program for actually getting feedback from those customers both through Slack connect itself through surveys and this winds up being a lifeblood of feature teams where you can, by the time you actually launch a big net new feature for Slack, have done so much customer feedback from people actually using in the wild to get work done and so much more confidence in what you're building from the metrics and the surveys that we do that you know can't guarantee it's going to be a hit.

**Noah Weiss** (01:00:05):
But you can be really confident not because it just worked well internally, which is no longer that predictive, but because it worked well for a thousand different companies, in 50 different countries, in 20 different industries. I think not early on SaaS companies don't need to figure that out, but I think as you grow and as you have a more diverse customer base as you said all these SaaS founders who said, "Hey, you got to keep reestablishing product market fit."

**Noah Weiss** (01:00:31):
I think that is a programmatic way of being able to do that with your product development process. That's pretty interesting.

**Lenny** (01:00:37):
Any tips for how to choose who to include in this group if someone wants to build something like this for themselves?

**Noah Weiss** (01:00:43):
I think the two most important things are you want a lot of diversity in terms of industry, company size, location and so on. I think you want to pick people who are actually motivated to want to be part of the development process and have a slightly higher risk tolerance. Not every company wants to actually be beta testing new functionality that might get removed.

**Noah Weiss** (01:01:05):
Making sure we have this champion network that we built that people who love Slack enough that they're willing to put up with a little bit of pain in that rougher period are willing to have something that they try to use and then we decide actually we're going to kill that feature before we ever ship it to everybody. Diversity and pain tolerance.

**Lenny** (01:01:24):
This reminds me of something else, the CTO Stripe shared of how they build new product, which is they pick a couple customers that need a problem solved and they just build it for them essentially and with them and in B2B. Generally, it's a lot easier to build something people really want because they are very motivated for you to solve their problem and they're going to put in the time. You don't need a thousands of people involved, you just need a couple.

**Noah Weiss** (01:01:46):
Yeah. I definitely think it was one of those things where if you can do it away and they say I can't live without it, the classic not ... Do you like it? Sure. But can you work without this thing? If the answer is definitely not, you've built something that probably a lot of other companies will want to.

**Lenny** (01:02:04):
All right. I'm going to shift to a totally different topic, which could also be its own whole podcast, but let's just see how it goes. You're with this, I'd say famous blog post on product management called The 10 Traits of Great Product Managers. I want to just try to go through this list briefly and just see how it goes. This could be an hour of conversation. But let's just run through it, because I think it'd be useful for people to hear and I think these are all 100% true even though you wrote this number of years ago at this point and let's just see what comes up. Then I have a few follow-up questions on this list.

**Noah Weiss** (01:02:34):
These traits are ... I wrote this other thing, which is the five minutes about product management, which are all the things that people think product management is and why they switch to the job and they're disappointed by. Then I was like, "Let me actually write a positive version of this," which is the things that the job actually is about. It's not a career ladder. It's not the, "Here's the structured interview things that you should interview for."

**Noah Weiss** (01:02:56):
But I think it's the actual job of product management, what is it about, what does success look like? I don't think they're really in a particular order in hindsight, but I'll read them in order. Living the future and work backwards I think is very much the idea of as a PM is one thing they're responsible for. It's having a longer-term vision and time horizon. How do you carve out time to not just be what are we doing over the next two weeks.

**Noah Weiss** (01:03:20):
But six months, a year, two years from now, how do you immerse yourself in them and bring ideas back, bring inspiration back to the team.

**Lenny** (01:03:27):
I'm going to just going to throw comments at as you're going through them, just add to them. I love that this is exactly Amazon's approach of work backwards, working backwards process. At Airbnb, this is actually the main thing Brian want pushed everyone to do is just think about the idealized product of a magical world where this is totally solid and then work backwards from that. Then Paul Graham talks about this, too, just live in the future and build it.

**Noah Weiss** (01:03:53):
I definitely riffed off at least the Paul Graham thing because I remember reading that essay of he thinks everyone thinks that you can get ideas by, I don't know, sitting with their co-founder laying in Dolores Park looking up at the sky and conjuring up the next unicorn or something. Definitely not how that works. You have to actually immerse yourself in the problem space and try to imagine what the future world looks like and then what's missing for people to get to that future state. Yeah. I agree.

**Lenny** (01:04:20):
I also saw a great tweet by [inaudible 01:04:21] the other day about how if you're working at a company with good leaders, they're never going to be sad that your vision is too big and too ambitious. If there's some reality to it that often they want that just like, "Let's go. Let's think bigger. How do we change the way we think about the future of all this stuff?"

**Noah Weiss** (01:04:39):
Yeah. I mean that was when I was at Google, the thing I took away most from any review with Larry and Sergei was they would ask how could we get 100X the scale or how could this work for this, would seem like an outlandish use case but would push the team to think much further into the future. Yeah. I think definitely what the founders always want.

**Lenny** (01:04:56):
That's what Brian Chesky always said too, just like, "How do we 10X this? What would it take to 10X this idea?

**Noah Weiss** (01:05:01):
Yeah.

**Lenny** (01:05:01):
Awesome. Okay.

**Noah Weiss** (01:05:02):
Okay. The second one, which is maybe obvious, but thinking about how do you actually amplify your team? How do you facilitate ideas? How do you create energy? How do you create momentum? A PM role I think can be a little bit unsatisfying if you're useful, where you create things yourself opposed to you are the one who's amplifying what the work that's being created by everyone else is. You have to get into that more of a facilitator mindset.

**Lenny** (01:05:26):
What I think about here is a lot of teams don't want PMs on their team or don't like PMs or don't think PMs are valuable. What I find is that just means your PMs not good because if you have a good PM, they're just going to help you do the best work of your life. They're going to help you clarify things, prioritize well, unblock you, all that stuff.

**Noah Weiss** (01:05:45):
Totally. I wish should find out who wrote that expression early on of PM should be mini-CEOs. I think that's the most dangerous piece of advice ever in the history of product management because I think that is how you end up having PMs who try to act like dictators instead of leaders and facilitators. Because if you're acting like that, yeah, your team can completely reject you and say I never want another PM again.

**Lenny** (01:06:09):
Yeah. So many UPMs are just like, "I'm finally going to have the power, finally." If they move from engineering or some other role and then they get there like, "Oh, what the hell? Is that to convince everyone of all these things I want to do?"

**Noah Weiss** (01:06:20):
That actually, I'm going to skip in a slightly different direction of the order of this post. But the fifth one that I wrote in there was your job as to facilitate the pace and quality of decision making. That is very different than you are the person who makes all the decisions. In fact, I think one of the things that PM struggled with early on is how do you actually get the team to be able to make high quality decisions quickly without you arbitrarily playing tiebreaker all the time.

**Noah Weiss** (01:06:48):
It's a soft art to be able to do that. But I think that is actually how you have a really healthy team dynamic instead of PM to want to say, "Okay. Now it's my turn to get to make the decisions." It's definitely not what the job is about.

**Lenny** (01:07:01):
What that makes me think about is I taught a course on product management at one point that I paused for now of just the core job of a PM is to figure out what's next for every single person on the team. There's this meme or GIF of a dog on a train and he's just laying the tracks as the team is moving forward ahead of them just one step at a time. To do that, this is such an important part of that is just help people make decisions, unblock them.

**Noah Weiss** (01:07:24):
Totally. I'll combine two of these together. One is you do have to have impeccable execution. This is more of a baseline thing. But I've never seen a PM who was disorganized or didn't do follow-up or wasn't clear about expectations or timelines. It's not high in Maslow's hierarchy of PM enjoyment. But I do think it's a baseline expectation.

**Noah Weiss** (01:07:47):
The thing I think is more enjoyable and probably the most important thing in the long-term is focusing on impact primarily to the customer experience but also to the business. I think there's that saying growth solves all problems. I think impact solves all PM issues, which is if a team is consistently building things people love and changing the director of the business, everything else is just an input.

**Noah Weiss** (01:08:16):
I think that focus and understanding as your point about laying the tracks is what direction do you need to go as a team to actually drive that impact? That's probably the single thing that PM can most control.

**Lenny** (01:08:28):
I love that. I always recommend exactly that if your career is not going as well as you'd hoped or you're not getting promoted, it's usually you're not delivering impact, whatever that means to the company. It may be moving a metric may mean building great product that the founders really love.

**Noah Weiss** (01:08:43):
Yeah.

**Lenny** (01:08:43):
Main impact can mean a lot of different things. But it's so true. On the executing impeccably bucket, the way I think about that is as a great PM you need to have this aura of "I've got this." Anytime someone puts something on your plate, it's not going to fall off. You're not going to forget about it. You're not going to let a ball drop that if the more you can create this aura of "I got this," the more responsibility people are going to give you, the more impact you'll end up having, the more people want to work with you and all that.

**Noah Weiss** (01:09:12):
Yeah. Ben Horowitz was a board member back at Foursquare. I remember he used to have this saying very Yoda of good leaders need to say what they're going to do and then do what they said. If they can't then they need to follow up and explain why. I mean that's like the amendment and I think that is what good execution looks like.

**Lenny** (01:09:33):
That last point is so important. You may not be able to do all the things on your plate, but just telling people. Hey, I'm not going to get to this thing. Let's reprioritize as such a small thing you could do and really creates that, or if you got this, they're not going to forget about this thing asked you to do.

**Noah Weiss** (01:09:47):
Yeah. You're the shock absorber for the team. You're the thing that builds people's confidence that things are going to be running smoothly and you'll get over the Navajo speed bumps and whatever else. I'll combine two or three of these that are related or just more skills. I said right well. I actually think especially as you get to more senior positions, writing is the only scalable way of having influence on a larger, larger product org.

**Noah Weiss** (01:10:15):
There's a book called On Writing by Stephen King, which I recommend to literally everybody. Stephen King, you're like ... See he's not maybe the most literary critical acclaimed author, but he's a prolific author who publishes things that people love and tell their friends about and he has a great short book on the practice of writing high-quality, high-volume production.

**Lenny** (01:10:39):
Before you move on, I'll throw a couple more books that I found useful in my writing. One is actually called On Writing Well. That's funny that they're so similarly titled, which basically every chapter is just another way to cut more from your writing. More and more parts you should cut. Interestingly, I do have a lot of guest posts in my newsletter and I find 90% of the time if I just cut the first paragraph of what they first took a crack at and jumps straight into the thing, immediately gets better. This book talks a lot about that.

**Lenny** (01:11:07):
Another book that is amazing for writing better is Nobody Wants to Read Your Shit by the guy that wrote The War of Art, forget his name. But that book is awesome and it's just like nobody wants to read what you're writing. Here's how to maybe make it something people want to read. Then recently I read one called Several Short Sentences or something like that. It's all about just writing short sentences and that helps a lot. There you go. Three more recommendations.

**Noah Weiss** (01:11:32):
Okay. I got to read the last two. I haven't read those, but they sound perfect. Okay. Maybe I'll throw one more. Let's say we talked about this earlier, but actually read this in the post many years ago, is optimizing for the pace of learning and knowing that long-term massive thing that's going to drive impact. I think it can be hard if you're a PM for a feature team. You're part of a big company. I don't know. I'm making this up.

**Noah Weiss** (01:11:55):
You're on the AdWords team at Google and you're responsible for the bid input selector or something and probably is a whole team, honestly, now at this point. You've got such a set of blinders on that I think it can be hard to think about what else could this team become, what else could you drive beyond the thing that's right in front of you?

**Noah Weiss** (01:12:16):
Optimizing for learning, being willing to take those bolder bets, knowing you can be wrong in the short-term, but that you'll learn new levers that will be really fruitful in the long-term. It's a portfolio approach to product, but I think a really important one.

**Lenny** (01:12:30):
I was just interviewing a product leader at Asana, Paige Costello. We were talking about how she's often the youngest person in the room and often manages people that are much older than her and more experienced than her and asked her just how do you that? How do you succeed in that environment?

**Lenny** (01:12:46):
What she's found is just being the person that has the answers and the insights in meetings, people obviously run to her like, "Hey, what do you think of this?" Because she just knows what people are going to need. I think that's exactly what you're talking about here is just be the person that knows the most about the problem, the customers, the space.

**Noah Weiss** (01:13:04):
Yeah. Then I'll combine the last two just because I know time. But the combination of ... I wrote data fluency, which is not to say that every PM needs to be a statistician. I mean it's great. I mean you've had a lot of great posts about how to understand some of the basics of experimentation, correlation, causation and statistical significance. That's all great.

**Noah Weiss** (01:13:23):
But by data fluency, I think it's more actually what you were just saying, which is you know enough about the insights about your customers that it can then inform making higher likelihood product bets and that data can be quantitative, that data can be survey based, it can be from doing 100 meetings with customers yourself. Those are all types of data inputs to me. Being really fluent and then maybe combining that with great product taste.

**Noah Weiss** (01:13:49):
I know it's a controversial statement now to say that there is taste for product. But I do think in all the love of the frameworks and the analytics and everything else and in the field of product, I think people sometimes lose sight of, "It's a creative field." It's not art on its own. But you could get all the inspiration from art and I actually think there's a lot ... there's a book, I think it's called Creative Selection, I forget the exact name of it, about some of the early iPhone development teams at Apple and working with Steve Jobs there.

**Noah Weiss** (01:14:21):
I've never worked at Apple. But I actually think it's the best book I've read about the just iterating creative work of building new products and what it means to have taste, which is to say you've developed some amount of intuition for what people will likely love before you're able to test it. Anyway, I think taste plus fluency and data, that too is a combination, is a pretty powerful combo.

**Lenny** (01:14:48):
Let me ask you just a couple questions about this list before we get to a very exciting lightning round and I can let you go.

**Noah Weiss** (01:14:55):
Okay.

**Lenny** (01:14:56):
Of these 10 attributes, say you're a new product manager, if you had to pick two or three that you think are most important to get right and focus on in your early career, which would you say they would be?

**Noah Weiss** (01:15:06):
I think for early on in your career, what I would say is getting great at execution. It's a thing that you can most control. Then I think building that news for impact, even if the impact is more local, because that's how you actually will demonstrate momentum and build credibility and then actually do think early on getting really fluent on the data and the research side that you can have insights that you can read back to your team.

**Noah Weiss** (01:15:29):
Those are to me the most slammed up ways of becoming someone who starts to build credibility as a product manager in any organization.

**Lenny** (01:15:38):
Awesome. That's what I always tell on new PMs too, is just get really good at execution because that creates that aura of, "Oh, this person's just killing it. They're just shipping on time. People know it's happening. They're hitting dates," things like that.

**Noah Weiss** (01:15:48):
Yeah.

**Lenny** (01:15:49):
The last question is just say more of a senior product leader, say, on director. Are there three other attributes you think are ones they should focus on most or maybe the same?

**Noah Weiss** (01:15:59):
Yeah. I mean I think this is where the pace and quality decision making starts to matter a lot more because you're still unresponsible sometimes for teams of teams and you're helping to facilitate high quality decisions, often ones that have a lot of uncertainty or risk or ambiguity. How do you keep the organization unblocked, not just a team moving well.

**Noah Weiss** (01:16:21):
I think the living in the future and working backwards, I think the more senior you get, it's always going to be the product founder who is responsible for the ultimate vision, but you become more responsible for that meeting a longer-term strategy to realize that vision. Becoming just someone who can dedicate more of your time to be out of the fray of the day-to-day and think more about the longer-term strategy that you want to pursue.

**Noah Weiss** (01:16:47):
The last one, and we talked about just earlier, but I think being a really good writer, it is just the highest leverage usage of your time. If you want to influence an organization at least for one that doesn't just spend all day in meetings, but I think it's really hard to dedicate the time to it because you're probably spending most of your day in meetings. It's the antidote to that to scale your ability to influence the product direction and maybe even the principles and how you develop product at a company.

**Lenny** (01:17:17):
Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Noah Weiss** (01:17:22):
Let's do it.

**Lenny** (01:17:23):
What are two or three books that you've recommended most to other people?

**Noah Weiss** (01:17:27):
These may not be the most unique, but I will say them, which is Innovator's Dilemma by Clayton Christiansen, whether you're working a large company and you're suffering it or you're working a startup and you're trying to out flank an incumbent, I still do think that and innovative solution, the follow on are the best books on product strategy to read.

**Noah Weiss** (01:17:47):
If you're moving into more of a leadership or management position, I think Radical Candor by Kim Scott is just incredible and worth everyone reading. Frankly, if you're a PM and you're doing soft influence, I think it's really important. Then the third one, which is maybe a little off the beat of path, there's a book called Leadership in Turbulent Times by Doris Goodwin who's a presidential historian.

**Noah Weiss** (01:18:12):
It's this amazing book that looks at four of the most notable presidents and how their leadership style evolved when they were in really critical hard times in their presidency. I just think it's actually the best book about leadership style and how do you evolve and how do you deal with crises, which again is maybe later on in your career. But I love getting inspiration from not just reading books about tech and product and I think that's one of the best ones.

**Lenny** (01:18:40):
What is a favorite recent movie or TV show you really enjoyed?

**Noah Weiss** (01:18:43):
The obvious answer, which I'm sure many people would say would be Succession. I'm not going to ruin anything for the finale because people haven't seen it all. But the writing, the Shakespearean level drama of it all, it's just incredible and just heart wrenching that you wind up loathing most of the characters. But you can't take yourself out of it.

**Noah Weiss** (01:19:03):
The one that's maybe less common, and I watched right when we started paternity leave is The Bear, I don't know if you heard about it.

**Lenny** (01:19:11):
The restaurants.

**Noah Weiss** (01:19:12):
Yeah.

**Lenny** (01:19:13):
Yeah. Seen that. Yeah.

**Noah Weiss** (01:19:14):
I'm a sucker for incredible cinematography, just what they do in basically the single room of this restaurant and kitchen and just the piece of it. I think it's just an incredible piece of art. I don't know if it's the best show ever, but it is a really moving, emotionally jarring piece of TV.

**Lenny** (01:19:34):
Also, quite stressful to watch.

**Noah Weiss** (01:19:36):
Very sure. I would not relax to it to go to sleep.

**Lenny** (01:19:39):
But Awesome. Okay. Favorite interview question that you'd like to ask candidates?

**Noah Weiss** (01:19:45):
That would depend a lot, I think on obviously, the seniority level and things like that. But I think the more general, and I always love to ask people is what unfair secrets have you learned to improve the velocity and energy level of a product team? When I say unfair or you in secret, I usually mean not something that you probably read on a medium input. But what did you learn? How did you learn it and how does it work and how do you apply it? You also just get amazing interesting bits of inspiration from asking that.

**Lenny** (01:20:17):
What is a favorite product you've recently discovered that you love?

**Noah Weiss** (01:20:21):
This will also serve for recommendations for you based on or you've not thread about parenting clients because none of the products I've learned or loved recently have been software. But they're all maybe software enabled. The Nanit, which is a weird name, but it's this AI-enabled camera for basically watching your day as they sleep. It's like incredible, look, because you sleep analytics and really helps you be a less neurotic parent. I would highly recommend it.

**Noah Weiss** (01:20:48):
The SNOO, which is basically this amazing device that can help soothe your kid when all they need is a little bit of that soothing while they sleep so that you can sleep a little bit more. You can tell the steam here is sleep. The last one is there's this chemical up baby that has this whole elaborate stroller system with interchangeable parts and, honestly, it's just an incredibly well-designed piece of hardware that works in and out of the car.

**Noah Weiss** (01:21:16):
Yeah. I think I've re-appreciated really well-designed hard products that are not necessarily hardware from Apple and that has been what baby new parents is about.

**Lenny** (01:21:26):
I have all three. Also, a huge shout-out to the Nanit team who sent me a Nanit and all the stuff around the Nanit. Thank you. I'm not going to name the specific PM who sent it to me, because I don't remember his name off the top of my head, but thank you, Nanit.

**Noah Weiss** (01:21:41):
Yeah. It turned out there was a whole world of baby tech, which I had no idea. I mean, it makes sense that existed, but you never know about until you're a parent. Now, I'm obsessed.

**Lenny** (01:21:49):
One tip that for Nanit, my wife and I have been playing with different names for our kid and we have been changing his name in the Nanit so that anytime we go into the room it sends us a push, "Hey, there's activity in the room with the names so that we could feel the different names."

**Noah Weiss** (01:22:05):
I love that. Yeah. My wife and I did something similar where we had three or four final name contenders and we didn't use the Nanit for. But we literal just picked a week and said, "On Monday we're going to like refer to the future baby by that name for the entire week and give some personification to it." That helped us get down from four to one. Yeah.

**Lenny** (01:22:28):
What a wide-ranging set of pieces of advice we got on this podcast. Two more questions. What is something relatively minor you've changed in how you develop product at Slack that has had a lot of impact on your ability to execute?

**Noah Weiss** (01:22:38):
By far, the biggest thing, which is more of a cultural shift is that we stopped spending so many cycles on design explorations of static mocks or walkthroughs and said, "How quickly can we get into prototyping the path in real software, even if it's messy and you throw it away," at least for something like Slack. You got to live and touch and smell the software. You can't just look at it. That's been a huge unlock for avoiding spending months on design debates and just getting to, well, how does the software feel? That's what matters.

**Lenny** (01:23:12):
Speaking of Slack, final question, what is your favorite Slack pro tip that people may not be aware of?

**Noah Weiss** (01:23:19):
I'm going to give two because if someone asks me this, "I'm like, these are the two things that if you're not in love with Slack, you'll fall in love with Slack." The first is obviously you have a sidebar, it can be unruly, but you can customize the sidebar into sections and each of those sections you can have settings like. "Show unread only" or "Sort by recency," or "Sort by alphabetical," whatever it might be. You can collapse the section so you don't see it all at once.

**Noah Weiss** (01:23:44):
I think having a well-managed sidebar, which doesn't actually take that long, it's like this amazing thing because then all this inbound is structured in an order and a grouping that fits how you want to view your working life. Customizing the sidebar. The second thing is just use the quick switcher for everything. Just hit Apple K and just start typing and it feels like they're playing a video game, just hopping around channels, people, files, search. Pretty much all the actions you can take are on as well.

**Noah Weiss** (01:24:15):
I think most SaaS products now have borrowed that pattern. You can use another software, but it works particularly well in Slack.

**Lenny** (01:24:23):
No. I know the last thing you needed was to record a podcast your first week back to work. I so appreciate you making the time. It feels like we're two ships passing in the night from pat leave and to new pat leave. 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?

**Noah Weiss** (01:24:39):
I will confess that I haven't used Twitter in months because I was doing digital detox, but still I think @Noah_Weiss is a pretty good place to find me online and whether there or anywhere else, still love to have peoples like Slack feature requests, especially about things that you wish were possible or that would get the rest of your company to join on Slack because you love it, but you can't convince them. Those are always golden nuggets.

**Lenny** (01:25:04):
Awesome. Noah, thank you so much for being here.

**Noah Weiss** (01:25:06):
Thank you so much for having me.

**Lenny** (01:25:08):
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.

---

## [6/20] The ultimate guide to A/B testing | Ronny Kohavi (Airbnb, Microsoft, Amazon)

**Ronny Kohavi** (00:00:00):
I'm very clear that I'm a big fan of test everything, which is any code change that you make, any feature that you introduce has to be in some experiment. Because again, I've observed this sort of surprising result that even small bug fixes, even small changes can sometimes have surprising, unexpected impact.

**Ronny Kohavi** (00:00:22):
And so I don't think it's possible to experiment too much. You have to allocate sometimes to these high risk, high reward ideas. We're going to try something that's most likely to fail. But if it does win, it's going to be a home run.

**Ronny Kohavi** (00:00:38):
And you have to be ready to understand and agree that most will fail. And it's amazing how many times I've seen people come up with new designs or a radical new idea. And they believe in it, and that's okay. I'm just cautioning them all the time to say, "If you go for something big, try it out, but be ready to fail 80% of the time."

**Lenny** (00:01:05):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard win experiences building and growing today's most successful products.

**Lenny** (00:01:14):
Today my guest is Ronny Kohavi. Ronny is seen by many as the world expert on A/B testing and experimentation. Most recently, he was VP and technical fellow of relevance at Airbnb where he led their search experience team. Prior to that, he was corporate vice president at Microsoft, where he led Microsoft Experimentation Platform team. Before that, he was director of data mining and personalization at Amazon.

**Lenny** (00:01:38):
He's currently a full-time advisor and instructor. He's also the author of the go-to book on experimentation called Trustworthy Online Controlled Experiments. And in our show notes, you'll find a code to get a discount on taking his live cohort-based course on Maven.

**Lenny** (00:01:53):
**Ronny Kohavi** (00:04:33):
Thank you for having me.

**Lenny** (00:04:34):
So you're known by many as maybe the leading expert on A/B testing and experimentation, which I think is something every product company eventually ends up trying to do, often badly. And so I'm excited to dig quite deep into the world of experimentation and A/B testing to help people run better experiments. So thank you again for being here.

**Ronny Kohavi** (00:04:54):
That's a great goal. Thank you.

**Lenny** (00:04:56):
Let me start with kind of a fun question. What is maybe the most unexpected A/B tests you've run or maybe the most surprising result from an A/B test that you've run?

**Ronny Kohavi** (00:05:06):
So I think the opening example that I use in my book and in my class is the most surprising public example we can talk about. And this was kind of an interesting experiment. Somebody proposed to change the way that ads were displayed on Bing, the search engine. And he basically said, "Let's take the second line and move it, promote it to the first line so that the title line becomes larger."

**Ronny Kohavi** (00:05:37):
And when you think about that, and if you're going to look in my book, or in the class, there's an actual diagram of what happened, the screenshots. But if you think about it, just realistically it looks like a meh idea. Why would this be such a reasonable, interesting thing to do? And indeed, when we went back to the backlog, it was on the backlog for months, and languished there, and many things were rated higher.

**Ronny Kohavi** (00:06:05):
But the point about this is it's trivial to implement. So if you think about return on investment, we could get the data by having some engineers spend a couple of hours implementing it.

**Ronny Kohavi** (00:06:19):
And that's exactly what happened. Somebody at Bing who kept seeing this in the backlog and said, "My God, we're spending too much time discussing it. I could just implement it." He did. He spent a couple of days implementing it, as is the common thing at Bing, he launched the experiment.

**Ronny Kohavi** (00:06:37):
And a funny thing happened. We had an alarm. Big escalation, something is wrong with the revenue metric. Now this alarm fired several times in the past when there were real mistakes, where somebody would log revenue twice, or there's some data problem. But in this case, there was no bug. That simple idea increased revenue by about 12%.

**Ronny Kohavi** (00:07:01):
And this is something that just doesn't happen. We can talk later about Wyman's law, but that was the first reaction, which is, "This is too good to be true. Let's find a bug." And we did. And we looked for several times, and we replicated the experiment several times, and there was nothing wrong with it. This thing was worth $100 million at the time when Bing was a lot smaller.

**Ronny Kohavi** (00:07:22):
And the key thing is it didn't hurt the user metrics. So it's very easy to increase revenue by doing theatrics. Displaying more ads is a trivial way to raise revenue, but it hurts the user experience. And we've done the experiments to show that. In this case, this was just a home run that improved revenue, didn't significantly hurt the guardrail metrics. And so we were in awe of what a trivial change. That was the biggest revenue impact to Bing in all its history.

**Lenny** (00:07:57):
And that was basically shifting in two lines, right? Switching two lines in the search results.

**Ronny Kohavi** (00:08:02):
And this was just moving the second line to the first line. Now you then go and run a lot of experiments to understand what happened here. Is it the fact that the title line has a bigger font, sometimes different color? So we ran a whole bunch of experiments.

**Ronny Kohavi** (00:08:16):
And this is what usually happens. We have a breakthrough. You start to understand more about, what can we do? And there suddenly a shift towards, "Okay, what are other things we could do that would allow us to improve revenue?" We came up with a lot of follow on ideas that helped a lot.

**Ronny Kohavi** (00:08:34):
But to me, this was an example of a tiny change that was the best revenue generating idea in Bing's history, and we didn't rate it properly. Nobody gave this the priority that in hindsight, it deserves. And that's something that happens often. I mean, we are often humbled by how bad we are at predicting the outcome of experiments.

**Lenny** (00:09:01):
This reminds me of a classic experiment at Airbnb while I was there, and we'll talk about Airbnb in a bit. The search team just ran a small experiment of what if we were to open a new tab every time someone clicked on a search result, instead of just going straight to that listing. And that was one of the biggest wins in search-

**Ronny Kohavi** (00:09:18):
And by the way, I don't know if you know the history of this, but I tell about this in class. We did this experiment way back around 2008 I think. And so this predates Airbnb. I remember it was heavily debated. Why would you open something in a new tab? The users didn't ask for it. It was a lot of pushback from the designers. And we ran that experiment. And again, it was one of these highly surprising results that made it that we learned so much from it.

**Ronny Kohavi** (00:09:49):
So we first did this. It was done in the UK for opening Hotmail, and then we moved it to MSN, so it would open search in new tab, and all the set of experiments were highly, highly beneficial. We published this. And I have to tell you, when I came to Airbnb, I talked to our joint friend Ricardo about this. And it was sort of done, it was very beneficial, and then it was semi forgotten, which is one of the things you learned about institutional memories. When you have winners, make sure to address them and remember them. So it was at Airbnb done for a long time before I joined that listings opened in a new tab, but other things that were designed in the future were not done. And I reintroduced this to the team, and we saw big improvements.

**Lenny** (00:10:35):
Shout out to Ricardo, our mutual friend who helped make this conversation happen. There's this holy grail of experiments that I think people are always looking for of one hour of work and it creates this massive result. I imagine this is very rare, and don't expect this to happen. I guess in your experience, how often do you find one of these gold nuggets just lying around?

**Ronny Kohavi** (00:10:57):
Yeah. So again, this is a topic that's near and dear to my heart. Everybody wants these amazing results, and I show them in chapter one in my book, multiple of these small efforts, huge gain.

**Ronny Kohavi** (00:11:13):
But as you said, they're very rare. I think most of the time, the winnings are made this inch by inch. And there's a graph that I show in my book, a real graph of how Bing ads has managed to improve the revenue per a thousand searches over time, and every month you can see a small improvement and a small improvement. Sometimes the degradation because of legal reasons or other things. There were some concern that we were not marking the ads properly. So you have to suddenly do something that you know is going to hurt revenue. But yes, I think most results are inch by inch. You improve small amounts, lots of them. I think that the best example that I can say is a couple of them that I can speak about.

**Ronny Kohavi** (00:12:00):
One is at Bing, the relevance team, hundreds of people all working to improve bing relevance. They have a metric, we'll talk about OEC, the overall evaluation criterion. But they have a metric that their goal is to improve it by 2% every year. It's a small amount, and that 2% you can see here's a 0.1, and here's a 0.15, here's a 0.2, and then they add up to around 2% every year, which is amazing.

**Ronny Kohavi** (00:12:28):
Another example that I am allowed to speak about from Airbnb is the fact that we ran some 250 experiments in my tenure there in search relevance. And again, small improvements added up. So this became overall a 6% improvement to revenue. So when you think about 6%, it's a big number, but it came out not of one idea, but many, many smaller ideas that each gave you a small gain.

**Ronny Kohavi** (00:13:00):
And in fact, again, there's another number I'm allowed to say. Of these experiments, 92% failed to improve the metric that we were trying to move. So only 8% of our ideas actually were successful at moving the key metrics.

**Lenny** (00:13:17):
There's so many threads I want to follow here, but let me follow this one right here. You just mentioned of 92% of experiments failed. Is that typical in your experience seeing experiments running a lot of companies? What should people expect when they're running experiments? What percentage should they expect to fail?

**Ronny Kohavi** (00:13:31):
Well, first of all, I published three different numbers for my career. So overall at Microsoft, about 66%, two thirds of ideas fail. And don't think the 66 is accurate. It's about two thirds. At Bing, which is a much more optimized domain after we've been optimizing it for a while, the failure rate was around 85%. So it's harder to improve something that you've been optimizing for a while. And then at Airbnb, this 92% number is the highest failure rate that I've observed.

**Ronny Kohavi** (00:14:09):
Now I've quoted other sources. It's not that I worked at groups that were particularly bad, Booking, Google Ads, other companies published numbers that are around 80 to 90% failure rate of ideas. This is where it's important of experiments. It's important to realize that when you have a platform, it's easy to get this number. You look at how many experiments were run and how many of them launched. Not every experiment maps to an idea.

**Ronny Kohavi** (00:14:39):
So it's possible that when you have an idea, your first implementation, you start an experiment. Boom, it's egregiously bad, because you have a bug. In fact, 10% of experiments tend to be aborted on the first date. Those are usually not that the idea is bad, but that there is an implementation issue or something we haven't thought about, that forces an abort.

**Ronny Kohavi** (00:15:01):
You may iterate and pivot again. And ultimately, if you do two, or three, or four pivots or bug fixes, you may get to a successful launch. But those numbers of 80 to 92% failure rate are of experiments.

**Ronny Kohavi** (00:15:17):
Very humbling. I know that every group that starts to run experiments, they always start off by thinking that somehow, they're different. And their success rate's going to be much, much higher, and they're all humbled.

**Lenny** (00:15:29):
You mentioned that you had this pattern of clicking a link and opening a new tab as a thing that just worked at a lot of different places.

**Ronny Kohavi** (00:15:36):
Yeah.

**Lenny** (00:15:37):
Are there other versions of this? Do you do you collect a list of, "Here's things that often work when we want to move" there's some you could share. I don't know if you have a list in your head.

**Ronny Kohavi** (00:15:48):
I can give you two resources. One of them is a paper that we wrote called Rules of Thumb, and what we tried to do at that time at Microsoft was to just look at thousands of experiments that run and extract some patterns. And so that's one paper that we can then put in the notes.

**Lenny** (00:16:07):
Perfect.

**Ronny Kohavi** (00:16:08):
But there's another more accurate, I would say, resource that's useful that I recommend to people. And it's a site called goodui.org, and goodui.org is exactly the site that tries to do what you're saying at scale.

**Ronny Kohavi** (00:16:25):
So guy's name is Jacob [inaudible 00:16:28]. He asks people to send them results of experiments, and he puts them into patterns. There's probably 140 patterns I think at this point. And then for each pattern he says, "Well, who has that helped? How many times and by how much?" So you have an idea of this worked, three out of five times. And it was a huge win. In fact, you can find that open a new window in there.

**Lenny** (00:16:54):
I feel like you feed that into ChatGPT, and you have basically a product manager creating a roadmap tool.

**Ronny Kohavi** (00:17:01):
In general, by the way, a lot of that is institutional memory, which is can you document things well enough so that the organization remembers the successes and failures, and learns from them?

**Ronny Kohavi** (00:17:17):
I think one of the mistakes that some company makes is they launch a lot of experiments and never go back and summarize the learnings. So I've actually put a lot of effort in this idea of institutional learning, of doing the quarterly meeting of the most surprising experiments.

**Ronny Kohavi** (00:17:32):
By the way, surprising is another question that people often are not clear about. What is a surprising experiment? To me, a surprising experiment is one where the estimated result beforehand and the actual result differ by a lot. So that absolute value of the difference is large.

**Ronny Kohavi** (00:17:53):
Now you can expect something to be great and it's flat. Well, you learn something. But if you expect something to be small and it turns out to be great, like that ad title promotion, then you've learned a lot. Or conversely, if you expect that something will be small and it's very negative, you can learn a lot by understanding why this was so negative. And that's interesting.

**Ronny Kohavi** (00:18:17):
So we focused not just on the winners, but also surprising losers, things that people thought would be a no-brainer to run. And then for some reason, it was very negative. And sometimes, it's that negative that gives you insight. Actually, I'm just coming up with one example that of that, that I should mention.

**Ronny Kohavi** (00:18:36):
We were running this experiment at Microsoft to improve the windows indexer, and the team was able to show on offline tests that it does much better at indexing, and they showed some relevance is higher, and all these good things. And then they ran it as an experiment. You know what happened? Surprising result. Indexing the relevance was actually high, but it killed a battery life.

**Ronny Kohavi** (00:19:03):
So here's something that comes from left field that you didn't expect. It was consuming a lot more CPU on laptops. It was killing the laptops. And therefore, okay, we learned something. Let's document it. Let's remember this, so that we now take this other factor into account as we design the next iteration.

**Lenny** (00:19:23):
What advice do you have for people to actually remember these surprises? You said that a lot of it is institutional. What do you recommend people do so that they can actually remember this when people leave, say three years later?

**Ronny Kohavi** (00:19:34):
Document it. We had a large deck internally of these successes and failures, and we encourage people to look at them. The other thing that's very beneficial is just to have your whole history of experiments and do some ability to search by keywords.

**Ronny Kohavi** (00:19:52):
So I have an idea. Type a few keywords and see if from the thousands of experiments that ran... And by the way, these are very reasonable numbers. At Microsoft, just to let you know, when I left in 2019, we were on a rate of about 20 to 25,000 experiments every year. So every working, day we were starting something like 100 new treatments. Big numbers. So when you're running in a group like Bing, which is running thousands and thousands of experiments, you want to be able to ask, "Has anybody did an experiment on this or this or this?" And so that searching capability is in the platform.

**Ronny Kohavi** (00:20:32):
But more than that, I think just doing the quarterly meeting of the most successful... Most interesting, sorry, not just successful, most interesting experiments is very key. And that also helps the flywheel of experimentation.

**Lenny** (00:20:45):
It's a good segue to something I wanted to touch on, which is there's often, I guess a weariness of running too many experiments and being too data-driven, and the sense that experimentation just leads you to these micro optimizations, and you don't really innovate and do big things. What's your perspective on that? And then, can you be too experiment driven in your experience?

**Ronny Kohavi** (00:21:07):
I'm very clear that I'm a big fan of test everything, which is any code change that you make, any feature that you introduce has to be in some experiment. Because again, I've observed this surprising result that even small bug fixes, even small changes can sometimes have surprising unexpected impact.

**Ronny Kohavi** (00:21:30):
And so I don't think it's possible to experiment too much. I think it is possible to focus on incremental changes because some people say, "Well, if we only tested 17 things around this," you have to think about, it's like in stock. You need a portfolio. You need some experiments that are incremental that move you in the direction that you know you're going to be successful over time if you just try enough. But some experiments, you have to allocate sometimes to these high risk, high reward ideas. We're going to try something that's most likely to fail, but if it does win, it's going to be a home run.

**Ronny Kohavi** (00:22:14):
And so you have to allocate some efforts to that, and you have to be ready to understand and agree that most will fail. And I've amazing how many times I've seen people come up with new designs, or a radical new idea, and they believe in it, and that's okay. I'm just cautioning them all the time to say, "Hey, if you go for something big, try it out, but be ready to fail 80% of the time."

**Ronny Kohavi** (00:22:42):
And one true example, that again, I'm able to talk about because we put it in my book, is we were at Bing trying to change the landscape of search. And one of the ideas, the big ideas was we are going to integrate with social. So we hooked into the Twitter fire hose feed and we hooked into Facebook, and we spent 100 person years on this idea.

**Ronny Kohavi** (00:23:14):
And it failed. You don't see it anymore. It existed for about a year and a half, and all the experiments were just negative to flat. And it was an attempt. It was fair to try it. I think it took us a little long to fail, to decide that this is a failure. But at least we had the data. We had hundreds of experiments that we tried. None of them were a breakthrough. And I remember mailing Qi Lu with some statistics showing that it's time to abort, it's time to fail on this. And he decided to continue more. And it's a million dollar question. Do you continue, and then maybe the breakthrough will come next month, or do you abort? And a few months later, we aborted.

**Lenny** (00:24:07):
That reminds me of at Netflix, they tried a social component that also failed. At Airbnb, early on there was a big social attempt to make, "Here's your friends that have stayed at these Airbnbs," completely had no impact. So maybe that's one of these learnings that we should document.

**Ronny Kohavi** (00:24:21):
Yeah, this is hard. This is hard. But again, that's the value of experiments, which are this oracle that gives you the data. You may be excited about things. You may believe it's a good idea. But ultimately, the oracle is the controlled experiment. It tells you whether users are actually benefiting from it, whether you and the users, the company and the users.

**Lenny** (00:24:48):
There's obviously a bit of overhead and downside to running an experiment, setting all up, and analyzing the results. Is there anything that you ever don't think is worth A/B testing?

**Ronny Kohavi** (00:24:59):
First of all, there are some necessary ingredients to A/B testing. And I'll just say outright, not every domain is amenable to A/B testing. You can't A/B test mergers and acquisitions. It's something that happens once, you either acquire or you don't acquire.

**Ronny Kohavi** (00:25:14):
So you do have to have some necessary ingredient. You need to have enough units, mostly users, in order for the statistics to work out. So if you're too small, it may be too early to A/B test. But what I find is that in software, it is so easy to run A/B testing and it is so easy to build a platform.

**Ronny Kohavi** (00:25:39):
I don't say it's easy to build a platform. But once you build a platform, the incremental cost of running an experiment should approach zero. And we got to that at Microsoft, where after a while, the cost of running experiments was so low that nobody was questioning the idea that everything should be experimented with.

**Ronny Kohavi** (00:25:59):
Now, I don't think we were there at Airbnb for example. The platform at Airbnb was much less mature, and required a lot more analysts in order to interpret the results and to find issues with it. So I do think there's this trade off. You're willing to invest in the platform. It is possible to get the marginal cost to be close to zero. But when you're not there, it's still expensive, and there may be reasons why not to run A/B tests.

**Lenny** (00:26:28):
You talked about how you may be too small to run A/B tests, and this is a constant question for startups is, when should we start running A/B tests? Do you have kind of a heuristic or a rule of thumb of, here's a time you should really start thinking about running an A/B test?

**Ronny Kohavi** (00:26:42):
Yeah, a dollar question that everybody asks. So actually, we'll put this in the notes, but I gave a talk last year, what I called it is practical defaults. And one of the things I show there is that unless you have at least tens of thousands of users, the math, the statistics just don't work out for most of the metrics that you're interested in.

**Ronny Kohavi** (00:27:05):
In fact, I gave an actual practical number of a retail site with some conversion rate, trying to detect changes that are at least 5% beneficial, which is something that startups should focus on. They shouldn't focus on the 1%, they should focus on the 5 and 10%. Then you need something like 200,000 users.

**Ronny Kohavi** (00:27:25):
So start experimenting when you're in the tens of thousands of users. You'll only be able to detect large effects. And then once you get to 200,000 users, then the magic starts happening. Then you can start testing a lot more. Then you have the ability to test everything and make sure that you're not degrading and getting value out of experimentation. So you ask for rule of thumb, 200,000 users, you're magical. Below that, start building the culture, start building the platform, start integrating. So that as you scale, you start to see the value.

**Lenny** (00:28:00):
Love it. Coming back to this kind of concern people have of experimentation, keeps you from innovating and taking big bets, I know you have this framework overall evaluation criterion, and I think that helps with this. Can you talk a bit about that?

**Ronny Kohavi** (00:28:14):
The OEC or the overall evaluation criterion is something that I think many people that start to dabble in A/B testing miss. And the question is, what are you optimizing for? And it's a much harder question that people think because it's very easy to say we're going to optimize for money, revenue. But that's the wrong question, because you can do a lot of bad things that will improve revenue. So there has to be some countervailing metric that tells you, how do I improve revenue without hurting the user experience?

**Ronny Kohavi** (00:28:53):
So let's take a good example with search. You can put more ads on a page and you will make more money. There's no doubt about it. You will make more money in the short term. The question is, what happens to the user experience, and how is that going to impact you in the long term?

**Ronny Kohavi** (00:29:13):
So we've run those experiments, and we were able to map out this number of ads causes this much increase to churn, this number of ads causes this much increase to the time that users take to find a successful result. And we came up with an OEC that is based on all these metrics that allows you to say, "Okay, I'm willing to take this additional money if I'm not hurting the user experience by more than this much." So there's a trade-off there.

**Ronny Kohavi** (00:29:41):
One of the nice ways to phrase this, as a constraint optimization problem. I want you to increase revenue, but I'm going to give you a fixed amount of average real estate that you can use. So for one query, you can have zero ads. For another query, you can have three ads. For a third query, you can have wider, bigger ads. I'm just going to count the pixels that you take, the vertical pixels. And I will give you some budget. And if you can under the same budget make more money, you're good to go.

**Ronny Kohavi** (00:30:16):
So that to me turns the problem from a badly defined, let's just make more money. Any page can start plastering more ads and make more money short term, but that's not the goal. The goal is long-term growth and revenue. Then you need to insert these other criteria, and what am I doing to the user experience? One way around it is to put this constraint. Another one is just to have these other metrics. Again, something that we did, to look at the user experience. How long does it take the user to reach a successful click? What percentage of sessions are successful? These are key metrics that were part of the overall evaluation criteria, that we've used.

**Ronny Kohavi** (00:30:55):
I can give you another example by the way, from the hotel industry or Airbnb that we both worked at. You can say, "I want to improve conversion rate," but you can be smarter about it and say, "It's not just enough to convert a user to buy or to pay for a listing. I want them to be happy with it several months down the road when they actually stay there."

**Ronny Kohavi** (00:31:19):
So that could be part of your OEC to say, "What is the rating that they will give to that listing when they actually stay there?" And that causes an interesting problem, because you don't have this data now. You're going to have it three months from now when they actually stay. So you have to build the training set that allows you to make a prediction about whether this user, whether Lenny is going to be happy at this cheap place. Or whether no, I should offer him something more expensive, because Lenny likes to stay at nicer places where the water actually is hot and comes out of the faucet.

**Lenny** (00:31:52):
That is true. Okay, so it sounds like the core to this approach is basically have a drag metric that makes sure you're not hurting something that's really important to the business, and then being very clear on what's the long-term metric we care most about.

**Ronny Kohavi** (00:32:05):
To me, the key word is lifetime value, which is you have to define the OEC such that it is causally predictive of the lifetime value of the user. And that's what causes you to think about things properly, which is, am I doing something that just helps me short term, or am I doing something that will help me in the long term? Once you put that model of lifetime value, people say, "Okay, what about retention rates? We can measure that. What about the time to achieve a task? We can measure that." And those are these countervailing metrics that make the OEC useful.

**Lenny** (00:32:43):
And to understand these longer term metrics, what I'm hearing is use models, and forecast, and predictions, or would you suggest sometimes use a long-term holdout or some other approach? What do you find is the best way to see these long term?

**Ronny Kohavi** (00:32:57):
Yeah, so there's two ways that I like to think about it. One is you can run long-term experiments for the goal of learning something. So I mentioned that at Bing, we did run these experiments where we increased the ads and decreased the ads, so that we will understand what happens to key metrics.

**Ronny Kohavi** (00:33:16):
The other thing is you can just build models that use some of our background knowledge or use some data science to look at historical... I'll give you another good example of this. When I came to Amazon, one of the teams that reported to me was the email team that it was not the transactional emails when you buy something, you get an email. But it was the team that sent these recommendations. "Here's a book by an author that you bought. Here's a product that we recommend." And the question is, how do we give credit to that team?

**Ronny Kohavi** (00:33:49):
And the initial version was, whenever a user comes from the email and purchases something on Amazon, we're going to give that email credit. Well, it turned out this had no countervailing metric. The more emails you send, the more money you're going to credit the team. And so that led to spam. Literally a really interesting problem. The team just ramped up the number of emails that they were sending out, and claimed to make more money, and their fitness function improved.

**Ronny Kohavi** (00:34:20):
So then we backed up and then we said, "Okay, we can either phrase this as a constraint satisfaction problem. You're allowed to send user an email every X days or," which is what we ended up doing is, "Let's model the cost of spamming the users."

**Ronny Kohavi** (00:34:37):
What's that cost? Well, when they unsubscribe, we can't mail them. So we did some data science study on the side and we said, "What is the value that we're losing from an unsubscribe?" And we came up with a number, it was a few dollars. But the point was, now we have this countervailing metric. We say, "Here's the money that we generate from the emails. Here's the money that we're losing on long-term value. What's the trade-off?" And then when we started to incorporate those formula, more than half the campaigns that were being sent were negative.

**Ronny Kohavi** (00:35:14):
So it was a huge insight at Amazon about how to send the right campaigns. And this is what I like about these discoveries. This fact that we integrated the unsubscribe led us to a new feature to say, "Well, let's not lose their future lifetime value through email. When they unsubscribe, let's offer them by default to unsubscribe from this campaign."

**Ronny Kohavi** (00:35:41):
So when you get an email, there's a new book by the author. The default to unsubscribe would be unsubscribe me from author emails. And so now, the negative, the countervailing metric is much smaller. And so again, this was a breakthrough in our ability to send more emails, and understand based on what users were unsubscribing from, which ones are really beneficial.

**Lenny** (00:36:06):
I love the surprising results.

**Ronny Kohavi** (00:36:08):
We all love them. This is the humbling reality. And people talk about the fact that A/B testing sometimes leads you to incremental... I actually think that many of these small insights lead to fundamental insights about which areas to go, some strategies we should take, some things we should develop. Helps a lot.

**Lenny** (00:36:31):
This makes me think about how every time I've done a full redesign of a product, I don't think ever, has it ever been a positive result. And then the team always ends up having to claw back what they just hurt and try to figure out what they messed up. Is that your experience too?

**Ronny Kohavi** (00:36:47):
Absolutely, yeah. In fact, I've published some of these in LinkedIn posts showing a large set of big launches and redesigns that dramatically failed, and it happens very often. So the right way to do this is to say, "Yes, we want to do a redesign, but let's do it in steps and test on the way and adjust," so you don't need to take 17 new changes, that many of them are going to fail. Start to move incrementally in a direction that you believe is beneficial. Adjust on the way.

**Lenny** (00:37:24):
The worst part of those experiences I find is it took three to six months to build it. And by the time it's launched, it's just like, "We're not going to unlaunch this. Everyone's been working in this direction. All the new features are assuming this is going to work," and you're basically stuck.

**Ronny Kohavi** (00:37:41):
I mean, this is a sunk cost fallacy. We invested so many years in it. Let's launch this, even though it's bad for the user. No, that's terrible. Yeah. Yeah. So this is the other advantage of recognizing this humble reality that most ideas fail. If you believe in that statistics that I published, then doing 17 changes together is more likely to be negative. Do them in smaller increments, learn from, it's called OFAT one-factor-at-a-time. Do one factor, learn from it, and adjust. Of the 17, maybe you have four good ideas. Those are the ones that will launch and be positive.

**Lenny** (00:38:22):
I generally agree with that, and always try to avoid a big redesign, but it's hard to avoid them completely. There's often team members that are really passionate like, "We just need to rethink this whole experience. We're not going to incrementally get there." Have you found anything effective in helping people either see this perspective, or just making a larger bet more successful?

**Ronny Kohavi** (00:38:42):
By the way, I'm not opposed to large redesigns. I try to give the team the data to say, "Look, here are lots of examples where big redesigns fail." Try to decompose your redesign if you can't decompose it to one factor at a time, to a small set of factors at a time. And learn from these smaller changes what works and what doesn't.

**Ronny Kohavi** (00:39:08):
Now, it's also possible to do a complete redesign. Just, as you said yourself, be ready to fail. I mean, do you really want to work on something for six months or a year, and then run the A/B test, and realize that you've hurt revenues or other key metrics by several percentage points? And a data-driven organization will not allow you to launch. What are you going to write in your annual review?

**Lenny** (00:39:33):
But nobody ever thinks it's going to fail. They think, "No, we got this. We've talked to so many people."

**Ronny Kohavi** (00:39:38):
But I think organizations that start to run experiments are humbled early on from the smaller changes. Right? You're right. I'll tell you a funny story. When I came from Amazon to Microsoft, I joined the group, and for one reason or another, that group disbanded a month after I joined.

**Ronny Kohavi** (00:39:57):
And so people came to me and said, "Look, you just joined the company. You're at partner level. You figure out how you can help Microsoft." And I said, "I'm going to build an experimentation platform," because nobody at Microsoft is running experiments. And more than 50% of ideas in Amazon that we tried failed. And the classical response was, "We have better PMs here."

**Ronny Kohavi** (00:40:26):
Right? There was this complete denial that it's possible that 50% of ideas that Microsoft is implementing, in a three-year development cycle by the way. This is how long it took Office to release. It was a classical every three years we release.

**Ronny Kohavi** (00:40:42):
And the data came about showing that Bing was the first to truly implement experimentation at scale. And we shared with the rest of the companies the surprising results. And so when Office was... And this was credit to Qi Lu and Satya Nadella, they were ones that says, "Ronny, you try to get Office to run experiments. We'll give you the air support." And it was hard, but we did it. It took a while, but Office started to run experiments, and they realized that many of their ideas are failing.

**Lenny** (00:41:20):
You said that there's a site of a failed redesigns. Is that in your book or is that a site that you can point people to, to help build this case?

**Ronny Kohavi** (00:41:29):
I teach this in my class, but I think I've posted this on LinkedIn and answered some questions. I'm happy to put that in the notes.

**Lenny** (00:41:36):
Okay, cool. We'll put that in the show notes. Because I think that's the kind of data that often helps convince a team, "Maybe we shouldn't rethink this entire onboarding flow from scratch. Maybe we should iterate towards and learn as we go."

**Lenny** (00:41:48):
**Ronny Kohavi** (00:43:03):
Yeah. So I think what you said is fair. I do want to allocate some percentage of resources to big bets. As you said, we've been optimizing this thing to hell. Could we completely redesign it? It's a very valid idea. You may be able to break out of a local minima. What I'm telling you is 80% of the time, you will fail. So be ready for that. What people usually expect is, "My redesign is going to work." No, you're most likely going to fail, but if you do succeed, it's a breakthrough.

**Lenny** (00:43:35):
I like this 80% rule of thumb. Is that just a simple way of thinking about it? 80% of your-

**Ronny Kohavi** (00:43:39):
That's my rule of thumb. And I've heard people say it's 70% or 80%. But it's in that area where I think when you talk about how much to invest in the known versus the high risk, high reward, that's usually the right percentage that most organizations end up doing this allocation, right? You interviewed Shreyas. I think he mentioned that Google is like 70% the searching ads, and it's 20% for some of the apps and new stuff, and then it's the 10% for infrastructure.

**Lenny** (00:44:16):
And I think the most important point there is if you're not running an experiment, 70% of stuff you're shipping is hurting your business.

**Ronny Kohavi** (00:44:23):
Well, it's not hurting, it's flat too negative. Some of them are flat. And by the way, flat to me, if something is not Statsig, that's a no ship, because you've just introduced more code. There is a maintenance overhead to shipping your stuff. I've heard people say, "Look, we already spent all this time. The team will be demotivated if we don't ship it." And I'm, "No, that's wrong guys. Let's make sure that we understand that shipping this project has no value, is complicating the code base. Maintenance costs will go up." You don't ship on flat, unless it's a legal requirement. When legal comes along and says, "You have to do X or Y," you have to ship on flat or even negative. And that's understandable.

**Ronny Kohavi** (00:45:08):
But again, I think that's something that a lot of people make the mistake of saying, "Legal told us we have to do this, therefore we're going to take the hits." No, legal gave you a framework that you have to work under. Try three different things, and ship the one that hurts the least.

**Lenny** (00:45:25):
That reminds me when Airbnb launched the rebrand, even that they ran as an experiment with the entire homepage redesigned, the new logo, and all that. And I think there was a long-term holdout even, and I think it was positive in the end from what I remember.

**Lenny** (00:45:41):
Speaking of Airbnb, I want to chat about Airbnb briefly. I know you're limited in what you can share, but it's interesting that Airbnb seems to be moving in this other direction where it's becoming a lot more top-down, Brian vision oriented. And Brian's even talked about how he's less motivated to run experiments. He doesn't want to run as many experiments as they used to. Things are going well, and so it's hard to argue with the success potentially. You worked there for many years. You ran the search team essentially. I guess, what was your experience like there? And then roughly, what's your sense of how things are going, where it's going?

**Ronny Kohavi** (00:46:15):
Well as you know, I'm restricted from talking about Airbnb. I will say a few things that I am allowed to say. One is in my team in search relevance, everything was A/B tested. So while Brian can focus on some of the design aspects, the people who are actually doing the neural networks and the search, everything was A/B tested to hell. So nothing was launching without an A/B test. We had targets around improving certain metrics, and everything was done A/B test.

**Ronny Kohavi** (00:46:50):
Now other teams, some did, some did not. I will say that when you say things are going well, I think we don't know the counterfactual. I believe that had Airbnb kept people like Greg Greeley, which was pushing for a lot more data driven, and had Airbnb run more experiments, it would've been in a better state than today. But it's the counterfactual. We don't know.

**Lenny** (00:47:14):
That's a really interesting perspective. Airbnb's such an interesting natural experiment of a way of doing things differently. There's de-emphasizing experiments, and also, they turned off paid ads during Covid. And I don't know where it is now, but it feels like it's become a much smaller part of the growth strategy. Who knows if they've ramped it up to back to where it's today, but I think it's going to be a really interesting case study looking back five, 10 years from now.

**Ronny Kohavi** (00:47:38):
It's a one-off experiment where it's hard to assign value to some of the things that Airbnb is doing. I personally believe it could have been a lot bigger and a lot more successful if it had run more controlled experiments. But I can't speak about some of those that I ran and that showed that some of the things that were initially untested were actually negative and could be better.

**Lenny** (00:48:04):
All right. Mysterious. One more question. Airbnb, you were there during Covid, which was quite a wild time for Airbnb. We had Sanchan on the podcast talking about all the craziness that went on when travel basically stopped, and there was a sense that Airbnb was done, and travel's not going to happen for years and years. What's your take on experimentation in that world where you have to really move fast, make crazy decisions, and make big decisions? What was it like during that time?

**Ronny Kohavi** (00:48:34):
So I think actually in a state like that, it's even more important to run A/B tests, right? Because what you want to be able to see is if we're making this change, is it actually helping in the current environment? There's this idea of external generalizability. Is it going to work out now during Covid? Is it going to generalize later on? These are things that you can really answer with the controlled experiments, and sometimes it means that you might have to replicate them six months down when Covid say is not as impactful as it is.

**Ronny Kohavi** (00:49:11):
Saying that you have to make decisions quickly, to me, I'll point you to the success rate. If in peace time you're wrong two thirds to 80% of the time, why would you be subtly right in wartime, in Covid time?

**Ronny Kohavi** (00:49:26):
So I don't believe in the idea that because bookings went down materially, the company should suddenly not be data driven and do things differently. I think if Airbnb stayed the course, did nothing, the revenue would've gone up in the same way.

**Lenny** (00:49:49):
Fascinating.

**Ronny Kohavi** (00:49:49):
In fact, if you look at one investment, one big investment that was done at the time was online experiences, and the initial data wasn't very promising. And I think today, it's a footnote.

**Lenny** (00:50:01):
Yeah. Another case study for the history books, Airbnb experiences. I want to shift a little bit and talk about your book, which you mentioned a couple times. It's called Trustworthy Online Controlled Experiments, and I think it's basically the book on A/B testing. Let me ask you, what surprised you most about writing this book, and putting it out, and the reaction to it?

**Ronny Kohavi** (00:50:24):
I was pleasantly surprised that it sold more than what we thought, more than what Cambridge predicted. So when first we were approached by Cambridge after a tutorial that we did to write a book, I was like, "I don't know, this is too small of a niche area."

**Ronny Kohavi** (00:50:47):
And they were saying, "So you'll be able to sell a few thousand copies and help the world." And I found my co-authors, which are great. And we wrote a book that we thought is not statistically oriented, has fewer formulas than you normally see, and focuses on the practical aspects and on trust, which is the key.

**Ronny Kohavi** (00:51:10):
The book, as I said, was more successful. It sold over 20,000 copies in English. It was translated to Chinese, Korean, Japanese, and Russian. And so it's great to see that we help the world become more data-driven with experimentation, and I'm happy because of that. I was pleasantly surprised.

**Ronny Kohavi** (00:51:31):
By the way, all proceeds from the book are donated to charity. So if I'm pitching the book here, there is no financial gain for me from having more copies sold. I think we made that decision, which was a good decision. All proceeds go with the charity.

**Lenny** (00:51:47):
Amazing. I didn't know that. We'll link to the book in the show notes. Trust is in the title. You just mentioned how important trust is to experimentation. A lot of people talk about, "How do I run experiments faster?" You focus a lot on trust. Why is trust so important in running experiments?

**Ronny Kohavi** (00:52:03):
So to me, the experimentation platform is the safety net, and it's an oracle. So it serves really two purposes. The safety net means that if you launch something bad, you should be able to abort quickly, right? Safe deployments, safe velocity. There's some names for this. But this is one key value that the platform can give you.

**Ronny Kohavi** (00:52:25):
The other one, which is the more standard one, is at the end of the two-week experiment, we will tell you what happened to your key metric and to many of the other surrogate, and debugging, and guardrail metrics. Trust builds up, it's easy to lose.

**Ronny Kohavi** (00:52:43):
And so to me, it is very important that when you present this and say, "This is science, this is a controlled experiment, this is the resolve," you better believe that this is trustworthy.

**Ronny Kohavi** (00:52:57):
And so I focus on that a lot. I think it allowed us to gain the organizational trust that this is really... And the nice thing is when we built all this checks to make sure that the experiment is correct, if there were something wrong with it, we would stop and say, "Hey, something is wrong with the experiment."

**Ronny Kohavi** (00:53:17):
And I think that's something that some of the early implementations in other places did not do, and it was a big mistake. I've mentioned this in my book so I can mention this here.

**Ronny Kohavi** (00:53:28):
Optimizely in its early days were very statistically naive. They sort of said, "Hey, we're real time. We can compute your P values in real time," and then you can stop an experiment when the P value is statistically significant. That is a big mistake. That inflates your, what's called type one error or the false positive rate materially. So if you think you've got a 5% type one error, or you aim for that P value less than 0.05, using real time P value monitoring to optimize the offer, you would probably have a 30% error rate.

**Ronny Kohavi** (00:54:06):
So what this led is that people that started using Optimizely thought that the platform was telling them they were very successful. But when they actually started to see, "Well it told us this is positive revenue, but I don't see this over time. By now, we should have made double the money."

**Ronny Kohavi** (00:54:23):
So their questions started to come up around the trust in the platform. There's a very famous post that somebody wrote about how, "Optimizely almost got me fired," by a person who basically said, "Look, I came to the org. I said, 'We have all these successes.' But then I said, 'Something is wrong.'"

**Ronny Kohavi** (00:54:40):
And he tells of how he ran an A/A test when there is no difference between the A and the B. And Optimizely told him that it was statistically significant too many times. Optimizely learned. Optimizely, several people pointed, I pointed this out in my Amazon review of the book that the authors wrote early on. I said, "Hey, you're not doing the statistics correctly."

**Ronny Kohavi** (00:55:05):
Ramesh Johari at Stanford pointed this out, became a consultant to the company, and then they fixed it. But to me, that's a very good example of how to lose trust. They lost a lot of trust in the market. They lost all this trust because they built something that had very much inflated error rate.

**Lenny** (00:55:26):
That is pretty scary to think about you've been running all these experiments, and they weren't actually telling you accurate results. What are signs that what you're doing may not be valid if you're starting to run experiments? And then how do you avoid having that situation? What kind of tips can you share for people trying to run experiments?

**Ronny Kohavi** (00:55:47):
There's a whole chapter of that in my book, but I'll say one of the things that is the most common occurrence by far, which is a sample ratio mismatch. Now, what is a sample ratio mismatch?

**Ronny Kohavi** (00:56:00):
If you design the experiment to send 50% of users to control and 50% of users to treatment, it's supposed to be a random number, or a hash function. If you get something off from 50%, it's a red flag.

**Ronny Kohavi** (00:56:15):
So let's take a real example. Let's say you're running an experiment, and it's large, it's got a million users, and you've got 50.2. So people say, "Well, I don't know. It's not going to be exactly the same as 50.2. Reasonable or not?" Well, there's a formula that you can plug in. I have a spreadsheet available for those that are interested, and you can tell, here's how many users are in control. Here's how many users have in treatment. My design was 50/50, and it tells you the probability that this could have happened by chance.

**Ronny Kohavi** (00:56:45):
Now in a case like this, you plug in the numbers, it might tell you that this should happen one in half a million experiments. Well, unless you've run half a million experiment, very unlikely that you would get a 50.2 versus 49.8 split. And therefore, something is wrong with the experiment.

**Ronny Kohavi** (00:57:06):
I remember when we implemented this check, we were surprised to see how many experiments suffered from this. Right? And there's a paper that was published, 2018, where we share that at Microsoft, even though we'd be running experiments for a while, is around 8% of experiments that suffered from the sample ratio mismatch.

**Ronny Kohavi** (00:57:29):
And it's a big number. I think about this. You're running 20,000 experiments a year. So many of them, 8% of them are invalid. And somebody has to go down and understand, what happened here? We know that we can't trust the results, but why?

**Ronny Kohavi** (00:57:44):
So over time, you begin to understand there's something wrong with the data pipeline. There's something that happens with bots. Bots are a very common factor for causing sample ratio mismatch. So that paper that was published by my team talks about how to diagnose sample ratio mismatches.

**Ronny Kohavi** (00:58:06):
In the last probably year and a half, it was amazing to see all these third party companies implement sample ratio mismatches, and all of them were reporting, "Oh my god, 6%, 8%, 10%." So it's sometimes fun to go back and say, how many of your results in the past were invalid before you had this sample ratio mismatched test?

**Lenny** (00:58:32):
Yeah, that's frightening. Is the most common reason this happens is you're assigning users in the wrong place in your code?

**Ronny Kohavi** (00:58:40):
So when you say most common, I think the most common is bots. Somehow, they hit the controller, the treatment in different proportions. Because you change the website, the bot may fail to parse the page, and try to hit it more often. And that's a classical example. Another one is just the data pipeline.

**Ronny Kohavi** (00:58:58):
We've had cases where we were trying to remove bad traffic under certain conditions, and it was skewed because of the control and treatment. I've seen people that start an experiment in the middle of the site on some page, but they don't realize that some campaign is pushing people from the side.

**Ronny Kohavi** (00:59:13):
So there's multiple reasons. It is surprising how often this happens. And I'll tell you a funny story, which is when we first added this test to the platform, we just put a banner say, "You have a sample ratio mismatch. Do not trust these results." And we noticed that people ignored it. They were starting to present results that had this banner.

**Ronny Kohavi** (00:59:37):
And so we blanked out the scorecard. We put a big red, "Can't see this result. You have a sample ratio mismatch. Click to expose the results." And why we do we need that okay? We need that okay button because you want to be able to debug the reasons, and sometimes the metrics help you understand why you have a sample ratio mismatch.

**Ronny Kohavi** (01:00:00):
So we blanked out the scorecard, we had this button, and then we started to see that people pressed the button and still presented the results of experiments with sample ratio mismatch. And so we ended up with an amazing compromise, which is every number in the scorecard was highlighted with a red line, so that if you took a screenshot, other people could tell you how to sample ratio mismatch.

**Lenny** (01:00:24):
Freaking product managers.

**Ronny Kohavi** (01:00:26):
This is intuition. People just say, "Well, my [inaudible 01:00:30] was small, therefore I can still present the results." People want to see success. I mean, this is a natural bias, and then we have to be very conscientious and fight that bias and say when something looks too good to be true, investigate.

**Lenny** (01:00:45):
Which is a great segue to something you mentioned briefly, something called Twyman's law. Yeah. Can you talk about that?

**Ronny Kohavi** (01:00:51):
Yeah. So Twyman's law, the general statement is if any figure that looks interesting or different is usually wrong. It was first said by this person in the UK who worked in radio media, but I'm a big fan of it. And my main claim to people is if the result looks too good to be true, your normal movement of an experiment is under 1% and you suddenly have a 10% movement, hold the celebratory dinner. It was just your first reaction, right? Let's take everybody to a fancy dinner, because we just improved revenue by millions of dollars. Hold that dinner, investigate, see, because there's a large probability that something is wrong with the result. And I will say that nine out of 10, when we call it Twyman's law, it is the case that we find some flaw in the experiment.

**Ronny Kohavi** (01:01:45):
Now there are obviously outliers. That first experiment that I shared where we promoted that made long titles, that was successful. But that was replicated multiple times, and double and triple checked, and everything was good about it. Many other results that were so big turn out to be false. So I'm a big fan of Twyman's law. There's a deck, I could also give this in the note, where I shared some real examples of Twyman's law.

**Lenny** (01:02:14):
Amazing. I want to talk about rolling this out of companies and things that you run into that fail. But before I get to that, I'd love for you to explain P value. I know that people kind of misunderstand it, and this might be a good time to just help people understand, what is it actually telling you, P value of say 0.05?

**Ronny Kohavi** (01:02:30):
I don't know if this is the right forum for explaining P values, because the definition of a P value is simple. What it hides is very complicated. So I'll say one thing, which is many people assign one minus P value as the probability that your treatment is better than control. So you ran an experiment, you got a P value of 0.02. They think there's a 98% probability that the treatment is better than the control. That is wrong. So rather than defining P values, I want to caution everybody that the most common interpretation is incorrect.

**Ronny Kohavi** (01:03:08):
P value assumes, it's a conditional probability or an assumed probability. It assumes that the null hypothesis is true. And we're computing the probability that the data we're seeing matches the hypothesis, this null hypothesis.

**Ronny Kohavi** (01:03:27):
In order to get the probability that most people want, we need to apply Bayes' rules and invert the probability from the probability of the data given the hypothesis, to the probability of the hypothesis given the data. For that, we need an additional number, which is the probability, the prior probability that the hypothesis that you're testing is successful or not.

**Ronny Kohavi** (01:03:49):
That's an unknown. What we do is we can take historical data and say, "Look, people fail two thirds of the time or 80% of the time." And we can apply that number and compute that. We've done that in a paper that I will give in the notes, so that you can assess the number that you really want, what's called a false positive risk.

**Ronny Kohavi** (01:04:10):
So I think that's something for people to internalize, that what you really want to look at is this false positive risk, which tends to be much, much higher than the 5% that people think, right? So I think the classical example in the Airbnb where the failure rate was very, very high, is that when you get a statistically significant result, let me actually pull the note so that I know the actual number. If you're at Airbnb, or Airbnb search where the success rate is only 8%, if you get a statistically significant result with a P value less than 0.05, there is a 26% chance that this is a false positive result. It's not 5%, it's 26%.

**Ronny Kohavi** (01:04:54):
So that's the number that you should have in your mind. And that's why when I worked at Airbnb, one of the things we did is we said, "Okay, if you're less than 0.05, but above 0.01, rerun, replicate." When you replicate, you can combine the two experiments, and get a combined P value using something called Fisher's method or Stouffer's method, and that gives you the joint probability. And that's usually much, much lower. So if you get two 0.5's or something like that, then the probability that you've got them is much, much lower.

**Lenny** (01:05:26):
Wow, I've never heard it described that way. It makes me think about how even data scientists in our teams are always just like, "This isn't perfect. We're not 100% sure this experiment is positive." But on balance, if we're launching positive experiments, we're probably doing good things. It's okay if sometimes we're wrong.

**Ronny Kohavi** (01:05:42):
By the way, it's true. On balance, you're probably better than 50/50, but people don't appreciate how much that 26% that I mentioned is high. And the reason that I want to be sure is that I think it leads to this idea of the learning, the institutional knowledge. What you want to be able to say is share with the org's success. And so you want to be really sure that you're successful. So by lowering the P value, by forcing teams to work with the P value maybe below 0.01 and do replication on higher, then you can be much more successful, and the false positive rate will be much, much lower.

**Lenny** (01:06:20):
Fascinating. And also shows the value of keeping track of what percentage your experiments are failing historically at the company or within that specific product. Say someone listening wants to start running experiments, say they have tens of thousands of users at this point. What would be the first couple steps you'd recommend?

**Ronny Kohavi** (01:06:38):
Well, so if they have somebody in the org that has previously been involved with a experiment, that's a good way to consult internally. I think the key decision is whether you want to build or buy. There's a whole series of eight sessions that I posted on LinkedIn where I invited guest speakers to talk about this problem. So if people are interested, they can look at what the vendors say and what agency said about build versus buy question. And it's usually not a zero one, it's usually both. You build some and you buy some, and it's a question of do you build 10% or do you build in 90%?

**Ronny Kohavi** (01:07:17):
I think for people starting, the third party products that are available today are pretty good. This wasn't the case when I started working. So when I started running experiments at Amazon, we were building the platform because nothing existed. Same at Microsoft. I think today, there's enough vendors that provide good experimentation platforms that are trustworthy, that I would say not a good way to consider using one of those.

**Lenny** (01:07:44):
Say you're at a company where there's resistance to experimentation and A/B testing, whether it's a startup or a bigger company. What have you found works in helping shift that culture, and how long does that usually take, especially at a larger company?

**Ronny Kohavi** (01:07:57):
My general experience is with Microsoft, where we went with this beach head of Bing. We were running a few experiments and then we were asked to focus on Bing, and we scaled experimentation and built a platform at scale at Bing.

**Ronny Kohavi** (01:08:13):
Once Bing was successful and we were able to share all these surprising results, I think that many, many more people in the company were amenable. It was also the case that helped a lot that, there's a usual cross pollination. People from Bing move out to other groups, and that helped these other groups say, "Hey, there's a better way to build software."

**Ronny Kohavi** (01:08:34):
So I think if you're starting out, find a place, find a team where experimentation is easy to run. And by that, I mean they're launching often, right? Don't go with the team that launches every six months, or Office used to launch every three years. Go with the team that launches frequently. They're running on sprints, they launch every week or two. Sometimes they launch daily. I mean, Bing used to launch multiple times a day.

**Ronny Kohavi** (01:08:59):
And then make sure that you understand the question of the OEC. Is it clear what they're optimizing for? There are some groups where you can come up with a good OEC. Some groups are harder.

**Ronny Kohavi** (01:09:11):
I remember one funny example was the microsoft.com website, which this is not MSN, this is microsoft.com, has multiple different constituencies that are trying to determine this is a support site, and this is the ability to sell software through this site, and warn you about safety and updates. It has so many goals. I remember when the team said, "We want to run experiments," and I brought the group in and some of the managers and I said, "Do you know what you're optimizing for?"

**Ronny Kohavi** (01:09:47):
It was very funny because they surprised me. They said, "Hey Ronny, we read some of your papers. We know there's this term called OEC. We decided the time on site is our OEC." And I said, "Wait a minute. Some of your main goals is support site. Is people spending more time on the support site a good thing or a bad thing?" And then half the room thought that more time is better, and half the room thought that more time is worse. So an OEC is bad if directionally, you can't agree on it.

**Lenny** (01:10:18):
That's a great tip. Along these same lines, I know you're a big fan of platforms and building a platform to run experiments, versus just one-off experiments. Can you just talk briefly about that to give people a sense of where they probably should be going with their experimentation approach?

**Ronny Kohavi** (01:10:32):
Yeah, so I think the motivation is to bring the marginal cost of experiments down to zero. So the more you self-service, go to a website, set up your experiment, define your targets, define the metrics that you want, right? People don't appreciate that the number of metrics starts to grow really fast if you're doing things right. At Bing, you could define 10,000 metrics that you wanted to be in your scorecard. Big numbers.

**Ronny Kohavi** (01:11:02):
So it was so big, and people said it's computationally inefficient. We broke them into templates so that if you were launching a UI experiment, you would get this set of 2,000. If you were doing a revenue experiment, you would get this set of 2,000.

**Ronny Kohavi** (01:11:15):
So the point was build a platform that can quickly allow you to set up and run an experiment, and then analyze it. I think one of the things that I will say at Airbnb is the analysis was relatively weak, and so lots of data scientists were hired to be able to compensate for the fact that the platform didn't do enough.

**Ronny Kohavi** (01:11:36):
And this happens in other organizations too, where there's this trade-off. If you're building a good platform, invest in it so that more and more automation will allow people to look at the analysis, without the need to involve a data scientist.

**Ronny Kohavi** (01:11:53):
We published a paper. Again, I'll give it in the notes with this nice matrix of six axes, and how you move from crawl, to walk, to run, to fly, and what you need to build on those six axes. So one of the things that I do sometimes when I consult is I go into the org and say, "Where do you think you are on these six axes?" And that should be the guidance for what are the things you need to do next.

**Lenny** (01:12:21):
This is going to be the most epic show notes episode we've had yet. Maybe a last question. We talked about how important trust is to running experiments, and how even though people talk about speed, trust ends up being most important. Still, I want to ask you about speed. Is there anything you recommend for helping people run experiments faster and get results more quickly that they can implement?

**Ronny Kohavi** (01:12:40):
Yeah, so I'll say a couple of things. One is if your platform is good, then when the experiment finishes, you should have a scorecard soon after. Maybe takes a day, but it shouldn't be that you have to wait a week for the data scientist. To me, this is the number one way to speed up things.

**Ronny Kohavi** (01:13:00):
Now, in terms of using the data efficiently, there are mechanisms out there under the title of variance reduction that help you reduce the variance of metrics so that you need less users, so that you can get results faster. Some examples that you might think about are capping metrics. So if your revenue metric is very skewed, maybe you say, "Well, if somebody purchased over $1,000, let's make that $1,000." At Airbnb, one of the key metrics for example, is nights booked.

**Ronny Kohavi** (01:13:30):
Well, it turns out that some people book tens of nights. They're like an agency or something, hundreds of nights. You may say, "Okay, let's just cap this. It's unlikely that people book more than 30 days in a given month." So that various reduction technique will allow you to get statistically significant results faster.

**Ronny Kohavi** (01:13:53):
And a third technique is called cupid, which is an article that we published. Again, I can give it in the notes, which uses the pre-experiment data to adjust the result. And we can show that you get the result as unbiased, but with lower variance, and hence, it requires fewer users.

**Lenny** (01:14:11):
Ronny, is there anything else you want to share before we get to our very exciting lightning round?

**Ronny Kohavi** (01:14:15):
No, I think we've asked a lot of good questions. Hope people enjoy this.

**Lenny** (01:14:20):
I know they will.

**Ronny Kohavi** (01:14:21):
Lightning round.

**Lenny** (01:14:22):
Lightning round. Here we go. I'm just going to roll right into it. What are two or three books that you've recommended most to other people?

**Ronny Kohavi** (01:14:29):
There's a fun book called Calling Bullshit, which despite the name, which is a little extreme, I think, for a title, it actually has a lot of amazing insights that I love. And it sort of embodies, in my opinion, a lot of the Twyman's law showing that things that are too extreme, your bullshit meter should go up and say, "Hey, I don't believe that." So that's my number one recommendation.

**Ronny Kohavi** (01:14:57):
There's a slightly older book that I love called Hard Facts, Dangerous Half-Truths And Total Nonsense by the Stanford professors from the Graduate School of Business. Very interesting to see many of the things that we grew up with as well understood turn out to have no justification.

**Ronny Kohavi** (01:15:21):
So a stranger book, which I love, sort of on the verge of psychology, it's called Mistakes Were Made (But Not by Me), about all the fallacies that we fall into, and the humbling results from that.

**Lenny** (01:15:37):
The titles of these are hilarious, and there's a common theme across all these books. Next question, what is a favorite recent movie or TV show?

**Ronny Kohavi** (01:15:47):
So I recently saw a short series called Chernobyl, the disaster. I thought it was amazingly well done. Highly recommended it, based on true events. As usual, there's some freedom for the artistic movie. It was kind of interesting at the end, they say, "This woman in the movie wasn't really a woman. It was a bunch of 30 data scientists." Not data scientists, 30 scientists that in real life, presented all the data to the leadership of what to do.

**Lenny** (01:16:22):
I remember that. Fun fact, I was born in Odessa, Ukraine, which was not so far from Chernobyl. And I remember my dad told me he had to go to work. They called him into work that day to clean some stuff off the trees. I think ash from the explosion or something. It was far away where I don't think we were exposed, but we were in the vicinity. That's pretty scary. My wife, every time something's wrong with me, she's like, "That must be a Chernobyl thing." Okay, next question. Favorite interview question you like to ask people when you're interviewing them?

**Ronny Kohavi** (01:16:56):
So it depends on the interview, but when I do a technical interview, which I do less of, but one question that I love that it's amazing how many people it throws away for languages like C++, is tell me what the static qualifier does. And for multiple, you can do it for a variable, you can do it for function. And it is just amazing that I would say more than 50% of people that interview for engineering job cannot get this, and get it awfully wrong.

**Lenny** (01:17:31):
Definitely the most technical answer to this question yet.

**Ronny Kohavi** (01:17:34):
Very technical, yeah.

**Ronny Kohavi** (01:17:34):
I love it.

**Lenny** (01:17:36):
Okay. What's a favorite recent product you've discovered that you love?

**Ronny Kohavi** (01:17:39):
Blink cameras. So a Blink camera is this small camera. You stick in two AA batteries, and it lasts for about six months. They claim up to two years. My experience is usually about six months. But it was just amazing to me how you can throw these things around in the yard and see things that you would never know otherwise. Some animals that go by. We had a skunk that we couldn't figure out how he was entering, so I threw five cameras out and I saw where he came in.

**Lenny** (01:18:18):
Where'd he come in?

**Ronny Kohavi** (01:18:19):
He came in under a hole on the fence that was about this high. I have a video of this thing just squishing underneath. We never would've assumed that it came from there, from the neighbor. But yeah, these things have just changed. And when you're away on a trip, it's always nice to be able to say, "I can see my house. Everything's okay." At one point, we had a false alarm, and the cops came in and had this amazing video of how they're entering the house and pulling the guns out.

**Lenny** (01:18:56):
You got to share that on TikTok. That's good content. Wow. Okay. Blink cameras. We'll set those up in my house asap.

**Ronny Kohavi** (01:19:04):
Yes.

**Lenny** (01:19:06):
What is something relatively minor you've changed in the way your teams develop product, that has had a big impact on their ability to execute?

**Ronny Kohavi** (01:19:14):
I think this is something that I learned at Amazon, which is a structured narrative. So Amazon has some variance of this, which sometimes go by the name of a six pager or something. But when I was at Amazon, I still remember that email from Jeff, which is, "No more PowerPoint. I'm going to force you to write a narrative."

**Ronny Kohavi** (01:19:34):
I took that to heart. And many of the features that the team presented instead of a PowerPoint, you start off with a structured document that tells you what you need, the questions you need to answer for your idea. And then we review them as a team.

**Ronny Kohavi** (01:19:51):
And Amazon, these were paper-based. Now it's all based on Word or Google Docs where people comment, and I think the impact of that was amazing. I think the ability to give people honest feedback and have them appreciate, and have it stay after the meeting in these notes on the document, just amazing.

**Lenny** (01:20:13):
Final question, have you ever run an A/B test on your life, either your dating life, your family, your kids? And if so, what did you try?

**Ronny Kohavi** (01:20:21):
So there aren't enough units. Remember I said you need 10,000 of something to run true A/B tests? I will say a couple of things. One is I try to emphasize to my family, and friends, and everybody, this idea called the hierarchy of evidence. When you read something, there's a hierarchy of trust levels. If something is anecdotal, don't trust it. If there was an experiment, it was observational. Give it some bit of trust. As you get more up and up to a natural experiment, and controlled experiments, and multiple controlled experiments, your trust levels should go up. So I think that that's a very important thing that a lot of people miss when they see something in the news is, where does it come from?

**Ronny Kohavi** (01:21:06):
I have a talk that I've shared of all these observational studies that people made that were published. And then somehow, a control experiment was run later on and proved that it was directionally incorrect. So I think there's a lot to learn about this idea of the hierarchy of evidence, and share it with our family, and kids, and friends. I think there's a book that's based on this. It's like How to Read a Book.

**Lenny** (01:21:34):
Well, Ronny, the experiment of us recording a podcast I think is 100% positive P value 0.0. Thank you so much for being here.

**Ronny Kohavi** (01:21:44):
Thank you so much for inviting me and for great questions.

**Lenny** (01:21:47):
Amazing. I appreciate that. Two final questions. Where can folks find you online if they want to reach out, and is there anything that listeners can do for you?

**Ronny Kohavi** (01:21:55):
Finding me online is easy. It's LinkedIn. And what can people do for me? Understand the idea of control experiments as a mechanism to make the right data-driven decisions. Use science. Learn more by reading my book if you want. Again, all proceeds go to charity. And if you want to learn more, there's a class that I teach every quarter on Maven. We'll put in the notes how to find it, and some discount for people who managed to stay all the way to the end of this podcast.

**Lenny** (01:22:31):
Yeah, that's awesome. We'll include that at the top so people don't miss it, so there's going to be a code to get a discount on your course. Ronny, thank you again so much for being here. This was amazing.

**Ronny Kohavi** (01:22:39):
Thank you so much.

**Lenny** (01:22:40):
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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## [7/20] Velocity over everything: How Ramp became the fastest-growing SaaS startup of all time | Geoff Charles (VP of Product)

**Geoff Charles** (00:00:00):
So when I joined, we were about 10-ish folks, about eight engineers, and in three months, we built a competitor to Amex. Six months after that, we built a competitor to Expensify, both publicly traded companies. We hit a hundred million in annual revenue. I think we were under at that point, 50 total in the R&D department, less than four engineers and three PMs. And then we started expanding into accounts payable. It was three engineers, one designer, one PM three months, and they hit out of the park. And that product is moving in billions of dollars a year. I think the recipe for all this is ...

**Lenny** (00:00:32):
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 Geoff Charles, who is VP of Product at Ramp. This episode is a unique glimpse into a startup and an approach to product that optimizes for moving quickly, thinking from first principles, and empowering individual team members. If you're not familiar with Ramp, they're the fastest growing SaaS business in history, getting to over $100 million in annual run rate in two years, which is just wild. And as you'll hear in this episode, they did this with 50 people. In our conversation, Geoff shares how they operationalize a culture of velocity, how they do a lot with few people, how they organize planning, how they define strategy, how they interview product managers and keep a very high bar for talent, plus also avoid burnout in a very fast moving culture and so much more.

**Geoff Charles** (00:04:53):
Thanks, Lenny, it's great to be here.

**Lenny** (00:04:54):
So you are head of product at Ramp. For people not familiar with Ramp, could you just give us a brief overview of what it is that Ramp does?

**Geoff Charles** (00:05:04):
Yeah, Ramp is a finance automation platform and corporate card solution for small and medium-sized businesses. So we help businesses essentially automate most things across expense management, card payments, bill payments, and accounting. And we've helped 15,000 of such businesses automate a lot of their back office to focus on what truly matters, which is growing their company and providing value to their customers.

**Lenny** (00:05:26):
Okay. So what you didn't mention is some of the most interesting stats about Ramp and the business and the growth story of Ramp. So could you just also share some stats about just the success of Ramp and a sense of just how rare the story of Ramp has been?

**Geoff Charles** (00:05:42):
Yeah. I mean, we were one of the fastest growing FinTech and B2B SaaS companies of all time. I think we've hit a hundred million in annual revenue for the first two years and we've continued to grow significantly since then. I think every day, about a thousand users join our platform. And this year, we've grown and hit 600 million in savings, 8.5 million in hours saved for our customers by controlling spend and automating a lot of the manual tasks. So we're continuing to grow fast, and in terms of just raw transaction volume, we have crossed 10 billion in [inaudible 00:06:17] spending on the platform and just getting started.

**Lenny** (00:06:20):
You've glossed over that stat of just Ramp is essentially known as the fastest growing SaaS business in history and also FinTech business. In two categories, the fastest Ramp to $200 million in run rate.

**Geoff Charles** (00:06:34):
Yeah.

**Lenny** (00:06:34):
Okay. So for that reason and many other reasons, there's a lot of interest in just how Ramp operates and how you all approach product and we actually previously collaborated on a newsletter post on how Ramp builds product. And that newsletter post is now the eighth most popular post on my newsletter across hundreds of posts that are ever written and even more than how Figma builds product and how Snowflake builds product and all these other incredible companies. And so, clearly, there's a lot of interest in how you operate. So I'm really excited to get into the meat of how you all work. And if anyone read this post and has any sense of just how you all operate, there's this one word that immediately comes to mind when people think of how Ramp operates and that word is velocity. So I want to start there. Can you just talk about how important velocity is to how you work and where that came from and how that actually looks day to day working at Ramp?

**Geoff Charles** (00:07:27):
Yeah, absolutely. So you mentioned it, you nailed it. Velocity is everything at Ramp. It's how we design our product development process. It's how we incentivize teams, it's who we want to hire, it's who we want to promote, and it's everything around how we make decisions and how we organize the organization.

**Geoff Charles** (00:07:43):
I think it came from the fact that during the pandemic, we started with a very small team and there was a huge market opportunity ahead of us and it wasn't so much which path we wanted to pick, but rather how fast we were able to execute on that path. And so velocity was ingrained from the early days on just building, shipping, and iterating. And I think it's a decent metric for how companies and teams perform. You might say, "Well, what's the impact of that velocity?" But realistically, teams that have high velocity are able to actually get to that impact over time by iterating. It's also a great way to have positive selection in terms of talent because talent wants to join companies that ship fast. And a lot of people who join Ramp, I ask them, "Why are you interested in joining the company?" And they often say, "Well, it's because you guys are actually building things and shipping things and I want to know what that feels like." And it's also a great way just de-risk decisions and decision making. If the cost of that decision is really low, then you're able to essentially simplify a lot of decisions.

**Lenny** (00:08:44):
To build on that, there's a lot of companies that say they move fast, that talk about moving fast, that say velocity is really important, moving fast is really important to us, but I feel like Ramp is very different from that, where it's actually incredibly, incredibly fast and it's actually something you come back to again and again, this idea of, how do we move faster? Can you just share an example or two of what velocity actually looks like at Ramp and what the reality of that is?

**Geoff Charles** (00:09:12):
Yeah. So when I joined, we were about 10-ish folks, about eight engineers, and in three months, we built a competitor to Amex. Six months after that, we built a competitor to Expensify, both publicly traded companies. We hit a hundred million in annual revenue. I think we were under at that point 50 total in the R&D department, less than four engineers and three PMs. And then we started expanding into accounts payable. We basically gave a team goal of building a competitor, Bill.com. It was three engineers, one designer, one PM three months, and they hit out of the park. And that product is moving in billions of dollars a year.

**Geoff Charles** (00:09:49):
And I think the recipe for all this is constantly small teams have a single-threaded focus, give them the resources they need to execute big lofty goals, very tight timelines, and then shield them from the chaos that is the rest of the organization. So basically don't bother them and don't even tell the rest of the company that you're doing these things until they find product market fit, until they actually find that early traction and then they can bring in more resources. So it's like gravity and you need gravitational pull to this thing.

**Lenny** (00:10:25):
Okay. I want to double click on some of these points you just made. So what you find is important to help teams and people move fast within Ramp is you talked about single-threaded teams, shielding them from other people, trying to pull them in different directions, lofty goals. There's a couple more things. Let's talk about the single-threaded piece a little bit. What does actually mean? What does that look like?

**Geoff Charles** (00:10:47):
There are very few people who are able to execute extremely well in more than one thing, and it's especially true for individual contributors. And so what I mean by single threaded is there's only one goal, one thread, that they're waking up in the morning to focus on. And in order to remove that, you basically need to remove anything else that they're being asked to do to just focus on that thing, whether it's any type of research or any type of production engineering or any type of process that's outside of that single goal. And it almost goes as far as just saving a room in the office just for them and they are just in that room all day every day just working on that one thing.

**Lenny** (00:11:30):
What's an example of that? Either maybe someone's working on it now or in the past that's a good example of a single-threaded goal or team.

**Geoff Charles** (00:11:37):
Yeah. So, for example, we launched a flex product over the last summer, that was a single-threaded team just focused on eCommerce companies and their needs with more cash flow conversion and cash flow smoothing. And so we kept that team again just purely focused on just shipping that product and hitting that goal. And if they were ever distracted by something else, I don't think we would've hit it.

**Lenny** (00:12:02):
How do you, as a leader, avoid distracting them knowing there's so many things you need to do and there's constantly this like, "Oh, if we just fix this one bug, this one customer is going to be so happy," and, "Okay, if I just ask this one PM to work on this for a day?" I know there's not going to be like, "Here's the rule of step one, two, three, but how do you actually approach shielding teams from things that just are constantly on fire?

**Geoff Charles** (00:12:25):
So, for example, on bugs or issues like that, we have individuals that are protecting those teams from those issues. So we have a rotational program on production engineering, for example, where engineers are protecting the core team from escalations, from bugs, from issues. We have product operators that are protecting the PM from the chaos that is documentation and escalations and release management and enablement customer requests. So we have layers of protective tissue to core teams, but I would say for any of these big bets, you basically have to pull folks from different teams and reorganize a sub-team. And that team typically doesn't have responsibility on any existing product because these are all fairly new products. I think it gets more challenging when you go from one to two rather than zero to one.

**Lenny** (00:13:15):
You also mentioned this idea of lofty goals and that's something I've seen a lot. At Airbnb, there was a ... It is very known for lofty goals. Brian was famous for going to meetings where people present their goals and their plans and he's like, "How do we 10X that? What do you need in order to 10X that goal?" And then that ends up being your goal and often works shockingly, sometimes burnt a lot of people out. How do you think about for just finding that balance and, I don't know, is there an example of just like, "Here's a really ambitious goal?" Or maybe the question is just, how do you find the balance of ambitious but not just impossible?

**Geoff Charles** (00:13:46):
Yeah. So the first thing is we have market comparables, which is very exciting for us. So when you look at Bill.com, they're a publicly traded company, Expensify, publicly traded, or Concur or Coupa, these are all large players that are actually very motivating and largely de-risk some of the business decisions you're making. That's existing markets. We've also been able to create markets. Spend management was an actual market before we and other competitors jump into it.

**Geoff Charles** (00:14:18):
So that's motivating. Go attack that market and go drive that revenue is very motivating. We also use designs as a way to motivate teams. So we spend a lot of time with designers crafting out what the future of this thing could look like and that's also extremely motivating. So we constantly go back to these cornerstone, Loom walkthroughs of Figma prototypes that the design spend a lot of time talking through and I think that's a big part of the motivation. And so both of those things combined, I think, helps us stay motivated. I think there's a constant pushback to like, "Okay, what can we actually achieve?" But you're able to move super, super fast if you have those two things in mind, the market and the revenue goal, because very revenue driven as a company and the designs that can really keep you anchored on what this could look like.

**Lenny** (00:15:11):
I know another important ingredient to how you all operate is you really like to empower product teams and give them a lot of control over how they operate and what they build and how they set goals and things like that versus micromanaging them. I think you have this concept of context over control. I'm curious how you actually operationalize that. A lot of people love the idea of empowering their teams and then they do that and then they do the wrong thing or they take too long or they set the wrong goals. So how do you actually make that work and create empowerment within your teams?

**Geoff Charles** (00:15:43):
Yeah, it was one of the biggest cultural differences, I think, in Ramp versus other companies that were as a part of where my boss, the CTO, Karim, was extremely hands-off in terms of the actual pride decisions because we were extremely aligned on the goals themselves. And so that's where you really just start alignment is, what is the goal that you're going after? What is the hypothesis that you have to reach that goal? What is the data by which you're coming up with that hypothesis? And then what is the potential solution to test that hypothesis? And oftentimes, more junior leaders, and I was certainly in that camp earlier on, kept focusing on the solutions and debating the right solution when in fact you should really be debating upstream of that. You should be debating the interpretation of data, you should be debating the hypotheses and the different ideas that you have there as to what's really going on or you should be debating the goals themselves.

**Geoff Charles** (00:16:39):
And so whenever things went wrong at Ramp, it was when I was being prescriptive with regards to the solution without actually explaining and aligning upstream on the goal, the hypothesis, and the data. And if you do that, you realize that the solutions actually can come much better from teams that are much closer to the ground. I think that's the biggest goal that I have now in my role is to continue giving context so that teams focus on the right goals, come up with the right hypotheses and focus on the right data points. And I spent most of my time just repeating myself, most of my time just sharing the context that I think they might be missing, especially given that I'm in certain meetings or certain groups in certain forms that they're not a part of and my responsibility to represent them and then share back the context for them to make better decisions over time.

**Lenny** (00:17:27):
That touches on a phrase that's come up a couple times on this podcast that a leader's job, you're essentially the repeater in chief, reminding people of strategy, vision, things like that. It feels like to move fast, you need to do what you're talking about, which is empower your teams to just move, otherwise, it's not scalable. And I'm curious just to make it even more real. Either ... Is there an version of something you did at your previous work versus at Ramp that just shows what that looks like when you're empowering your team and not in the weeds? What's most different there? Is it the product reviews, you're not as involved in design iterations? Where do you come in to actually give feedback? How does that actually look like working at a Ramp versus another company?

**Geoff Charles** (00:18:12):
I think that the contract between me and the team is really their strategy and their roadmap. And as long as we are aligned on the strategy, and we can get into that, and aligned on the roadmap and the timing, that's their contract. And so then at that point, my goal is to continue to give them context to execute on that and to coach them through that by getting firsthand data on how things are going that they might be missing. And their role is to highlight risks and highlight one-way decisions that they need my input on. And, again, it didn't use to start that way. I mean, when we first started, it was just me and another PM. I was fairly micromanaging in some areas. I think you build trust over time and you start having these contracts. And so as, I suppose, good more senior, they're basically publishing out the API by which they interact with me and we basically align on what's most important on each one on one.

**Geoff Charles** (00:19:09):
So I basically have teams ... All my directs post their goals every week first thing Monday. The goal there is to also have them review each other's goals. I have a one-on-one template that I basically use to keep on track of how progress is being made, but I certainly don't spend the time in the one on one going into that. I spend the one on one just focusing on what they need from me. And then on a biweekly basis, I have a team-wide meeting where I share context that everyone is missing and we go deep on the most important topics of the day.

**Lenny** (00:19:44):
What about the product experience itself? Is there design review that happens? How do you stay on top of just like, "I'm proud of this product that we're shipping as a team?"

**Geoff Charles** (00:19:52):
I'd say we're iterating. I think when the first couple of years, it was more asynchronous and ad hoc process. And once you hit 10, 15 PMs and 20 or 30 different mini pods shipping constantly, I think you need a bit more of a process by which you have high-risk decisions that are being surfaced. So we're iterating. I think we're relating now is any large rock that we have on the roadmap needs to be brought into the product review process, where myself and the head of design are present and giving feedback, but it needs to be structured in a way where you are asking specifically for what type of feedback you need and you're highlighting the key risks and tradeoffs that you're making implicitly in that review.

**Geoff Charles** (00:20:38):
So that's one way we're able to scale, but I would say largely people ship and it's the difference between a beta and the GA, that's where we really get plugged in. When we make the decision to go live to the rest of the customer base and asking sales to start selling, that's where I'll really come in and stress test the hypotheses and the decisions. It's further downstream so it's more risky, but because we move so fast, you don't waste that much time if you have to pull it back.

**Lenny** (00:21:07):
Yeah, that came up actually. I just had a chat with Nicole Forsgren, who's world expert on developer productivity and developer experience, and they've done all this research on quality and speed of engineering and the engineering team. And they find that quality goes up as your product velocity goes up. You'd think it'd be the opposite. The faster you move, the lower quality ends up being. But exactly to your point, because you can fix things really quickly and you can get things out the door and there's not this huge chunk you have to wait for people to review and release and break things, ends up being higher quality. So it's very much aligned with our experience.

**Geoff Charles** (00:21:45):
Yeah. And you have to create a system by which those folks are getting that feedback. And so we've really focused on what are the control mechanisms that ensure that your high velocity doesn't tank the business. And so examples of that is we have a voice of customer processes where every single negative review that is shared to our products is shared back to the tech lead, the PM and the designer on a monthly basis. We report back NPS and CSAT. We report back operational overhead, meaning the percentage of tickets that come from your product area normalized by the number of users that are using that product. And that's a core contract that the team has to maintain a low or lower part of operational burden. We also have bugs and issues being directly assigned to the engineer that's on call. So they feel that pain and then they can continue, to your point, leveraging velocity to solve those problems. Velocity is just a magnitude, it's not necessarily a specific direction.

**Lenny** (00:22:55):
With these bugs that are coming in and quality issues versus a team's goal and their KPIs that they're trying to hit, how do you recommend teams balance those two things?

**Geoff Charles** (00:23:06):
We don't have a bug backlog. We fix every bug once they're surfaced almost.

**Lenny** (00:23:13):
Okay.

**Geoff Charles** (00:23:13):
So it's part of the production engineer's job really just to fix those things. I think where we get to nuances, like user experience improvements, the metric there that I really look at is how many support tickets come in that were due to a customer being confused. So we track that. And if that number is slightly elevated, we're basically saying, "You can't ship any new features, you need to fix these things." And so, yeah, there's just these types of controls, but basically trying to standardize across the teams. This is your percentage of operational burden, this is your CSAT, this is your NPS, and this is the number of customers that are confused. As long as you maintain those metrics, you can do whatever you want. But the moment that these things are under the red, you can't ship new features and you need to revert back to the [inaudible 00:24:03].

**Lenny** (00:24:03):
Something funny that happened after our post on how Ramp builds product came out, someone on LinkedIn, a product manager, posted half-jokingly that her CEO came to her and every PM CEO came to them after that post. And they're just like, "How do we prioritize velocity? How do we move faster? Look at this, this culture of velocity that Ramp's got, why don't we have that? What do we need to create this culture of velocity?" And I worried a little bit because it creates this additional pressure on product managers that already have a really hard job with already a lot of pressure. So I was like, "Oh, man, we're creating this new pressure that this one company is doing things really well and now everyone has to do it this way." So I guess my question is just, what's your advice to product managers who are getting this push from leaders to move faster as a result of how you guys operate?

**Geoff Charles** (00:24:49):
Yeah. Well, one, I'm sorry. It goes without saying. PMs, we can't do anything by ourselves. We're very useless. We're force multiplier. So the one thing that I'll highlight is behind Ramp's velocity is a lot less the culture that I try to amplify, but a lot more the quality of the engineering and design talent candidly. And so I'm just standing really on their shoulders here. And so advice number one is ensure that from the top down there's an investment in R7D as a first-class citizen that you're paying upmarket, that you're hiring the best, that you're focusing on your engineering and tech brand, that you're bringing people who want to work there because they want to be empowered. And then you have a culture of empowerment. And what that means is ... And it's hard to get right. What that means is the CEO has less say in the product that is built and the engineers have a lot more say into it.

**Geoff Charles** (00:25:48):
And so it's something that I've seen done really, really well at Ramp where the CEO sets the vision but is much less opinionated about the specific sequence by which we get there and trusts a tech organization that is radically empowered. The second thing that I would say is the biggest waste of time is meetings and status updates. And I think that oftentimes CEOs would say, or leaders would say, "Hey, we've got increased velocity, therefore let's just add these status meetings and let's add all this process and all these documents and all these ways to hold teams accountable." And that's just a huge way to demotivate people. And so I've never had a status meeting. I've never scheduled a status meeting. Statuses are done async. They are done in the systems by which they operate and largely they should be in real time. And meetings should be all about collaboration, ideation, decision-making, et cetera. So just look at your calendar and just kill as many things as possible and kill just unimportant process.

**Geoff Charles** (00:26:56):
And the last thing that I would say is oftentimes leaders say, "I want to move super fast," but they'll say, "I want everything under the sun. I want this and that and that." An example of that at Ramp is always like the debate between adding more products to one segment or going to a different segment, SME versus mid-market versus enterprise. And you ask the CEO, "Hey, which one should we do?" And they would say, "All of it," because they think that the more goals you have, the faster you'll be able to execute. And I think there's just a limitation to that.

**Geoff Charles** (00:27:29):
So the thing I would amplify is be very clear with the tradeoffs that you need to make and present those tradeoffs back to your leadership team. So here's what we're doing and here's what we're not doing and why and which one would you pick? Give them a menu of items. And you'll see that you're able to execute much, much faster on four things rather than eight at the same time. That's your job. Your job is to basically communicate those tradeoffs that oftentimes are not well communicated to executives out of fear of looking like you're pushing back. You're actually not pushing back, you're increasing velocity.

**Lenny** (00:28:02):
What I'm hearing from a meta point you're making is use that ask as leverage to change the way things are operating. Is that right?

**Geoff Charles** (00:28:09):
100%. You can't ask for velocity and not have empowerment and not trust and not eliminate process and not increase the focus. And that requires some serious tradeoffs that oftentimes leaders, especially those coming from more traditional industries, are not comfortable with. And it was the biggest breath of fresh air when I joined Ramp was how committed the team was.

**Geoff Charles** (00:28:33):
The last thing I'll say is there's nothing more motivating than a leader just commenting, "This is awesome," on a random project channel at a random design crit. I know that our founders are just reading the projects that they actually care a lot about and the engineers know that. And so there's just a general excitement on just building great cool shit. And engineers just feel that and they're also highly motivated by that. So that's another piece of advice is just being able to stay plugged in to give engineers the opportunity to present to those leaders present in the all hands. That's also a great way to amplify the culture.

**Lenny** (00:29:17):
It's a good segue to this idea of burnout. Hearing a team operate incredibly fast and velocity, velocity, velocity makes you think about, are people burning out? Are they enjoying their work? How are they sustainably going to last at Ramp? I'm curious just what that's like and how you think about avoiding burnout for folks that are just constantly shipping, shipping, shipping.

**Geoff Charles** (00:29:38):
I think the debate around working hard and burnout misses a key point, which is all about how much impact and how good you feel about the work that you're doing. And I think that for me, when I felt burnout, it was actually at the time where I had the lowest amount of velocity. But it was when I felt like I was putting a lot of effort into things that weren't actually moving. And so I actually think velocity is a way to potentially avoid burnout. I'm not asking people to work endless hours a week. I'm asking people to get out of their own way and to focus on what truly matters, which is building great products for our customers. And I think you do that if you get into a flow state, if you get into a cadence where everything becomes easier, where work can really become thrilling.

**Geoff Charles** (00:30:28):
And I think sometimes organizations, especially as they grow, make that really hard. They make it really hard to just be in that flow state with a ton of distractions, a ton of meetings, a ton of cross-functional teams that are all asking for your attention and grabbing for attention. Another parallel of this is running. The best runners are the ones that love running and they feel like running isn't a chore, work isn't a chore. And I think as a runner, I try to evaluate that whenever we're doing something hard, that's challenging, that's exhausting. If you love what you do, you feel much better about the amount of effort you're putting into it. And work doesn't feel like work.

**Lenny** (00:31:08):
I find the same thing. I find that when I think back to the times that had the best experience, the most fulfilling work that I've done, it's often I was working insane hours. It was just like this very long stressful project but ends up ... Looking back, you're always like, "Wow, that was so much, that was so cool. I learned so much. We shipped so much interesting stuff, made so much impact." I think the key is what you said is that you have to actually be proud of it and it has to be something that's meaningful to you because you could work long hours on something that you have no interest in and that does not help and that does lead to burnout. So that's the key.

**Geoff Charles** (00:31:42):
And you said something there, which is meaningful to you. So not meaningful to your boss or your boss's boss's boss, but meaningful to you. And I think that that's the role of management is to make everyone on your team feel like it's their goal. And the way to do that is to, again, align on that goal and give it to them and to problems to solve. If everyone feels like it's their team, it's their company, their mini company, then they will radically avoid burnout. But if they feel like the work is being pushed onto them, they feel like they're not aligned on the goal or they don't feel empowered with the solution, then the burnout will absolutely happen.

**Lenny** (00:32:22):
One of my favorite quotes that you have shared is, any second you spend planning is a second you don't spend doing. And on the one hand, I love that because the more you do, the more things happen, the more you get done, everything's happening. On the other hand, it also feels a bit chaotic and I'm curious how you find that balance between, "Okay, we're not going to spend all this time planning, we're just going to go, go, go, go, go." And just how you think about that balance and how it actually ends up working out at Ramp sounds like not spending a ton of time planning.

**Geoff Charles** (00:32:54):
Yeah. I would say when new joiners come at Ramp, I intro myself and I talk about our product strategy. And in the meeting with an apology, I say, "You signed an implicit contract joining Ramp. It's one where we prioritize velocity over almost everything else. What that means is it'll be somewhat chaotic. We'll ship things that don't work. We will change our products without necessarily fully enabling you and you'll have to constantly be on your toes whenever you load up a demo instance." And I think that it's an expectation and people are welcoming of that because they understand that the tradeoff is that we don't move forward, that we don't actually innovate, that we don't continue to provide value for our customers.

**Geoff Charles** (00:33:41):
I think there's certain things that we plan for. And so the question really is because accuracy has cost, make sure that you're only increasing the accuracy of planning for the things that have high value of that accuracy.

**Geoff Charles** (00:33:56):
And so those things for us are large market moments where we have products, marketing, and sales all coordinating these big moments. And those typically happen maybe once a quarter, once every six months. It's basically your marketing calendar. We need a plan for that, for sure, but it's oftentimes a low percentage of our total R&D focus. And so it's totally fine for each team to be somewhat autonomous, somewhat chaotic within their pod. They're extremely clear, but for the outside in, it might be very chaotic. But be very accurate on the things that truly, truly matter. The rest actually doesn't matter. You don't need a lot of accuracy and confidence on when specifically certain features will be live. It's much better to spend whatever time you would spend trying to create accuracy and creating velocity.

**Lenny** (00:34:48):
I love that you set expectations very clearly upfront. That seems really important to be successful at a company like that. It also just makes me remember every successful startup is extremely chaotic. As much as it may not feel like that on the outside, it's insanely chaotic. Things are constantly changing. I was at a fireside chat with Sheryl Sandberg once at Airbnb and somebody asked her just like, "How do you deal with change? Things are just ... We're reorging every six months. People are leaving and coming and teams are shifting and priorities are always adjusting." And she's just like, "This is the problem you want, you want to be going through this because that means you're growing and you're going through hypergrowth because the alternative is much worse where you're not growing and that's much more painful." So I think it's just a good reminder that if you're working at a place that's chaotic, it's often a good thing.

**Geoff Charles** (00:35:37):
I would say so. I mean, oftentimes, people use that excuse to not have a very strong strategy. And I think that for us, we've always been, from the start, the spend management platform that helps you spend less. Our strategy ... I share an annual newsletter around what we did and what we're going to do next year. And it's oftentimes pretty spot on in terms of the goals. Again, the goals and the value and the problem and the vision, that's consistent. The specifics, the timing, the quarterly scopes, all these things, yes, it changes, but what you want to avoid is the thrash of people waking up and feeling like they're working at a different company or that leaders are constantly changing their minds. We've been extremely consistent from the start and I think most of the products that we build, most of the code that we written, is in the customer's hands and hasn't been ripped away. And I think that speaks a lot to velocity, too.

**Lenny** (00:36:33):
Awesome. That was a good addition. I didn't mean to say if your place is chaotic, it's no problem. It's that side effect of growth and hypergrowth as things are going to be pretty chaotic.

**Geoff Charles** (00:37:58):
Strategy means a lot of different things. In my mind, strategy is about how do we get to our goals? And it's not a roadmap and it's not a vision, it's something right in between that. So the first thing you need to do is align on what are the goals, what do you want to see in the world? Then the hypothesis, why do you think this will work? Figure out why we're uniquely positioned as a company to get after that goal. Figure out the metrics by which you would measure whether we reach that goal and then talk about the initiatives, talk about the risks, and talk about the long-term outcomes.

**Lenny** (00:38:31):
So these are the bullet points of the contract essentially of a strategy document?

**Geoff Charles** (00:38:35):
Correct. And now every pod basically spends time writing that doc for themselves. So the pods are basically organized against outcomes, so they should be very clear on their goals and they publish these things out. And then what I typically do is take all these documents and make sure that they're aligned with our high-level product strategy, which is a bit more long-term thinking than the individual pods, and that they are also aligned with our financial strategy, which we can get into. But that's a little bit of how you also create a culture of empowerment where each team is thinking about these things thinking like you. And the more that, as a leader, you make teams think like you, the more leverage you get over time and the more you can start thinking ahead on other ways of operating.

**Lenny** (00:39:25):
How long does planning roughly take and how often do you do this strategy rethink?

**Geoff Charles** (00:39:30):
We've gone through iterations, good and bad, I think. For a period of time at Ramp, we created OKRs with financial goals and quotas to some extent for different teams. And that led to just taking a long time to plan because people were trying to make sure there was the right metric, trying to make sure that it was achievable. And it became very political, very annoying. And largely, our entire R&D team was like, "Look, we're just going to execute on the roadmap, screw the OKRs." And so we moved from quarterly, very expensive quarterly planning, which took one month every three months, so basically 33% of the time was planning, to a biannual one-pager on, these are the company priorities and it's much more smooth and much faster. Related to that, though, we have a strong financial plan that we execute on and each row or lever of that financial plan has an owner. Oftentimes it's marketing and sales. For anything that's product led, it's product. So that's one contract. And then we have our roadmap, that's the second contract.

**Lenny** (00:40:43):
One of the bullet points you mentioned is this idea of being, what are we uniquely positioned to do? Can you talk a bit more about that and maybe what's an example of something you worked on, how you described why you're uniquely positioned to win at that?

**Geoff Charles** (00:40:55):
One of the biggest values, I think, of software is how do you reuse the components that you've built to increase, again, velocity and impact. So why we were interested in bill payments as an expansion of our corporate card platform was we saw a bill as just an invoice to the company. And an expense was an invoice to the employee. And so there was a lot of parallels between these two things. It was all about having a liability. It was all about processing that liability in terms of the financial event and moving the money, moving the money either between the company, between the company and the employee or between two companies.

**Geoff Charles** (00:41:38):
So we believed that we were uniquely positioned to get after that space because we already had money movement. We already had some type of liability. We already integrated with accounting systems and we had a pretty strong risk process that can govern all that. And the employees that were requesting to pay these bills were already on the platform. So that's an example of a right to win. And I think that if you continue to focus on where you're uniquely positioned to win, you'll increase velocity because you already have a lot of the components of the expertise.

**Lenny** (00:42:12):
I love that. It's not something you really see in teams' docs of just why we have the right to win this. So I think that's a really interesting element. By the way, I should mention we'll link to a template of your planning approach in the show notes, which we also had in the post that we worked on. So folks are trying to write down notes of all these little bullet points. We'll link to a doc that has all these things.

**Lenny** (00:42:34):
What do you think of OKRs and how do you approach OKRs as a part of this planning?

**Geoff Charles** (00:42:39):
I largely stay away from OKRs from a product perspective.

**Lenny** (00:42:39):
Go on.

**Geoff Charles** (00:42:44):
I think that, again, strategy, financial plan, roadmap. I think where we landed on with OKRs were really around more cross-functional things in nature. So, for example, we'll have an OKR around winning a specific market and we'll have OKRs that are cross-functional across different teams. But, again, an OKR is just a method to measure an objective with metrics and you can use them at various levels of granularity. I stay away from them from a product perspective because, again, I want to focus on velocity, which is just output, which is your roadmap, but they're pretty strong at more of the cross-functional side of things as well as the financial side of things.

**Lenny** (00:43:30):
I don't even know what separates an OKR from not an OKR. I feel like OKRs are just a goal with some high-level statements of things we're trying to accomplish. I don't even understand when people say they use OKRs or don't, what that even means anymore. There's a recurring point on this podcast and other posts of just people are weary of just being obsessed with, "Here's the metric that we're going to hit and that's all that matters." And there's a fear they lose sight of the bigger picture, what they're trying to accomplish. But I think in the end, it's just like, "Here's what we're trying to do. Here's some goals, we're going to hit it," because I don't know care, I don't know.

**Geoff Charles** (00:44:02):
I think that's right. I think that's right. And at the end of the day, again, the contract is your product roadmap and that's the contract you have, the sales organization. Marketing can take that product roadmap and create market moments. And ultimately, if your product roadmap doesn't actually hit the goals of the company, then I'm accountable because I've created a system by which I've aligned with each team on why the roadmap is going to hit the goals. And so you essentially need to point back to the leader in that regard. But I can't ask every team to try to manipulate OKRs to fit their roadmaps. That's just completely exhausting. We've aligned on what we need to do, let's get it done.

**Lenny** (00:44:41):
Something that comes across pretty clearly in the way you think and the way Ramp operates is this idea of thinking from first principles. And it's a cliche term, feels like everyone's always trying to talk about how they're thinking from first principles and it's important to their culture to think from first principles, but it feels like you guys actually do it. And so I am curious just where that emerged for you or for Ramp. And is there an example of something that emerged within Ramp, a new product or an idea, that was very clearly from first principles?

**Geoff Charles** (00:45:10):
The most important thing to talk about here is that Ramp is a very unique business. I mean, we're a credit card company, which is all about risk management and underwriting. We're also a payments company because we move money between businesses. We're also a software company because we deal with spend management and expense management, accounting. We're building for SMEs. So we have PLG, but we're also building for enterprise. So we are sales driven, we're everything.

**Geoff Charles** (00:45:40):
And so it's really important when you're dealing with something that hasn't been done before to think from first principles. And what I mean by that is you don't pattern match from your past experience, but you go back to the fundamentals of what we're trying to do and you think through them very, very deeply. And that means you need to hire people who can think from first principles and be okay putting aside their experience. And that's a tough pill to swallow for some folks who will come in and will say, "I'm the subject matter expert on X, Y, Z and I know what's best." And they come in and they get a reality check about the complexity of our business. And how also you can't influence teams by saying, "I've seen this before." That's just like an anti-pattern. You can't say, "My past company, X, Y, Z."

**Lenny** (00:45:40):
No one wants to hear that.

**Geoff Charles** (00:46:32):
No one wants to hear that. And surely, I thought I was coming into Ramp and I was going to apply the best product [inaudible 00:46:39] process, and I had to shift that process entirely because the process was predicated on a B-plus engineering team, and I was faced with an A-plus engineering team. And so my entire ... I had to go back to first principles around how products should be developed and built. So, again, all the advice I'm sharing here, don't just take it and map it and copy paste. Start from the first principles that we're sharing.

**Geoff Charles** (00:47:00):
An example of that is our support team. So support reports into me. And the first principle there was saying, "Well, every support ticket is a failure of our product." We literally have that as a quote just posted on all those channels. It's a failure. And if the product works perfectly, no one should ever have to contact our support team. And what better way of holding the product team accountable for support other than having support report into product.

**Geoff Charles** (00:47:30):
And the second piece was that we believe that a lot of our value to our customers were because it was going to come from deeply understanding them, deeply listening to them, and moving on that feedback. And so instead of hiring people who were focused just on resolving the ticket, we incentivized people to actually decrease number of tickets over time and decrease deflection or increase deflection. And that required hiring a different breed of people that then became leaders in different parts of the organization as well.

**Geoff Charles** (00:48:03):
So, again, we could have easily just pattern matched, look at comparables, hired people who've scaled large support teams, and just used benchmarks in the industry, but we've started from first principles. And the outcome of that is we have an extremely low contact rate. We have over 400,000 users on our platform and a team of agents that's under 30. And it's a pretty crazy ratio to think about.

**Lenny** (00:48:30):
That's wild. I missed this nuance. So the support team reports into you and the product team?

**Geoff Charles** (00:48:37):
Yes.

**Lenny** (00:48:38):
Wow, I've never heard of that. That's cool. Okay.

**Lenny** (00:48:42):
So I'm going to change course a little bit and I'm going to talk about writing. So we worked on this post together on how Ramp operates. And I was just incredibly impressed with your attention to detail, your ability to articulate, your approach to product. And as we were working on this, you mentioned that writing is really important to you as a way of figuring out what you think and to solve and crystallize problems, which is exactly how it works for me. And that's how this whole newsletter started. It was just trying to crystallize what I remembered and did so that I can remember it and share with people. So I'd love to just hear your insights and take on just what writing does for you and maybe what you'd recommend listeners do with this approach of writing, helping them think.

**Geoff Charles** (00:49:25):
Throughout the years at Ramp, I was often faced with a problem or a question that I couldn't answer off the bat, and I had to go back to first principles. And the best way of doing that is to shut down your laptop, take out a piece of paper, write the question as simply as possible at the top of the paper, and just spend time just thinking about how to answer that question. And there were a ton of questions over time. For example, how do we ... And it was all scalability problems that few companies have actually done successfully. And so you have to start with your own thinking, how do we scale decision making? How do we incentivize teams to work together? How do we do headcount planning? How do we allocate headcount in a fair way? How do we avoid politics as firsthand data goes away? How do we make decisions on doubling down versus pivoting?

**Geoff Charles** (00:50:24):
All these things are really tough. And I found myself ... You could read things and that's helpful, but I don't think that reading makes you necessarily think better. It makes you more wise, but the best way to increase your capacity to think is to actually do the thinking. And so that's where I see writing. If you're able to write things clearly, you're able to think through things clearly. It was also a way for me to effectively communicate, especially during COVID, where we largely grew up during COVID, where everything was written, and it was also a way for me to get content out there to increase my brand and Ramp's brand in terms of the space that then led us to hire better people over time. So all these things worked out, but it does require you to block out time and to, again, focus on how you think about problems rather than try to Google the answer. After you thought through it, then go out and read and you'll fine-tune your thinking and you'll identify new questions to ask yourself afterwards.

**Lenny** (00:51:34):
I love this advice. You mentioned earlier that PMs can't really do much on their own, but I think this is the thing PMs can do is PMs have the time to think and to plan and think ahead because they're not required to build code all day and design. This is the advantage you have as a PM. I always think that PMs often don't really have any special unique skills. They just have the time to do the things that nobody else wants to do or doesn't have the time to do or doesn't want to do. And just this really important point of just spending the time to think and not just constantly try to discuss things in meetings or, like you said, just Google around for answers. That ends up being incredibly important. And I just love this framework of just starting a doc with a little question at the top and just sit there and try to answer the question on your own before doing anything. I think that's a really good approach.

**Lenny** (00:52:26):
I want to ask how you actually do that. How do you actually create these blocks of time? There's this concept of deep work and how valuable that is to creative work and knowledge work. How do you do that for yourself? How do you block out time and not get bugged all day?

**Geoff Charles** (00:52:39):
Because we're really anti-meeting at Ramp, I had time in my calendar. And so what I would basically do is the Friday before I clocked out, I would look at the next week, I would look at the top questions that I needed to spend time thinking about, and I would block out that time. I also work on one day of the weekend in terms of deep work. I find that hanging out outside and doodling on my piece of paper, some thoughts is actually really refreshing because it doesn't feel like work. It feels like just me just philosophizing about something. And so, yeah, blocking out that time, finding a space where things are less busy, where you're not in a critical path either early mornings or later afternoons or a day on the weekend is the best path for it.

**Lenny** (00:53:34):
What do you do if someone wants to actually schedule a meeting with you or reach out or put someone on your calendar? Do you have a policy there to protect that time?

**Geoff Charles** (00:53:41):
I think that I should never really be in the critical path of anything. So largely, I'm not available, but if they really need to get to me, they have my phone number.

**Lenny** (00:53:53):
Cool. The thing that I found really valuable is just on Wednesday mornings and Friday mornings, I just have this huge block called deep work time. If you book a time during this time, I'll slap you. And I don't know if I'm allowed to put that into meeting calendar invites anymore, but that actually worked really well. Nobody really booked meetings in that slot.

**Geoff Charles** (00:54:11):
I didn't know Zoom had a slot feature that's coming handy.

**Lenny** (00:54:15):
It was a Google, it was in the calendar. It was like the calendar invite. And I also worked usually at least one day a week and I found that to be really effective and I know a lot of people don't want to be doing that, but I found that really important to have great success.

**Lenny** (00:54:30):
One other question along these lines around just optimizing for processing and getting stuff done and deep work time, do you have any other best practices for just being organized and staying on top of stuff, knowing there's just stuff coming at you all day every day?

**Geoff Charles** (00:54:46):
If you're a manager and, like me, you're in back-to-back meetings from 10:00 to 6:00, it's very easy to be completely overwhelmed with a sheer amount of stuff you need to do. And so I've invested over time in just a very robust but fairly simple task management process, which is, at the end of every meeting, I would write down the tasks that I owe and the tasks that someone else owes and I would write them down to as clearly as possible, not some vague thing, but a very clear thing and just when I need to get this done by. I don't spend time just grooming. So at the end of the day, I use notes. I have just a page-long thing of all the things I need to get done, all the things people need to get done for me. And then I spend time grooming, which is basically just trying to group things together in logical chunks, grouping the tactical versus the strategic, the important versus the less important.

**Geoff Charles** (00:55:40):
I group also what other people owe me and I Slack them what they owe me and I put a reminder on Slack for when they owe it to me by. And that way, it's just out of sight, out of mind. I think that the high-level theme is I try to create or free up headspace for processing, not memory. And so I just basically spend very little time memorizing anything and I write everything down. That is hard when you're trying to remember a specific date or remember something that someone said, but you have a system by which you can pull these things up very, very quickly. In the Google Space, you can pull up any document and search a bunch of documents very, very quickly. So that's what I would do is just spend a lot more time on the processing, be extremely good at just task management, and then grouping things, and then the next day, creating your calendar aligned to the goals that you've set for yourself the day before in terms of the tactical, where you group those tactical tasks together and then the more strategic deep thinking, walking out that additional space.

**Lenny** (00:56:40):
I feel like you and I are very aligned on a lot of things. That's exactly how I approach priorities. Have you read Getting Things Done by David Allen?

**Geoff Charles** (00:56:47):
I don't read a lot of nonfiction actually.

**Lenny** (00:56:50):
Okay, because what you're describing is very aligned with this approach to processing and taking to-dos, and it's what I built my approach on. And so you naturally merged out of your head. I love it.

**Lenny** (00:57:03):
Let's move on to talking a little bit about your team and hiring and things like that. And there's just going to be a grab bag set of questions. What is your current PM team look like, either number wise or just ratio and just a PM wise?

**Geoff Charles** (00:57:17):
We have about 13 PMs at Ramp and probably over a hundred engineers. So I try to keep basically one to eight to one to 15 depending on the team. Obviously, B2B is slightly more complex because you're dealing with pretty strong marketing team and pretty strong sales team and pretty demanding customers that you have relationships with. So I've seen ratios be a bit lower than the B2C space. But, yeah, that's a little bit of the team today. And they're organized by those teams, by those customer pain points.

**Lenny** (00:57:47):
And I have this note from before, you said that you reached a hundred million ARR, and that's a run rate, not recurring revenue at that point, I imagine, right?

**Geoff Charles** (00:57:55):
Yep.

**Lenny** (00:57:56):
With 50 people, which is incredible. And so just on that point, how do you do so much with so few PMs, especially? Do you have anything that you figured out that ends up being really important there?

**Geoff Charles** (00:58:06):
I think that by eliminating or reducing the size of the team, we've forced other people in the company to think like PMs and I think it's been a huge value add to our culture. When I say product, often people think about product management, but I actually think product is anyone that actually reports into our CTO, and that's product engineering, product design, product managers, product data scientists. So making everyone feel like a PM is a great way to get leverage as a PM, and that means basically empowering the designer to think about the actual specs and priorities and scopes more than you or empower the engineer to take something that's fairly lightweight in terms of a spec or direction and actually think through it deeply and come back with some great questions that the PM hasn't thought through. So that's one thing.

**Geoff Charles** (00:58:58):
The second is that we invested early on in product operations, which was a team that also reports to me that basically focuses on the operational functions of product that's everything around whether it's project management or issue management or release management or enablement and content beta and customer research. They basically are tasked with a lot of the work that needs to get done to continue shipping products and scaling product development.

**Geoff Charles** (00:59:29):
And then lastly, just cutting as much of the low-leverage work that PMs often get sucked into. So, for example, we never write a ticket. We don't spend much time in linear, which is our ticket management system. Basically, our contract is the vision and the priority and a very high-level spec and everything else is pushed on the engineering teams. And I think that's when engineers actually are also able to move even faster because they can create whatever tickets they want, they can break down the work that they want, they are accountable for the projects that they're driving, and that increases trust and moves things faster as well.

**Lenny** (01:00:09):
That makes a ton of sense. Basically, you distribute the PM job that other companies put on the PM across other team members. So if you had to think about just what is the core product manager job at Ramp at this point, I imagine from what I've been hearing, it's strategy, vision, aligning the team. What else plays into that, just bullet point wise? A few things that come to mind.

**Geoff Charles** (01:00:32):
Team building. So building a culture within the pod because oftentimes your managers are no longer in your team, right? Engineers might report to different people, designers might report to different people. PMs might report to different people. So actually building a team culture within the pod is really, really important. And oftentimes it falls on the PM to create those offsites or to create those ideation sessions or to find ways to have fun as a team.

**Geoff Charles** (01:01:00):
The second is making sure that the team is humming in terms of the actual focus areas and then protecting the team from stakeholders that might want to have an opinion or want to have an update or want to schedule certain meetings. So protecting that core team from that chaos and then being the central point of contact if someone has a question or needs something, and then being able to bring in the right person at the right time. So those are the different things that is also really important to mention.

**Lenny** (01:01:34):
Coming back to a note that I made earlier, you talked about how a lot of this advice you're sharing in the approach to product at Ramp is assuming that the team is A plus, the engineers are A plus, the designers A plus. For somebody listening to this that may be wondering, "Are my engineers A plus or not?", what comes to mind as ways that you could get a sense of this is a team that can operate in this way versus, no, we're never going to work in this way and maybe we should shift the way we work or I should get work somewhere else?

**Geoff Charles** (01:02:06):
Great question. Yeah, it's very hard to identify. A few things. One is, does the engineer want to win in the market? Does the engineer really care about winning against competitors, winning the hearts and minds of the customer? Do they understand the business context in which they operate by which they need to do that? Are they curious about how the company makes money, about what customers love and don't love, about what the most important project is and why it's important? They're asking you questions about the business outside of just the engineering domains. Are they able to execute on what they said they were going to execute without your help or do you actually feel like you need to be behind them? Are they the one actually setting the pace, asking you to keep up with your specs, keep up with your decisions, respond more quickly to the things that are blocking them, bringing more PMs or more designers to do more things?

**Geoff Charles** (01:03:14):
Are they being proactive in different channels where you think it's actually your job, but actually they'll jump in anyways? For example, we have different Slack channels with a bunch of people sometimes asking questions or raising issues or having blockers. And you have engineers who are just jumping in and explaining how a feature works, getting the feedback and fixing a bug proactively. And you may think, "Well, that's not the priority. I need to control what the engineers are doing." That's not your job actually, that's not your job. Your job is to make sure that they're aligned with the long-term vision and that they can deliver what they've committed to, but on top of that, they can do whatever the hell they want. And if they're taking on something that puts the things that they committed to at risk, they'll communicate that. So, again, that proactiveness, that desire to help, that desire to improve that accountability on their product.

**Geoff Charles** (01:04:03):
If their product isn't performing, if their product has feedback, are they doing it themselves or they need you to push them? So those are all mentality and culture aspects. I'm not even getting into the technical rigor and the quality of their systems and the velocity of code because I'm not a good judge of that. That's not really my role. But those are the things that I would immediately look at that, I think, is just fundamentally different in the engineering team that we built at Ramp versus others. And it's just a big part of the culture shift and the culture that we've been able to build.

**Lenny** (01:04:36):
That was an awesome answer. And I think as a PM, you often don't want your engineers and designers to have such strong opinions and to be so on top of everything because there's just like, "Oh, no. Okay, here's what I think we should actually do," but engineers have all these opinions. And what you're saying is that's what you want to lean into, assuming you trust that they know what they're doing and can actually get things done. And so it's like a catchment to you a little bit, but I think that's a really unique culture and approach. And so that's an awesome answer.

**Geoff Charles** (01:05:05):
And, look, there's drawbacks to that culture where you get to a radically empowered engineering team that thinks that they know the product better than the designer or the PM and they push back on the designs or they disagree with the PM, but I'll take that culture any day compared to a culture where they're just taking things at face value and not challenging the thinking and not actually thinking from their own perspectives. And it is like I'll take someone on my team any day that challenges what I tell them to do or what I think is important and is maybe a bit harder to manage, but it'll make me think way deeper about what I'm asking them and what I think is important. And I'll grow as a manager much faster because of that.

**Lenny** (01:05:45):
I love it. Two final questions, one around hiring. When you're interviewing people, what do you look for and what does Ramp look for that maybe other companies don't value as much as they should or maybe overvalue? What do you look for that you think is unique that helps you hire this A-plus team?

**Geoff Charles** (01:06:02):
We look for people who have a very strong desire to have impact. And the best way to assess that is the impact that they've had or the reason why they are switching jobs. So, again, it goes back to what I was mentioning earlier in the chat, which was velocity leads to people wanting to join because they want to have velocity. And the best signal that is, I'm leaving because things got too slow, things got too bureaucratic. I missed the old days where we were just building and shipping and launching. I look for people who can think deeply, so I'll go super deep into a decision, a tradeoff that they had to make. And I'll really just scratch at that until I get to a deep understanding of how they make decisions and how deep they think about things.

**Geoff Charles** (01:06:57):
And in general, we tend to overemphasize those two skills rather than necessarily experience because experience ... Again, to the point around Ramp is a unique business, it matters a lot less. You can have a lot less impact than your ability to be hungry and your ability to think deeply.

**Lenny** (01:07:20):
Final question. A lot of people listening to this want to get into product management. What's your advice? I'm sure you get asked this a lot. How do you break into product management? What do you tell people?

**Geoff Charles** (01:07:30):
Yeah. So for me, I went from college to consulting to my four into tech was really into more like solutions analyst, I think that was my title. I was basically trying to implement a large B2B software in national banks. And how I got into product management was really around understanding deeply the customer and understanding deeply the product and being able to show impact on the combination of these two things. Typically, the folks that join product teams are the highest performers outside of product that either understand the customer really well and can advise product or understand the product very well and can serve customers.

**Geoff Charles** (01:08:12):
And so my advice is for folks that want to break into that is to find a role that is adjacent to product that enables you to have those experiences and to prove yourself. So, for example, product operations is a good one. Business operations is a good one. More consulting sales engineering or solution engineering is a good one. There are designers and engineers that can become PMs as well. Typically, it's folks that can do the job as well as the PM. And what we typically do is we give those PMs a shot or those folks a shot. So we'd give them like six months to go into a new area and try it out. And then we basically have the engineers they work with and designers they work with actually make the call as to whether or not they would want this PM versus another PM on the team.

**Lenny** (01:09:05):
Is there anything else you want to share before we get to our very exciting lightning round?

**Geoff Charles** (01:09:09):
Yeah. I mean, first, think from first principles, don't take everything I'm saying at face value. And second is back to talent, that a huge part of our success was the early team that Karim built on the tech side. And so I can write blogs all day on how we increased velocity, but if there's one thing to take away from this is that empowered and talented engineers and designers are the biggest reason why Ramp was so successful and it's something that requires a ton of focus. I mean, early on for the first year at Ramp, Karim, our CTO, was only focused on that. It was hiring the best talent. He was a lot less interested or focused on our product strategy, our product market fit, or even our revenue. It was all about bringing in the best engineers and the best designers and that has had compounding effects on the company and the team.

**Lenny** (01:10:09):
And I think an important element there is the initial people you hire end up impacting the next batch and the next set because they see, "Wow, this person is working at Ramp. That's incredible. I got to look at that." So there's an early compounding effect, too, that happens.

**Geoff Charles** (01:10:24):
Exactly.

**Lenny** (01:10:25):
Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Geoff Charles** (01:10:32):
Yes.

**Lenny** (01:10:34):
What are two or three books you've recommended most to other people?

**Geoff Charles** (01:10:40):
Because I work a lot, I try to read things that are completely outside of work. I don't think I can get through any fiction or nonfiction book that's often recommended. So anything that will pull on your heartstrings and try to make you more human. When Breath Becomes Air is a really good one that I often recommend.

**Lenny** (01:10:59):
Amazing. Love that one. Favorite recent movie or TV show?

**Geoff Charles** (01:11:03):
I started watching The Bear a few weeks ago. I think it's a great show around leadership around how a different industry operates, the restaurant industry. My dad owned a restaurant so I got a little bit into that and all about teamwork and quality versus velocity [inaudible 01:11:24] of personal and professional stress. So I thought it was a really good learning.

**Lenny** (01:11:29):
Wow, that show makes me really think of Ramp. That makes a lot of sense. It feels very ... Everything's just crazy moving fast. I'm just so stressed watching that show. I haven't watched the second season yet.

**Geoff Charles** (01:11:41):
You should come to our office, probably very similar.

**Lenny** (01:11:44):
Just delicious food, sandwiches and the velocity. Favorite interview question you'd like to ask candidates?

**Geoff Charles** (01:11:52):
I ask, what's the hardest thing you've ever done? And I ask that because working at Ramp is hard. I want to understand what hard means for them. I want to understand why it was hard. I want to understand how they overcame that difficulty, how they worked with other people to overcome that difficulty, and how much agency they had in overcoming that. So it's a really good sign around what is difficult to them and how much work they put into overcoming that.

**Lenny** (01:12:23):
What is a favorite product you've recently discovered that you really like?

**Geoff Charles** (01:12:28):
So my partner bought me this WHOOP recently. Wearing it now. It gives you this real-time stress signal. [inaudible 01:12:36] that's pretty helpful. But I think it's a great product in terms of just actual insights. It's very data-driven, so it'll tell you ... You have a daily journal of all the things you did that day and it'll correlate what you did that day to your recovery score or how healthy you are for that day.

**Geoff Charles** (01:12:55):
And so it'll give you insights around how certain actions you take will have impact on your next day's health, which is all about heart rate variability. I thought it was just a great way to continue to focus on your health. I think running a team has a huge impact on your physical health, on your mental health, and I think you are an athlete at a high growth startup or even a small business or a large company. And focusing on that health is really, really important. So any tools like the WHOOP to invest into that is great.

**Lenny** (01:13:30):
That was a really good pitch for the WHOOP. I have never wanted one, but now I do. Okay, next question. What is something relatively minor you've changed in your product development process that has had a big impact on your team's ability to execute?

**Geoff Charles** (01:13:42):
It's not something I've changed, it's more something that our head of design, Diego, has changed. Basically having designers spend more time creating more visionary prototypes and then sharing those out in videos. It just has just huge impact on how exciting work is and how excited the team are. And so just providing that clarity is massive. And I think just, again, Figma and Loom and prototypes that actually are interactive so people can actually play around with it is a huge way to unlock velocity.

**Lenny** (01:14:18):
Final question. I've already asked you about this a couple of times, but I'm curious if there's any other productivity tip or tool that you'd recommend to listeners that you haven't mentioned yet.

**Geoff Charles** (01:14:29):
Turn off notifications. Quit Slack when you're doing deep work. Check your emails once a day and just literally go through them in five minutes. Oftentimes, most of them use lists. Check Slack only at the top of the hour. Use Slack snooze or reminders. I mean, there's a whole other podcast we can talk about over Slack channels and how to organize that, but just get really good at the tools you're using. I think the first year of consulting, we just got really good at Excel and Excel shortcuts, and it was a big part of our training. And so just train yourself and train your teams on how to use their tools, how to use your calendar, how to use Slack, how to use email, whatever the tool you've designed as the right tool for you. Be dogmatic. I mean, what Ramp is, is a tool at the end of the day and we're helping finance teams more efficient, so let's dock through that and do that with our own tools.

**Lenny** (01:15:27):
I think we've had just enough velocity in our chat. I think we're going to hit a hundred million downloads. I think we built an A-plus team here. Geoff, thank you so much for doing this. Two final questions. Where can folks find you online if they want to ask you any other questions? And second question, how can listeners be useful to you?

**Geoff Charles** (01:15:44):
You can find me on Twitter and LinkedIn. Twitter is geoffintech. How can they be useful? Honestly, your attention is a gift. If you're interested in joining us here at Ramp, we're obviously hiring incredible people. So if anything that I shared resonates with you and if you want to join the team, and we're hiring across product engineering design, but most importantly, be kind to yourself. I think I've been a huge listener to this podcast. It's an honor to be here. I know very little. Hopefully some of what I shared was meaningful to you. But keep the growth mindset. Keep thinking from first principles. Keep investing in that growth and be patient. It takes a lot of time.

**Lenny** (01:16:24):
What a beautiful way to end it. Geoff, thank you again so much for being here.

**Geoff Charles** (01:16:28):
Thanks a lot, Lenny. This was a lot of fun.

**Lenny** (01:16:30):
Same. Bye, everyone.

**Lenny** (01:16:34):
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.

---

## [8/20] Relentless curiosity, radical accountability, and HubSpot’s winning growth formula | Christopher Miller (VP of Product, Growth and AI)

**Chris Miller** (00:00:00):
... The actual really small initial growth team. We really had an aggressive mentality, an aggressive approach, and what that looked like was at the time, a very small percentage of, I think HubSpot's subscription revenue would be described as self-service, so we approached the team who owned it and we were like, "Are you all working on this?" They were like, "Nah, we're working on a bunch of other stuff." We were like, "Can we take this?" They were like, "Sure, if you want it." And so, we took it and immediately blew it up, and so that attitude of saying that every problem is our problem and radical accountability and ownership mentality helped us find opportunities that maybe the business wasn't explicitly asking us to solve, but we were able to triangulate why it might be important for the business for us to solve it. When you do that, we look hungry, so let's keep feeding us, right?

**Lenny** (00:00:48):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard win experiences building and growing today's most successful products. Today, my guest is Chris Miller. Chris is VP of product for growth and AI at HubSpot. Chris started as an ICPM at HubSpot where he helped create their early growth team and as you'll hear, shifted HubSpot towards one of the most successful product-led growth businesses in history. Seven years later, he leads both their growth and AI teams and advises founders on product-like growth and growth strategy in general.

**Chris Miller** (00:04:19):
I'm so excited to be on the podcast. Thank you, Lenny, for having me. This will be a lot of fun.

**Lenny** (00:04:24):
A huge thank you to Kyle Poyer for introducing us. I've heard so many great things about you from so many great people, and so I'm really excited to be chatting and I wanted to start with your very unique role that you're in now at HubSpot and it feels like it might be a sign of things to come for product leaders. Your title as far as I can tell is VP of product of growth and AI. Can you just talk about what that is and how growth and AI relate in the context of HubSpot?

**Chris Miller** (00:04:54):
I've been leading PLG at HubSpot for several years now, and I recently took on the AI leadership role. It's a special place to be in and that I get to help lead HubSpot in terms of how we should be thinking about building the foundational technology to create AI-powered experiences and then also lead the strategy of how we leverage those experiences to help that B2B business builder be way more successful using our platform than they might've been in years past. So, it's a really cool intersection point between those two things. There's a lot we can do there.

**Lenny** (00:05:33):
One thing I took away from what you just shared is that you are given these two teams to lead, which aren't necessarily connected, but I think it tells me that you're doing a great job at HubSpot and I'm going to try to pierce through your modesty and I'm curious, what is it that you think you've done really well or been successful at that got the leaders at HubSpot to decide to give you this other team that feels like an incredibly important initiative in this time of AI?

**Chris Miller** (00:05:58):
So when I joined HubSpot in 2016, it was definitely an element of timing that really worked in my favor. It was maybe like a year or so after HubSpot had launched their free CRM, which was a big strategic play for them and for us, excuse me, at the time, and it was meant to be disruptive, but I don't think that there was a fully formed perspective on what was going to happen after that. How are we actually going to get leverage and enterprise value out of this sort of big, enormous piece of free software we just put into the universe? And I think the pedigree of product manager at HubSpot at that time was also a bit different. There were folks who maybe started their time at HubSpot in support, and so intimately familiar with the product and with customers. Some of these people had closed thousands of support tickets and my background was a bit different.

**Chris Miller** (00:06:57):
I was actually less of a feature PM and I was sort of more of a growth PM in my DNA, and so I sort of looked at this through a completely different lens and I guess I understood that what we were trying to actually do was product-led growth, but we didn't really have the shared vocabulary to call it that. And so I think to answer your question, I think I was just willing to take some risks and really push for the things that I believed made sense even though maybe based on the titles that I had at the time, I wasn't sort of inherently given a seat at the table and really pushed my away into some of these conversations and then was eventually invited to them. And so, just always had an interest in driving a strategy that was a click or two higher than maybe what my immediate team was focused on and was always curious about how other parts of the business functioned.

**Chris Miller** (00:07:51):
I used to spend a lot of time sitting on the sales floor, just going into the other buildings and talking to other folks, working on different parts of the business, and that's part of maybe the serendipity that I miss about being in person, which is that you might just discover something from having a casual conversation with someone at the water cooler. You're like, "Oh, that's an interesting problem. I think my team can help with that," so you absorb a bunch of context around how pieces of the business are connected and you can start to really widen your aperture in terms of the size of opportunities that might be in front of you that maybe you would've missed if you would've been so heads down on execution work. And so, if I had to guess how people might talk about that, if I wasn't in the room, maybe they would cite that, but it's tough to say.

**Lenny** (00:08:34):
Hard to do those serendipitous watercolor chats in these remote hybrid times, huh?

**Chris Miller** (00:08:39):
Yeah, everything's so scheduled and tightly scheduled and you're bouncing from Zoom to Zoom and obviously HubSpot has embraced hybrid and there's a ton of benefit to it. In fact, I was a new dad when I came back to work and my son wasn't in daycare, and so it was so cool to just be able to pop out in between meetings and play with him for a few minutes just to go back and you don't get that when you're in the office all day. So definitely a lot of upside, but certainly you got to be a little bit more creative in terms of that serendipitous knowledge sharing, the osmosis learning, and just context sharing that happens more organically when everybody's sharing the same physical space.

**Lenny** (00:09:17):
You talked about how some of your early success was taking risks and being in meetings maybe you shouldn't be in. Is there an example or a story that comes to mind of doing that where you kind of took a risk early kind of in being a PM at HubSpot and/ or something that worked out really well, surprisingly?

**Chris Miller** (00:09:33):
This is a funny story. For anybody at HubSpot listening, I apologize in retrospect for this, but-

**Lenny** (00:09:40):
I'm excited for this.

**Chris Miller** (00:09:41):
There was a time where we were having a lot of debates around pricing and packaging, and we'll get into this, but our go-to-market model and sort of where we play in the addressable market created some complexity in the sense of we're serving different parts of the market simultaneously with the connected unified platform. And so, how do you think about packaging and go-to-market? And we were trying to just figure out how to simplify, simplify, simplify. And at the time I was an IC, individual contributing PM, so who am I to have a point of view on pricing and packaging? But the person I was working with, my designer, her name's Mariah Moscato, she's in product now, she's excellent, we were part of a triad and we both had a similar school of thought in terms of what the pricing packaging could be.

**Chris Miller** (00:10:33):
And we were over in Dublin where we have our European headquarters and there was a party happening at the Guinness sort of storehouse, and I don't know that we were exactly on the guest list, but we figured out a way to get into the party and we ran into the COO at the time and out of the blue I think he had asked us what we thought about pricing and packaging and it was sort of one of those funny you should ask moments. And so, we ended up kind of pitching in the midst of pints being sort of handed every which way you could turn this vision for a completely different way we might approach pricing and packaging, and he was pretty intrigued and he said, "Why don't you come to the next executive meeting and pitch us on it?"

**Chris Miller** (00:11:22):
I think that meeting was maybe a couple of weeks away and so we looked at each other and we were like, "Uh-oh," not exactly what we expected in terms of, I think people welcoming maybe a contrarian point of view at that moment in time. And so, we sort of were invited into this meeting with folks that we generally don't get to spend a lot of time with to pitch this thing that swam a little bit upstream and we ultimately didn't go full steam ahead down that path. I think a lot of elements of what we pitched have made their way over time into HubSpot's pricing and packaging, but it certainly I think opened the door for us and for me, speaking for myself, certainly for me to be welcomed back into that room in the future and to be able to contribute ideas towards important decisions.

**Lenny** (00:12:09):
I love that. It's another example of serendipity and just running into people. Also, I think it's a really good example of just how important it's for PMs to be proactive and think ahead and not just rely on people coming to you, asking you for your advice and getting invited to rooms. I feel like so much of success in the product leadership role is just suggesting great ideas, being ahead of where people are and having the answers. You have the answer right there in the moment because you did the work ahead of time. Is that something you find as well that ends up being really important?

**Chris Miller** (00:12:42):
Yeah, one of the traits that I look for in PMs that I hire onto my teams, and also when I think back to the people that I've learned a lot from working with over the years, one of the common behaviors or traits is relentless curiosity, this insatiable desire to understand things and a lack of fear in admitting when they don't understand things and being uncompromising and getting the answers so that they do understand. And I think if you can bring that to the table, it's much easier to have an outsized impact on whatever or you're a part of or whatever mission you're working on or whatever team you may be a member of.

**Lenny** (00:13:30):
Are there any other traits on that list of traits you look for that you think are really important that maybe other people don't focus on?

**Chris Miller** (00:13:37):
Yeah, relentless curiosity is probably my number one. My number two would probably be resilience, specifically if you're working in growth. I think if you're doing growth, right, if you're doing product-led growth the right way, then you're trying to balance the science and sort of taking a somewhat hygienic approach to validating assumptions and hypotheses with being really ambitious and really pushing for the things that are going to have massive impact for your customers at the end of the day. And when you're doing that, you're going to fail more than you're going to be successful along the way. And if you're not resilient, that can be really demotivating. I think there's a stat that some growth person put out there years ago, which is that on average only 20 to 30% of experiments of growth team runs might be successful. So, that means 70 to 80% of the time you're, you're not putting numbers on the board and you're extracting learnings hopefully that you can apply to the future.

**Chris Miller** (00:14:43):
But I think if you're not resilient, what I've seen happen is you end up sort of grasping for a win, which can sometimes look like making bets that are too small and too insignificant to matter. If your sort of primary modality of product-led growth work is experiment-driven product development and you're hitting more than like 30, 40% of the time, you're thinking too small. And so, that resiliency piece is certainly important in my mind. I think coachability is another one in the sense that I still think that the sort of subcategory of growth product management is still fledgling compared to PMs working on platform features. And so, even when I'm interviewing folks, I'm not necessarily looking for 10 years of experience doing PLG. I think that's mostly an unreasonable ask, but it can certainly be taught and even if you do have some experience doing PLG work, it's important to know that what that work is going to look like is going to potentially vary in a meaningful way from shop to shop.

**Chris Miller** (00:15:49):
And so, being coachable and adaptable to whatever the context is of the business or problem space that you're working on I think is an important trait that I look for in PMs, and then creativity is so important too. Valuing simple solutions to really hard problems, I think if building the next super sophisticated widget is the thing that gets you out of bed in the morning, growth might not be for you, I think the best growth product leaders and growth minds that I've worked with over the years or have had the privilege of learning from over the years, I think the thing that I noticed about them is they're almost ambivalent to the solution and certainly ambivalent to how complex a solution may or may not be. And taking little to no pleasure or pride in the complexity of a solution so long that it delivers the outcome that the business and your customers need, I think is a really cool trait, and I kind categorize that under creativity.

**Lenny** (00:16:53):
You mentioned this phrase, relentless curiosity, and it made me think about a story I read about you where the way you got into product management was you were at some startup and the founder was just like, "I've read that the cure to all our problems is going to be hiring product manager," and you heard that and you googled, what is product management, and then you asked them, "Can I do that?" And that's how you got into the role. So first of all, is that true? And second of all, what's your advice to people trying to get into product management and any lessons from that experience?

**Chris Miller** (00:17:22):
So first, yes, that is 100% true. That is how I stumbled into product management. So, I appreciate all the folks who took a shot on me back then, but this was at a time where I would say product management even as a function was definitely not ubiquitous across tech. There was, at least in the world that I was in, a lot more of a standard waterfall approach to building product with a lot of middle layers and engineering managers and really no one who had the job of owning the problem from a customer's point of view. And so, there wasn't a ton of content out there. There weren't even a ton of people in the city at the time that I could really talk to sort of learn, and so a lot of what I did was scrape my knees through the first years and a lot of painful trial and error.

**Chris Miller** (00:18:08):
And then eventually I think there's a lot more energy and an interest around the trade craft and the function, and so I think it's much easier today for someone to learn the fundamentals of product management without necessarily needing to do it via trial by fire. My advice to folks who are interested in breaking into product management specifically is focus on a few things. One, focus on structure. I think there's usually a lower barrier to entry to do product management at a smaller shop, which they might not have as much access to the best talent out there, but I think what you may often give up in those instances is structure to your own sort of professional development and formal training and education and potentially even the opportunity to work for people who are truly battle tested and have seen the movie several times and can actually wisdom share because truthfully, it looks different in every company, and so it is one of those functions.

**Chris Miller** (00:19:13):
I do believe that taking a truly academic approach towards upskilling has fairly diminishing returns because it's tough to field curveballs in a classroom. And so, choosing where you want to break in is almost as important as choosing that you want to break in the first place. Thinking about who you're going to be reporting to, thinking about what's the track record of success for people at that company, breaking into product management, trying to think five years in advance and work backwards, I think are all sort of important thought exercises along the way. I would also say that if you're already at a shop where you are working at a different function and you're sort of product curious, go talk to the PMs, literally I say go reach out to a PM and ask how you can make their day easier.

**Chris Miller** (00:20:01):
Figure out what you can do in your spare time that they can offload to you and do a little bit of volunteer labor, even if that's just shadowing because I think just getting that context and understanding the sort of rhythm of how a team ideates and defines problems and prioritizes and ship software is the experience that's going to be the most important because a lot of product management is also managing personalities and figuring out how people want to work with you and figuring out how you work for them. And so, just getting that hands-on experience or at least direct sight-line into the day-to-day of a team is really important because the extent to which you can understand their problem space and understand the things that keep them up at night, you can be valuable, and then at the very least, what you get out of it is hopefully an advocate or a sponsor at the end of the day who is willing to gamble some professional and political capital on you to get your foot into the door even though you might not have any formal experience on your resume.

**Lenny** (00:21:04):
There's so much stuff that super resonates there. One is that I always think of the bare minimum job of a PM is just to be useful to people on the team and help them do better work. If you do that alone, people-

**Chris Miller** (00:21:15):
Bring the donuts, right?

**Lenny** (00:21:16):
Bring the donuts, exactly.

**Chris Miller** (00:21:19):
I must be old, I don't know that anybody uses bringing the donuts now anymore.

**Lenny** (00:21:22):
No, we had Ken on the podcast, we talked about it. We asked, what is the digital version of that when everyone's working remote? I think that's something that even if you're a brand new PM you come across soon enough. And then the other piece there, I really love this metaphor of scraping your knees because I find that to be so important to becoming a PM is you think you could just read these things, take some courses and you got this, and you're not going to mess up, but I find that messing up is so important in helping to learn to do the job because like you said, there's relationships and people and changing plans and leaders, and it's just like you're not going to get it right and you learn how to deal with all these things by messing it up.

**Lenny** (00:22:01):
So, I super agree with that, and even though you said it's easier not to learn to be a PM, it's still I think important to scrape your knees a number of times for you to actually learn to do the job. Along those lines, what did you find was most helpful to you to learn the craft of product management in the first few years? What do you think back to like, "Oh, that was really helpful," other than just doing it messing up, sometimes getting it right?"

**Chris Miller** (00:22:27):
So, my first product management job/mission was working on a B2B2C product, and there's a lot of unique challenges that came with that. Our customer was not the end user of our product. We sold into institutions who then white labeled our product and then resold it to the end customer. And so at the end of the day, our customers own the relationship with the end user and not us, and so-

**Chris Miller** (00:23:00):
... own the relationship with the end user and not us. And so, the challenges that that created were that there was a lot of distance between us and the voice of the end user. And we ended up building a lot of things to satisfy the buyer and the customer, but not necessarily the end user. And that's challenging because you don't necessarily know whether you're building something to get a contract signed, or you're building something that's going to delight the person using it at the end of the day, or provide magical value. And so, I think I probably shipped a lot of bad product those years, if I'm being completely honest. I don't know that I would look back at what I shipped back then or what we shipped back then, and say they were the best possible solutions or best possible product.

**Chris Miller** (00:23:47):
It wasn't until I got my second product management job where it really was an inflection point, where I was like, "Oh, got it. This is what this is supposed to look and feel like."

**Lenny** (00:23:57):
Where was that? Was that with Keeper?

**Chris Miller** (00:23:59):
I was working at a fitness technology company, and the person who really I would say changed my entire paradigm of what product management is supposed to be, someone I know you know, Fareed Mosavat, who I believe was on the pod-

**Lenny** (00:24:17):
Ooh. Absolutely.

**Chris Miller** (00:24:17):
... last October. Shout out to Fareed if you're listening. Fareed is a good friend and mentor, and he really helped me level up. And what was interesting about those years is it was the first time I'd really gotten to work on a product where it was a freemium B2C run-tracking app. And so, we spent a lot of time talking to users directly, and a lot of guerrilla user research techniques. Literally, sometimes going outside and just talking to runners in passing to understand what were the challenges in finding motivation, and why do they choose running assistance, running applications in the first place? And so, just that having that deep connection to the customer and not feeling like you're being kept at arms' distance was eyeopening. I was like, "Oh, I didn't know that it could be like this."

**Chris Miller** (00:25:12):
And then, the second thing that we had at our disposal that changed the game for me was access to a huge user data set. And so, having data at scale to drive decisions, being able to know that if we make a change, we can prove causation from a business impact standpoint or a customer delight or engagement standpoint. And so, it was almost like I didn't realize I was blind until... Or you didn't realize you weren't seeing in color. It's like that scene in The Wizard of Oz where they land on Oz, and all of a sudden, everything's in Technicolor. And you're like, "Oh, my gosh, I can actually make informed decisions about what I'm shipping."

**Chris Miller** (00:25:56):
And having a level of rigor around that and really being forced to articulate a hypothesis and have a point of view on what the outcomes might be before you actually build something, were all sort of, I would say, behaviors and just philosophy around product discipline that I learned from Fareed and that group of folks that I worked with closely during those years. And that was, I think the... I consider that to be when I really became a product manager.

**Lenny** (00:26:30):
There's two things I want to highlight there that, again, super resonate. One is just whenever I talk to customers, I'm like, "Why don't I do this more often?" Because every time it's like, "Wow, I had no idea how big of a problem that was. Why don't I do this all the time?" And then, you don't again. And then, you do it months later and you're like, "Oh, my god, I learned so much again." And so, I think if you're listening and you're just like... Maybe just go talk to a customer today.

**Chris Miller** (00:26:55):
Talk to customers, and we also learned a lot from talking to people who we wanted to be customers but were not, right? And people who had either broken up with our product or evaluated it and never fell in love with it in the first place. And so, I think every PM struggles with time management and it feels like you need 60 hours in a day to get through your weekly checklist, or 60 hours in a week, excuse me. But finding time to just talk to people. Even today, I have a lot of friends who are entrepreneurs or small business owners, and some use HubSpot, some don't. But I usually tend to really enjoy my conversations with people who decided not to use HubSpot and to really try to unpack what drove that decision.

**Chris Miller** (00:27:40):
Was it as calculated, as I think sometimes we can all maybe assume that some of these decisions are? And then you often learn that they're sometimes kind of emotional, really instinctual and visceral and maybe connected to brands more than they even connected to product. And there's a lot of things that I think when you're in the proverbial digital conference room with your team, trying to understand what makes your users tick, you're just like, "We're actually just..." We're illogical humans at the end of the day at our core, and that all rides on decisions people make in the day-to-day. And it doesn't change, necessarily, when they're engaging with your product. As much as we love it to be perfect science, so that we can moneyball the system, if you will.

**Lenny** (00:28:23):
It reminds me of a story where we were doing some user research on a booking feature with an Airbnb. And we went to Paris to do these really in-depth user research studies. We were behind one-way mirrors and all that stuff. And we were trying to figure out why hosts weren't connecting Facebook to their account. This is like, I don't know, five, six years ago. Because it gave them so much access to where their friends are traveling and reviews and all these things. And especially, in France, they were just like, "I don't trust Facebook." And this was before it became a big thing in the US. They're just like, "I don't trust... I don't want them to have any of my data." "But look at all this power you get." They're like, "No, I don't care. I don't trust it." And-

**Chris Miller** (00:28:59):
Yeah, that's why talking to customers is so... You could have all the usage data in the world, that's going to tell you what's actually happening in your product, but it doesn't tell you why. It will never explain the why behind a behavior that you can track through events firing. And so, that's why that sort of proximity to the customer and directing that sort of relentless curiosity towards the qualitative stuff is so, so important because you just learn things that are just sometimes really unintuitive or are blind spots because we're often not the people we're building product for.

**Lenny** (00:29:35):
Absolutely. I want to shift talking about HubSpot the business, but one more last thing I wanted to highlight from what you just shared, which is a really good insight is you shared that your biggest inflection in your career was a manager, Fareed in this case, who helped you learn the craft and develop your skills, and that's the exact experience I had too. Just one specific manager changed everything for me. And that feels like a recurring theme to a lot of people, just having one person that really spends the time to help you learn and correct you when you're making mistakes and all that. So, if folks are wondering maybe why am I not learning enough or why is my care stagnating? See if you can just find... Easier said than done, but oftentimes it just takes one person to change everything.

**Chris Miller** (00:30:15):
It gets into sort of a conversation about the difference between a manager and a mentor, versus a sponsor and an advocate. Mentors are great, don't get me wrong. I have a ton of people that I would consider to be mentors, but when I think about the people in my life, who... The time that they donated to me, the time that they volunteered to me and for me, calling them mentors, I think sells what they were very short. And I would actually describe those folks as being sponsors and advocates, people who were willing to put up capital, whether that's professional, social capital to bet on you.

**Chris Miller** (00:30:56):
I mean, truth be told, when I interviewed with Fareed that first time, I think back to the interview and I think I bombed it. I actually don't think I would've hired me back then. And I remember the answers I gave to some of those questions, and I think they were good, but I don't think they were certainly great. And I imagine that there was something in there where the decision maker, who was Fareed said, "I think I can make something out of this." And I think being willing to invest in someone and finding people who are willing to invest in you is what really matters. And finding people who are willing to, again, put something up for you, whether that be whatever kind of capital it is. When I think about true gasoline on the career fire, it's finding mentors, but it's also finding sponsors and advocates.

**Lenny** (00:31:48):
Is there anything that you think you did right to help find mentors and sponsors and advocates for people that are thinking about, "Hey, I need this. How do I help myself in the same way?" Is there something you did that helped people get excited to help you?

**Chris Miller** (00:32:02):
Something I think I certainly continue to work on, but really, putting ego aside and embracing not knowing stuff and embracing not being good at stuff, and not feeling self-conscious about that and letting the desire to be the best at something or at least be great at something overpower the fear of being inadequate at something. And I played sports growing up, and so I like being coached. I can take hard feedback, and I like it because if I get better feedback than the people I'm competing against, I think I can beat them over time if I work hard enough.

**Chris Miller** (00:32:42):
And so, I think just taking that mentality with me into product management, I think has helped me build bridges with people who don't owe me anything, right? People who don't necessarily need to be invested in me at all, but who might get delight out of it somehow. And I don't know exactly how that works and the calculus that goes on in folks' brains, but at least what's within my control is how I can show up in the context of those relationships and really embrace even the hardest, ugliest feedback and hope that I can extract something from it that'll make me better at the end of the day.

**Lenny** (00:33:22):
I love that advice. Makes me think about Jules Walter's advice, which I've referenced many times on this podcast now, where his tip is when people are giving you feedback, just be like, "Thank you so much for that feedback," even though you're melting inside and just completely disagree with what they're telling you.

**Chris Miller** (00:33:40):
Yeah, shout out to Jules. Jules is also someone who has been generous with me in the past in terms of giving time when I've needed help with stuff. Also, a great episode you did with Jules.

**Lenny** (00:33:51):
So, many people have said what you just said about Jules, about how helpful he is been to them. So, clearly, a class act to that guy, maybe we'll have to bring him back.

**Chris Miller** (00:33:59):
Would love that.

**Lenny** (00:34:00):
Yeah. V2 Jules. So, let's shift to HubSpot the business, which is a pretty incredible success story. From what my notes, it's worth something like $30 billion now as a business. It's been around for 17 years. Still growing, I think, something like 30% year over year. And most interestingly, Okta put out this really interesting report recently where they looked at their data of what tools people are using to authenticate with, and they showed that basically HubSpot is maybe the fifth fastest-growing software product in the world. I don't know if it's true, but feels true because all the other companies make sense there. So, you don't have to confirm or deny this, but clearly things are going great at HubSpot. I'm curious just what makes HubSpot so special and unique and successful that's specifically unique to HubSpot versus other companies?

**Chris Miller** (00:34:51):
There's a lot in there. I can speak to the things that have resonated most deeply with me in my time there. The first is legitimate customer obsession. It's not marketing, it's legitimate, right? I've witnessed fierce and passionate debates internally that the root of what the people in the debate were really trying to unpack was what was the best thing for the customer. And so, really having that be central to our dogma and how we think about the business and why the company exists in the first place, really walking the walk there is something that I don't know that that's true everywhere.

**Chris Miller** (00:35:39):
I mean, I've certainly worked at places where that hasn't been true, and there's a lot of factors that can lead to those trade-off decisions at times. Like is this the right thing for the business, the right thing for the customer? Being really challenging. I think just sort of having that customer centricity really baked into the DNA of the company makes those decisions, maybe not easier, but at least you can have more conviction around the why behind the decision at the end of the day. Another thing that I think makes HubSpot-

**Lenny** (00:36:07):
Before you actually move on to the next one, I want to spend a little time on this one because I think people hear this and they're like, "Yes, okay, we're going to be customer obsessed." And then, you have to make these hard decisions. Look at this experiment, it's going to grow our revenue 1%, but it's not really going to make the customer's life easier. How do you actually make this real? And there may be an example where you have to trade off growth versus we need to make sure the customer is getting what they need or making the customer happy to make it a little more real even.

**Chris Miller** (00:36:34):
One, I think that's a really fantastic, maybe not counterpoint, but thing to call out. My point of view here is that oftentimes it's a function of what's the time horizon that the company uses as their sort of baseline for assessing decisions? And typically, when you're making decisions that could be described as hostile towards your customers, but a net positive for the business, you're probably not thinking long-term enough, right? Because there's no possible way, unless you have completely cornered a market and there is no competition whatsoever, that you could continually be hostile towards your customers and grow, right? At some point, that's going to catch up.

**Chris Miller** (00:37:25):
And so, oftentimes I think it's the tension of what do we need to do in the short term to survive? Versus long-term, where are we going? What's the path that we're actually charting? Is I think the true tension. But if you're making decisions that might have lasting impact that are customer hostile, I think that's a really dangerous path to kind of go down. And so, having, I think, the discipline or the bravery or the courage, whatever, to I think focus on not necessarily tomorrow or the day after, and really think about two, three, four years from now, what are the outcomes we're trying to drive and what are the decisions we need to make in the interim that are going to lead to that outcome? If you stick to that sort of framework, or first principle is a better way to describe it, then I think you'll often end up arriving at the conclusion that doing the thing that's right for customers at the end of the day is the right decision.

**Lenny** (00:38:24):
Is there something in the way you operate that helps you systemize that in your experiment plan or product specs or experiment results? Or is there a story of something where you just shipped something that shows this customer obsession to make it even more concrete for listeners?

**Chris Miller** (00:38:42):
There's definitely structure you could put around customer centricity. And I think a lot of it for growth at HubSpot and the teams that I lead, it's around forcing specificity of language. So, for example, you look at a lot of standard documentation for features or experiments, whatever, and one of the first things, it's like outline the problem. I don't know that we even talk about problems without a qualifier. Are we talking about a business problem? Are we talking about a customer problem? Are we talking about an efficiency problem? Describe the nature of the problem and parse it out. Because generally speaking, if there's a business problem, you might do the thought exercise of asking, "Well, why hasn't that problem solved itself? What's the actual customer problem that is leading to the downstream negative thing that's happening to the business?"

**Chris Miller** (00:39:34):
And if we can actually create some daylight between those two things conceptually, we can avoid making the mistake of trying to solve a business problem in a way that leads to a bad outcome for the customer at the end of the day. And I think, also, creating a system that makes it easy for PMs to call out assumptions that they might be making. So, if we do this, what would you predict to be some of the sort of derivative downstream things? And if we can call those things out and just keep asking why, why, why, to sort of justify some of the direction you want to go in and then keep asking in what, what, what, in terms of what's the sort of true blast radius and domino effect of these decisions is the approach that we take at HubSpot, in my teams at least.

**Lenny** (00:40:23):
Awesome. Okay. So, I cut you off in this one bullet point so far. So, let's keep going.

**Chris Miller** (00:40:29):
Yeah. So we're talking about the things that make HubSpot special. So, customer obsession is definitely one. I think where we play in the market, too. Being a company that has been comfortable staying in the mid-market, SMB mid-market space, and resisting the temptation to try to crawl up into enterprise software, I think makes us special. And one of the things that's actually really straightforward, which is that a lot of enterprise software companies, a lot of your revenue is tied up in a small subset of customers. And I think what can happen there is if those customers decide that they want you to build something and they're willing to threaten their business over it, then you'll end up building it. And is that necessarily the thing that is going to serve all your customers best? Probably not. Are you going to end up having to build and maintain bespoke software for one customer? Probably.

**Chris Miller** (00:41:21):
And don't get me wrong, I think there's a lot of product folks out there who enjoy that modality of work, I'm not one of them. And so, by playing in the mid-market, it means our revenue is distributed more evenly across our entire install base, which means that there's no single customer who can hold us hostage, really. But what that does is with great power comes great responsibility. I think what that does is the forcing function of ensuring that the decisions that we make are a net benefit for the largest swath of customers possible. And I think it really is the guiding light behind some of our decisions around connected experience and usability and user experience. And so, playing in the mid-market, I think affords us to be able to do that. So, I think that's another thing that makes us special for a company of our size.

**Chris Miller** (00:42:10):
Culture is another one. And I won't get into the culture code. I think a lot of folks have probably read it. If not, go check it out.

**Lenny** (00:42:18):
I don't know if people have heard of that. What is that?

**Chris Miller** (00:42:20):
Yeah. Dharmesh, our co-founder, one of our fearless leaders, Dharmesh, one of the things he most famously did early on is he published the HubSpot culture code externally. You can Google it and find it anywhere. I think a lot of companies sort of replicated that over the years, but by being really open and transparent about the culture both internally and externally, I think one, it internally creates alignment and it gives everyone something to point to to enforce why did we choose to work with each other the way that we work with each other. I think it also helps in attracting the right type of candidates because we put it out there, we're sort of really open about it. If you don't like that culture, chances are you probably won't be super excited to work here. But if that's something that you're craving, and I think a lot of quality people crave a lot of the things that are sort of codified in our culture. Humility, empathy, adaptability, remarkability, transparency are sort of all things that I think people take quite seriously.

**Chris Miller** (00:43:19):
And so, being really open and honest about that. And being willing to sort of pressure test it on a regular basis, like is this still a company we want to be? We are growing really fast. What has changed? What conditions are still able to be supported with the culture we have codified today? What amendments might we need to make in terms of who we want to represent ourselves to be to our customers and how do we want to work with each other? And investing in that, hiring really good people that can help us scale that I think is something that makes HubSpot really special.

**Lenny** (00:43:52):
Amazing. I'm reading the culture code on the side here, and there's these little quotes that are really sweet. I really like this one, "Solve for the customer, not just their happiness, but also their success."

**Chris Miller** (00:44:04):
Yes.

**Lenny** (00:44:05):
Wise.

**Chris Miller** (00:45:17):
Yeah, there's a ton, but I think there's definitely a very legitimate school of thought around how culture can both contribute to inclusion, but also, be a headwind to inclusion. I think a lot of the things that I might associate with HubSpot culture are very much rooted in a specific period of HubSpot, right? It was probably a pre-pandemic period. It was probably a period where we were all working in the same physical space. And so, there's a lot of inside jokes. And sometimes the things are rooted in very specific quirks of specific individuals who may not even be at the company anymore. And so, if you're someone who's joined the company in the past two or three years and that flies over your head-

**Chris Miller** (00:46:00):
The company in the past two or three years, and that flies over your head. I think we have to ask ourselves, "What's the value of continuing to embrace these things?" And so I think what we've been doing over the years is taking inventory of the things that might have been considered part of HubSpot legacy culture and really trying to again, pressure test it. Does this continue to serve us today? And if not, we should be really comfortable of letting it go.

**Chris Miller** (00:46:24):
But one of the things that I think is super dope that we do is we do this thing called PEER Week, which was something that popped up during the pandemic and the TLDR is that it's like an event for product and engineering; where travel changed with the pandemic and people don't get to see each other in person as much, but there's a couple of weeks in the summer in June where we fly everybody in either if you're in North America, we fly you to Cambridge. If you were in Europe somewhere, then we fly you to Dublin and we spend a week together.

**Chris Miller** (00:46:56):
There's not a ton of focus on just classic productivity. There's a ton of focus on building connections and safety and just getting to know people and who they are as human beings, but also, damn I forgot how much I missed whiteboarding. It's actually being able to get in a room with a physical whiteboard of people and work on some stuff. And so this is, I think the second year in a row, or second or third I don't remember, pandemic years have really fogged the brain... That we've done it. And it's one of the things I look most forward to every year is getting everybody in the same city to just hang out.

**Lenny** (00:47:27):
I love it. I keep peeking at these highlights and they're really interesting. So we're going to link to this culture code also in the show notes if you want to check it out. But anyway, let's focus on how HubSpot grows. And there's kind of two parts, in my mind there's just like, how did it start and what worked really well. You're actually on the inaugural team, I believe, of HubSpot's growth team and things worked out. Well done. I'm curious maybe just to start what you think you did so right, early on in the history of HubSpot to help it grow into the behemoth it has become. What was kind of the early success elements that were key?

**Chris Miller** (00:48:03):
I would say the early years of doing freemium. And for the record, there's definitely an iteration of the growth team before I joined that, you know really like Brian Balfour was the person who I would say injected that first dose of PLG DNA into HubSpot. So shout out to Brian. I want to make sure he gets the credit that he's owed.

**Lenny** (00:48:26):
Yeah, we're going to have him on the podcast at some point. It's in the works.

**Chris Miller** (00:48:29):
Yeah, he's a legend. Brian's great.

**Lenny** (00:48:30):
Absolute legend.

**Chris Miller** (00:48:31):
And so after Brian had left HubSpot, it was a bit start and stop. And so when I joined and we sort of took another stab at it, I think there were a few things we did. One, in the beginning is we really had an aggressive mentality, an aggressive approach I think. And by we, I mean the team, the actual really small initial growth team. We tried not to be pedantic about where we were spending our time. And so we sort of tossed our mission and charter out of the window. We said, cool, maybe on paper we were, I think the sales tool, activation team. It was a very boutique mission and remit compared to I think a lot of the other teams at HubSpot's missions and remit at the time.

**Chris Miller** (00:49:21):
But even though that's what we were supposed to be working on paper, we were sort of like, if we find something that looks like an opportunity and no one else in the business is thinking about it, we're just going to try to fix it. We're going to ask for forgiveness rather than permission and start to call some plays.

**Chris Miller** (00:49:38):
And what that looked like was at the time, a very small percentage of, I think HubSpot's subscription revenue would be described as self-service, like people putting in their credit card and buying something. It was predominantly product driven leads like PQLs. And so we were literally sending everything to the sales team, which it was running revenue, but certainly opportunities for efficiency because it was the first time we'd really had a product at a price point that could be transactional and not a highly considered purchase. And so we were thinking about this and we were like, "Well, how does this work? Is there even a pricing page in the product that people could actually buy something?"And we found it, but it had been neglected. It was sort of like, I think no one was sort of committing any code to that repository.

**Chris Miller** (00:50:31):
So we approached a team who owned it and we were like, "Are y'all working on this? Is this an active development?" And they were like, "Nah, we're working on a bunch of other stuff." We were like, "Can we take this?" And they were like, "Sure, if you want it, take it. It's one less code base for us to maintain." And so we took it and immediately blew it up. We redesigned the whole thing focused on discoverability, how are people getting to this page, focusing on desirability, like how are we talking about the value props of the things that we're wanting to sell to customers to help them grow better. And then thinking about doability or usability, how do we actually just remove the friction that's standing in the way?

**Chris Miller** (00:51:10):
And so we did a mad dash towards this outcome we wanted to drive, and when we released it worked. It was actually a step function change in the way that the physics of the business and the funnel really looked. And I think that was probably a catalyst moment of everyone saying, "Oh wow, there might actually be something here." And so that attitude of saying that every problem is our problem and being willing to really take a mentality of like, I think radical accountability and ownership mentality helped us find opportunities that maybe the business wasn't explicitly asking us to solve, but we were able to triangulate why it might be important for the business for us to solve it.

**Chris Miller** (00:51:54):
And when you do that, I think the business, a business may get more comfortable putting more on your plate. Right? And so it's like we look hungry, so let's keep feeding us. And so over time our remit expands and there's other things that we think are opportunities to gain leverage for the business or deliver a delight to our customers in a more efficient way, and honestly in a way that they probably expected to engage with us at that point in time. It was quite odd that there were so many humans involved in every stage of the customer journey and some of our customers just like, "I just want to be able to try the thing and buy it if I want to be. I really don't want to be forced into a sales engagement." And so it was really kind of meeting the expectations of the modern software buyer in many ways.

**Lenny** (00:52:41):
It sounds incredibly important. Basically your team turned HubSpot into a very product led growth business, which feels very important in the history of HubSpot's growth. Would you consider what was there before where it was the beginnings of self-service, but they had to talk to a salesperson? Would you consider that product led?

**Chris Miller** (00:52:59):
Yes.

**Lenny** (00:53:00):
Okay.

**Chris Miller** (00:53:00):
Yes.

**Lenny** (00:53:00):
And so how would you describe what the shift was in terms of the way the sales motion and growth motion changed?

**Chris Miller** (00:53:07):
The go-to-market motions that we were working on definitely fit under, I think the broad umbrella of PLG, but I don't think the culture of the company was necessarily explicit about being a PLG company. I don't think that's the way we talked about who HubSpot was and trust me, there were a bunch of other factors in here. I definitely, I won't say that our team were the sole driving force behind that shift in our strategy and approach, but certainly the data that we were able to collect and the experiments we were able to run and the insights we were able to surface and the research we were able to synthesize... It gave us conviction to double down on it for sure. And that was definitely maybe the beginning of that inflection point for the company, but there was certainly a lot of other things that led to us wanting to become more product led.

**Chris Miller** (00:54:01):
Again, I think about it, I think any company is probably searching for ways to operate more efficiently. And if your revenue is so tied to go-to-market headcount, it gets really hard to scale the bigger you get. And so I think there's an innate desire to want to be more non-linear in our growth. And I think us arriving at the right place at the right time created sort of alignment around what the path forward could look like. If we want to live in that world, how might we get there? And I think that's where we really fit into the equation. It's like, "Oh, we invest in this team. If we invest in the type of work this team is doing, that's how we're going to build efficiencies over time." And it's also, we like that because it's in line with what our customers are already expecting from us.

**Lenny** (00:54:47):
And it sounds like you weren't like, "We need to be more product led." It was more just how do we get the sales process more efficient and the motion of growth more efficient and that emerged out of that.

**Chris Miller** (00:54:58):
Yeah, I mean, don't get me wrong. We were definitely like, we need to be more product led. And I think that's actually the nuance here. You asked would I consider what we were doing product led growth? And I think the answer is absolutely, but that's because a fallacy that people, a lot of, I think maybe early stage founders or folks who are unfamiliar with chronic growth or maybe only know about it from an academic point of view, maybe fall into the trap of is assuming that in order to be a PLG company you can use that interchangeably with being a fully self-service business or fully self-service go-to market.

**Chris Miller** (00:55:34):
I don't actually think that those things are one and the same. I think that most companies, at least the larger, more successful ones that have done amazing things and are cornering their market or category, that we would consider to be PLG companies have a bunch of humans working on really important things on their go to market, and it's more of a hybrid motion. And I think it's less about, again, being sort of myopic about your approach to PLG and having it being really rooted in principles that are, I think very kind of academic or conceptual in nature.

**Chris Miller** (00:56:08):
But more sort of being pragmatic and saying, "Okay, cool. Who is our customer? What is the product that we sell? How are our customers used to buying this thing? How would they prefer to buy it in the future that they would like to live in? What's the packaging of our products? How do our customers decide? Is it a top down decision or a bottoms up decision? How complex are our building and subscription terms is something that's going to be pretty transactional or something that's going to be fairly considered? How comfortable is our target market with the technology in our category? Are we competing against non-consumption? Are we competing against competitors in the same category?"

**Chris Miller** (00:56:48):
And if you actually answer those questions, and I think it may be obvious where I'm going with this, but based on the answer to those questions, the conditions on the ground might lend themselves to be more favorable to product-led growth and be more favorable to self-service, right? It's why there are companies that the value prop is just so... Like you don't need a person to sell you Loom. I use Loom and it's so intuitive that I can just decide on my own whether I want to buy it. You don't need a person to teach you how to use even Slack to some example. Like Slack is extremely intuitive. Right? Like you could throw someone in Slack and use a product in a similar paradigm and it can probably figure out the basics on their own.

**Chris Miller** (00:57:25):
There are certain products that don't necessarily check those boxes. And so I think what you can do is kind of take a more modular approach to PLG, and it's like based on how a customer in the best case scenario might go from zero to one when it comes to activation and onboarding, do we need to have a human involved in that process at all? Or as a backstop? If the answer is yes, then maybe figure out ways to have humans involved where your cost structure is durable or at least defensible. If that's not the case, then go take a PLG approach to it.

**Chris Miller** (00:57:59):
And so across our entire business, we've never taken a very pure, everything here for this line of business or this product line is going to be self-service without being able to defend and contextualize why across the entire customer journey this makes sense. And so yeah, we have customers who come in through the product led front door and kick the tires on the product on their own and activate on the product on their own. But then when it comes time to buy the product, they want to talk to somebody and there's legitimate reasons why, right? There are maybe IT and security concerns that they need to get somebody on the phone for. Maybe they're coming for a platform where data migration is a huge fear they have, and that's not something that's easy to do in a self-service environment yet. I think that's going to change over time. But today it's still kind of painful when you're doing rip and replaces.

**Chris Miller** (00:58:48):
And so to try to brute force that into a sort of self-service motion for every customer writ large would be solving for your business' desires, not necessarily solving for the customer at the end of the day. But we also sell into different segments of customers that are maybe digital natives but not familiar with products in our category. And maybe they're coming from not a competing product, but they're coming from a more rudimentary system like spreadsheets. I mean, I've seen customers using post-it notes to manage their.

**Lenny** (00:59:25):
[inaudible 00:59:25].

**Chris Miller** (00:59:25):
The deal pipeline, the real old school way, and that was sort of their locus of control for their sales team. Right?

**Chris Miller** (00:59:31):
And so there are use cases like that if you're a smaller team, you kind of have an acute understanding of the pain points that are like today's buyers that you need to put out. You don't have to deal with the burden of a huge data migration. And the person who's going to be in the CRM day in and day out is also the person who gets to make the final call on what CRM they're going to use. There's a ton of those customers that we never talk to in person, right? And that's awesome too. And so being comfortable with things not necessarily fitting into clean boxes and having conviction that a modular approach or a more hybrid approach is actually the way to optimize for the customer and the business at the end of the day is something that I think we embraced really early on.

**Chris Miller** (01:00:17):
One of the first metrics that I had was activation rate, but it was also how much demand am I sending to the sales team? And there was no turf war about that, right? It's like, oh, that's net positive for if people are able to get helped and a lot of the questions that they have cannot be answered with the product today, we should absolutely be proud to connect them with one of our awesome people in sales who can be like, help see if the solutions we offer are a good fit for them. And there are instances where people just don't want to talk to somebody, and our job is to make sure that there's a friction-free way for them to make that decision on their own.

**Lenny** (01:00:48):
Amazing. I think on the one hand, this could be a whole podcast is just talking about your PLG learnings, knowing... It feels like HubSpot is one of the biggest success stories of transitioning more and more into PLG, at least at that point. Even though you're saying it was PLG early on, it feels like a huge shift to the business. So I really like this framework you just shared of if you're trying to become more product led, just think about the zero to one from visit to activation and when does someone really have to talk to someone and how do we help them not have to talk to people in that moment? So either in that direction or just broadly, if someone was trying to explore how do we become more product led, what are the first couple steps and dives you would recommend they do to help them down that road?

**Chris Miller** (01:01:34):
First I would ask, why do you want to be product led? What assumptions are you making in terms of why being product led are going to be net positive for the business or for your customers? And I might even ask them to define what product-led means to them that we can get on the same page of what we're even talking about.

**Lenny** (01:01:52):
How would you define it? Do you have a rough, an answer to that? Just so people get a sense of what it probably means.

**Chris Miller** (01:01:58):
Yeah. At the highest level, it's like taking a go-to-market approach where your product job is to grow revenue and you use humans as a backstop and not the other way around.

**Lenny** (01:02:08):
Awesome.

**Chris Miller** (01:02:09):
And I think the key thing is that humans can be a backstop. There are moments where it's going to make sense for humans to be a backstop. One example that is I think is really normal, a hardship circumstance where a customer needs to end their relationship, right? Like every SaaS company deals with this. Some take a fully automated approach, but most usually have some sort of escalation path that will result in a human having to resolve this. It doesn't make them any less product led. I think every company at its core is having some humans behind the scenes interface with customers on things related to go-to-market. But I think once defining that and getting on the same page about that, I think you can learn a lot. And by the way, these are the normal conversations that I have with founders all the time. I'm actually an operator in residence at OpenView, and so I speak to a lot of their poor [inaudible 01:03:01], and this is usually the conversation that we end up having.

**Chris Miller** (01:03:03):
And I think what's always interesting is how different the sort of array of answers are when you ask that question. Some are like, oh, it's about top of the funnel demand. We want to be more product led because we want more leads, we want more signups. You're like, "Oh, okay." And that's a very defensible reason. There's a lot of data that shows that freemium products attract a lot more top of the funnel demand than sales led go-to-market products do. Right? Some, it might be a matter of constrained resources. We absolutely need to be more product led in the stage of the company because we simply cannot hire an army of implementation specialists and folks on the customer success outside of the house to help every single customer at scale, which is generally a byproduct of having a really large top of the funnel. And then there are others that are, it's about revenue efficiency.

**Chris Miller** (01:03:56):
And so when you can kind of articulate the outcomes that you want to drive, it helps triangulate where to begin. So if you are really focused on top of the funnel demand, trying to do self-service checkout is a silly place to start. And so just really doing the fun exercise of articulating why do you care about this? Why are you actually interested in this in the first place? If you do this, what would change about your business? What assumptions are you making? And when you can actually list those things out, you can map them to parts of the customer journey where there may be opportunity to be more product led if the company isn't there yet.

**Lenny** (01:04:34):
Awesome. Maybe a couple more questions along these lines and then I just have a couple more questions I definitely want to ask. When someone is trying to go in the direction of product led growth, A.K.A. more self-service, and I guess maybe let me just ask, is that sort of how you think about the equivalency of those two?

**Chris Miller** (01:04:50):
Sure.

**Lenny** (01:04:50):
Okay. What are maybe the most common mistakes they make that aren't as obvious?

**Chris Miller** (01:04:55):
I mean, the number one mistake is hiring a head of growth, giving them no resources and expecting them to pull rabbit out of their hat.

**Chris Miller** (01:05:04):
I feel like every PLG veteran has some joke that they tell about the poor head of growth who has no tooling, no engineering cycles, no designer, no access to data, and then are handed a really scary big number and told to go move it. I think that's a common mistake that has stood the test of time.

**Chris Miller** (01:05:28):
Another one is expecting really quick turnaround and thinking of it the same way you might think about hiring a sales, an incremental sales headcount, which is that you're expecting near term liquidity from that investment, but when you're doing PLG at its core, it's still R&D. You're still sort of planting seeds with the hope that over time this is going to play out in the form of durable pie efficient growth. But if you're expecting, you put a team on something and then you want that team to sort of have outsize impact, and sure there's going to be low hanging fruit, but I think just not having the patience to see the investment through and cutting bait too early is another, I think mistake some companies make.

**Chris Miller** (01:06:20):
And then I also think that bad data hygiene is the other one. So not having taken a beat to properly instrument their product, messy data, no real self-service way for people to access that data. Like having analyst bottlenecks can be a terrible position to be in. And so eating your veggies, getting your house in order from a data standpoint, I think is a crucial first step because if you can't actually measure what's happening, then like why?

**Chris Miller** (01:06:54):
And then maybe the last one is people giving up because they don't have enough data, right? They're like, we can't do PLG because we don't have this massive data set the way that HubSpot has or the way the Airbnb has. And it's like you can still do PLG, you just need to use different data. The way we think about data is that quant data is just another form of data. The same way experiment results are just another data point. You can learn a ton from just talking to customers. Like qual research is super-duper important, and so if you don't have data to tell you exactly what every single person is doing in your product in aggregate, you can still talk to 10 customers and probably get a clear sense of what's happening and why it's happening. That you wouldn't even get from the quant data.

**Chris Miller** (01:07:33):
So people getting demotivated or companies getting demotivated because they think they're too early to do PLG, you can still do PLG. PLG at its core is just having your product sell the value prop of what your business does, and you can still deliver on that without being able to stand up a very robust and sophisticated experimentation practice.

**Lenny** (01:07:53):
Kind of along those lines, but going even broader. Without disclosing trade secrets of how HubSpot works, how would you describe the loop of growth of HubSpot? In the words of, you mentioned Brian Belfor and Fareed, what is the growth loop of HubSpot either now or recently? Just a simple way to think about how HubSpot grows.

**Chris Miller** (01:08:12):
Our loops are less tactical. In fact, if I'm being brutally honest, I think loops are kind of hard to achieve in B2B SaaS. I think there's some examples of that, but I think some of the best loops come from UGC, user generated content. I think a lot of B2C community focused platforms can do loops really well. I think if it's B2B SaaS, it's hard to find things that get loopy. And it is me going, I think all my Reforge [inaudible 01:08:40] are going to be upset that I said that. But I think that's the truth.

**Chris Miller** (01:08:42):
When I think about the flywheel of HubSpot, I think it's more of a macro flywheel. And just to kind of lean into our own lingo, it's really attracting gage and delight. And so, one of the principles that guides our thinking and our strategy is give value before you extract value. And I think that was at the core...

**Chris Miller** (01:09:00):
Give value before you extract value, and I think that was at the core of inbound marketing at its inception, that outbound marketing was asking for something from customers or prospects before giving anything. And so at its core it's like, okay, yeah, if you give a little for free, people who are interested in sort of hearing the rest of how that album sounds are going to come and stick around for more. And so in our pre PLG days, it was content marketing and white papers and listicles and eBooks and things that people had to download that were really filling the top of the funnel. And that is just taking another form with PLG.

**Chris Miller** (01:09:39):
And so we intentionally put out a lot of free software. And the idea is that this software is not sort of gimmicky. It's not designed to run out of value on day one. It's actually designed so that our smallest customers can get some value out of it in a sustainable way. But if they're engaging with it deeply enough, they're going to run into the limits of what that value is. And if we've done our jobs and delivered what we believe we were supposed to deliver, then the decision to purchase becomes a no-brainer.

**Chris Miller** (01:10:10):
And if they're delighted with the experience of being a customer, they're going to become advocates, and they're going to become promoters, and they're going to tell their peers. Because what we also know is that a lot of small business owners and even medium-sized business owners take a lot of guidance from their community of peers. And sometimes that's a digital community, sometimes that's not. And so anytime we win an advocate through delivering an excellent customer experience, they bring more people into the top of the funnel. And so it's a really honest, and I would say an honest macro loop in the sense, but that's the way we think about our flywheel.

**Lenny** (01:10:50):
Oh man, this could be a whole other hour of a podcast just diving into this stuff. This is so good. You shared this interesting story that I wasn't aware of. So HubSpot's kind of known for content and SEO. You search for anything and there's always a HubSpot article about it. And so is what you're sharing here, essentially that was a big part of the early days, SEO, free content that drove people to the site and the product wasn't free, is what I'm hearing. And then it shifted to now it's a free product that anyone can use and that's what drives the top of funnel.

**Chris Miller** (01:11:21):
Yes, correct.

**Lenny** (01:11:22):
Amazing.

**Chris Miller** (01:11:23):
I can't give a specific number, but a large percentage of our revenue flows through the product. And it's not necessarily maybe where people ultimately purchased, but that's their sort of first conversion event with us. They were in the product, they liked what they saw, they spoke to somebody, and then eventually became a customer. And that is now a pretty robust top of the funnel for the company.

**Lenny** (01:11:45):
So I think this is a really interesting story of just starting with one growth channel of SEO essentially, content marketing and then shifting to something else. Is there any lessons from that experience for people trying to kickstart their growth of SEO versus this freemium approach? Is there anything there that just like this worked really well for us and you should probably try this, or SEO kind of runs out in this specific type of business?

**Chris Miller** (01:12:10):
I'll admit I'm definitely not an SEO expert. I've been fortunate to work with some of the best marketers in the world who I think are bonafide legends at this point in terms of what they've been able to achieve at HubSpot and building that lead and signup machine.

**Chris Miller** (01:12:24):
What I will say is being really aggressive about experimenting with new channels is so important, and diversifying your channel mix is so important because things can change overnight and that might disrupt your entire funnel. Like a Google algorithm change can have a massive impact. If you're reliant on app store optimization, a change in Apple's algorithm might have a massive impact. What we're seeing with generative AI, I think there's a lot of people losing sleep at night because it's unclear how this is going to impact SEO writ large. If that's what fuels your entire business is being on Google search result page, then what's going to happen in this new sort of world we're about to enter?

**Chris Miller** (01:13:15):
And so I think to the extent that you can not have your funnel be relying on a single or a couple of channels is really important. We're always testing new channels. One of the channels that we're spending some time experimenting with is this concept of microapps. And it's actually not a new concept for HubSpot. One of the first microapps you ever built was a... Maybe Dharmesh built this, the original one, but it was called Website Grader. And it was you put in your domain, and it crawled your site, and then gave you a set of recommendations for how you would optimize your site. And it was free. It was definitely a one trick pony. But what it did was it created an interesting conversation, which is like, okay, cool, now that you have this information, what are you going to do about it? And one of the things you could do is you could become a HubSpot customer and you can use our product to fix a lot of this stuff.

**Chris Miller** (01:14:06):
And that worked for us. It worked really, really well. And so we've done that play a few times and it's something that we'll probably continue to do. We have a bunch of these microapps. We have a brand kit generator, we have an email signature generator. We've experimented with a Build My Persona generator. There's a couple of ones that I can't talk about right now, but we'll learn a little bit about in a few weeks at Inbound. But yeah, microapps are an exciting new channel for us. And some will be successes, some will flop, and we'll probably sunset them. But being willing to fail in the pursuit of finding new distribution channels is also really important.

**Lenny** (01:14:44):
That's an awesome insight. Is there a place people can go to find these microapps that you all have built?

**Chris Miller** (01:14:49):
There will be soon.

**Lenny** (01:14:50):
Oh, mysterious. I also noticed Dharmesh tweeting about some AI projects he's working on. Is that related to these microapps? Or is that just him on his own time just doing fun stuff?

**Chris Miller** (01:15:00):
Very related to microapps. I would say ChatSpot is actually, and for those who don't know what ChatSpot is, ChatSpot is a bit of an AI copilot that Dharmesh built that has sort of been very positively received by both HubSpot customers and non-HubSpot customers alike. And so that's something that we're, wearing my AI hat, spending a lot of time thinking about, sort of what direction do we want to go in the ChatSpot.

**Chris Miller** (01:15:26):
But again, it was something that we put out in the universe to see what happens. And now it's like, oh, we're getting an interesting amount of signups every month. Who would've guessed that? I don't think that... That definitely wasn't on the roadmap a year ago. And I think being a 17-year-old SaaS company that can still operate with that sense of urgency and pace helps a lot to why wait to get consensus on a decision when we can put something out there and then see what happens and see what the data says.

**Lenny** (01:15:58):
Yeah, I was just going to say that it feels like it's such a win-win-win, including it's just a release for people on the team that have been there for a long time just to work on something totally different and new and just launch a new product.

**Chris Miller** (01:16:08):
Yeah, 100%.

**Lenny** (01:16:10):
I love that. Is there anything that just significantly accelerated growth in the last, I don't know, number of years that was like, wow, this really changed the game.

**Chris Miller** (01:16:18):
Covid. Covid was obviously challenging and awful on so many levels, but it was scary. It was super scary. We were all terrified. We didn't know what it meant for our jobs. My own sister, who also works at HubSpot now, she at the time was transitioning into hospitality and was two months into her job when she got furloughed because of Covid. So who knew what the world was going to look like and how it was going to impact businesses?

**Chris Miller** (01:16:45):
I think we were prepared for the worst, and we actually caught a bit of the Covid tailwind and a lot of other businesses did, because companies who never had to think about digital marketing all of a sudden had to, and it was urgent. It was a burning need for them to figure out how they were going to weather the storm. And I think one of the things that HubSpot did, and this is one of the sort of phrases we use internally, is never waste a good crisis.

**Chris Miller** (01:17:14):
And so, one of the things we leaned into was sort of goodwill pricing, and we lowered the price on some of our tools and created some temporary leniency around certain things. And just the removal of that friction ended up being a really interesting tailwind for the business and specifically for the business that I run, which is our starter business, our free and starter business, we really accelerated growth during that period, which was not... I think if you would've looked at my Bingo card in March of 2020, I don't know that I had that on the Bingo card.

**Lenny** (01:17:50):
I'm looking at the stock price in another window here and I could see what happened. That went great, and even it came down with the whole market, but it's coming right back up. With that, we reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Chris Miller** (01:18:04):
Yeah.

**Lenny** (01:18:06):
What are two or three books that you've recommended most to other people?

**Chris Miller** (01:18:10):
Truthfully, I don't read a ton of books. Got a one and a half year old. I also probably didn't read a ton of books before, but it's a nice excuse to have. That's why I don't have time to read today. But when I think of books that I think about a lot still, there's a book called Everybody Lies, and it's a book... I believe the guy who wrote it was a data scientist at Google. And part of the message is that everybody's a data scientist and really trying to democratize the idea of using data in your everyday lives to make decisions and demystifying the idea of data science. But the way he kind of does this is through comparing Google search data and what we know people to be actively looking for answers for, with sort of qualitative survey data. And people lie on surveys all the time for a variety of different reasons, but no one lies to Google because it's transactional. If I lie to Google, I'm not going to get what I want. And so it kind of really explores what it means to tell the truth and how honest we are with ourselves and with the internet. And so I really love that book.

**Chris Miller** (01:19:15):
The other book I really love is Chop Wood Carry Water, which it's like a parable about a young boy who wants to become a samurai. But the sort of message of the book is about falling in love with the process, especially the most mundane parts of a process of becoming great at something. And that's something I... It's a good reminder about patience, humility, and sort of taking things one step at a time. And I often reference Chop Wood Carry Water a lot.

**Lenny** (01:19:47):
Reminds me of The Score Takes Care of Itself, I think is the name of the book.

**Chris Miller** (01:19:51):
Yeah, yeah, I've heard of it.

**Lenny** (01:19:53):
Bill Walsh. Amazing. Okay. What's a favorite recent movie or TV show?

**Chris Miller** (01:19:57):
Oh, man. On Amazon Prime, I'm a Virgo, and it's a Boots Riley show. Boots Riley directed Sorry to Bother You. It just blew my mind. It's super surreal and funny and dark and it stars Jharrel Jerome, who I think he played one of the characters in the Netflix Central Park Five. I think he won a couple of awards for that too. And that was a show I watched recently where I had no expectations going into it other than I knew it was a Boots Riley show and was just enthralled. It touches on... It is a really cheeky way of touching on a lot of really important topics, but often hard to talk about topics and themes, and it's kind of delightful to get through it. So, I'm a Virgo. I just binged Barry from season one through four. Henry Winkler was spectacular. And then just came off of Succession, too. The theme here is I really dark comedies. Yeah, really, really dark comedies are kind of my thing.

**Lenny** (01:21:00):
And that first one was called I Am a Virgo, because I thought you were just saying you're a Virgo.

**Chris Miller** (01:21:04):
No, no. The name of the show is called I'm a Virgo. Yeah.

**Lenny** (01:21:07):
Amazing. I will check that out. Okay. What's a favorite interview question you like to ask candidates?

**Chris Miller** (01:21:12):
I think it depends on what level of role that they're interviewing for. I don't really interview as many frontline PMs anymore, but I used to really like doing case study questions and really random ones too. I'd be like, "Tell me how many people crossed the Longfellow Bridge in a week." And I could not care less what the actual number they arrived at was, but it's more for me to observe what's the array of data points that they can kind of start to collect in their mind to inform their calculus, and how close can they get to ballpark, and what's their defense behind their thinking. And then just the process of watching people's brains move in those moments is... You learn a lot about how they might operate as a product manager I think in those scenarios. I try not to overdo them, because I do think there's a lot of inherent bias in some of those types of questions. And so trying to think of things that are really relatable to anybody who might be looking to work on a team that I'm leading is I think a requirement there.

**Chris Miller** (01:22:23):
But I would say the other question I really like to ask is, if the people that you most recently worked with were in a room and you weren't there, how would they talk about you? One, it's because sometimes I will reach out and get references, and so the extent to which that might actually be part of the interview process is very legitimate, but also I think it is usually very clear whether the person is taking an honest and introspective and self-aware approach to answering that question. And I like to see people being really self-aware, because I don't think anybody ever comes in any situation perfect. I have a lot of rough edges to my personality that I think people have just learned to deal with over the years, but I try to be self-aware about them at the... If I can do nothing else, if I can't change them, at least recognize them and do what I can to mitigate the blast radius.

**Chris Miller** (01:23:17):
And so I think just getting a sense of the EQ of a candidate and their self-awareness is really important for me because at the end of the day, if you're in product, you can be the smartest person in the room, but if people don't want to work with you, you're probably not going to go very far.

**Lenny** (01:23:32):
Do you have a favorite life motto that you come back to or you share with other people?

**Chris Miller** (01:23:38):
The details matter.

**Lenny** (01:23:39):
And that's both in work and life, I imagine?

**Chris Miller** (01:23:41):
Yeah, the details matter. The details matter. I read a cool interview with the product leadership team at Stripe, and one of the things they talk about is for their product managers, they want you to have taste. And it was a really kind of controversial thing to say because it was like, "Oh, that is so subjective. Who gets to decide what taste is?" Maybe that's even biased to some extent.

**Chris Miller** (01:24:07):
And I think they had a super defensible answer about how they define taste, and taste in their opinion was to be so interested in something, it doesn't matter what that thing is, where you can go deep enough in it to have a strong set of informed opinions. And that's how they defined it. And they were almost ambivalent to what that thing that was, what the subject was. But having taste, having something that you were passionate about, that you have spent enough time learning and understanding and appreciating and critiquing and being frustrated with that you have a point of view that is potentially even polarizing is taste. Riding the fence is usually not taste. And so when I think about the details matter, that's almost like a nod to taste. Obsess over the details of something, whether that be art, music, product, film, whatever. I care a lot about that.

**Lenny** (01:25:11):
I love that. And that comes back to a lot of the things we've talked about of talking to customers, looking the data, actually having the firsthand information on what people need and what people want from your product.

**Chris Miller** (01:25:22):
Yeah, absolutely.

**Lenny** (01:25:24):
Okay. I'm just going to ask two more, and I'll let you go. What is a favorite product that you've recently discovered that you love?

**Chris Miller** (01:25:30):
I fell in love with golf right before the pandemic, but the pandemic really is when I lost my mind and was obsessed with golf. It was one of the few safe things that you could do outside that was social and less dangerous than getting a drink with your buddy at the bar. That's the joke. It's like men invented golf so they could go on walks with each other, and that's essentially what kind of drove the interest in golf. And I also was horrible at it when I first started.

**Chris Miller** (01:25:59):
And so I think also as you get older and maybe you get more established in your career, or I've been in a product-led growth sort of lane for a while. You almost forget what it's like to be really bad at something until you have a kid and then everything's new and you're failing every day.

**Chris Miller** (01:26:18):
But golf was a refreshing, consistent experience of frustration and inadequacy and just really embracing that and just waiting in it for a while knowing that it's just going to take cycles and time to get better and better. It was something I got really addicted to, and so I tried to play golf whenever I can, and most recently I bought a Garmin watch, and that thing is just magical. You roll up to the first tee box, you look at your watch, it knows exactly where you are, which golf course. Sometimes it'll even tell you which tees you're at, because in golf sometimes you're further back and sometimes you're further ahead, and it tracks your swings, it tells you distances.

**Lenny** (01:26:57):
That's insane.

**Chris Miller** (01:26:57):
It reads the greens for you.

**Lenny** (01:26:58):
Wow. I just want to play golf just to use that watch.

**Chris Miller** (01:27:01):
Oh my gosh, some of the guys that I golf with, a couple of them had one recently and I just was enthralled by it and I literally went home and ordered it that same day. And it's been the coolest product or gadget that I bought in a while.

**Lenny** (01:27:15):
Damn. I love it. And I was also thinking as you were talking about getting into golf connects back to your relentless curiosity and resilience that you look for in people that you hire. So clearly you have it yourself.

**Lenny** (01:27:27):
Final question, I believe you have a dog named Ferney, which is short for Fernet.

**Chris Miller** (01:27:31):
Yes.

**Lenny** (01:27:31):
Okay. So on that note, what is your favorite current cocktail, if it's not just a shot of Fernet?

**Chris Miller** (01:27:36):
The nightcap is always a shot of Fernet. Sometimes you might mix a little Coca-Cola with that. I think, where do they do that? Is that Spain?

**Lenny** (01:27:46):
I have not heard of that.

**Chris Miller** (01:27:47):
Or Argentina. I don't know. It's definitely a country that that's a thing. My wife has been really into really high quality margaritas, made at home, and we're big into Aperol Spritz in the summer, so I would say that that's usually what dominates the happy hour rotation these days.

**Lenny** (01:28:06):
I just had an Aperol. Is it Aperol? Aperol Spritz, right?

**Chris Miller** (01:28:09):
Yeah. I'm not good at pronunciation. It's probably one of those two.

**Lenny** (01:28:12):
I just had that for the first time. It's amazing. That's going to be my new go-to.

**Chris Miller** (01:28:16):
You had an Aperol Spritz for the first time recently?

**Lenny** (01:28:18):
Yes. I didn't know what that was.

**Chris Miller** (01:28:21):
That was like the zeitgeist a couple summers ago and then there, oh man. There's the other one too. The Negroni Sbagliatos are having a moment too. It's like a Negroni with Prosecco. I forget.

**Lenny** (01:28:36):
Ooh, that sounds amazing. There's so much knowledge to be gained in this podcast episode. Chris, this was incredible. Thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out and maybe ask you a question or two. And two, how can listeners be useful to you?

**Chris Miller** (01:28:52):
You can connect with me on LinkedIn. Shoot me a message. Christopher Miller. There's a lot of Christopher Millers. I'm the one that looks like me, works for HubSpot. I have a Twitter. I don't spend ton of time... X. I have an X account, but I don't spend a lot of time on the app, formerly known as the bird app, but I'm on Instagram @millsyjoeyoung, which is a nod to one of my favorite old monster films, Mighty Joe Young. And so yeah, I'm on Instagram a bunch, too. That's where you can find me.

**Lenny** (01:29:20):
Then I know two other things that you wanted to share. One is that you advise on PLG and things like that, so maybe talk about that real briefly. And then also you're hiring at HubSpot, or can people know about that?

**Chris Miller** (01:29:31):
I definitely do a bit of angel investing and advising companies on the side, and I really enjoy it. I think there's something really cool and awesome about getting to see fresh problems all the time and not necessarily being so laser focused on the sort of categories or verticals or target customers that you're dealing with for 40 plus hours a week. And so it's kind of refreshing to spend time with founders who are working on products in different categories and having different challenges at different stages of growth and being able to figure out how I can be a resource to them. And so if you're looking for, if that sounds interesting to you, you're a founder or head of product out there, definitely reach out and maybe opportunities for us to collaborate and maybe that can be a resource.

**Lenny** (01:30:21):
Cool. And then on the hiring front, any specific roles you want people to know about that you might be hiring?

**Chris Miller** (01:30:25):
There'll definitely be more roles opening up in the fall, but I think most immediately I'll be looking for a group product manager to work on the AI platform team that I'm leading.

**Lenny** (01:30:35):
What a role.

**Chris Miller** (01:30:37):
Yeah, it's a great role with a fantastic team and a space that might be a little important these days. And so if you go to the HubSpot job site, that role should be there by the time this podcast is live. That role should definitely be up there.

**Lenny** (01:30:50):
Amazing. Chris, thank you again for being here.

**Chris Miller** (01:30:53):
Lenny, pleasure. Thank you for having me. This has been amazing.

**Lenny** (01:30:56):
Bye, everyone.

**Lenny** (01:30:59):
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.

---

## [9/20] The ultimate guide to Martech | Austin Hay (Reforge, Ramp, Runway)

**Austin Hay** (00:00:00):
From 2010 to 2020, we had the golden years of deterministic matching where it was very easy to run an ad and understand with precision who installed the app. Maybe you didn't know their name, but you actually would know their IDFA and you could tie that to their PII. You can't do that anymore. So, what that means is these ad networks are becoming more complex, sophisticated, and interesting, right at the same time that it's harder for marketers to really understand how they're spending money. And so I am paying a lot of attention to how marketers make decisions with probabilistic data because most of the work that I'm doing now is actually saying, well, given that we don't have determinist data about a per certain audience or where somebody came from, how can I find other information that will create a model for 30% of the population and we can use that to extrapolate to a hundred.

**Lenny** (00:00:52):
Welcome to Lenny's Podcast, where I interview you world-class product leaders and growth experts to learn from their hardwood experiences building and growing today's most successful products. Today my guest is Austin Hay. Austin is one of the smartest people in the world on the field of MarTech, aka Marketing Technology. He's advised companies like Notion, Airbnb, Walmart, Postmates, Robinhood, even Pete's Coffee and Mars on their MarTech strategy and tactics. He's currently head of marketing technology at Ramp. Before that, he was VP of business operations at Runway. Before that, he was VP of growth at mParticle and the fourth employee at the Unicorn Branch Metrics. He's also a teacher at Reforge on this very topic of MarTech. In our conversation, Austin explains what exactly is MarTech, how it fits into your growth organization when you need to hire a MarTech person and what to look for plus his favorite interview questions.

**Austin Hay** (00:04:03):
Lenny. Thank you so much for having me.

**Lenny** (00:04:04):
We are going to get super nerdy today and we're going to dive deep into the very cool field of MarTech. How excited are you about us chatting about MarTech?

**Austin Hay** (00:04:15):
I'm so excited. Because it seems like you might be one of the first people in product and growth to talk about MarTech.

**Lenny** (00:04:21):
Wow, okay. That makes me even more excited. Yeah, it's something that I haven't fully understood and so I'm excited to dig real deep. So, let's start with just the basics. What exactly is MarTech and then what does someone who is in MarTech do?

**Austin Hay** (00:04:35):
Such a good question. Because marketing technology is like this very amorphous, cross-functional discipline that lives at the crossroads of product and growth and engineering and marketing. It brings together processes and systems from a wide range of disciplines. And I think really the way to think about marketing technology is it's a product manager whose specific role and focus is the system or the third party or first party platform because marketing technology can mean a collection of third party tools, which is a lot of people think, but as a company scales and grows actually it could include a collection of first party homegrown solutions that you build yourself with or in addition to third party. So, I like to think about marketing technology more as one piece is people and process and the other is the system and the platform. And that probably sounds pretty familiar to what a lot of product people think about their world as, and that's how I define MarTech.

**Austin Hay** (00:05:31):
And then you asked this other question around what exactly the role of somebody in MarTech, and maybe we'll talk about this a little later, but it's such a function of the size and the stage of the company that you're at. At Airbnb, I would say Dmitri who you might've worked with was the MarTech guide. He managed a lot of our Airbnb's, the first and third party tools. Airbnb at that size was, I don't know, maybe 800 people or so. And so it makes sense to have a function with product and engineering resources. A small startup for example, when I was working with Siqi, we were just talking about this at Runway, there was no such thing as MarTech. There was me and Tanner and Siqi standing up tools and using them because you just have to use the tools to get the job done. And so I would say on the spectrum of what is MarTech, you really have to look at the size and the stages of the company and as you grow you start to see it become more refined or pronounced.

**Lenny** (00:06:17):
So, if someone listening to this that has done growth or has a growth PM may be like, oh, but this is sort of what I do. What is the difference between someone that just runs growth or has a growth team versus someone that's specifically a MarTech person?

**Austin Hay** (00:06:30):
At some levels there's maybe no difference. There's a lot of startups I would say are 30 people or less where you have a growth team and your growth acquisition person is using a CDP to send data to their ad network to run their ads because that's part of their job and maybe they are the MarTech person. And actually you find a lot of people who consider themselves MarTech professionals now having started in growth or user acquisition roles because they had to just use tools in order to get their jobs done. But what I would say is as a company grows and scales, it moves from being a community or village driven aspect of your products to being something that's centrally owned. If you're a startup, again, like 30 to 40 people, everybody might chip in to manage your CDP or use Amplitude or build a first party solution on top of those.

**Austin Hay** (00:07:16):
It's a mixture of first and third party tools and engineering and product and marketing all work together on it. That doesn't scale though. As you cross a hundred to 200 people, somebody has to be responsible for knowing how data flows through tools, how it's worked, what's the schema. And that's not even considering procurement and legal stuff. You have infinite liability if you don't manage your contracts well. And so usually around I would call it a hundred to 150 people is the critical mass where you can't just have a village approach to systems and tools much like in the IT org, if it was a village approach to SSO businesses would be in a lot of danger. That's where you typically start to see the question of, all right, we need a systems and tools person. We need somebody to manage these systems and manage that platform.

**Austin Hay** (00:08:01):
And there's a variety of ways it can go. I've seen it go just into pure product that's with a product operations org and a product ops person actually will manage a lot of third and first party tools. I've seen it go into the IT org, Walmart for example, at a really big scale. They had a MarProd function which was marketing products. It was product within the marketing function or product that was designed to serve marketing. And then of course you can have more traditional routes like you can have marketing technology as a single standalone unit or business technology as a standalone unit. Some of this depends too on whether the business is B2C versus B2B. Classically in a B2B business you see it in rev ops or some types of systems role because you have to serve not only users coming into your funnel, but then the businesses that you're serving afterwards.

**Austin Hay** (00:08:46):
That's also where you typically see tools like Salesforce coming into play and more advanced CRMs. In a B2C business, your user funnel is actually really simple acquiring users and you're getting them into your product and then product is taking them over. There's no additional CRM, so usually your CDP is the source of truth and that's where you might actually see marketing technology fit in with growth a lot more. Just some examples like at Postmates, I worked for them for a long time as a consultant. Marketing technology was just part of growth. We had a director of growth even before that, Siqi Chen who's the CEO of runway, and I guess you were his first manager as I just learned, he was the first VP of growth and marketing technology was just part of growth and product owned that as a system.

**Austin Hay** (00:09:30):
As a different example though, at Ramp we're big enough and we're a B2B company, but we have a B2C top of funnel where we try to acquire users and get them to fill out our application to get a credit card. We have a distinct revenue operations team that's broken into business technology and marketing technology. So, there's lots of flavors of how it can exist. I think that's kind of the interesting and fun part of Marketing Tech is that it's not just one single version of the world that you apply to many companies, there's like a million variations that I've seen and they all kind of look to solve the same problem.

**Lenny** (00:10:00):
So, to make it even more specific and really simple for people to think about what someone in MarTech does, essentially it's using technology and tools to drive growth. Is that a simple way of thinking about this one specific roles?

**Austin Hay** (00:10:11):
Totally. That's exactly right. And I have this adage I always say, which is tools are just meant to solve problems. And the problem set for marketing technologists and business technologists is you focus on the tools.

**Lenny** (00:10:24):
And so when someone currently say listening doesn't have a MarTech person and they're thinking about, hey, is this a gap we have? What is that slice of work that a MarTech person would take if they currently have say a growth team or a growth PM that's leading growth and a growth team around them?

**Austin Hay** (00:10:40):
This comes up all the time, by the way, I talk to businesses every year that have this problem of we have a growth team, we're growing pretty fast. We have a guy that we hired, usually an engineer who stood up all these tools for us. Or it could be gal too just to be clear, but this person has been here for two years and knows all of our systems really well, but now they're becoming overwhelmed. They don't have enough time. The systems are too complex. This is the flavor of story that I hear so often around startups who have hired a great growth person and managed tools and systems, but at some point they reach that point in time where it's no longer manageable by one person or even a set of people. And that slice of works looks like setting up new tools, building new tools on top of them because a lot of times you'll take a third party tool, call it like a segment or an amplitude, and you'll build tooling in your own stack behind it to power something much more advanced.

**Austin Hay** (00:11:35):
And everybody thinks that marketing technology is just the third party tools, but actually it's designing, architecting and building that stuff on top of your third party tools. That's how you actually have a lot of velocity is thinking about not just build versus buy. It's build and buy now. So, you buy the tool to get 90% of the way there and then you build the cool thing on top with the other 10%. And so that architecting decision usually falls on this person. The one really unsexy part of it, which I tend to love because it's really high leverage is the contract part. When you start out as a business, you sign any contract you want with a third party because you're just trying to get going. You have much bigger problems, product market fit, staying alive, runway. But at some point as you scale and you're starting to make money, now you start to care more about not just how much money you're making but how much money you're losing usually from contrasting SaaS tools.

**Austin Hay** (00:12:24):
And so that's where you start to have more scrutiny around what types of deals are we signing, what are the terms? Do we have liability exposure? What's it going to cost us if we actually scale? And it's great that we have this cool rate at 500 MTUs, what happens when we have a million MPUs? So, I worked at mParticle, which was a CDP provider for a long time and I was their VP of growth and part of their SaaS vendor strategy is like, how can we design these cost structures in a way so that at the company scales we make more money? That's just part of the business. And so if you have that mindset of, well, I'm looking out for the business not just now, but two 30 years in the future, that's where you can also have a lot of value from a systems or marketing technologist.

**Lenny** (00:13:05):
Maybe a sign that you should start thinking about a MarTech person on a growth team is what I'm hearing is you're starting to accumulate all these different tools and maybe there's a sense that you could be a lot more efficient in connecting data and the backend infrastructure for how you think about growth and how you drive growth and measure growth.

**Austin Hay** (00:13:24):
Yeah, efficiency and pain. I would say pain drives people more. It's like, hey, we can't do something because nobody knows this thing. We can't do something because we don't know the best way to set up these tools or to change these tools or we can't even move forward where a business plan because we're worried that changing our tools might have an impact. And usually this is related to email marketing tools and data tools, so like CDPs and folks like Braze interval and just because a lot of times your email is the thing driving recurring customers to come back to your product and use it. So, you can't actually sometimes make the changes you want without understanding how something was set up in the first place.

**Lenny** (00:14:03):
You talked about where this person would live in the organization. There's all these different places. I talked about revenue team, maybe the ops team, maybe growth team, marketing team. What's your general advice for who should lead the hiring of this role and also just roughly who should they report to?

**Austin Hay** (00:14:21):
So, I have not to shamelessly plug my Reforge course in the fall, but I'm going to be shamelessly plug my Reforge course in the fall. We have this awesome matrix that we built that shows where this person should live, what they do, who they should report into, and it's all part of the fall course if you want like the deep dive into it. There's going to be a section on it, but just the gist of it is I first like to break it down into two dimensions. First is a B2C company or B2B company. And then the second dimension is how important is it to you that this person report into a specific function or not? So, first with B2C and really maybe a simpler version of that is centralized versus decentralized. So, we have B2C, B2B, centralized, decentralized. In a B2C organization I think actually thinks it's quite simple.

**Austin Hay** (00:15:08):
Most of the time your tools, your marketing tools are intended to help the growth team. The growth team has a job to be done, which is to spur user growth and tools are just meant to solve the problem. So, marketing technology's job is to serve the growth team. Now it obviously serves product and analytics and data, but its key stakeholder and customer is the marketing or growth function. And so I think it makes a lot of sense that if you're designing an org under a CMO or a marketing person, you put marketing technology alongside your head of growth or maybe reporting into your head of growth depending on the seniority of the person. And that works quite well. The key thing there is you just want to make sure that this marketing technology person is a really strong technical architect or some type of technical operator because they're going to be your representation to the product in engineering orgs.

**Austin Hay** (00:15:53):
Now, some people take a little bit of a slight twist on that. They say, hey, I have a product manager who manages growth that comes from the PM side. You could have a platform PM that serves the same thing in MarTech and they're responsible for all internal platform systems. And then you get into questions of does that belong in product ops or not? And I'm not going to go there. But for B2C, that's the centralized function. For B2C decentralized, what you do instead is you just say like, hey, we're going to have one of these systems, people in every org. Product is going to have a product ops person and growth is going to have a growth ops person, engineering will have engineering ops, and then we kind of divide the lines based on what tools they're managing. I generally don't see that working very well just because as you add more operational people, it just creates more systems.

**Austin Hay** (00:16:39):
And so unless you're a massive company where you need that type of scale, I think most startups should avoid that decentralized model. And then for B2B, I think B2B is really messy because not only do you have pure B2B where you're only selling to enterprises, but you have this concept of B2B2C, which is where you're actually selling to users and to businesses sometimes at the top of the funnel and the bottom, but also sometimes at the same time like notion. Notion sells to users so, they have a little growth acquisition funnel at the top, but then they also sell to businesses. And I find there's really, again, there's two ways decentralized or centralized actually at Ramp we've gone back and forth between the two models. We started centralized with the Rev ops group, we decentralized it and put marketing technology into the CMO org and now we're rolling it back into the revenue operations org Largely has to do with who is our customer?

**Austin Hay** (00:17:28):
Whose problems are we solving and where are resources allocated? Because if you have a decentralized model, then you run the risk of having to have lots of resources decentralized across the team. And the question is, can that function actually get work done or resources spread too thin and the priorities on align that it makes it challenging to get work done. And yeah, I would just say especially on B2B, for people out there listening, there is no right answer. And I even think that marketing technology could live in product, it could also live in engineering. Some of this has to do with who is the leader of this function. If it blends more towards ops, meaning managing processes and systems, then yeah, maybe you want to decentralize it and keep it in its representative function. If you have a really technical leader who was an architect or a PM that might indicate where that person should actually be leading their team. So, it's very case specific, which I know is a terrible answer, but it's the way it is.

**Lenny** (00:18:25):
Makes total sense. If someone were to hire someone like in Austin, are you doing the work yourself? Are you an IC for quite a while or do you end up building a team, say engineers that are building some of this infrastructure, how does that usually play out?

**Austin Hay** (00:18:38):
I think all marketing technologists at some level are ICs. I think it's a great job personally, because I get to be an IC and a manager. You have to be an IC in that, you are the most senior technical expert on all first party and third party systems. So, you have to know really well how third party tools work and you don't know that without doing the work yourself. So, I do find that some of the best marketing technologists have at least at some point in the last five years, been an operator and expert managing tools and systems. And then usually the teams are small and super cross-functional.

So, what I would say is more important to look for than how many people has this person managed is how well can they manage upward, laterally and downward because they're going to have to go talk to the head of rev ops if they want to change something in Salesforce, they're going to have to talk to the VP of product if they want to make a big platform change that touches something else. They're going to be relying constantly on data resources from their head of data. So, I think that this person, the secret sauce is more of how good of a cross-functional team player are they. I almost view them like a true quarterback every [inaudible 00:19:41] says people are quarterbacks. But really marketing technology because it lives between so many departments, it plays that role of having to call plays and pull on different departments.

**Lenny** (00:19:50):
And because it sounds like you don't have a team to do some of these things and you need to convince people to help you out.

**Austin Hay** (00:19:56):
Totally. Yeah. It's a game of persuasion and salesmanship. You have to convince people why the problems are big and especially as you get bigger, a lot of the decisions or problems of marketing technology are not about rapidly making a huge transformation. It's slow transformation that can have big implications. I'll just give you one example. Like lots of big companies I talked to have two CDPs or two attribution tools and it's like there's the cost problem. How do we get rid of this secondary tool to reduce the cost? Maybe it's a million dollars, but there's also the complexity and decision-making problem. How do we make people move and work faster by not having the complexity of asking, which tool do I use in such a simple decision?

**Austin Hay** (00:20:39):
And then you get to a really big scale at Walmart where your problem isn't even. How do we consolidate the stack and make it so tools that are helpful for people, but how do we prevent from getting back to that state? How do we put safeguards in place to make sure people actually have access to the tools that they want and can solve their problems? But we're not introducing duplicative tech into our organization because a really well-known, sorry to put SaaS vendors on the spot here, but well-known SaaS vendor plays the land and expand motion. You get in small and then you grow your business. Well, that's a distinct problem for businesses that are trying to control costs and simplify the way the world works.

**Lenny** (00:21:15):
I want to talk about tools that you recommend and use most often, but I'm thinking maybe we start with a different question, which is around just what does your day look like as a MarTech person? What are you doing day to day and from the lens of your growth PM listening or a leader listening and what could this person do for me and how much leverage can I get if I were to find a MarTech person?

**Austin Hay** (00:21:37):
There's half of marketing technology, which I would call somewhat administrative and high leverage. It's managing PI requests and PI technology, managing administrative stuff like contracts and admittance to tools and permissions. This is all at a big company scale. You probably don't do this when you're a small company, but that stuff matters because give you an example, you give edit access to somebody who wants HubSpot and they send a fake email test to a million people and now you're on Twitter being embarrassed as a company. It's like-

**Lenny** (00:22:12):
Does that happen to you?

**Austin Hay** (00:22:13):
It hasn't happen to me. But I've gotten the emails from certain companies where it's like, this is a test and it came from an intern.

**Lenny** (00:22:20):
Yeah, same.

**Austin Hay** (00:22:20):
You're like, that's just permissioning gone wrong. So, I think a big part of the role is designing systems that are automated to handle that stuff because ideally you don't want to be sitting around in your computer all day clicking one conductor request to approve permissions. You should look at the role, look at the experience of tenure and department and make a decision about which accesses you get. So, automating that is a big part of my job. The manual part of my job, which I feel like is actually really fun, is again the designing systems and contracts for the future. So, it's about how do we design a system and create a vision and persuade people about what our system technology can look like over the course of one to two years, the time span that I usually look at. And then how do you change state from then to now? Some of that has to bring in financials and contracts. That's where this plays a role. What are our contract terms today? What's the price we're paying? What is our growth going to be?

**Austin Hay** (00:23:12):
Can we build a financial model to show how much it's going to cost us both in terms of operational efficiency and actual real fixed and variable costs to end up in that state? And then how do I create a graceful argument to persuade people that we should spend engineering time and resources? And usually it nets out pretty clear. It's like if it's less than a certain amount, how do you justify spending any engineering time on it? You have to wait for the problem to become big enough. But then back to your other point around how do I give growth managers out there something useful. I would say the big thing that people forget in an early stage of a company's lifetime is that the company will outlast you, hopefully. You will not be the last growth manager unless the company fails. So, I tend to take a little bit of a different approach than most, which is like I think you should always be thinking about the future.

**Austin Hay** (00:24:02):
That doesn't necessarily mean you should make design choices that over index towards the future so much that you miss product market fit or you make poor product decisions. But when you set up tools and you pick tools and you implement them, you should be thinking, what's going to happen a year from now if I don't change anything? And is this going to be a catastrophic situation or not? And then try to take actions to mitigate that risk. Some examples are like if it's $2,000 to get SSO and two days to set it up and that prevents you from having a security problem where somebody downloads all your users, it seems like a great investment.

**Austin Hay** (00:24:37):
And guess what? Over time, if you don't do that, you're going to eventually have to hire an IT person to go and set up SSF for all your tools. So, some of this is more of just being a good steward about managing first and third party tools with an eye towards the future. It's always a trade-off, right? Because the more time you spend when you're building product early in a company's lifetime, that time could be spent on other things. So, if you waste it managing third party tools or setting up correctly, then maybe you miss out on a key product feature. So, I think it is a tough balance to strike.

**Lenny** (00:25:06):
Coming back to the different kind of roles within the growth umbrella, if someone has someone leading paid growth let's say, and they're just like a paid growth person, do you also find a MarTech person to work alongside this person? How connected would you be to someone that's just responsible for paid growth?

**Austin Hay** (00:25:24):
Maybe a key differentiator too. We didn't talk about this in the beginning, but there's marketing technology and marketing operations. So, in my mind, this is just my own kind of mental framework is marketing technology has tech in it. So, it's usually an engineer or somebody with an engineering background doing that function. Marketing operations is usually not always technical. Maybe a systems analyst or business analyst could be somebody really, really smart, but they may not have an engineering background. So, I think that's a key distinction too. And you typically see that in B2B where you'll have mar ops function, which is setting up campaigns, sending email blasts, debugging, doing analytics work, SQL queries, all semi-technical work but not engineering based. So, in my mind when we talk about marketing technology, I'm really thinking it as an engineering based role and even by background, I'm not a software engineer, but I was a civil engineer and I learned how to program and I went through a bunch of coding to get there.

**Austin Hay** (00:26:21):
So, that's my way into the engineering world. And you typically find that a lot with marketing technologists in particular is they either are software engineers or they've gotten enough experience to moonlight as software engineers. And so we get to this problem set of a user acquisition person. How would they rely on a marketing technologist? Well, I think the most superhuman user acquisition people out there are engineers and they don't need a marketing technologist because they set up the tool themself. They know how the paid campaign runs and they just do it all. And you'll typically find these super humans at small startups where the engineer is just told by the co-founder, hey, go figure out how Facebook ads work. And superhuman is born. More often though that doesn't happen. Or those people once they do it once, they never want to do it again. So, you'll typically find the role split and that's the natural thing that happens.

**Austin Hay** (00:27:13):
As you scale, you divide responsibility and you'll see you'll have the person who's responsible for bidding and acquiring users and paying down those campaign costs. Then you have the person who's in charge of how does it all work? How do we get this thing to actually run? And that's very similar to what we have at Ramp. We have an amazing user acquisition team. I know Sri Batchu was on here a while back. He hired a guy named Cody Morgan at Ramp who has a user acquisition team. And the way to think of it is, my job is to help support them in running all their campaign needs and when they have a directive from the CEO that says we need to improve CAC or change any of our metrics, it's my job to partner with them to help them do that. And actually one of the coolest and most fun projects that we worked on early when I joined Ramped is we were optimizing.

**Austin Hay** (00:27:55):
We're trying to get top of funnel data all the way down to the bottom of the funnel and tie it with opportunity data so we could send that back to the ad network so that rather than optimizing your campaign off of when a user clicks a button on the website, you're actually optimizing it off of did the opportunity occur and what was the kind of ideal value for that opportunity? And you're sending that data as a synthetic event back to Facebook and all those guys. So, it can be really cool and super advanced stuff depending how deep on the funnel you get and how complex your business is.

**Lenny** (00:28:25):
So, you're generally not running campaigns of your own unsafe Facebook or AdWords. You're mostly as a MarTech person supporting people who are doing that.

**Austin Hay** (00:28:34):
Yeah.

**Lenny** (00:28:35):
Awesome.

**Austin Hay** (00:28:35):
Helping them use tools and technologies to do it.

**Lenny** (00:28:38):
Great. Do people give you goals? Are you responsible for growth goals of your own? And in general, are MarTech people, should they have goals and growth goals on their plate or are they just there to support people who do?

**Austin Hay** (00:28:52):
Oh, that's a great question and I would like, maybe this is at the end of the podcast, we ask people about this because I would love to know what is a better version of goaling? So, there's two ways that I've thought of it. One is my goals are directly tied to the people I'm serving. So, if user acquisition has, I mean we do, we have a growth goal and we have a CAC goal at Ramp. So, my goals are tied to them, so I'm going to help make sure that that is achieved, but then there's also a cost and efficiency goal that I internally think is valuable. Whether or not the business thinks it is valuable, it doesn't really matter. I come from a sales background and I like to run lean and efficient teams, and so I'm always thinking to myself, how much were the tools when I came in, how much are they now?

**Austin Hay** (00:29:34):
Have I set us up for success so that as we grow, our cost per user or cost per seat comes down and how much more efficient are we because of that? The ideal world is that you actually are growing as a business making more money, hiring more people, acquiring more users, and your total cost of tooling per person goes down. That's like the dream. And there's lots of ways you can build that financial model, but I mean that's what I think most marketing technology leaders should strive for is to make sure that they're controlling costs over time because most businesses don't. There can be some goals that are discreet in nature that are not cost-efficient, but more like net capability related. So, it's like, hey, we want to design a first party system that's world-class that achieves these three goals, right? Maybe you want to incorporate artificial intelligence into some part of our product platform and incorporate third party tools.

**Austin Hay** (00:30:25):
And those are more like discrete product goals. In the same way that a business might launch an external product goal to launch a feature, they sometimes also might have internal product goals, clean up our revenue operations systems, make our email marketing system better. In particular, email marketing is one I see come often a lot with small businesses and even medium-sized businesses where they'll have picked a tool at the start of the company's lifecycle and as the company has grown, they've outgrown that tool. They need to move to a Braze or Marketo. And so there'll be a big six-month initiative to say, we just got to switch. That's the goal. We have to safely get off this small tool to a much bigger, more complex tool that's going to cost us more. It's a lot more complex, but we need to do it without losing money. That's usually the job of a MarTech person in some type of change transformation effort.

**Lenny** (00:31:14):
Perfect segue to where I wanted to go, which is tooling and your recommendations and favorite tools. And so maybe we start with just what do you find as a good starting tool stack for people starting to think about MarTech and basically growth, and then what does it end up being generally?

**Austin Hay** (00:31:32):
In terms of stack, again, we think about B2B and B2C. B2C I would say the stack was largely solved from 2017 to 2020. We've had like a renaissance of the data architecture, so what I'm going to do is I'm dig through B2C then and now and then we can go B2B then and now.

**Lenny** (00:31:52):
Great.

**Austin Hay** (00:31:52):
Okay. So, B2C, if you back up to 2016, 2017, you have segment and the rise of the CDP. Consumer based businesses have to collect a user and tie a bunch of data to them and then track their actions to send it out to performance ad networks and email marketing tools and product analytics tools. And so you would see this very commoditized stack. It would be like CDP in the middle bunch of tools connected. The promise of the CDP was you integrate one SDK, your engineers don't hate you send all the data to the other tools you can create audiences.

**Austin Hay** (00:32:26):
Great. Lasted for a long time. The thing about it though that I think really changed around 2020 is that the cost of ownership of warehousing became much cheaper. And so 2021, you start getting to the place where it actually makes a lot of sense and is really easy to store all your data in a warehouse model all your data in the warehouse, and to do it without needing a vast data team. I would say Airbnb was probably doing all this well before anybody else was, but they had the main advantage of a lot of money and a lot of resources. So, now come 2020, it's cost-efficient to have a data team with your own warehouse and to manage data centrally in something like Snowflake. So, now this question is like, okay, well we got to get data into the warehouse, but how do we move data around is totally different.

**Austin Hay** (00:33:11):
And that's what really led to the rise of reverse ETLs. So, now you can actually build your own CDP and lots of businesses already have, I'm consulting with a well known financial trading platform a couple of months back, and they have a CDP, they have all this internal data in their warehouse, but they have not been able to activate it because it's pretty old architecture. Everything's batch based end of the day. What they need is a reverse ETL. They don't need to take that data and just get it out into the world. So, they need the reverse ETL component or the transformation component of a CDP. And so I'd say now today when we think about B2C businesses, you can either go to the traditional route, buy CDP, hook up all your tools, third party.

**Austin Hay** (00:33:52):
I think that's a great move if you do not have a lot of engineering resources because you're not spending a ton of time and energy on a warehouse and all the modeling that comes with it, you're just spending time to implement one SDK. I think if simplicity is the name of the game for your business, CDP, Centralized Stack, great move. If you are an advanced engineering culture and you are cutting edge and you're going to do a bunch of modeling in DBT and you already have Snowflake, you should move towards a model of using a reverse ETL. What it means is that there's a way to get your data into the warehouse and then how you activate it is completely independent from the CDP. And so what that means is actually you can have lots of different variations of the stack.

**Austin Hay** (00:34:31):
You could use Amplitude as your CDP, collect all your data, stream it into Snowflake. They actually now have an integration with Snowflake that lets you feed data directly out of Snowflake, and then you could use a reverse ETL to just pipe that data wherever you want. There's a really good section though, again, sorry to self aggrandize, but there's a really good section in the Reforge module this fall that talks about what happens when you have multiple ways to move data. You buy amplitude for your CDP and you're moving data to your warehouse. Amplitude is a bunch of integrations, but you also have reverse ETL and you can move data out of your warehouse.

**Austin Hay** (00:35:05):
Where do you choose? And I would say a lot of businesses get in trouble when they don't have a methodology or a system for how and when to move data from one place to the other, so they just do it haphazardly, right? And the key in systems management is you want to design a process for doing it some type of waterfall or mental model for when it makes sense to move data directly from Amplitude, which is the ingestion point of your data stream or from the warehouse where you can model it and make it better. I think the key is just having a philosophy and approach. There's not really one answer, but that's all B2C. So, B2B I would say ... Yeah, go ahead.

**Lenny** (00:35:40):
Before we move on to that one, you mentioned reverse ETLs. What are some examples of products that are reverse ETLs so that people can look them up?

**Austin Hay** (00:35:47):
Yeah, I personally think the reverse ETL is a capability. It's the ability to move data from a warehouse to a tool. So, technically speaking, you'll find reverse ETLs in CDPs and as standalone products. Segment has a reverse ETL function they just launched, and Particle has a reverse ETL function they just launched. Rudder Stack, which is a CDP has always had a reverse ETL function where you can take warehouse data and move it to different cloud infrastructure. Then there are distinct standalone products. Census, which was back Bay 16Z and Hightouch are the two standalone reverse ETLs. And like I said, I'm an investor in Hightouch, love their work, we use them at Ramp. At the end of the day, you should pick tools because they help solve problems, not because of anything else. So, we can come back to that if you want.

**Lenny** (00:36:32):
Wonderful. Great, great. Yeah, that was perfect. Keep going.

**Austin Hay** (00:36:35):
Okay. Yeah, so we talked about B2B, or sorry, B2C. B2B, I probably don't have as much history as say people who survived the dot-com crash in 2008. I started really my career in B2B in 2014, so I'll share a little bit of my experience and I'm just hopefully just saying this because listeners may chime in and be like, oh man, this guy doesn't know what the hell he's talking about, which is totally fair game. So, 2014 though, I remember working at Branch, I was working for our COO Mike Molinet, who's now at this really cool company called Thena, but at the time I was working for Mike, and as we talked about before, oftentimes growth stacks just appear because you're given a challenge. And I remember sitting in this tiny room with Mike. We were over in Palo Alto, right off the fills in Palo Alto in this tiny room.

**Austin Hay** (00:37:27):
It was boiling in the room like so hot we were sweating and we were mapping out on a whiteboard how we would design our first version of our system, like how we capture leads, how we get them into Salesforce, how we would email them with a little tool called Outreach at the time, that was still a startup. And I'll send it to you after this if you want to show them to viewers, but it's so MVP, but it still models what a lot of people have today. There's some ingestion point for your data. There's Salesforce, there's some type of outbounding tool, there's an enrichment tool, and then a lot of other Jerry rig stuff hooked up to Salesforce. And for the most part, that's how B2B still exists today as you have Salesforce and then the whole world and the universe revolves around Salesforce. You just have more advanced tools, you have Gom and stuff like that.

**Austin Hay** (00:38:12):
I think the big change though, and what is really fascinating and has been fun to watch is in the last two, three years, you now have this whole rise of B2B2C, which takes all the complexity of the top of funnel user acquisition system and stuffs it right alongside your CRM and how you build an elegant system there in that space, I think is one of the most complicated and intricate pieces of being a MarTech person today. And some of it just has to do with the data language. Like all these B2C tools were designed with two objects, a user and an event. And so if you're not a technologist, it's like object orientation is how you kind of think about the world. There's only two concepts for the world in a user acquisition based system. A user who's a person either anonymous or known coming into your website and the things that they do on your website or application, and you use all that data to acquire them or model them.

**Austin Hay** (00:39:03):
In a B2B business you have all that complexity, but at the end of the day, you might not really need it if all the person is doing is it's just the company is signing the contract and then you don't really care what happens afterwards. You might track users and events inside your application, but it's not for the acquisition, it's for the retention of the user. B2B2C is fascinating because you have all the complexity at the top, but then how and when do you tie a user to a company or some type of entity object, and what tools do you need to do that and where do they live in the system? And do those tools actually have competing priorities? Let me give you the greatest example of this that happened at Notion when I was consulting to them at Chris when I was consulting to them and at Ramp is having both HubSpot and Salesforce.

**Austin Hay** (00:39:45):
Both are CRMs, both have the ability to track users and companies, neither are CDPs. And how you actually map the data from HubSpot to Salesforce kind of determines how much hell you're in, and there's really no good solution. It's just like you have to figure out for yourself, how do you want to acquire use at the top of the funnel? How do you merge them into the bottom of the funnel of the Salesforce? And again, there are lots of options or versions of the world. You could use Amplitude only and collect all your user and event data and then merge that into Salesforce directly. You could collect all your data in Amplitude or Segment and then post that to HubSpot, which then posts that to Salesforce. But of course, as you make these decisions, your systems becomes more complicated and more than one person can manage. So, there's this trade-off between complexity and resources that you always have to juggle.

**Lenny** (00:40:33):
**Austin Hay** (00:42:09):
Actually, I listened to your pod on multi-touch attribution. I'm forgetting who you were with at this point, but it was like I was loving it because it talked about MMM and MTA specifically.

**Lenny** (00:42:19):
Yeah, that was a newsletter post actually, not even a podcast.

**Austin Hay** (00:42:22):
Yes. So, back to our conversation around division of responsibility. I'm not always the person you should talk to create an MMM model. I'm not a data scientist. I know how to make MMM models and I know what they are.

**Lenny** (00:42:36):
Can you explain MMM briefly?

**Austin Hay** (00:42:38):
Mixed Media Modeling. And MTA stands for Multi-touch Attribution and it's these two ways of measuring the world and marketing to understand how you should allocate resources to campaign spend. MTA and MMM though are both underpinned by how you collect data. They're both informed by the user object and the event objects that you collect on your website or your application that then lead to the data that data scientists use for MTA and MMM. That's the connection between data and MarTech is often the tools and systems that we build and stand up and manage are what are used for these very complicated growth, experimentation and attribution results at the end of it. And one of the most discreet things you can do for MTA, because I get this question all the time around, hey, do we need MTA?

**Austin Hay** (00:43:21):
What should I do first touch or last touch? Should I do both? And there's actually really, I can send you this guide, but there's six or seven things you can do to basically futureproof yourself from needing either one. Because most businesses either start with first touch or last touch and then eventually want to move to a multi-touch attribution model. And for those who don't know what that is, first touch is where you kind of collect the data about where somebody first came from. Last touch is where you collect the data about where the person last came from. So, an example, would this be like if I went to Lenny's Newsletter from a Google ad and that's all he has? That would be my first touch and my last touch. If I first came from a Google ad to Lenny's Podcast, but then later I came from a Facebook ad or I don't know direct, then that would be my last touch.

**Austin Hay** (00:44:06):
And so it's this question of does the Google original first Google Channel get credit or does the second one the Facebook or direct get credit? And the first touch attribution model, a hundred percent goes to the first channel and the last touch attribution model, a hundred percent credit goes to the last touch. And a mixed attribution model or multi-touch attribution model, you're trying to figure out how to split the difference. And usually the evolution for businesses is they start with first touch or last touch, then they go to splitting it literally 50/50. And then somebody gets angry because they're not getting enough credit and they say, we've got to go to MTA. And there are both first party solutions for that and third party solutions for MTA. But back to the main thing, the main point is if you think about what you're collecting, this is for website businesses, you're collecting the referrer, like in the URL where the person's coming from, and you need any UTMs associated with that person.

**Austin Hay** (00:44:58):
And you also need any parameters from the advertising networks that might give them the ability to counter a conversion. Every ad network out there has little things they stuff into your URL that tell you that you came from them. Facebook has FVP, FPID, they sometimes encode it. Google has this thing called Google Click ID, which is just a really long string of characters that don't matter unless you know how to decode it. But all advertisers, and for the longest time advertising worked by putting parameters in URLs, pushing somebody through to your website, collecting those parameters and then passing it back to the ad network so they could get credit for it. And so in my mind, the best practice that everybody should stand up from day one is to basically design the system for MTA and then use whatever makes sense as you grow.

And so the way that I typically recommend to people is like imagine when a user comes to your website, you collect the URL, collect the referring URL, collect all the additional marketing parameters that you might want, [inaudible 00:45:57], TikTok ID, Microsoft ID, you should just make a list of them. And if you don't have that list, I can give them to you. And then you should collect all UTMs. So, in the URL, you're going to have UTM campaign, UTM medium. Most marketers use this to note what the campaign type was. Now the thing is that UTM is only going to be specific to the moment in time that the person came to your website. So, back to example about Lenny's podcast. If I come to LE's podcast and I came from a Google ad, then my UTM is only for that Google ad.

**Austin Hay** (00:46:28):
So, I have a Google Click ID and I have a UTM. So, what you're got to do is you've got to store those parameters locally on the device. Either was a browser or whatever. You got to store it as UTM first campaign, UTM last campaign. And what you do is every single time that a person comes, you replace the last campaign or the last value with the one that's there. So, say the last one was Facebook and then I come later from a direct mailer ad you replace the UTM last medium with the new one. Now what's happening if you're using third party tools is that you're collecting this user information when the person's on the website, you're going to collect it both as a user attribute and as an event that way. What's going to happen on the backend for your data warehouse team is they're going to see a user profile that has both the first attribution information and the last attribution information.

**Austin Hay** (00:47:20):
And then for all the stuff in the middle, you're firing off a page view event with first and last, where the last might deviate if there were multiple steps in the middle. So, what they can do is they can just coalesce over all the last UTMs they've seen on all your events by user to get both their first one, all the ones in the middle and the last. And so this isn't actually that complicated to set up. Most people just don't do the work early on. And then when they want to go back later and have MTA results, they don't have the data to do it. So, one of the things I tell people who are debating this is let's just get the infrastructure right from the beginning.

**Austin Hay** (00:47:55):
Let's set up so that you have users, you have user attributes, you're collecting first and last UTM on users. You're firing events with all those. There's some other more complex things you can do too. You can set them in first party cookies and you can also set them in your third party cookies for your tooling vendors. At the end of the day though, what matters is you just are collecting this information from the beginning. That way when you actually want to progress your attribution model, you don't have to wait a really long time to start gathering that data.

**Lenny** (00:48:24):
Amazing. I love the details that you're sharing. I don't know where else people can find this sort of advice. It sounds like a core part of this is one, just having a data warehouse where you just throw all this data into, and two, having a taxonomy that you can rely on and do multiple things with down the road. Is that roughly right?

**Austin Hay** (00:48:42):
Yeah, I think that's right. The taxonomy though, I think what's interesting is it's very much guided by your third party tools. And again, that's the reason why I think companies often miss the mark here is because they're not thinking about what can my tool actually allow me to put into it in the first place.

**Lenny** (00:48:59):
Just to make sure I understand what you're saying there, you're saying generally maybe third party tools limit what you can do, which set you up for hardship later. And maybe what you're saying is do that yourself, that tracking piece, is that roughly what you're saying?

**Austin Hay** (00:49:14):
Yeah, I think that's right. The way to think of it is if you build your own data warehouse, your schema is unlimited. You can do whatever you want. You can design product schema, you can design user schema and event schema, but most third party B2C tools don't allow you to control the schema. There's only one CDP I know that does that, that's Snowplow. The rest are there's a user object and an event object. So, you can either stuff data as a user property onto the user object or you can stuff data into the event and fire it off as an event, but that's what you're working with. So, what I'm saying is most people just don't think about the object orientation of the third party tools they think about and they don't design their website traffic or their app traffic. We didn't talk about app, which is a whole different slew because doing attribution with Iowas 14 is much more difficult.

**Austin Hay** (00:50:07):
But even in the website version of the world, people will often just collect UTMs and think that their job is done and it's like actually it's more complex. You have to think about first and last, think about the steps in the middle, design it so that you're putting it on the user profile and in the event. And so this goes back to the main thing that we were talking about earlier, whereas the job of a marketing technologist is to think often one to two years down the road about what we're going to need to solve for and design systems in an elegant way, not to break the bank, but to at least be the minimum viable product to actually get there. And a lot of my job, and I think the job of marketing technologists is trying to preserve that future state in the most minimally invasive engineering and resource way possible.

**Lenny** (00:50:48):
You've talked a bit about thinking ahead and a bunch of tools and platforms, and I'm wondering are there any new and emerging tools, platforms or even growth channels that you're keeping an eye on or excited about or finding more and more useful?

**Austin Hay** (00:51:02):
I'd be remiss if we didn't talk about Threads, right? Threads is super interesting. The question will be how quickly can they stand up an API for advertising and what does that look like or do they just blind it in with the existing meta and Facebook architecture? One of the caveats that I'm sure a lot of performance marketers out there will agree with is Facebook has a conflict of interest in reporting, right? They want you to spend money, so obviously they want to report the best results. And that's the reason why attribution parties like Branch and AppsFlyer exist is to somewhat curtail that conflict of interest. And so I'll be really interested just to see how attribution works, especially when you're moving from Instagram to Threads, from Facebook to Threads. Will it be the same architecture, will be the same advertising platform? Will they try to do something new?

**Austin Hay** (00:51:52):
So, I'm keeping my eyes on that. Reddit is also a very interesting place to convert now. They're opening up their conversions API, and I'm seeing a lot more investment in Reddit just because you can have embedded ads now that almost look like they can be posts that you can comment on. I think it just speaks to the maturity of the advertising business. What's happening in the background of all this is ad attribution from apps has become a lot more difficult and mostly aggregate. From 2010 to 2020, we had the golden years of deterministic matching where it was very easy to run an ad and understand with precision who installed the app. Maybe you didn't know their name, but you actually would know their IDFA and you could tie that to their PI. You can't do that anymore. It's very challenging.

**Austin Hay** (00:52:35):
Even when you can do it, the results that you would get are pretty low because nobody's going to be opting into giving you their IDFA. So, what that means is these ad networks are becoming more complex, sophisticated, and interesting right at the same time that it's harder for marketers to really understand how they're spending money. And so I'm paying a lot of attention to how marketers make decisions with probabilistic data because most of the work that I'm doing now is actually saying, well, given that we don't have determinist data about a certain audience or where somebody came from, how can I find other information that will create a model for 30% of the population and we can use that to extrapolate to a hundred. So, probabilistic matching and probabilistic attribution I feel like is a skillset that more marketing technologists and marketers should just get familiar with the way that we make decisions today.

**Lenny** (00:53:27):
Wow, I hadn't heard of this concept before. And that's how people are starting, or at least you're suggesting that's how people should start thinking about growth results and impact is less, here's how much this ad drove, the likelihood that this ad did this had this sort of impact.

**Austin Hay** (00:53:46):
And it's not the case with all channels, but it's specific for apps that have mobile apps, they're going to be impacted by it because they just aren't going to be able to discreetly identify one-to-one the person that came from a campaign. They'll know that a group of people came from a campaign, but they won't be able to make measurement with those people alongside other attributes. For website, it's not the same, but there are lots of things that are making it more challenging. One is browsers now are stripping out those URLs we talked about. So, you're just seeing a bigger and bigger percentage of people being counted as organic that actually came from a paid advertisement because when they got redirected to your website, the browser truncated all those URL parameters. The second thing is cookie blockers. We talk about all these third parties before.

**Austin Hay** (00:54:30):
The way that third parties often collect information is they drop a cookie in your browser that tracks you, if you've heard of Segment, which is one of the most well-known CDPs of the last few years, is they implant a little third party cookie on the site that contains an anonymous user ID and all of your attributes as you're navigating the site. And then once you log in, they convert that to a known or non-anonymous user ID.

**Austin Hay** (00:54:53):
Usually that's tied to some type of entity ID or a user record. And at that moment in time, if you come back and they see your cookie, they kind of know who you are. Now, if you're blocking cookies, that means you're basically remaining anonymous throughout the entire user journey until you log in. Not to mention a lot of people have lead funnels where you need that information to actually understand what the user is doing before they convert. So, if you're blocking third party cookies before they even get a chance to convert, you have no information about where the person came from. You just saw that they signed up, and so it might as well be organic.

**Lenny** (00:55:26):
So, you talked about how many people are trying to get used to this new world of ATT and much harder to measure attribution and all that. Is there anything you've learned that has worked well to help you recover from that a little bit in terms of measuring what's happening? Is there any tips you can share or anything you've seen work?

**Austin Hay** (00:55:44):
Yeah, I mean I think a lot of people are just gravitating towards MMM now without really understanding when MMM is useful or not. I don't know if there's a company called Recast. I think you're an investor. Am I crazy?

**Lenny** (00:55:57):
I am. And that's who wrote that article that you mentioned actually.

**Austin Hay** (00:56:01):
That's right. It's Michael and it was somebody else, I can't remember the name besides-

**Lenny** (00:56:04):
It was another Mike Taylor.

**Austin Hay** (00:56:06):
I'm not an expert on MMM, so I'm not going to be able to comment to quite the degree that they have. But when I spoke with Michael, and when I think about MMM, a lot of my conversation is this actually really realistic for our business right now? Do we have the data to run an MMM model and how is it going to change or chart the course of our performance ad marketing business in light of having this information? And when I think about it through those lens, most of the time businesses are not ready for MMM. They actually just be an MTA and they need better probabilistic modeling. And I know that's not a super spicy take, but I'd just say at least at Ramp and what I'm seeing at other businesses right now that are operating, it's much more of like we're going back to the days where we understand in broad strokes how much each of our campaigns is driving in advertising revenue.

**Austin Hay** (00:57:00):
We're not able to tie that discreetly with the user journey. And we know that some percentage of this user base might have been lost or organic. So, in light of those, how do we make spend? And then also you can be pretty smart. You can do, for example, geo-based testing on billboards. Try to isolate that as a factor if you withhold all other confounding factors so you can be smart. Coordinating these types of campaigns though is really challenging, especially if you're a really big business, let's say runs online advertising throughout the US and you're trying to do targeted billboard tests in an isolated number of cities across the states coordinating to turn off demographics, make sure there's not isolating factors. It can be really challenging. So, there's not a silver bullet right now I don't think.

**Lenny** (00:57:42):
Awesome. Just a few more questions and then a broader question I want to ask. So, say you want to start hiring the next Austin, first of all, what do you look for in the person? What are signs that they're probably going to be worth chatting with? And then what are some interview questions you'd like to ask to get a sense of how strong they are?

**Austin Hay** (00:58:02):
So, the first thing that I always gravitate towards is just intellectual curiosity. And I know that's very, maybe a little bit overrated, but I think you can tell pretty quickly if somebody's just interested in the world and learning things. And the thing about third party tools is you are constantly learning. You'll never be an expert in everything because there's way too many tools to be an expert on, I forgot what publication, I think it's MarTech editor in chief or something. There's a publication that I subscribed to and everything is classified as MarTech and the diagram is huge, like cover a wall. Now I don't believe everything like that is MarTech, but even if a fraction is, there are way too many tools in technology to ever be an expert. So, you have to be both very interested in learning and very willing to quickly learn if you want to be in the space.

**Austin Hay** (00:58:50):
And so I generally look for intellectual curiosity as the first sign. The second thing that I think helps people a lot who have intellectual curiosity is they're scrappy in engineering. They might not be the best engineer possible, but they know how to get around. They know JavaScript, they know Python, they can read API documentation and make an API request. They have enough base knowledge to basically understand how to solve a problem that an engineer might do even if they themselves are not an engineer. Now obviously you can get lucky sometimes and you'll find the engineer who never wants to be an engineer again and decides to move into something less technical. And in those cases they're super powerful, but I haven't met a lot of those people in my life. And also there's just some business dynamics to it. You could probably make more as a backend engineer than as a MarTech guy.

**Austin Hay** (00:59:41):
So, you probably just pursue the pathway that makes more money. It's like a little bit of a utility function. So, I look for intellectual curiosity. I look for basic engineering scrappiness. And as a side note, I would say lots of people out there, the advice that I give them is you don't have to go get a software engineering degree. You can teach yourself, I am self-taught. You can take a coding academy online. I think you get enough knowledge through being able to do web programming or some type of backend programming. So, I would say it's not more than a six-month investment for anybody to really get the skillset that's needed. Obviously once you get the skillset, you can build upon it with years of experience afterwards. But if you're new to the space and you're in marketing ops and you want to get more technical, or if you're a user acquisition manager who did paid performance, but you're like, I really want do things end to end.

**Austin Hay** (01:00:33):
You can just go pick up some software skills and you probably are going to be pretty dangerous from that. And so those are the two things I gravitate towards. There's obviously many more, but those are the first two. The questions that I like to ask is what does I like to ask people how they prepared for the interview. This is not, I can't take credit for this. My wife told me about, gave me this idea and I loved it. I think it was a16z partner. But I love the question because when you ask, hey, how did you prepare? You're really asking how does the person think? How did they plan? How did they take things seriously or not? What did they read? What did they do? And if you have to prompt them to tell you all the things they did, then they're just not a systems thinker.

**Austin Hay** (01:01:17):
But if they're like, hey, actually I read these things, I did this. I woke up, I went for a run. The more interesting complex the answer, the more interesting complex the candidate. And so I love the question because it just gives you a really good understanding of the person on a whole, like right out the gate. And then the other question I like to ask is I like to ask, so you're coming in tomorrow to our marketing tech system and by Friday you have to write up a report on all the things we should change. What do you do? And I like to ask that question because it pretty much signals out people who are biased versus not. People who have tooling biases will immediately just like, we should implement this tool because I used it before and I really like to hire people who are not tool specific, who are more tool agnostic and they think about tools as being things to solve problems as opposed to tools being things that you just solve because you've already solved it one way.

**Austin Hay** (01:02:12):
This isn't a gripe and it's certainly not intended to slice at PMs, but one of my observations of a lot of PMs is they just pick the tools they've already used before because it's easy and it's a shortcut for them, which I understand, but problems are not always the same. So, tools shouldn't always be the same. So, I like to pick people who think about the problem set and the solution space more and they ask questions about what problems you're trying to solve, which I think is much more of an actual PM mindset of trying to work backward from the problem as opposed to just taking the problem and regurgitating stuff that you already know.

**Lenny** (01:02:45):
Are there any flags you look for that tell you maybe this person isn't someone you want to be working with?

**Austin Hay** (01:02:51):
I answer that question on two spectrums. One is if I'm hiring as somebody who's hiring an IC versus I'm getting hired. So, one of the red flags whenever I'm approaching a company to work for them is I'll ask for their company financials and a company that's not willing to divulge their financials to a director level or above person, I don't want to do business with because that means they're hiding something. Or they have a culture where they don't trust the most senior leaders of the organization. Either is a bad choice in my perspective. So, that's one of the questions I always ask when I'm going up for a job, when I'm hiring somebody. Red flags, I feel like one of the false flags not a red flag is more like when there's a gap in somebody's job resume, everybody gravitates towards that and it's often really explainable.

**Austin Hay** (01:03:39):
A good example is I was hiring somebody once who had a two-year gap in their resume. We didn't end up hiring the person, but they went through all the stages and we didn't hire them, not because of them, but because the job got removed and this person took two years to get a philosophy degree or maybe it was a poetry degree and then also taught himself to program. So, it was a really enriching two years and there were lots of ways that I could see them bringing their past experience and the way that they took time off together to be a really well-rounded candidate.

**Austin Hay** (01:04:12):
So, I would say I look less for red flags and more for false identifiers on the resume application that may shortcut me towards the decision. Another one is just school people just look at your school where you went to undergrad or grad and they kind of make a decision one way or the other. And I feel like that's also can be a really bad shortcut because there's some amazing founders, for example, who went to school as you maybe had never heard of. Yeah, I know that's not a good way to answer the question, but I don't have a good way of looking for red flags, but I do tend to spend a lot of time on netting out of false flags.

**Lenny** (01:04:49):
That was a great way to answer the question. I want to move on to something totally different, and this isn't something I've been asking people, but I'm curious if there's something here then maybe if there is, I'll start asking this more regularly. I'm curious if there's just any frameworks that you've found especially useful in your work or even life. Does anything come to mind?

**Austin Hay** (01:05:07):
One thing that I want to build, so if I ever build this, maybe it'll be a newsletter for you, is just a one-page doc of the most useful life frameworks and they're just the words, and so you obviously have to know them, but I feel like I come across really good frameworks all the time and then I forget them. So, I just want a one pager of Lenny's Life frameworks.

**Lenny** (01:05:07):
Okay, we're starting this right now.

**Austin Hay** (01:05:30):
Okay, great.

**Lenny** (01:05:31):
We'll have number one.

**Austin Hay** (01:05:31):
All right.

**Lenny** (01:05:31):
I like this.

**Austin Hay** (01:05:34):
Okay, so I've already said this and you've promised to put this at the top of the list, so I'm really excited. It's just tools are meant to solve problems and I tell that to every person I hire. I repeat it consistently at Ramp and all of my consulting gigs. And it's not just the words, it's the spirit of it. Tools are really just meant to solve problems. You don't have to buy a tool to solve the problem. You also don't have to buy a specific tool to solve the problem. And I think it embodies so much of what marketing technology is trying to do. It's trying to help people understand their problems and then actually take action on them using tools and technology that are most first party and third party. And most people just focus on the tool part and focus on the buying and integration part.

**Austin Hay** (01:06:16):
And so I think if you consistently remind yourself that tools are just meant to solve problems, then you really get into a space where you as a systems' person can be an advocate for your marketer or your product people. I think sometimes there is a little bit of a tendency for people to think that people who manage and set up tools are just interested in managing and setting up tools, but really at the end of the day, we're trying to help people actually do stuff. Then there's this PPS framework that I talk about a lot, which is problem, people and system. So, whenever there's a challenge that comes up like at Ramp or in a consulting gig, I like to first say what's the problem? Who are the people involved and what system does it impact? Usually because people just jump straight to the system. They're like, hey, there's this problem, I just need to solve it with the tool. Hey, I'm trying to do X, Y, and Z. Can you just give me admin permission straight to the system?

**Austin Hay** (01:07:07):
So, if you back up though first you understand the problem like, hey, what is this person trying to solve? What is their discreet issue? A great example is I'm a sales manager and I want to make it so that every time I hire somebody, I don't have to go through this really tough process of onboarding my staff. All right, so that's the problem. Who are the people that involves, does the sales manager need permission from the CRO? Do the sellers need to be trained? Is there some other confounding factor that we're not aware of why we don't want to just automate this thing? Once you have an understanding of the people and the problems that you're trying to solve, then it's really, really easy to design the system to solve that. And so that's my number one framework for technologists in particular is like don't just jump to the system, think backwards, start with the people and the problem and then move to the system solution.

**Austin Hay** (01:07:52):
And then another one that I've already mentioned too is it's B and B as opposed to BVB. So, build and buy as opposed to build versus buy. People all the time just think the second that you're talking about implementing a tool or procuring a solution, it's, Hey, I want to build this thing or I want to buy this really expensive thing. Build versus buy is a very narrowly constricting decision tree. If it's only build versus buy, then you've already made the decision that you can only do one or the other, which means you're already fighting somebody at your organization. Build and buy means that both of you can win and you can actually create a solution that is not only unique but saves the company time and resources and makes everybody happy. It's more of a consensus driven approach. Whenever I hear in a meeting or a call or some discussion about how we have a tool and it's really expensive and we want to build in herself, I try to just use the build and buy framework to tee people up and say, what about the problem?

**Austin Hay** (01:08:59):
Can we buy? What about the problem can we build? And where does it make sense to invest our resources and our people accordingly to get the optimal outcome? A great example is a company that I was consulting for was thinking about building their own AB testing tool. And actually we had the same problem at Ramp recently, and they're like, well, we just think we should build ourself. This is core to our technology. We have the engineering resources to do it. And they were evaluating it to build the entire system themselves or buy a third party, I think it was split.io or something like that. And the entire engagement was basically designing a financial model to show them that they could make a lot more money, save money, move faster if they just bought the third party tool at the lowest possible cost and spent all of their resources that they were going to spend building it, building around it and making it their own. And there's lots of, I hate the word synergy, it's just so yucky.

**Lenny** (01:09:54):
I don't mind it. I think it communicates what you want to communicate, and I feel like people don't say it as often anymore, so maybe it's okay.

**Austin Hay** (01:10:00):
Yeah, because they're afraid. There are mutual benefits is a better way of saying it, if you build a tool custom to yourself when you've bought a tool because the vendor at that point is committed to you and they want you to be successful, so you often can get accelerated outcomes if you build on top of a third party than if you just build it yourself. A great example is say you buy one of these AB testing tools and you build around it and you're a large customer of them, but you've invested a lot of your own engineering resources to make this solution your own.

**Austin Hay** (01:10:31):
If they know that and they care about you, they're going to be willing to actually make you happy in the moments where you need a change from them, say some SDK change or a new feature or something like that. A framework that I talk a lot about in my Reforge course is about building a stack. Everybody asks, hey, how do I build my stack? What should I do? What tool should I use? Even you earlier were like, what's the golden stack? Tell me what five tools should I get?

**Lenny** (01:10:57):
Just tell me.

**Austin Hay** (01:10:58):
Yeah, yeah. I'll tell you at the very end, I got to hold out. Otherwise, you'll ditch this podcast.

**Lenny** (01:11:04):
That's right. Yeah. Wait until the end. Is there anything else you want to share before we get to our very exciting lightning round?

**Austin Hay** (01:11:14):
**Austin Hay** (01:11:27):
Okay. So, Steven B. Sample is a professor at USC. He wrote a book called The Contrarian's Guide to Leadership, really great book. It's one of his principles. There's actually a lot of great principles in the book, but this is the one that I think has stuck with me the most in my career. And the concept of thinking gray is so often in life and in our jobs, we are forced to make decisions very quickly. We have to think black or white about a problem set or a solution, and then decide. One of his tactics is this concept of thinking gray, which is actually to not decide for as long as you possibly can before you have to decide. It's really challenging because it involves this little thing called patience, which I do not have a lot of, most of the time, and I know most people don't as well. But it's particularly really relevant in systems thinking and product because so often we believe that we have to make a decision because our boss is telling us because there's an OPR, because we feel the pain because somebody's complaining to me.

**Austin Hay** (01:12:30):
But actually in reality, you don't have to make a decision at all. You can just let it sit for a while. And this also applies to, I think, how you move through the world and view people. A lot of times we will meet somebody in a company setting or in a business setting, and we are quick to make decisions about them. We even asked me questions about how I hire people very quickly. We're looking for shortcuts to make decisions about evaluating people. One of the best pieces of advice though about thinking gray is it gives you the grace to not decide about people until you have to decide. So, obviously for an interview decision, you have to decide.

**Austin Hay** (01:13:05):
You have to decide yes or no. But so often you'll come across people and you'll meet them once or twice. And I feel like there's this tendency in the back of everybody's brain to be like, do I like this person? Do I want to work with them? And the question often is not that it's do you have to even make a decision right now? And by leaving yourself to have space to decide, you actually open up the possibility that in the future you'll make a better decision. So, I think that's a really good lesson for systems, and it's obviously a lesson that you can apply to the rest of your life too.

**Lenny** (01:13:37):
Austin, that was awesome. And with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Austin Hay** (01:13:43):
I'm so ready, Lenny.

**Lenny** (01:13:45):
What are two or three books that you've recommended most to other people?

**Austin Hay** (01:13:49):
So, first book I already mentioned, but say it again. It's The Contrarians Guide to Leadership awesome book. Second book that would be really good is the Art and Adventure of Leadership by a guy name Warren Bennis. And these are more philosophically leadership books. They're less about technical specs on how to run a business. So, you have to be into that.

**Lenny** (01:14:10):
Favorite recent movie or TV show.

**Austin Hay** (01:14:12):
I'm currently watching for the first time Suits, which I'd never seen before, which I think is pretty good because the story arc of every Suits episode is that there's a problem. Then they solve the problem and then the problem is solved at the end. So, it's very gratifying for anybody out there who's a high anxiety person who just wants to have this story arc resolved at the end of the episode. But if that's not your jam and you like excitement, also watching Silo, Witcher. For comic relief, there's Our Flag Means Death, which is hilarious. Have you seen that show?

**Lenny** (01:14:44):
No, not Our Flag Means Death.

**Austin Hay** (01:14:46):
Now you need to go watch it. It's about black beard and gay pirate captain. So, strongly recommend that. And then for just really dumb comedy, What We Do in the Shadows is hilarious.

**Lenny** (01:14:59):
What was that? What We Do in the Shadows?

**Austin Hay** (01:15:01):
Yeah.

**Lenny** (01:15:02):
Okay. Wow, a lot of recommendations. Thank you for that. What is a favorite interview question you like to ask candidates?

**Austin Hay** (01:15:09):
So, I talked about what you did to prepare, but the other one that I think is really good because it forces people to get vulnerable is tell me about the most difficult or challenging thing you've overcome in the last year in your life. It doesn't have to be work related, it could be personal. And I think it's a great way to just reset the atmosphere, make people dig a little bit deeper into who they are and be more vulnerable. And I find usually it also helps calm them down because if they shared them one of the most challenging, difficult, and hard parts of their life, then all the other questions just are pretty easy. So, that's one of my favorites.

**Lenny** (01:15:43):
What is a favorite product that you've recently discovered that you really like?

**Austin Hay** (01:15:46):
This sounds super dumb. It's called cal.com, and I'll tell you the story first. I've been a big Calendly user for a long time, but Calendly is pretty expensive. If Calendly is listening, you want to give me promo, cool. But it's very expensive. And then I also just found that it is not always graceful at syncing multiple calendars from both businesses and consulting gigs and personal, and I had trouble remembering my Calendly link. I don't know. The interface is like circa 2016. So, really looking for something a little bit more notion like with a Command K interface and just integrations that work. And cal.com has not failed me. It has been awesome. So, if people are looking for new Calendly tools, strongly recommend.

**Lenny** (01:16:30):
Wow, I never heard of this. What a great domain, cal.com.

**Austin Hay** (01:16:32):
I know, right. Killer.

**Lenny** (01:16:34):
What is a favorite life motto that you often repeat to yourself or share with other people, either in work or in life?

**Austin Hay** (01:16:42):
I just think a lot about the power of appreciation, and one thing that I've just been thinking a lot about recently is the challenge that people might be facing in their daily lives. I actually was recently listening to another podcast by Adam Fishman, and he had Brian Balfour on. And Adam's basically just interviewing a bunch of dads, which is cool. But the nice thing about being a little bit older in your life being a dad is that you maybe have seen hardship before. And this podcast is great at just exploring the stories of people who I really admire and go through their hardship. And in that it's been a very profound experience, understanding the type of challenges that people have gone through in their lives, people who have lost mothers and fathers early in life, people who have lost children. I myself, my wife and I lost her dad last year.

**Austin Hay** (01:17:35):
We lost two grandparents to COVID, we lost our dog. So, I think that the way that it ties to appreciation is if you can understand what people are going through and you start to view them a little bit more as a human and understand what's beneath the surface of work, who are they? What do they care about? What are the things that are driving their life forward? It just makes you so much more appreciative for what you have and the good moments when they're actually there. And this doesn't just apply to life. It's also like business too. It makes winning a lot more fun when you know the hell that people have gone through. That's just something I like to talk a lot about with people, especially folks who are younger in their careers who maybe have only seen wins describing what the losses look like so they can picture in their mind and then have some experience when they go through it. It's a big part of my shtick.

**Lenny** (01:18:23):
What an excellent answer. I am definitely going to keep asking this question. For people who are still listening here is the promised Golden Stack.

**Austin Hay** (01:18:32):
Okay, so Golden Stack. If I was a B2C business, I'd buy Amplitude for my CDP, I'd buy customer IO and maybe I'd upgrade to Braze in the future. I put everything in Snowflake, I'd buy high touch to reverse ETL, all that data out to my ad networks. For attribution, probably AppsFlyer from a mobile app, if not Branch, but it'd probably be AppsFlyer first. So, that gets you, you got AppsFlyer, Amplitude as your CDP and product analytics, Customer IO for email. Snowflake for your data warehouse, Hightouch for streaming all the data tools. That's like golden stack today if I were implementing it for a B2C business. For B2B, roughly the same, Amplitude. If you need an attribution tool, if it's B2B, actually, if it's a web only business, probably we use Branch because Branch is better for web.

**Austin Hay** (01:19:23):
So, you have Branch, Amplitude, connect all the data to Salesforce. Hopefully at some point in time somebody builds a better Salesforce. That'll be for our next podcast though, Lenny, can't cover that today. And then reverse ETL is Hightouch. So, very similar except the only difference is what do you do for an email tool? A lot of people use HubSpot. I would try to go away with Customer IO as long as I could and then I'd move to Braze afterwards. So, a big difference is just Braze versus Customer IO for B2B.

**Lenny** (01:19:49):
Final question for you. I heard that you're a drone pilot and I'm curious, what is the coolest place you've flown your drone or the coolest thing that's happened with your drone?

**Austin Hay** (01:19:57):
So, this actually gets back to our intellectual curiosity thing. Maybe I just search for weird people when I hire because I just love when people do interesting things that are unrelated to work. And the story is during COVID, I didn't really want to just better myself online through a bunch of educational platforms. I just felt like it would be a little bit soul crushing to sit in front of my computer screen and learn how to do statistics or whatever. So, I was trying to look for things that were interesting, niche, outside of my domain knew nothing about. And the three that I came up with were, I learned to fly a drone. I became a CFP, certified financial planner and I became a notary. And it's just because they seemed really useful things that had nothing to do with my work and would learn about something completely interesting and different.

**Austin Hay** (01:20:46):
So, those are the three that I chose. The drone stuff, it actually was funny. I started flying here in DC. I live in Virginia, but maybe a mile outside of Washington DC and around DC there's a restricted air zone. And so after I did my FA drone pilot license and I became a certified drone pilot, I really went down the rabbit hole of trying to figure out how to fly a drone in DC, because I've seen them around, but obviously it's a national security and I'm probably dramatically mutilating the exact experience. But as I went to do this, it was very complicated, archaic, but also funny because it was all online. You have to go file out a form, you get a letter from a local representative who says you're in good standing. So, we found a councilman that I just knew. And then you have to fill out all the stuff.

**Austin Hay** (01:21:39):
This paperwork, the site looks like it's from 1994. There's an office literally in DC where a person approves you. Then you have to let go and get a police officer to effectively babysit you while you fly this drone. And so I did all that and I got to the point where I was going to get babysat and I called our local police department and I was like, yeah. So, I talked to the office, I just need an officer to come out and meet at this time. And they just laughed me off the phone.

**Austin Hay** (01:22:04):
They're like, we're not going to send a police officer to watch you fly a drone. And I just thought the thing was really funny because yeah, it makes sense. Why would they waste taxpayer dollars to have me fly a drone? But it was a requirement. So, I ended up not being able to fly this drone in DC. But if anybody's listening and they know how to fly a drone and they want to fly, I would be totally down. I have two drones. I have a Mavic Air 2 and a Skydio Enterprise, which Skydio is a really cool company as well if people are looking for drones.

**Lenny** (01:22:33):
Okay, so you're saying if people have an awesome drone and they live in Virginia, they should come contact you and fly some drones together?

**Austin Hay** (01:22:38):
Yeah, exactly. Exactly. But just not in DC.

**Lenny** (01:22:42):
All right. Well, Austin, I think we delivered on the promise of making this extremely nerdy and in the weeds, and I think we've solved a lot of people's problems. I feel a lot of gratitude for you, and I feel like we taught a lot of people about MarTech, which was my goal. So, thank you again for being here. Two final questions. Where can folks find you online if they want to ask you more questions? And how can listeners be useful to you other than coming to fly drones with you?

**Austin Hay** (01:23:05):
So, first find me online LinkedIn. Threads, I actually have Threads. I don't have Twitter, like hot take, I think Twitter ruins people's careers. I've already seen multiple careers ruined by Twitter. Some people just don't know how to shut their mouth. So, I'm not on Twitter, but I am on Threads and I'm trying to figure it out. So, if you want to document Threads, you can. I'm on LinkedIn and then I have my email address on LinkedIn too, and I'm always willing to talk to people.

**Lenny** (01:23:28):
Amazing. And is there any way listeners can be useful to you?

**Austin Hay** (01:23:31):
Yes. I have a marketing technology course coming out with Reforge in the fall. If you're a practitioner of MarTech or you're interested in MarTech, would totally love for you to take the course, would love to your feedback in particular. I love to stand on this podcast and act like I know a lot about MarTech, but I'm still learning. And so I think it would be awesome to just get feedback from the community about what was interesting and helpful, what wasn't there, and we can improve upon. And then the other thing is, if you're ever looking for MarTech help and you want to reach out, that's great.

**Lenny** (01:24:02):
Amazing. Austin, thank you again so much for being here.

**Austin Hay** (01:24:04):
Thank you for having me, Lenny. It was a pleasure.

**Lenny** (01:24:07):
The pleasure was all mine. 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.

---

## [10/20] Monetizing passions, scaling marketplaces, and stories from a creator economy vet | Camille Hearst (Spotify, Patreon, Apple, YouTube)

**Camille Hearst** (00:00:00):
... those Steve Jobs' lore was that if you were in an elevator with him, you better be prepared to talk about what you do at the company because he had a habit of getting in the elevator and looking at you and saying, "What do you do? What do you do here?" And there were also rumors that people who had not given him a good answer, that ended up being their last day at Apple.

**Camille Hearst** (00:00:23):
So there was someone who I didn't know personally but worked in my department before I got there who got in an elevator and looked up and Steve was approaching him and so he went to press the button to open the door and accidentally pressed the one to close the door. And it was like doing this press... You can't see me if you're listening on podcast but frantically pressing the button, trying to open the door, but accidentally pressing the closed door button and the elevator going to its destination. And apparently he got off and just bolted straight up, ran down the hallway.

**Lenny** (00:01:00):
He'll never remember my face.

**Camille Hearst** (00:01:02):
Yeah, exactly.

**Lenny** (00:01:02):
I disappeared.

**Lenny** (00:01:07):
Welcome to Lenny's Podcast where I interview world-class product leaders and growth experts to learn from their hard win experiences building and growing today's most successful products.

**Lenny** (00:01:15):
Today my guest is Camille Hearst. Camille is head of fan monetization at Spotify. Before that, she was head of product for creators of Patreon. She was product marketing manager at YouTube and the second PM on iTunes. She's also a former founder. She started a company called Kit that she sold to Patreon.

**Lenny** (00:01:31):
And this episode is for anyone who's curious about the creator space, either from the creator side or the platform side, or if you'd just like to hear a bunch of fun stories from an awesome product leader.

**Lenny** (00:01:42):
We chat about the future of creator platforms, how to be successful as a creator, and also as a new creator platform, the downsides of creator life plus frameworks, stories from Steve Jobs, ways to monetize being a creator and so much more.

**Camille Hearst** (00:04:28):
Thank you so much for having me, Lenny.

**Lenny** (00:04:29):
I first wanted to just give a big thank you to Adam Fishman for introducing us who had just so many nice things to say about you and so I'm really excited to be chatting.

**Lenny** (00:04:38):
I want to start with talking about your current role at Spotify and I believe your role is head of fan monetization. What does that actually entail and what are you responsible for within Spotify?

**Camille Hearst** (00:04:49):
As head of fan monetization, I have a team of folks who are really passionate about figuring out new ways to help artists and fans connect and also figure out ways to make those connections result in new monetization opportunities for the artists.

**Camille Hearst** (00:05:08):
So one of the things that we all know and we've seen is how passionate fans are about the artists that they love. You've been following any of the latest bits about the Taylor Swift tour, the Beyoncé tour that's been happening this summer, and their effect on local economies. It's been pretty impressive.

**Camille Hearst** (00:05:28):
But one of the things that we also know is it's not just the big huge superstars who have those rabid and super engaged fan bases. People are really passionate just about supporting the artists that they love in general.

**Camille Hearst** (00:05:40):
And on Spotify, we want to figure out ways we can help that result in more money that goes directly to the artist.

**Lenny** (00:05:48):
What are some of those ways just to give people a sense of what might be happening?

**Camille Hearst** (00:05:52):
So one of the ones that most mature is merch which is funny to say because most people probably don't realize that you can purchase merch on Spotify. That's one that's been around-

**Lenny** (00:06:03):
I did not realize that.

**Camille Hearst** (00:06:04):
... for a bit of time and my team's recently been working on making it more prominent, giving artists more ways to offer that merch in the form of a reward for fans. So things like an exclusive discount or an exclusive design or early access because you're a top listener on Spotify, really thinking about thank yous and rewards for your Spotify listenership and fandom.

**Camille Hearst** (00:06:28):
And then other things we've been looking at have been listening parties. We ran a few of those over the past year. I think I talked about it actually on a Spotify event a few years ago. We were running... Sorry, it wasn't a few years ago, it was last year.

**Camille Hearst** (00:06:45):
But listening parties is another way and then we've got some new ideas we're exploring.

**Lenny** (00:06:50):
I've heard people do listening parties with this podcast actually and I hope that you roll that out to podcast too because that would be very cool.

**Camille Hearst** (00:06:58):
Yeah. We have all kinds of ideas of really interesting ways we can bring groups of people together and get the monetization going.

**Lenny** (00:07:08):
All right.

**Camille Hearst** (00:07:08):
One day.

**Lenny** (00:07:09):
Mysterious but exciting.

**Lenny** (00:07:11):
Speaking of Taylor Swift, I was watching a TikTok the other day and they showed a video of someone inside the concert showing the whole concert and then they panned to the parking lot and there was just tens of thousands of people just standing around in the parking lot listening to the second order music out at the stadium. And I wonder how can you monetize that if there's an opportunity?

**Camille Hearst** (00:07:34):
Yeah. I think they often have the merch trucks in those parking lots though one way-

**Lenny** (00:07:38):
Probably unofficial merch.

**Camille Hearst** (00:07:40):
Yeah.

**Lenny** (00:07:40):
So you work with artists and I actually wanted to ask this question. What's the best part about working with artists, musical artists, and what's the worst part?

**Camille Hearst** (00:07:48):
I think the best part is working with people who really lean into their creativity and their passion so much so that they do it for a living. And I think a lot of us have creative pursuit and passions and things we love to do and if we made millions of dollars and could retire, what would you do full time? Usually, it's one of these pursuits. But I think it takes an element of bravery, not to mention talent, but you really have to go out on a limb.

**Camille Hearst** (00:08:18):
And so that's this equality that exists in this group of people and it's fun to be around and feel that rub off on you and think, "Oh, maybe I could take the dive one day and I don't know, go do my calligraphy or learn my ukulele and then do it full time." But that's the best part.

**Camille Hearst** (00:08:35):
And the thing I'm really... I grew up in a musical household. My dad's a drummer although his joke when we were growing up was real musicians have day jobs because he had to actually have a job with benefit to support the family and couldn't just be gigging full time.

**Camille Hearst** (00:08:55):
Which actually brings me to the flip side of the question which you asked what is the hardest part. I do think we saw this a lot at Patreon and I think you see it especially with musicians and artists, this feeling that you want to give your fans everything that you create and you want to do it for free because you're so enamored with this idea that people really love you and want to support you and they're really responding to your creativity and everything that you're making, you don't want to charge them. But what comes with that is, well, how are you going to make a living.

**Camille Hearst** (00:09:29):
To some degree, there has to be a value exchange that happens in order for a creative person to live from their art.

**Camille Hearst** (00:09:37):
And I've found that that's much more pronounced with musicians, this starving artist ethos which makes what I'm trying to do actually quite difficult because a lot of the feedback we get is, "Oh, that's awesome. I want to have a listening party and have everything be free and just have everyone show up and don't sell anything." And we're really looking at it as a way to fans want to support the artists they love, they want to open up their wallets.

**Camille Hearst** (00:10:04):
You've see nothing else from a Substack and Patreons that people are actually really happy to be a patron of the arts and they look at it as like a badge of honor.

**Camille Hearst** (00:10:12):
But musicians in particular I think tend to shy away from that which makes the kind of thing that I'm working on more difficult.

**Lenny** (00:10:20):
This's a great segue to an area I want to spend time on is the creator economy and creators and artists and things like that. And along these lines, I think I have this issue too. I feel bad charging people but there's also... I don't think my stuff is worth enough to charge for and why would anyone ever pay anything for it and so I imagine you see that too. It's just like, "No one's going to pay for this. It's crazy."

**Camille Hearst** (00:10:40):
Yeah. It's funny because we live in a very capitalist and market dictate the price kind of society, but on an individual level, particularly when the commodity so to speak is art, there's so many emotions and feelings involved in that that it's hard for someone who's the creator to disassociate themselves from it and see what the market will bear.

**Camille Hearst** (00:11:05):
Which is why I actually think it's great that there's platforms who have stepped in and said, "Hey, we see an opportunity. Let us insert ourselves in the center, let us aggregate, and let us do the hard work of pricing and payment and tax and finance and actually create value where it would be really hard for an individual person who's a creator to do all of this work and facilitate that connection." It's almost like the perfect marketplace solution.

**Camille Hearst** (00:11:38):
But again, it's hard because if the supplier doesn't want to actually make money in some cases or shies away from optimizing or making money.

**Camille Hearst** (00:11:47):
And then there's the creative process. Sometimes, you're in a flow mode and you're producing a lot and then other times, you're in a drought spell and these things ebb and flow which is why I think companies like Patreon and Substack are really cool because what they try to do is smooth out that revenue and make it so an artist can actually have a predictable... They're not even artist, a creator can have a predictable sustainable paycheck so that they aren't bouncing around from job to job and losing the ability to have that burst of creativity because they're worried about their bills.

**Lenny** (00:12:22):
I have that experience myself with Substack which is a subscription newsletter and one of the big downsides people don't think about with this life is once you start charging, people start buying, say, an annual subscription and that means I have to at least go for another year and in reality, I never really want to stop it because the revenue would just stop and that would be really sad. So you get on the treadmill where you don't really have an exit path. And I'm not sure exactly where this all goes, but it's been great. But that's something people don't think a lot about is this never ending, keep creating, keep creating life.

**Camille Hearst** (00:12:52):
We call it internally the hamster wheel of content creation. You get on because you love it and then how do you get off.

**Camille Hearst** (00:12:59):
So it's actually an interesting challenge again for platforms to think about where can they add value, are there ways to either make the content creation process that much easier and I don't want to say less of a burden because it's not a burden but sometimes, if you don't have time or you're just at a point in life where you can't do it, are there services or things that can be offered, are there things like financing that makes sense for creators that banks or traditional institutions wouldn't offer because of just the difference in the type of work that's being produced.

**Camille Hearst** (00:13:34):
Or another potential solution is are there ways that platforms can create content. Maybe it's automated so that the creator can take a break. So maybe they're not AI necessarily, maybe it's more just aggregating data or doing summaries or maybe there's just other ideas that haven't been explored out there. But it's a real problem.

**Lenny** (00:13:56):
So I have this lennybot.com site which is an AI chatbot based on all my content including the podcast episodes and actually, an engineer who was listening to this podcast reached out and offered to help me build it and he did and it's awesome. And I'm curious if that becomes my retirement plan as the bot ends up just doing this and learns enough. I highly doubt it, but it's fun to experiment with.

**Camille Hearst** (00:14:18):
Yeah. Use your own content as your large language model, right?

**Lenny** (00:14:22):
Exactly. That's exactly what it is. And I'm curious where this goes.

**Lenny** (00:14:26):
I want to follow the thread of the creator economy. It feels like there's this huge wave of the creator economies, the future of work, and all these platforms launched to allow creator to make money. But it feels like over the past couple of years, it feels like it faded away. And these very small number of platforms essentially one YouTube, Spotify, Instagram, TikTok, Patreon, maybe Substack, and there was also the sense that the future of work is freelance, everyone's going to be working for themselves, creating stuff, and it feels like people are still working regular jobs. A lot of these startups haven't done great.

**Lenny** (00:15:01):
So I guess I'm just curious what you think happens maybe in the next five or 10 years from a perspective of platforms emerging and also just from creators, what... Do you think things stay the same? Do you think there's another wave? Where do you think things go?

**Camille Hearst** (00:15:14):
I think it was probably predictable to some degree that platforms would win because just of the nature of aggregation. Once you have either all of the supply or you've aggregated the demand, it's really a strong network effect. Why investors love to invest in these types of businesses, it's hard to break out.

**Camille Hearst** (00:15:37):
I wouldn't underestimate the strategic ability either of some the big platforms. They were definitely thinking ahead and building features and thinking about whether or not they saw it as a monetization opportunity. It certainly is a great strategic play to make sure that creators felt like they were on the platform that made the most sense for them and they weren't going to churn or leave or try too many other places out.

**Camille Hearst** (00:16:04):
So I think the rush and the funding was to figure out is there room for any other new platforms, are there specific vertical that maybe there's an opportunity to create vertical specific features and tooling.

**Camille Hearst** (00:16:19):
And actually, I think we saw a huge massive creation there in Twitch, right? Twitch did not exist and they're just a juggernaut.

**Camille Hearst** (00:16:26):
I think TikTok is another one that came out of this era. Maybe they weren't positioned as creator economy type startups but effectively...

**Camille Hearst** (00:16:35):
Did you see what happened in Union Square here with Kai, the gaming streamer?

**Lenny** (00:16:39):
No.

**Camille Hearst** (00:16:39):
So I'm in New York and last week, there was a mob and a riot because a Twitch streamer announced that he was going to be giving away PlayStations and computer gear in Union Square and something like a million teenage boys showed up. I'm not making this up. And they had to shut down the center of New York City to clear what turned into protest, riot, mob-

**Lenny** (00:17:07):
Holy shit.

**Camille Hearst** (00:17:08):
... of teenagers who came for this one creator that probably no one listening to me right now has even heard of.

**Lenny** (00:17:15):
Yeah.

**Camille Hearst** (00:17:17):
So I do think a lot of the predictions have come to bear. There are tons of people making money and making a living from creating content on the internet.

**Camille Hearst** (00:17:28):
There have been studies too where they ask young people what they want to do and what they want to be when they grow up, we quote these at, excuse me, Patreon and over 60% want to create content for a living.

**Camille Hearst** (00:17:42):
So those trends I don't think are going anywhere. Maybe it'll be supplemental income, maybe it'll be something you do for a period of your life. But I do think that this area continues to be untapped. I just don't see a world where...

**Camille Hearst** (00:17:58):
I think of Michelle Phan, right? She's basically a mini Disney and when you think of it like that, she's created IP. What can you do with IP? Comic books, movies, TV shows, plushies, merch. How many millions of Michelle fans are we going to have seen?

**Camille Hearst** (00:18:16):
Look at what's happening in China. There's tons of creators like this.

**Camille Hearst** (00:18:20):
So whether or not the VCs have won or the startups have succeeded, there's no way that you can lower the cost of content creation and increase the scale of distribution and not see this emerge, this creator economy I think emerge. But I think that maybe there's still opportunity for more companies to blossom and to grow and certainly for more individuals maybe do this, figure it out on their own, and do it without too many big platforms getting paid off of their creative pursuit.

**Lenny** (00:18:58):
Have you seen the NPC trend on TikTok/maybe Instagram Reels where people pretend to be NPCs, non-playable characters, from a video game?

**Camille Hearst** (00:19:06):
I have not.

**Lenny** (00:19:07):
Okay. It's crazy. People just pretend to be a computer character and people pay them little gifts to do a thing.

**Camille Hearst** (00:19:15):
Oh. Is this the... Yes. Have seen it. [inaudible 00:19:19] ice cream, ice cream.

**Lenny** (00:19:22):
Yeah, exactly.

**Camille Hearst** (00:19:22):
Yes. I didn't realize.

**Lenny** (00:19:24):
You're making tens of thousands of dollars a day just... So that's one way to make a living.

**Camille Hearst** (00:19:24):
Yeah.

**Lenny** (00:19:30):
On the thread of becoming a creator, you've seen a lot of creators try to do this on Patreon, back at Apple even with iTunes, I want to chat about that, at Spotify now, and even your startup. I'm curious what you've seen is important to success in the creator life, especially things that are maybe not obvious to people. What do people need to get right if they want to pursue that path?

**Camille Hearst** (00:19:54):
One of the things that I've seen that I don't know if people realize is consistency and predictability of content creation which is where this idea that we were talking about earlier of a hamster wheel kind of comes on.

**Camille Hearst** (00:20:08):
But there is something to churning out consistent quality work and putting it out there for your audience to consume and respond and react to that goes a long way. It's almost like the 10,000 hours. You have to do 10,000 hours of something in order to truly master it. But I've seen that time and again.

**Camille Hearst** (00:20:30):
I started at YouTube in, let's see, how old am I? It must have been 2010. And that was when I really think this whole thing was just first getting going. And we used to put together these playbooks of what made a creator successful because a lot of the effort there was trying to support this burgeoning economy. And I remember even back then in 2010 and to this day, that continues to be one of the top pieces of advice.

**Camille Hearst** (00:20:57):
Another one is collaboration. So working with other great creators, sharing audience, exposing one another to those audiences, and then this was something we tried to employ at my startup, Kit. We would actually host events for creators to get together to facilitate meeting and cross pollination in the hopes that it would just benefit their careers. If they were doing YouTube videos with someone they met at the party, then it would be great for all parties all around. So those are two things.

**Camille Hearst** (00:21:32):
And then I do think in a world with all of this content, there continues to be a need and a space for the curator. And curators as creator's kind of an interesting concept. But a curator is almost like what the role at book publishing company plays or a record label plays or a radio station plays, right?

**Camille Hearst** (00:21:56):
There is a degree of having a brand, having something you stand for, having a vibe or an ethos and that person being almost, not a gatekeeper in a bad way, but like, "I, Camille, can't consume anywhere near all this content. You, I trust your vibe. Tell me what I should be listening to." And so that would be the third thing I would say is figure out who are those curators who you really can associate your content with who are on the same page as you, have an audience who you think would like your stuff and just try and get associated with them.

**Lenny** (00:22:30):
Yeah. The last piece is so... I totally see that all the time. If there's someone I super respect and they recommend something, I'm obviously going to value that recommendation highly. That's like we're influencing emerged from organically, right? People just, "Here's something you should check out," and then, "Oh, let's pay you to share things so that people try our product."

**Camille Hearst** (00:22:48):
That was the exact concept behind my startup, Kit. It was all about curating, finding people who are great recommenders for gear, having them curate that gear, and then you could follow the curators you love who wants to go look on Amazon and see reviews from people you've never heard of. Oftentimes, if it's your brother-in-law who's a great cyclist and they say, "Buy this," you just buy it. You don't even care what the reviews say because you trust that person.

**Lenny** (00:23:14):
What happened with the startup and what did you learn from that experience?

**Camille Hearst** (00:23:17):
I started working on the startup in 2015. We managed to raise some money, raised over $2 million, which is a huge accomplishment, especially if you know anything about venture capital. They have a horrible track record when it comes to funding people of color, women, people who are non-cisgender white male, just the track record.

**Camille Hearst** (00:23:43):
And we had an amazing experience building this company over several years, grew a bunch of the key metrics up into the right and got to a point where we were trying to figure out what the next move was and should we get a bridge round. We were trying to raise Series A. We were, I think, early on the creator economy trend. Probably about a year and a half later, it would've been, I think, I hope a snap to raise money. But anyway, we were battling a bunch of different choices, different options.

**Camille Hearst** (00:24:19):
And I actually did this startup accelerator called StartX that's run out of Stanford which is my alma mater. And we learned a lot about how to sell a company and what M&A looks like. So we started exploring that path.

**Camille Hearst** (00:24:34):
And in the end, it made the most sense for us to have an exit and join forces with Patreon. And so that's what we ended up doing. Sold the company in 2018, joined Patreon, worked there a couple of years, and that's where I met Adam.

**Lenny** (00:24:49):
Amazing. And I wanted to ask actually about that experience of selling a company. There's a lot of people listening right now who are thinking about selling their company or maybe you hope to sell their company someday, and I think there's a reality of it and then there's the idea of how it might go. I'm curious what you've taken away from that experience. And I guess specifically is there any advice you could share with folks that are thinking about selling their company someday? What you think maybe could have done earlier or also just share a glimpse of the reality of acquisitions?

**Camille Hearst** (00:25:20):
I think it's different for every company for sure. Some companies get souped in and get bought. And other companies actively sell themselves.

**Camille Hearst** (00:25:31):
We are definitely in the latter camp which means that we manage a process. It's similar to how you manage a process for fundraising. Not every company just meets the VC and raises money on the first try. They go through a process and meet tons of VCs and put them through the funnel and end up on the other side hopefully with a successful round. So I think that's one takeaway is treat it like a process and manage it like a process if it is something you're interested in. It doesn't really just... For most companies, I would say it doesn't just happen.

**Camille Hearst** (00:26:04):
And then the second piece of advice I would give I think we should have been talking to potential acquirers from the beginning and sharing our vision and what we were trying to accomplish because we started those quite late in our journey as a company and it just meant it took... When I met a potential CPO, who would acquire the company, who would end up being my boss or CEO, it was their first time meeting me whereas if it had been their fifth time, we would've had a relationship established and they would've known more about the vision and what we're trying to do and hopefully, would've had some more time to think about it.

**Camille Hearst** (00:26:42):
So those would be my two pieces of advice. Start preparing to sell your company from the moment you found it which is a weird thing because obviously, if you're starting a company, for most founders, they want it to be the next big thing, they're not starting it in order to sell it, but it's a good thing to have on your radar because you never know what the future holds. And then two is to treat it like a process.

**Lenny** (00:27:07):
Yeah. On that piece of knowing people who may acquire you, I found that to be a thousand percent true. We sold our company the Airbnb and that's how it got to Airbnb and what I realized is you just need people who may buy you in the future to have you in their head when they have a problem so that they could be like, "Oh, Camille and her team could solve this problem for us. Let's go chat with her and-

**Camille Hearst** (00:27:28):
Exactly.

**Lenny** (00:27:28):
... see if they're interested in acquisition."

**Lenny** (00:27:31):
And on the process piece too, 1000% resonates. We basically... When we started chatting with a company, we're just like, "Okay, who else could potentially acquire us? Let's make a big list and who we can talk to at that company as soon as possible and then just explore." But it's more challenging there because it's you reaching out to them being like, "Hey, you want to chat about buying our company," versus them reaching out to you. So to your point, always goes better if they reach out to you, but you can't always control that.

**Camille Hearst** (00:27:54):
Right. Or if the meeting is not under the context of buying it all, it's like, "We're working on something cool. We have a great vision. It aligns with what you're doing. Maybe there's a partnership here," versus just tell you what we're doing and then when I contact you in 12 months about buying me, you've heard of me before.

**Lenny** (00:28:12):
I find even when you're starting to chat about acquisitions, you never want to say directly, "Hey, you want to buy us?" It's like, "Hey, you want to have a strategic partnership of some kind? You want to explore partnership?" So funny.

**Camille Hearst** (00:28:23):
Like dating.

**Lenny** (00:28:24):
Yeah, yeah. You can't just be too direct sometimes.

**Lenny** (00:28:28):
So when you got to Patreon, I don't know if it was immediate or eventually you ended up leading the creator side of the marketplace, and I find that looking at your background, you basically stayed on the supply side of marketplaces through your career mostly.

**Lenny** (00:28:43):
And I actually did the same thing. All I worked on at Airbnb especially, or mostly, was the host side.

**Lenny** (00:28:48):
And I think it takes a specific mindset in person to be excited about that side of the marketplace versus the consumer side which is where everyone always generally wants to go, to the customer side. So I'm curious what it is that's drawn you to that side of the business across all the places you work and then just what you found to be important to be successful in that role and on that side?

**Camille Hearst** (00:29:09):
What drew me to that side of the business probably was maybe accidental at the beginning. Just again, coming from this musical family and background, I always had a natural interest in helping artists make a living. So I think that interest was there.

**Camille Hearst** (00:29:29):
At Apple, I did... There were only two PMs there. We did everything.

**Camille Hearst** (00:29:34):
At YouTube, I accidentally ended up in creator.

**Camille Hearst** (00:29:39):
But where I started understanding deeply the dynamics of the marketplace was actually my experience and the one job I've had that not been in the creator or art or these big consumer platforms or creator economy which was at a startup called Hailo based out of London and at the time was a huge competitor to Uber and Lyft in the ride sharing and ride hailing space and I worked on the supply side making sure that there were enough cars to fuel the demand.

**Camille Hearst** (00:30:17):
And in a marketplace like that where it's real time people trying to get a cab to go from uptown to downtown, you see the inexperience firsthand the impact to your business if you don't have suppliers, if your suppliers aren't happy, if they go on strike, if there's regulations that mean you can't use your service. And there I think I was...

**Camille Hearst** (00:30:44):
So one of the projects that I worked on that I launched was the U.S. Uber competitor because Hailo in Europe was all about getting taxi cabs and did not play in the livery is what it's called in New York or the private rides. Basically, it's like your uncle or your aunt or your cousin who can switch on Lyft and go pick up whoever. That just was not a thing in Europe.

**Camille Hearst** (00:31:09):
And so we had to figure out how to launch that in the U.S., how to get drivers on how to create this supply and it was like it doesn't matter how nice the user experience is, how great the marketing is, how much demand you can generate if when someone opens that app, there are no cars available.

**Camille Hearst** (00:31:31):
So a lot of people talk about marketplaces as chicken and egg. I actually just think they're two-sided and you start with the supply and at the end of the day, you can optimize for the demand side or choose who you're going to prioritize in terms of if there's a conflict, we're going to pick this side or the other.

**Camille Hearst** (00:31:53):
And yes, you won't be successful with one side or the other but I just experienced and lived firsthand the pain of having built this great operations back in that fed into this gray UI and then you open that app and you can't get a ride because there aren't enough cars available.

**Camille Hearst** (00:32:12):
So I think that solidified my feeling that with marketplaces, you can't lose sight of the solving real pain points and needs for the supply side in order to make sure the entire business can operate.

**Lenny** (00:32:26):
I've done a bunch of research into marketplaces and I found basically the same thing, that supply is almost always where you need to focus almost all your time especially at the beginning.

**Lenny** (00:32:34):
The way I think about it is that's if you have a store that's stuff on your shelves and you're not going to have a business if you don't have anything on the shelves.

**Camille Hearst** (00:32:41):
Exactly.

**Lenny** (00:32:42):
There's a few rare cases, I forget exactly which they were, where demand was actually the bigger challenge and supply is really easy.

**Lenny** (00:32:47):
You know what? It was Rover. Rover had no problem it turns out with supply because who wouldn't want to make 50 bucks watching a dog for a few hours. It was a really easy sell and a lot of people could do it and wanted to do it so they actually found supply was not an issue.

**Lenny** (00:33:01):
But in most cases exactly how you said most 10 times supply is what people are looking for.

**Camille Hearst** (00:33:05):
Totally.

**Camille Hearst** (00:33:06):
I find that the counter example I hear a lot is eBay, how they were so good at aggregating demand, they were basically able to force suppliers to the terms that they like. But I can't imagine... It'd be interesting to talk to some folks who were at eBay in their early days that the whole thing didn't start up without them going out and figuring out who are the key suppliers we need to get on this thing so that we can get aggregating demand.

**Lenny** (00:33:32):
Yeah. You got to have some good stuff on eBay. I wonder if Beanie Babies or whatever they started with.

**Camille Hearst** (00:33:37):
Yeah, exactly.

**Lenny** (00:33:39):
**Camille Hearst** (00:34:57):
Yes.

**Lenny** (00:34:58):
Okay.

**Camille Hearst** (00:35:00):
Yes. So I was very early on in the iTunes days I started interning there when I came out of grad school and my internship was actually in label relation and then I started a full-time job doing product marketing.

**Camille Hearst** (00:35:17):
And at Apple at the time, I think even to this day, they didn't have a product manager title, they had product marketing managers. And so one of my colleagues who remains good friends to this day, Steve was the first also named Steve, not Steve Jobs was the first PMM working on iTunes and he primarily was doing all the client stuff. He launched the store and everything. But I think I was the second person in the iTunes group with that title. So that was really cool.

**Camille Hearst** (00:35:44):
And then as far as the Steve Jobs story, I would think I mentioned to you people like hearing this story, nothing happened, I just went up to him and said, "Hi, I'll tell the story."

**Camille Hearst** (00:35:53):
But I think the context of why people find it interesting is because of other stories about Steve. So let me give a little context.

**Camille Hearst** (00:36:01):
Those Steve Jobs lore was that if you were in an elevator with him, you better be prepared to talk about what you do at the company because he had a habit of getting in the elevator and looking at you and saying, "What do you do? What do you do here?" And there were also rumors that people who had not given him a good answer that ended up being their last day at Apple.

**Camille Hearst** (00:36:24):
So there was someone who I didn't know personally but worked in my department before I got there who got in an elevator and looked up and Steve was approaching him. And so he went to press the button to open the door and accidentally press the one to close the door and was doing this press... You can't see me if you're listening on podcast but frantically pressing the button, trying to open the door, but accidentally pressing the close door button and the elevator going to its destination. And apparently he got off and just bolted straight up, ran down the hallway.

**Lenny** (00:37:02):
He'll never remember my face.

**Camille Hearst** (00:37:03):
Yeah, exactly.

**Lenny** (00:37:04):
I disappeared.

**Camille Hearst** (00:37:04):
So that's the context.

**Camille Hearst** (00:37:07):
So in 2005, it's my first day of my internship at Apple and I had this situation where I attended graduation because I only had one semester left to go back to, so I just decided to attend the graduation. That happened basically the week before. And for those of you who are the job span, this is when he gave his really inspiring and famous Stanford commencement speech and it's an awesome, awesome thing to listen to.

**Lenny** (00:37:41):
You were at that speech?

**Camille Hearst** (00:37:42):
I was there, yeah.

**Lenny** (00:37:42):
Whoa. People love that speech.

**Camille Hearst** (00:37:47):
It's a good one. It's really-

**Lenny** (00:37:48):
What did you feel being there listening to it in the moment?

**Camille Hearst** (00:37:51):
Totally inspired.

**Camille Hearst** (00:37:54):
Apple was not quite what it is today in terms of brand and influence and just it's at the peak. It's really come a long way. It was still when I met the recruiter at a conference, I was like, "Apple? What do they do again? My roommate had a Mac, but what's iTunes? Oh, yeah, I think I've heard of that. I think..."

**Camille Hearst** (00:38:19):
The dancing iPod silhouette ads which really sent Apple over the top. Those hadn't even really dropped yet, but it was starting, right? It was starting to percolate and bubble and you heard more and more about it and just the association with music was making Apple more cool.

**Camille Hearst** (00:38:35):
But that speech is... Talk about a commencement speech. That is top-notch.

**Camille Hearst** (00:38:41):
And Steve's great at those. He was phenomenal storyteller.

**Camille Hearst** (00:38:44):
So graduation is what? Saturday, I go home Sunday. The Monday I started my internship and here we are at Cafe Max with my new coworkers and Steve is sitting literally at the table next to me. And so I was like, "Oh my gosh, there's Steve. I would love to say hi and introduce myself and everyone at the table."

**Camille Hearst** (00:39:09):
Now mind you, I hadn't heard this story about the elevator button in the full yet because it was my first day, but they're all looking at each other. They're like, "Yeah, go say hi to him if you want, but you're an intern." They say, "Hopefully, he doesn't fire you on your first day."

**Camille Hearst** (00:39:22):
But I've always, in my family and in my life, had this encouragement to say hi to people when you see them and let them know that you appreciate what they do and just thank them because it doesn't happen often.

**Camille Hearst** (00:39:39):
A lot of times, people go and they ask for a picture or an autograph but this idea of just introducing yourself, saying hello, and thanking someone for something that they've done that impacted you to something that's been a way that my parents have encouraged me to behave in the world and something that I saw them do and saw them model because probably, again, coming from my dad being a musician and being fans of other musicians that like a thing in music, the artist culture that talked to one another about how something you created influenced you or whatnot.

**Camille Hearst** (00:40:09):
So I went up to him and I got up from my lunch table and walked over and I said, "Hi, my name's Camille. I'm interning here this summer. It's my first day. I was at graduation at Stanford on Saturday and your speech was amazing. I was really inspired. I'm so excited to be here and so excited to work on this company and I just wanted to say thank you for spending your time doing that speech for us on Saturday."

**Camille Hearst** (00:40:38):
And he was like, "Who are you? What? You're an intern? Well, what are you doing here?" It was a little... We had a little bit of an exchange. I had to clarify like, "Yeah, I graduated, but I'm interning and I have another semester left." And he was like, "Oh, okay. Well, welcome to Apple and good luck and I hope you have a really great experience this summer." And that was it. I didn't get fired and I said hello to Steve.

**Camille Hearst** (00:41:01):
And after that, I felt like I knew him. Every time, I'd see him around campus I'd wave high and I think he had no idea who I was but he would look at me confused and then wave back hello.

**Lenny** (00:41:12):
"She's so friendly. Who's this person?"

**Camille Hearst** (00:41:14):
Yeah.

**Lenny** (00:41:15):
Do you still remember how you would've described what you do? I have a feeling it's seared in your head, but if not, then never mind.

**Camille Hearst** (00:41:21):
Oh, my statement, if he had asked me where [inaudible 00:41:23].

**Lenny** (00:41:23):
Yeah, exactly.

**Camille Hearst** (00:41:24):
Well, yeah, I was lucky because one of the things that I did he would actually know exactly what it is which is I would manage press rooms whenever there was an iTunes launch. So this is very much grunt work.

**Camille Hearst** (00:41:38):
But when there would be a press event for one of the new iTunes 6 launch or whatever, they would have interviews with Walter Isaacson or I don't know if Kara Swisher was working back then, but whoever the journalist and Steve would have a room set up with an iMac computer with an iTunes library full of track. There would be whatever the new iPod was synced to that computer and all of the track. And after every interview, everything would have to be reset.

**Camille Hearst** (00:42:10):
Also, the library was crafted so he would give feedback for months on the content of the library because he would do demos. And so he wanted to know, "Make sure all my favorite tracks are in there, my favorite Beatles records, my favorite Bob Dylan records, and who's this artist? Let me check them out. Okay, they don't cross the bar. Oh, what's this song? Oh, I love this song. Oh, add this." So he was very involved in the entire presentation and someone had to go do all that.

**Camille Hearst** (00:42:38):
So who better than the fresh out of masters of engineering in Stanford graduate student to go do all of the grunt work of making library? But those are the kinds of details that he paid attention to. And so I would've just told him that I did product marketing and one of my main responsibilities was fixing the press room for him and he would've been like, "Oh, okay."

**Lenny** (00:43:01):
You mentioned that your title is product marketing manager and there was a recent kind of a hubbub on Twitter where Brian Chesky at Airbnb shared that they shifted the role of product manager to essentially the Apple model. And I'm curious what your perspective is on that approach to product, the Apple kind of way versus a traditional product manager?

**Camille Hearst** (00:43:21):
They have done this very intentionally from what I've seen. I know they hired Hiroki actually from Apple-

**Lenny** (00:43:29):
Yeah. A lot of Apple people.

**Camille Hearst** (00:43:31):
Yeah. And actually one of the new leaders they've hired, I don't know if you know Judson Coplan, dear friend of mine, we interned that same summer at Apple and he worked there for 15 years before heading over to Airbnb.

**Camille Hearst** (00:43:45):
But yeah, the Apple construct, it's much more of design and engineering led organizations, craftspeople I would say more so than strategy people. So that was one of the stark differences I saw in my transition from Apple to Google. There are a lot more like people from Coca-Cola and McKinsey and Bain at Google. I don't think any of those people even existed at Apple.

**Camille Hearst** (00:44:15):
And it was very much like, "Let's 3D chess our way into what our next move is going to be." Whereas at Apple it was, "Let's tinker and let's craft and let's build and let's see what feels right." There's different approaches. As a result, the approach to product management was quite different.

**Camille Hearst** (00:44:33):
So I think it makes sense. Brian Chesky's background is a designer so it probably resonates a bit more within the Apple way.

**Camille Hearst** (00:44:41):
And then in terms of what it means for product managers on an individual level, so again, there weren't product managers, the closest thing would've been CPMs, technical program managers who help manage the sprints and manage the schedule and listing out what features would happen.

**Camille Hearst** (00:44:59):
I spent a lot of my time with the incredibly talented design team and if I had ideas of product features or... We would think months ahead of time, like what's the anchor story or what are the three key messages for the launch of iTunes 10 or whatever and we might have ideas for new features that would go in that.

**Camille Hearst** (00:45:19):
But because we had that moment in time, we knew well ahead we were planning for and you were working on the messaging and working on the consumer positioning again while in advance of anything actually being live or built. That was what framed what features you wanted to build and what problems you would put on the table to be solved as opposed to as clear cut metric you're trying to drive forward which is how product management has evolved in another capacity.

**Lenny** (00:45:52):
And that's how it works at most companies.

**Camille Hearst** (00:45:52):
Mm-hmm.

**Lenny** (00:45:54):
I want to come back actually to the creator economy stuff. I feel like you've worked in the creator economy longer than most anyone, and so I wanted to use our time to spend a little more time there. What about on the platform side? If someone were thinking about starting a company to cater to creators, to build a new platform maybe for creators to make a living, do you have any advice for them? Where do you think maybe there's opportunity? Where do you think it's like, "No, probably you don't want to spend time here?"

**Camille Hearst** (00:46:24):
I think with any company, solving a real problem is the most important thing. So creators have lots of challenges and things that can be solved. Some painful things are more acutely felt than others.

**Camille Hearst** (00:46:40):
I think at the core, every creator needs two things. They need to grow an audience and they need to get paid so that they can make a living. And in some ways, I do think that growing an audience is more important because with that audience, it opens up opportunities in ways that you can monetize.

**Camille Hearst** (00:46:59):
But there are all kinds of other things like we're talking about financing, health insurance, the list goes on, things we face as human beings, trying to be freelancers in the world often apply equally to people who are creative for a living.

**Camille Hearst** (00:47:14):
And then there are unique things about the creator space like the spurts of energy, the spurts of creative flow that maybe don't apply in a salary job or an hourly job.

**Camille Hearst** (00:47:28):
So there are lots of problems out there still to be solved for creators. I don't think that this space is nearly solved, done, stick a fork in it. So my advice would be to look at the problems that exist and pick a real one and go for it.

**Lenny** (00:47:47):
Wise advice.

**Lenny** (00:47:49):
Have you seen this podcaster, Bobbi, I forget her last name, she rocketed up to the fourth biggest podcast in America with a few episodes of her podcast, she interviews Drake and a few comedians. Have you seen this person?

**Camille Hearst** (00:48:05):
I feel like I should, but as we said at the beginning, I'm such a music head, I don't listen to any podcast.

**Lenny** (00:48:11):
The reason I thought of her is I was watching a clip of her on an interview show and she hasn't made any money from this even though she's got the hottest podcast in America right now, and we're going to link to her in the show notes, but she's hilarious.

**Camille Hearst** (00:48:25):
Amazing.

**Lenny** (00:48:25):
There's something about her that just is really fun to watch. But okay, no podcast for you right now. We'll get you on a podcast. You're on the podcast.

**Camille Hearst** (00:48:32):
I'm on a podcast now.

**Lenny** (00:48:34):
There we go.

**Lenny** (00:48:36):
You've mentioned your parents and I was reading your Wikipedia page and the way your parents are described on there is radical Buddhist artists technologists. I'm curious what that means maybe and then also just is there a memory or moment of growing up that highlights that aspect of them?

**Camille Hearst** (00:48:56):
What's funny about this is I had no idea how to Wikipedia page until you sent that.

**Lenny** (00:48:56):
What?

**Camille Hearst** (00:48:56):
I don't know where it came from.

**Lenny** (00:48:56):
Oh my God. Who made this?

**Camille Hearst** (00:48:56):
Exactly.

**Lenny** (00:48:56):
That's amazing.

**Camille Hearst** (00:49:08):
Like, "What? I'm on Wikipedia?" So that was funny.

**Lenny** (00:49:08):
That's crazy.

**Camille Hearst** (00:49:13):
Yeah.

**Camille Hearst** (00:49:13):
So let's see. I grew up in San Francisco in the eighties and nineties. My parents started practicing Buddhism on the East Coast in the seventies. And my dad was, I mentioned he's a drummer and a musician, and he also had a studio. We had this closet under the stairs that he turned into a production studio and he was an artist.

**Camille Hearst** (00:49:43):
He worked for the city. My mom worked for the city, didn't have a ton of money growing up, and so a lot of the computer equipment came from the street. He would find... Somebody put a PC out... He was building PCs before the gamers were doing it. And I remember he would come home with boxes and boards and chips and would literally go get a book from the library or the store and would figure out how to assemble these computers, keyboards that were broken. He would just fix them. Probably should have been a mechanical engineer, super talented at this stuff.

**Camille Hearst** (00:50:15):
But basically he had this entire production studio with drum machines and all the equipment. And I was his helper. So I would help him solder stuff together and tinker and actually put these computers together. So that's probably... I don't know where that quote came from. I'll have to go click the link of what the reference is from, but that's some of the background there.

**Camille Hearst** (00:50:42):
And the other thing that happened back in San Francisco in the eighties and nineties, we used to host Buddhist meetings in our house and back then there was a lot of what was called street propagation like the Hare Krishna used to be up and down Haight Street right around the corner for me.

**Camille Hearst** (00:51:01):
The Nation of Islam, which my brother joined for a period of time, would be selling Final Calls and bean pie brothers on the corners.

**Lenny** (00:51:09):
Yes.

**Camille Hearst** (00:51:10):
So The Final Call is the newspaper at the time for the Nation of Islam.

**Camille Hearst** (00:51:15):
And so it was just a different era, completely different from today, and us practicing Nichiren Buddhism, we had pamphlet that said, "Nam myoho renge kyo," on them, and I would stand on the steps of our house and... We had a gate. So I would stand behind the gate and I'm probably seven or eight years old, just ask people walking by, "Hey, if you're a nam myoho renge kyo, here's a pamphlet. Learn a little more. We're having a meeting at our house."

**Camille Hearst** (00:51:40):
I'd laugh with my mom now. She's like, "I can't believe we're doing that." It seems totally crazy now but at the time, it was just, again, coming off of the seventies, it was a very different era.

**Camille Hearst** (00:51:49):
If you've ever seen What's Love Got To Do With It, Tina Turner's probably... Who recently passed away, probably one of the more famous, more well-known practitioners of Nichiren Buddhism and she actually started practicing in the same kind of era, seventies and eighties... Or seventies probably.

**Camille Hearst** (00:52:05):
So that's what that means. And those are a couple memories that illustrate that moment. But you can see, music, technology, helping creators get paid, it's certainly influenced everything about how I am today.

**Lenny** (00:52:20):
That was a perfect description of your parents based on those stories. And it feels inevitable that you would've ended up doing what you're doing now. Product, technology, music, artists, creators. So that's amazing.

**Lenny** (00:52:33):
I'm going to ask one more question before we get to our very exciting lightning round, and the question is just around frameworks. Is there just a favorite framework or process or system or approach to building product or teams that you come back to and/or to share often that you think might be useful to listeners?

**Camille Hearst** (00:52:51):
I have this great manager in my experience at Hailo who turned me on to Marty Cagan who I since befriended and learned a ton from. And I just love the way that-

**Lenny** (00:52:51):
Really?

**Camille Hearst** (00:53:03):
Yeah, he's awesome. Actually, I should ask him about early days at eBay because I think he was there probably one of the people who got off the ground.

**Camille Hearst** (00:53:12):
But one of the things that I learned and that we really emphasized during that time is this idea of having dual track agile going where you're doing discovery and delivery simultaneously and doing it in a way that's not waterfall.

**Camille Hearst** (00:53:29):
It's not like, "All right, the designers are going to go over here and tinker for months, and then once we've figured it out, we'll lob it over the wall to the coders and cross our fingers and hope everything works." But rather having this continuous cycle of essentially de-risking your assumption and getting to a point where you're able to do that with speed so that you can chart your way to new paths and to innovation by constantly figuring out where the errors are in your thinking or where things that you didn't expect to happen were going to happen.

**Camille Hearst** (00:54:04):
So I think everyone knows an impact effort or risk reward two by two and can map out different opportunities and things you might do on that two by two.

**Camille Hearst** (00:54:16):
But one of my favorite takeaways from that is that from this way of working around this dual track agile de-risking your riskiest ideas first approach is a concept of taking the things in the top, the biggest swing and actually prioritizing those first in terms of product discovery and figuring out what can you do to start de-risking because if you constantly put those off in favor of the lower risk or more predictable smaller swings, how are you ever going to truly innovate and get to the next level.

**Camille Hearst** (00:54:53):
It's a less safe choice. So it's someone that as a leader, you are in the hot seat and you can take accountability. So if some of these things don't pan out, it's on you and not on your team and give your team permission to fail and try things and de-risk those risky assumptions and get them to a point where they become low risk and they become predictable and you can just put them in the delivery column and execute them.

**Lenny** (00:55:18):
It reminds me of this piece of advice that people call eat the frog which is first thing in the morning eat the frog which essentially is do the hardest thing first and then there's the day becomes easier.

**Camille Hearst** (00:55:30):
Yeah.

**Lenny** (00:55:30):
I don't know why it's eat a frog, I don't know where that comes from.

**Camille Hearst** (00:55:34):
I don't know either. I like draw the owl. That's one of my favorite values, the Twilio ones.

**Lenny** (00:55:39):
Say more. I would say more. What is that?

**Camille Hearst** (00:55:44):
Companies have their values. One of them is draw the owl. It's really draw the effing owl and the meme is how do you draw an owl and you draw some circles and then you draw a fucking owl. So it's like just do it. At some point, you got to just figure it out and figure out how to do it.

**Camille Hearst** (00:56:10):
Excuse my language, but it's funnier when you say what the value actually is which is sometimes you got to just go for it. You're not going to know the exact path to get there and maybe you won't have de-risked everything but you start with some circles and then you get it done.

**Lenny** (00:56:27):
I love it. Cursing is very loud on this podcast, so I'm glad you went there.

**Lenny** (00:56:32):
And with that, we've reached our very exciting lightning round. Are you ready?

**Camille Hearst** (00:56:36):
I hope so. I didn't prepare this. I thought I'd figured out on the spot.

**Lenny** (00:56:40):
Great. Perfect.

**Lenny** (00:56:41):
What are two or three books that you recommended most to other people?

**Camille Hearst** (00:56:46):
Three-Body Problem, A Wrinkle in Time, and Octavia Butler's Kindred.

**Lenny** (00:56:53):
Three-Body Problem's come up a number of times recently and there's a show coming out actually based on the book.

**Camille Hearst** (00:56:58):
I'm excited. Yeah.

**Lenny** (00:56:59):
I'm so excited. I've been watching Foundation which is also another series I've been excited to see, but it's like, I don't know what's going on. It's so complicated.

**Camille Hearst** (00:57:07):
How is it? I've been waiting...

**Lenny** (00:57:08):
Eh.

**Camille Hearst** (00:57:08):
So I'm a huge sci-fi head. I watched Battlestar Galactica. Classic. [inaudible 00:57:16] and so I've been waiting to see what happens with Foundation because I just don't have that kind of commitment in me these days.

**Lenny** (00:57:23):
Yeah. I don't know what to think of it. It's beautiful and there's a lot of interesting pieces but it just goes out... I think they're making a lot of stuff up. I don't know if you've read Silo. Have you read Silo?

**Camille Hearst** (00:57:33):
No. But I saw the preview for the show. Another one I'm going to [inaudible 00:57:36] season two.

**Lenny** (00:57:37):
That's a good one to read because in the show... They're just making up stories. I don't know what they're doing. There's... Ninety percent of it, they just totally invent for the show and then there's a little bit that's connected to the story so I don't know what's going on.

**Camille Hearst** (00:57:49):
Okay. Cool. I didn't even know it was a book. I'll read it.

**Lenny** (00:57:51):
Oh, yeah. It's really good. There's three of them, but the first one's the only good one, so I found.

**Camille Hearst** (00:57:54):
Okay.

**Lenny** (00:57:55):
Anyway, moving on. Speaking of this topic actually, any favorite recent movies or TV shows that you've really enjoyed?

**Camille Hearst** (00:58:02):
I've been watching Hijack over the last week with Idris Elba. So that's been fun. Got a couple episodes left there.

**Camille Hearst** (00:58:10):
And then movies, I'm a huge Chris Nolan fan. So I haven't seen Oppenheimer yet, but can't wait to see it. Most of his movies I'm confused by, but the visuals are just so stunning if you let it go.

**Lenny** (00:58:24):
Yeah. I'm excited to see it too. I've not seen it either. Have a new child and it's harder to see movies [inaudible 00:58:30].

**Camille Hearst** (00:58:30):
Oh, another good one. Shadow and Bone on Netflix.

**Lenny** (00:58:34):
Shadow and Bone?

**Camille Hearst** (00:58:35):
Way better than the book I have to say. Well, I read one series, the Six of Crows. This is my young adult sci-fi fantasy streak. Again, coming to the forth. But the show is incredible. It is so good. So if you're into-

**Lenny** (00:58:35):
Really? Never heard that.

**Camille Hearst** (00:58:48):
... this kind of vibe, go for it.

**Lenny** (00:58:51):
Okay. I'm going to check that out.

**Lenny** (00:58:52):
What is a favorite interview question that you like to ask people when you're interviewing them?

**Camille Hearst** (00:58:58):
I like to ask people to tell me about something they're really proud of that they accomplished and take me through the process and talk to me about why they're proud of it. I find you can learn so much about a person's motivations, about their work ethic, about what they care about, what good looks like to them, and I think those are all really important things to understand about a person if you're going to work closely with them.

**Lenny** (00:59:23):
What is a favorite life motto that you just really like to share or often come back to either in work or in life?

**Camille Hearst** (00:59:31):
Yeah. So there's one which is actually a Japanese proverb. I took Japanese in high school and college but this phrase is a frog in a well cannot know the ocean. And so the idea is to push yourself to expand your limits and your horizons and get out of the well so that you can experience the ocean.

**Lenny** (00:59:31):
I love that.

**Camille Hearst** (00:59:55):
I got a better one, sorry.

**Lenny** (00:59:57):
Okay, great. Go.

**Camille Hearst** (00:59:58):
Another one.

**Lenny** (00:59:58):
Sure. Tell me.

**Camille Hearst** (01:00:00):
I learned this one from someone at Patreon because someone was posting this around the streets of San Francisco. It's become more known recently. Apparently, it's a Chinese proverb. I don't know if it's true or not but it is that the best time to plant a tree was 20 years ago, the second best time is now. So this idea that don't delay, maybe you missed the prime opportunity but waiting any longer certainly isn't going to help.

**Lenny** (01:00:28):
I heard that one actually I was at the park in San Francisco and there was this piano thing, I think it was called, it's a botanical garden and people play piano all throughout once a year. And there's a guy that was just playing incredibly well and I left and he left around the same time and I was standing next to him. I'm like, "Man, I wish I studied piano when I was younger." And he's like, "The best time to have studied piano is 10 years ago. The second best time is to start now."

**Camille Hearst** (01:00:51):
Yep, he's right.

**Lenny** (01:00:53):
And I couldn't get off the hook there. He is like, "You're right. And you're still not going to do it I guess."

**Lenny** (01:00:59):
Final question, who's a favorite artist right now? Who are you liking?

**Camille Hearst** (01:01:05):
Ooh. So I've been for probably a good three years now really into Afrobeat and right now there's this artist called Rema, R-E-M-A, who I first heard a couple years ago, he's got this track called Dumebi. But he has a song out right now that is, my opinion, song of the summer called Calm Down. I think Ariana Grande, is it, came over and did a verse on it? But I've just been listening to Rema Radio, Calm Down radio on Spotify and tons of Afrobeats artists. So that's the vibe I'm on right now.

**Lenny** (01:01:42):
I love it. I actually... Once someone suggested some music at the end of a podcast and I was just like, "Hey, we're going to end the podcast with that tune." And it turned out we did that and then YouTube shut us down because it's copyrighted and so I'm not going to offer. Never going to do that again, so we're just ending with regular music but we'll link-

**Camille Hearst** (01:01:59):
[inaudible 01:01:59] it's hard.

**Lenny** (01:02:00):
I know. It's so tough. Come on. It's just like a few seconds. Give us a break.

**Camille Hearst** (01:02:06):
You should have 30 seconds for your play. Right?

**Lenny** (01:02:06):
I don't know. Maybe we'll-

**Camille Hearst** (01:02:07):
Don't ask me, I'm not a lawyer.

**Lenny** (01:02:10):
We'll send you the bill.

**Camille Hearst** (01:02:11):
Yeah.

**Lenny** (01:02:12):
Camille, this was amazing. I think we're living the creator economy here. I really appreciate you making time for this.

**Lenny** (01:02:17):
Two final questions. Where can folks find you online if they want to reach out and maybe ask any additional questions? And then how can listeners be useful to you?

**Camille Hearst** (01:02:24):
I used to be real big on Twitter but that ship has sailed. I'm still on there. You can find me-

**Lenny** (01:02:30):
It's X now.

**Camille Hearst** (01:02:31):
Yes, on X. Camillionz is my handle, C-A-M-I-L-L-I-O-N-Z. Also on Threads these days, trying that out, seeing if that sticks. So probably LinkedIn. You could find me on LinkedIn. I don't think anyone ever promotes that.

**Lenny** (01:02:31):
They do. Most people actually.

**Camille Hearst** (01:02:48):
Do they? Yeah?

**Lenny** (01:02:48):
Yeah.

**Camille Hearst** (01:02:52):
Okay.

**Camille Hearst** (01:02:52):
And how can listeners be useful to me? Hey, go support your favorite creator. Find out, go to the show, find out if they have a Patreon. I would love to see more and more people feeling like they are patrons of the arts.

**Lenny** (01:03:08):
Amazing. Maybe buy some merch.

**Camille Hearst** (01:03:09):
Buy some merch. Yeah.

**Lenny** (01:03:12):
Camille, thank you again for being here.

**Camille Hearst** (01:03:13):
Thanks, Lenny.

**Lenny** (01:03:15):
Bye, everyone.

**Lenny** (01:03:18):
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.

---

## [11/20] The ultimate guide to JTBD | Bob Moesta (co-creator of the framework)

**Bob Moesta** (00:00:00):
I think one of the biggest misconceptions around Jobs to Be Done is this notion that it's pain and gain as opposed to context and outcome. When you hear somebody's story and it seems irrational, like we'll have people go, "Oh my God, that's an anomaly. That doesn't happen." But what you realize is that the context makes the irrational rational. So the moment you hear a story, you go, "I can't believe that," nine times out of 10, it's because you don't have the rest of the story. And so part of it's being able to understand the rest of that context that would drive somebody to say, "Why would somebody cut their arm off?" Well, if they're in this situation and this and this and this, there's nobody who would say they want to cut their arm off, but in certain situations you'll do it. And so that's what we're trying to do is find, where will people change behavior?

**Lenny** (00:00:38):
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 Bob Moesta. Bob is the co-creator of the Jobs to Be Done Framework alongside Clay Christensen. And as you'll hear at the top of our conversation, is maybe the most anticipated guest I've had based on the LinkedIn response. Bob has started eight companies and is currently the co-founder and CEO of the Rewired Group, and currently spends his time helping companies of all sizes unlock hidden insights and create successful products and services.

**Bob Moesta** (00:04:08):
Thanks, Lenny. Excited to be here. Big fan.

**Lenny** (00:04:10):
Ah, I'm a big fan of yours. I wasn't even super familiar with you before we started organizing this podcast chat.And then as you saw, I posted on LinkedIn what questions people had for you and around Jobs to Be Done in general. And I've never seen so many comments and questions and so much passion for guests I had on, I think there was over-

**Bob Moesta** (00:04:30):
Really?

**Lenny** (00:04:30):
Absolutely. There's, I don't don't know, 130 questions and comments and folks like Jason Fried, founder of 37signals and Des from Intercom came out and just like, I'm excited for this episode, so we got some here.

**Bob Moesta** (00:04:45):
I've worked with all of them, they're great people and fun to work with.

**Lenny** (00:04:48):
I just had no idea there's so much passion for Jobs to Be Done. I have a million questions for you, a lot of them coming from the audience, some from me. So I'm excited to dig into a lot of this stuff.

**Bob Moesta** (00:04:57):
All right, let's dive in.

**Lenny** (00:04:58):
Okay, so I thought it'd be useful just to start with the very basics briefly, just what is the simplest way to understand the Jobs to Be Done framework?

**Bob Moesta** (00:05:07):
I think the easiest way to think about it is that I'm an engineer, electrical, basically have been building product for almost 30 years and one of the lies I was told growing up was build it and they will come. And so we always think about it from a technological, how do I build this thing? And all right, who wants this product? And what I realized very early in my career is that really it didn't work, I couldn't make it work.

**Bob Moesta** (00:05:31):
And so Jobs to Be Done is this whole premise that people hire products, they don't buy them, they hire them to make progress in their life. And if we can take a step back and look at it, we see it in a very different light to realize at some point they're in some context and there's some outcome they want. And if we can understand that, we start to realize that different things compete, right?

**Bob Moesta** (00:05:51):
A simple example is think of Snickers and Milky Way, right? They're both candy bars, they're both bought in the checkout aisle, they're both made almost with the same ingredients, one has peanuts, one doesn't. And if you start to compare the products and do a competitive benchmark, you start to get to one's a little softer, one's a little harder, one's got a few more calories, one's got less calories. But when you talk to people about when's the last time they ate a Snickers, when time's the last time they ate a Milky Way, you start to realize that Snickers typically is a case where they missed the last meal, they've got a lot of work to do, they're running out of energy and they want to basically get back to the tasks as fast as possible. And so you start to realize that Snickers is about almost like a meal replacement and it's about the stomach is growling and things like that. And you start to realize that if they didn't have a Snickers, it competes with a protein drink, it competes with a Red Bull, a coffee.

**Bob Moesta** (00:06:49):
But a Milky Way typically is eaten after an emotional experience, could be positive, could be negative. It's usually eaten alone, and it's taking time to regroup after this emotional thing. And you start to realize that it competes with things like a glass of wine, a brownie, and to be honest, a run. And so when you start to realize that, jobs helps you see the true competitive set from what we call the demand side of the world as opposed to the competitive set from the supply side of the world, which is the technology or the underlying business model by how which we're making it. And so it allows you to actually see what customers really want as opposed to trying to figure out, how do we sell things to people?

**Lenny** (00:07:29):
To maybe follow up on this example a bit, how often do you find these jobs emerge after they've developed a product, in this case I guess Snickers or Milky Way, how often is it just like they see this problem and actually apply this approach even accidentally?

**Bob Moesta** (00:07:44):
What's interesting is that at least for me, the thing is what I learned was that supply and demand are not as connected as everybody thinks. Most people think they create a product and that creates demand. But the real thing that if you start to study causality is that a struggling moment causes demand. And you start to realize that in some cases that struggling moment exists and can exist for a long time and nobody solved it. So one of the companies I helped was Southern New Hampshire University and Paul Le Blanc. And one of the things in 2010, we found basically these anomalies, these people who were going to school but not actually coming to class and watching everything online. And it was like 50 or 60 of them and the anomalies basically, and they're paying full price, they didn't want to come. For Paul, it was kind of like why are they doing this?

**Bob Moesta** (00:08:29):
And when we went to study them, we realized that they actually had a very different job than a typical 18 to 24 year old because one, they were a little bit older, typically they had either already had a degree or they basically had tried to go to college and it didn't work. And it was about basically time now that they had responsibility to do something new. And so they didn't actually build the product at all. And as they started to look and say how many people want to go back to school but can't? They started to realize it's not a thousand people, it's not 10,000 people, they have over 200,000 students. They're one of the largest universities in the world. And so all of this starts with a struggling moment, not with a product.

**Bob Moesta** (00:09:06):
And so that's what we mean when we're customer-centric is that we're studying the struggling moments they have and people like Intercom and Basecamp, they look at struggling moments and that becomes their roadmap. Because again, think about a roadmap. I'm literally trying to tell you what I'm going to build in the next 24 months, for example, but none of us saw ChatGPT coming. And so all of a sudden I have to go undo the roadmap. But if I talk about the struggling moments that I'm trying to go after, all of a sudden I realize that the roadmap is now when I get to that struggling moment, there's multiple ways I can solve it. So instead of just talking about features, it's typically talking about features for the first 90 to 120 days, but after that we just talk about struggling moments because that's the seed for real innovation and basically where new products come from.

**Lenny** (00:09:51):
To unpack the framework a little bit more, if you were to come to a founder and tell them, "Hey, you should be paying attention to struggling moments," I feel like all of them will say, "Yeah, we know that. We do that. We look for pain and we try to solve it," so what I'm curious there maybe is just what is maybe the right way to do it?

**Bob Moesta** (00:10:07):
But it's not just the pain. See, what we're taught in business school was pain and gain, but the reality is it's the context. It's the fact that I didn't eat lunch before, the fact that I still have a lot of work to do, the fact that I have this podcast going on. It's not that I'm in pain, but it's the context that makes me value this in the moment that much more than something else. And so part of this is it's not just about pain and gain, it's about context and outcomes.

**Bob Moesta** (00:10:34):
And so when you frame it that way, it becomes a vector, a vector of progress or a vector of intention of what they're trying to do. And once we frame that, then we can actually wrap technology around it. And the crazy part is that I was always told or taught if I build the best product, it will sell better. And what I've learned is that actually a kick-ass half is better than a half-ass hole, and that's what Jason talks about. But the reality is like if you look at QuickBooks, QuickBooks has half the features and double the price. And you start to realize that at some point in time it's about meeting customers where they are, not trying to wow them and not trying to convince them. They convince themselves to make the progress.

**Lenny** (00:11:14):
I'd like to understand this vector piece more because that feels really important. So you were saying that it's not just there's a pain point, solve that, what you're saying is what's even more important is this context around that pain point and things that precede it?

**Bob Moesta** (00:11:27):
Yeah, so the first thing is we don't talk to people who just want to.

**Lenny** (00:11:34):
For people listening on the podcast, Bob pulled up a drawing, so you should try to check out the YouTube video of this to see what he's doing.

**Bob Moesta** (00:11:42):
So there's some Product A is the old product and there's some Product B, which is the new product. And ultimately people don't randomly do anything. And so the real heart of the method of Jobs to Be Done is understanding the causation of what pushes people to say, "Today's the day I got to do something different." And the push or the context they're in has nothing to do with the new product, it's the only reason why they would leave the old product. And if there's no push, they can't even see your product because we're creatures of habit, right? And so as soon as I have a push, I call that F1, force one, and I have some idea of what's possible, then I create something called F2, which is basically the pull to a new outcome, a new state, a new thing, right? And so at some point in time it's like I have to be in this situation and I have to want this outcome, right?

**Bob Moesta** (00:12:34):
But here's the other part is that there's this waterline that there's these other forces and there's two other forces. Every time I show somebody something new, it actually creates anxiety, right? Anxiety of the new, and I call this F3, right? And then the other thing is I have to get them to leave old thing. So I call this habit of the present. And what you start to realize, and I call that F4, is if F1 and F2 are not greater than F3 and F4, they're not going to move, they're not going to do anything. And so ultimately what we're doing is we're framing the market as a system of behavior. And most people say, "If I just add more features, create more pull, people will buy." It's not true. More features create actually anxiety, can it do all those things?

**Bob Moesta** (00:13:24):
And what you start to realize is if I reduce friction, which is the bottom part, I actually don't have to do anything with a product, I just have to make easier. So for example, one of the things I did is I built houses and one of the frictional points that people had in moving was the fact of moving house was basically packing all their stuff up and going somewhere. And so I would literally sell them a condo, they'd go from a 3000 square foot home to a 1500 square foot condo and they'd cancel six weeks later because they didn't know how to get rid of all their stuff, which is a frictional point. So what did I do? I actually raised the price of the condo, included moving in two years of storage as part of the deal with the condo because it's the frictional coefficient and I increased sales over 30%.

**Lenny** (00:14:06):
I love that.

**Bob Moesta** (00:14:07):
So what this is it's really about focusing on the customer. It's about understanding the causation behind it and then using design thinking to actually start to realize, how do we actually enable people to make progress? We don't need to sell them, we need to enable them to buy.

**Bob Moesta** (00:14:24):
And so I wrote a book called Demand Side Sales that basically took the premise of stop trying to sell people and just help them make progress, help them buy. And so the whole book is instead of trying to base the sales process on how we want to sell, we need to actually design the sales process on how they want to buy. And it seems like it's the same thing, but they're actually really, really different things.

**Lenny** (00:14:47):
Is there an example that can make this even more real of a company or a product?

**Bob Moesta** (00:14:51):
So one of the companies I work with a lot lately is a company called Autobooks, they're based here in Detroit. And basically they help banks basically do invoicing through let's say Apple Pay. And so instead of having to use Square or PayPal, you literally can use your bank now to do these things. And so there's two things, they have to sell small business on it, but they also have to sell banks on it. And when we started talking about it, they talked about why do banks want it? And the first thing we did is we found out there's three really different reasons why banks want them.

**Bob Moesta** (00:15:22):
But the thing is that where the process looked at is they would talk about the struggling moment, they talk about what was going on and then everything was about getting them to a demo. And once we got them to a demo, we had to close them. Well, it turns out that the buying process literally has different phases in it. There's the first thought, there's something called passive looking where they're problem aware and solution unaware and they have to learn a bunch of things, and then there's active looking where they're both problem and solution aware and they're trying to figure it out and frame a solution, and then there's deciding which is about making trade-offs.

**Bob Moesta** (00:15:53):
And so what we end up doing is when I started to talk to the team about it, what they started to realize is I said, "Where is the customer in their timeline of buying?" And they looked at me like, "Huh?" I said, "No, no, you have a timeline of how you want to sell to them and after the demo you try to close, but what if they're actually in passive looking and want a demo to learn more? It's very different than if I'm trying to close." And so what we ended up doing is breaking the demo apart, asking people where they were in their buying process. And by doing that we actually then found out a way in which to give them three different demos, one about telling stories and giving them the background about the problem, another one about showing them all the alternatives, and then the last one is about basically giving them choices between ways to move forward, right?

**Bob Moesta** (00:16:37):
And you'd think that it would make the sales process longer, it actually made the sales process almost half and at 4x basically conversion because now we meet them where they are as opposed to where we want them to be.

**Lenny** (00:16:52):
And is that something you find generally in the sales process, there's these three phases that everyone goes through and you got to think about them individually?

**Bob Moesta** (00:16:59):
Yeah, there's actually, I call them six phases. First thought, passive looking, active looking, deciding, first use, and then ongoing use. How do we build the new habit? And so if we don't actually study that part of how do people transform themselves through a struggling moment, we don't know what they want. If I talk to people who want to buy a house, they tell me they want granite and hardwood and they'll make everything these things they want.

**Bob Moesta** (00:17:25):
But when you actually talk to people who bought a house, they actually made a lot of trade-offs. Although for example, everybody I would survey before buying a house, I had 93% say they wanted an Energy Star compliant house. It cost 30 grand to make an Energy Star compliant at the time. And the reality is nobody bought it, they all bought the finished basement. And so there's the difference between what they say they want and what they want.

**Bob Moesta** (00:17:48):
And so the method itself is not based on traditional research or market research, asking people what it is. It's actually based on criminal and intelligence interrogation about telling me the story about how you decided today's the day I bought a house or today's the day I went back to school. It's not random. And if it's not random, then we need to actually find it. And that to me is one of the bigger differences, most people build their sales process on probability, "If I get so many leads in, I'll convert so many to here to so many..." But the ultimate thing is, how many people are really ready for your product? They have to actually be ready for it. And that's what Jobs to Be Done is really about, is understanding where they are, what's causing it, and how do they make the trade-offs?

**Lenny** (00:18:30):
So let's follow that thread of interviewing and talking to your potential customers and customers to understand the jobs to be done. What is the actual process you recommend?

**Bob Moesta** (00:18:39):
The first thing we do is we frame a question. And the way I think about it is most people, so the one thing to know about me is I've been building things for over 30 years, I've worked on 3,500 different products and services across many, many industries, but I've had three close head brain injuries before I was seven years old and I can't read and I can't write. And so one of the things for me is that I could not understand the research that I would get from marketing around basically they'd say, "Hey, I need something that's easy, fast and fun and cheap." And I'd be like, "Okay, what does any of that mean? What is fast? How fast is fast and what's not fast?" And you start to undo all those things.

**Bob Moesta** (00:19:18):
And so the first thing we do is we start to frame, let's just talk about what causes people to say today's the day they want to go on vacation or today's the day they wanted a new set of windows. And you start to frame around that, and then you go find people who recently purchased and say, "What in the world happened that says today's the day I need new windows?" And you start to realize that there's pushes and there's pulls and there's anxieties and there's habits. And so the first thing we do is we try to extract the story from the customer. And it doesn't have to be my product, it could be somebody else's product if I haven't built it yet. It's like, what are people going to fire when they hire me?

**Bob Moesta** (00:19:55):
And so when we get the stories though, then the stories are going to get us the pushes, the pulls, the anxieties and the habits, the trade-offs and what we call the hire and fire criteria. And then what we do is instead of trying to look for themes across all of them, we actually do something, instead of segmenting them, we cluster them, we find the pathways because what you start to realize is it's not one reason why people do it, it's sets of reasons. And those sets actually work together. So the pushes work with the pulls. So when they have these pushes, they want these pulls. And when they don't have these pushes, they don't want those pulls.

**Bob Moesta** (00:20:29):
And so when you start to see the patterns and you start to pull it out, you start to realize that most companies or most products are hired to do 3, 4, 5 different jobs and they're in conflict with each other. One person wants to go faster and one person wants to be more thorough. And so all of a sudden being more thorough means it's slower. If I say we're thorough, the people who want it fast say, "I don't want this because it's too slow." So how do you frame those things out and understand where the conflicts are behind it and think about different products from it?

**Bob Moesta** (00:20:59):
That's what Intercom did, right? Intercom realized that people hired it for four very, very different reasons and then instead of building four different products, they literally took their product and turned off the features that were not relevant to the pathway that people wanted to take. So for acquire, they didn't need a whole bunch of these other features and so they actually framed it around basically, how do we help people convert? And that job actually competed with HubSpot.

**Bob Moesta** (00:21:24):
There's another one where it was about helping with support, and that one competed with Zendesk. And so they changed the pricing model to basically match who the competition was and to match the progress that people were trying to make because Zendesk was too much and too hard, and HubSpot felt like it was an overkill for where people were. We basically figured out how to actually position ourselves as a good next step between HubSpot adds nothing or between nothing and HubSpot. And that's how they've grown to be valued over 2 billion.

**Lenny** (00:21:56):
I have a follow-up question, but did you say that you can't read and write?

**Bob Moesta** (00:22:00):
Yeah, can't read and write. So the thing is I cannot read the words that I write and I cannot read... So if somebody reads it to me, I can actually play it back. So I'll listen to audio. But the fact is the way I was taught to read is so that when I look at a paragraph, I see the spaces between the words first, and then I usually see the left-hand edge of the words, so the last three letters. And so my mom taught me to look at the five largest words on the page by circling the longest words on the page. And then I would study those and translate those and then figure out what those five words would have in common. Because for me, the part that's broken in my brain is that I can't look up things fast enough. So by the time I try to look at a word, figure out what it is, get the definition, I've literally forgotten every word before it.

**Lenny** (00:22:53):
Damn. How are you writing books?

**Bob Moesta** (00:22:55):
It's a gift. I'm telling you, it's a gift. It's a gift I'd never wish upon my children. But to be honest, it's given me abilities to see patterns in so many different ways because I can remember the first five words in the first paragraph and the last five words in the last paragraph so I turned through a book three or four times, and I have as good a comprehension as everybody else.

**Lenny** (00:23:14):
This is insane. How are you writing books?

**Bob Moesta** (00:23:19):
It's really simple, I have a company called Scribe Media, and what we do is first thing we do is we look for what struggling moments do people have? We then look at what are the competitive books wrapped around it? I then basically outline what progress looks like. We then take each chapter and define it as a system and what we have to do in each chapter to help them make the progress along the way. And then we just talk and we talk, we have ten two hour sessions, they get recorded, and then somebody basically takes... So if you listen or read any of my books, it sounds like me talking because it is.

**Lenny** (00:23:56):
Wow.

**Bob Moesta** (00:23:56):
And so I can get a book out in three and a half, four months.

**Lenny** (00:24:00):
That's incredible.

**Bob Moesta** (00:24:01):
And so now I'm a teacher, I'm adjunct lecturer at the Kellogg School at Northwestern, and then I guest lecture on the East Coast in kind of different business schools, and then I help Techstars and Y Combinator. So I'm really moving myself into being into, I feel it's time to pass on. I've had some amazing mentors who helped me, and again, I was told to be a baggage handler or a construction worker when I graduated high school, and my mom thought I could do more. And so I met these people who poured their knowledge into me to enable me to do all this stuff so now I'm trying to pay it forward as much as I can. So that's one of the reasons why I do as many podcasts as I can. So again, I appreciate you having me.

**Lenny** (00:24:42):
Yeah, this is a great opportunity to pass it on and so I'm very happy we're doing that. I had no idea about any of this about you, so thank you for sharing that.

**Bob Moesta** (00:24:52):
It's been fun. I pinched myself. The other part is I don't know how I got here. One of the things that I've been doing is I've been studying people for the last 10 years around why they switched from one company to another to literally understand the jobs of jobs because employees actually hire companies more than companies hire employees. And so you start to realize the struggling moment is why don't we have enough people? And otherwise I want to leave, but I don't know how to leave. And so I'm in the midst of writing a book around that right now with Michael Horn and Ethan Bernstein.

**Lenny** (00:25:23):
Is there an insight from that work that you can share about why people leave jobs or join jobs?

**Bob Moesta** (00:25:27):
So the number one thing that I would say is almost everybody when you ask them about how they got the job they're in, the number one phrase you get is, "It was so lucky. I was so lucky, just happened to fall in my lap." And then when you actually unpack the story, luck had nothing to do with it. They were prepped, they were ready, there was pushes, there were pulls, there was anxieties, they were able to do it. And you start to realize, and the funny part is that if I talked to somebody who's been through three or four kind of switches, they all can say, "Yep, I've had that job. Yep, I've had that job. Yep, I've had that." And so there's frames around basically understanding what progress are you really trying to make now? Is it, do I need balance? Am I not challenged enough?

**Bob Moesta** (00:26:08):
And you start to frame it, and when you frame it, you start to realize, I'm willing to actually take less money to be around smarter people because I want to be a founder later. And so you start to realize that all of these things where we think we have to pay more money, over 50% of the people who got new jobs didn't get more money. It's a lie. It's about progress. It's about what do they want to learn? What skills do they want to get? At some point it's about money, but it's not always about money.

**Bob Moesta** (00:26:37):
And the other interesting part is when you talk about money, we talk about this notion of unpacking. We'll say, "Well, why do you need more money?" It's like, "Well, I have larger obligations," or, "I want more money because I want more respect." And so what you realize is in the hiring and firing criteria, they talk about money, but money actually has a bigger effect than just money. It's about respect or it's about responsibility or it's about their metric of progress. There's a whole bunch of things, but it's not just money. That's the interesting part.

**Lenny** (00:27:09):
Yeah, I've definitely done that myself, there's a status component to your job.

**Bob Moesta** (00:27:14):
Yeah, I want the title, right? Happens all the time.

**Lenny** (00:27:18):
I want to come back to the discussion we were just having around interviewing people to understand the jobs to be done. And a bunch of people on LinkedIn were trying to understand just tactically what they need to get right in order to get accurate jobs. So I guess, are there just a couple tactics you'd recommend for how to interview people?

**Bob Moesta** (00:27:37):
Let me give you three tips. The first tip I'd tell you is go read Never Split The Difference by Chris Voss. I started to write a book around basically techniques that I learned back in the eighties and nineties around this, and his book is amazing around it, the whole notion of getting to know. I play things back incorrectly because they're going to say no, and I'm going to say, "All right, fix it," and then they'll talk more. The moment somebody says yes, there's nothing more to say. And so there's a bunch of techniques you have to learn to basically get them talking.

**Bob Moesta** (00:28:09):
The second is I only talk to people who have already tried to make the progress, right? So for example, people talk about like, "Well, you can't apply this to something that's new. It doesn't exist." So I worked with a company that was, let's say a fairly large social media company, and at some point in time they found people kind of transacting on their platform, but they didn't know anything about it and they hadn't built anything. And what they ended up doing is we ended up going and studying eBay and Etsy and what caused somebody to say, "Today's the day I'm going to set up an eBay store or sell something on Craigslist." And out of that, we found all the jobs of what people, both sellers were doing and buyers were doing, and now I think it's I think almost a $3 billion marketplace that didn't exist and they learned about it all from the competitors.

**Lenny** (00:28:58):
Sounds like Facebook Marketplace, maybe? No comment?

**Bob Moesta** (00:29:01):
I didn't say that.

**Lenny** (00:29:03):
How many interviews do you recommend people do to get to a confident?

**Bob Moesta** (00:29:07):
That's a great controversial question. The interesting part is from a causal mechanism perspective and from a set theory perspective, meaning the sets of pushes, pulls anxieties and habits, it starts to repeat around seven or eight. And I usually do 10, no more than 12. And I would rather do two rounds of 12 interviews than do 24 interviews. I had some really interesting mentors, one of them was Dr. Deming, who's the father of lean and quality systems and like that. And so he would always push me to basically how to do things faster and smaller. And so that's where a lot of it came. And you just realize that people will say, "Oh, we have to do something statistically significant." Well, you do if you're doing it randomly, but if you actually understand the range of your market and you know that 50% of it is above 30 years old and 50% is below 30 years old, I could actually sample in a way that makes me get a good representation without having to actually do 50 interviews. And so we use something called design experiments to help with that.

**Lenny** (00:30:07):
I love the concrete numbers. And so along those lines, when you're actually asking questions of people, do you have any best practices and ways of phrasing a question to get a response you can trust?

**Bob Moesta** (00:30:18):
In a lot of cases, you have to look at it from multiple perspectives. And so the other tip I have is to not have a discussion guide. It drives people crazy because everybody wants to ask the same set of questions, but the problem happens is when you ask the same set of questions, you actually don't follow the ones that actually have the most meaningful information in it, right? And so what happens is, what I say is I use the framework of pushes, pulls, anxieties and habits and say, "What caused them to do this?" And everything else is just a conversation of trying to understand their story.

**Bob Moesta** (00:30:53):
And so part of this is being able to ask the questions around why, but you can't ask "Why, why, why, why why?" It's like, "Tell me more about that. Give me an example." And in a lot of cases, I usually get them to what I call the edge of language where they have no more language, and what I do is I literally then bracket it, "So was it more about this or more about that?" And I know it's neither one of those, and it forces them to talk more, right? It's always trying to get them to know, because the moment I get to... So when I play it back, "So you did this and this and this and this," and say, "No, that wasn't it." And the people who I'm working with are like, "You know that's not the right answer," I'm like, "I know, but they're going to elaborate on why it's not that." And so it's literally being able to reveal kind of the causal mechanisms of why people do what they do.

**Lenny** (00:31:41):
**Bob Moesta** (00:33:14):
So what I would say is I find a lot of founders, especially really successful founders, like I would say Jason Fried is one of those where he intuitively understood this. He actually thinks this way but didn't have language wrapped around it, right? So I think that it's a very useful framework. I think that the danger you run into is that when you look at the customer through the product, so if I look at the customers through the Snickers bar, then I think of Milky Way as a competitor. But if I look at the customer and say, "Why did they pick that thing?" Then I realize that a protein shake and an apple and a sandwich are the competitors not Milky Way.

**Lenny** (00:33:53):
Got it. So say someone wanted to start going in this direction of Jobs to Be Done, what is the simplest, I don't know, first version, lightweight approach to starting to think this way?

**Bob Moesta** (00:34:04):
So there's two things. If I have a product, go find 10 people who recently bought your product, but what I want you do is go talk to them, not about the product, but about why they bought the product, what was going on, what were they hoping for, what were they worried about? What did they have to give up? How did they convince somebody else? Just listen to the story. Start with just getting the story.

**Bob Moesta** (00:34:26):
Because there's three levels of information we have to get or three sources of energy that I talk about. So think about it as there's got to be energy in the system for us to do something. And there's what I call functional energy, which is usually time, space, effort, knowledge, right? There's emotional energy, which is how I feel. I want to feel better, I feel frustrated, I feel overlooked. There's emotional aspects to it. And then there's social aspects, how I want others to perceive me or how others perceive me, "Oh, my boss is going to fire me because he doesn't think I'm doing this fast enough and I feel inadequate." So part of his understanding kind of the emotional, social and functional components that are part of that energy source.

**Lenny** (00:35:11):
Got it.

**Bob Moesta** (00:35:11):
The second part is if it's an established product and it's been there a while, I'd actually go and talk to people who churned. Because in churn, what's interesting is when somebody leaves your product, they're still making progress. We think it's bad for us, which it probably is, but in their mind it's like, "Yeah, this was too hard and complicated," or, "You know what? It didn't do enough for us." It allows you to actually understand the struggling moment they had because, again, they were using your product and something happened and some context changed and now they struggle with it, and now they got to go find something else.

**Bob Moesta** (00:35:43):
Nobody wants to change. So that makes this actually the easiest thing to look at is tell me why people change. We just seem to literally not want to go deep enough and we use the lazy word of random and probability as pseudo for knowledge, and it's not knowledge. It's literally just if context is the same, if outcomes is the same, then I can do it. But if I listen to football stats, third down in preseason is very different than third down in playoffs, right? And so giving me a stat about how their third down conversion is across the whole season makes no sense to me because the context is different.

**Lenny** (00:36:25):
You brought up this point that people often say they really hate something and it comes across that they're ready to switch and will use something that you've built that's better, but they don't because of that friction you mentioned. What do you look for that might tell you that they're really actually going to use it for real and it's that serious?

**Bob Moesta** (00:36:43):
The very first thing I would say is I never trust anybody telling me things they're going to do because they can't assure it, and it usually never happens. It's my experience that says that. And so the thing is, I need to talk to people who did something and tried and though they might've failed, what made them try? So the phrase I have 'Bitchin' ain't switchin'." Just because people bitch about something doesn't mean they're going to do anything about it. This is where at Basecamp, we learned the fact that everybody said, "Oh, if you had Gantt charts, I'm going to leave you if you don't put Gantt charts in or resource allocation," and as much as they all say they want it, they're not leaving because of it.

**Bob Moesta** (00:37:23):
And this is the other part, if you follow your best users, they'll take you up to this world that then actually destroys the lower end of the world of why people are there. And so if Basecamp would've added all those things, one of the reasons why people join Basecamp is because it's so dang simple. And if I start to add all these things that make it more complicated, it doesn't work.

**Lenny** (00:37:43):
And so in those conversations, is there something you find that just this is a sign they're actually really serious, or do you just like, "I'm not going to listen to anything they're saying in this case until we actually build it and they're using it"?

**Bob Moesta** (00:37:55):
So for example, in the first five minutes of an interview, they're going to tell you, "I bought a new car because I got a deal on it and it was a car I've been dreaming about forever," and it's like they have all these things and then when you start to get to, it's like, no, the old car had 280,000 miles on it. You had three large bills in the last four months. The fact is it's making a sound and you've got a long trip coming up, that's why you're getting a car. You're not getting the car because of the deal. And so there's these, I call it the layers of language. And the very first layer is called the pablum layer, where people just, "How was your day?" "Oh, it was good," but nobody knows what that means. And if you ask one further question, "Well, what was good about it?" They're like, "Ugh."

**Bob Moesta** (00:38:34):
And then you get to the next layer, the next layer is usually the fantasy nightmare layer, "Oh, it was so good because of this," or, "Oh my God, it was so bad because..." They exaggerate to one degree or the next. And then what you want to do is actually then pull it back to what actually happened. This is where you've got to be more of an investigator and an interrogator. And the way I would describe it is it's criminal and intelligence interrogation that feels like therapy because most people don't actually know why they bought because they only think about the time they wrote the check, swiped the card. But the reality is like I did an interview with somebody who bought a coat rack, $137 coat rack. It took them 18 months to buy it. And in their mind, they say they bought it in a week, but the reality is the debate about getting it and why they couldn't get it was happening for over 18 months. So this is where you can't believe what they say, you have to do your investigation to get there.

**Lenny** (00:39:32):
And what does that phrase use again for that vector of progress?

**Bob Moesta** (00:39:36):
The intention, it's the context that they're in and the outcome. So here's the thing is that most people talk about you want to get to this outcome and people value this outcome, but value is not just the outcome. Value also has where you start. So if I start here and I end here, I'm going to value it this much. But if I start down here... Wait, I've got to get there, start down here, and I go up here, I value it that much more. And so part of it is value is actually part of where they're starting from and where they want to go. And most people say, "If I just get them up here, they're really going to love it," but some people say, "I just want to get here." And so you're overshooting it and they actually want a price discount because you're giving them more than they want.

**Lenny** (00:40:16):
So I'm going to go in a different direction. The most liked comment on LinkedIn asking people what question to ask you was by Sharam Krishnan, who's actually on this podcast in the past.

**Bob Moesta** (00:40:27):
Yeah, yeah, yeah. I remember seeing it, I remember hearing it. By the way, I think it's one of the reasons why I reached out because I'm like, "Okay, we need to clarify this a little."

**Lenny** (00:40:37):
Okay, great. So you saw the brand, he's not what you'd say a fan of Jobs to Be Done.

**Bob Moesta** (00:40:41):
No, no.

**Lenny** (00:40:43):
And so here's the question he wanted to ask, "Is there a case of a startup or a modern technology company or any company that was using Jobs to Be Done to launch a product from zero to one that has had broad adoption?" That's his challenge.

**Bob Moesta** (00:40:56):
Inside the company or broad adoption that the product that we've developed had broad adoption?

**Lenny** (00:41:01):
The latter, yeah, the product has done really well.

**Bob Moesta** (00:41:03):
I already told you an example. I can't say it, but you can. The thing is, for example, Autobooks is another one that did this, right? They start to realize that the fact is you need to study the struggling moments and it helps you determine what not to build, right? Too many times we just keep adding more and more things to the product. And so in larger organizations it's very difficult because at some point the dominant market research is about hypothesis testing, "I'm going to go build a hypothesis and go basically then go build a research project to prove or disprove that hypothesis."

**Bob Moesta** (00:41:44):
But the reality is, Jobs to Be Done research is hypothesis building research. I don't know, that's part of the point is we really don't know. We think we know, but Dr. Taguchi would always tell me there's way more unknown than there is known and never forget it. And so again, what causes people to buy windows is not what we think it is. And so you start to realize that. I think Drucker said it best, he goes, "What businesses think they're selling is not what customers are buying." And to be honest, he said that in 1953, and it's still true today. I just did interviews today where they're like, "Oh, people are buying for this reason," and we did 12 interviews and you started to realize, nope, that's not why they're buying. And they're shocked.

**Lenny** (00:42:30):
Awesome. Okay, so you didn't say it, but maybe Facebook Marketplace?

**Bob Moesta** (00:42:33):
So Autobooks would be one, you're trying from zero to one from nothing, right?

**Lenny** (00:42:41):
Yeah, brand new product is kind of the question there.

**Bob Moesta** (00:42:42):
Yeah, so at Techstars we basically make sure that everybody, they come in, they usually don't have a product to start with, at least in the Chicago and San Francisco offices. We basically have do jobs in the very, very beginning of that. And we have companies like Nutrisense and Havoc Shield, and there's a whole bunch of them that are out there that are growing and going down that pathway. And so to me, it's very, very useful, especially in the zero to one space.

**Bob Moesta** (00:43:08):
But the notion is the way that I frame it is, what will people stop using when your product comes out? And that's who you want to go interview. So for the Marketplace thing, it was like, "Hey, I want them to stop using Craigslist. I want them to stop using eBay. I want them to stop using Etsy." If that's the case, what are they doing and how do I do it better than that so I can understand? There are really no new jobs, it's just the fact is we get better at them. And so the hire and fire criteria get better, but the context and outcome, most jobs, I can look back 10 years in the job existed and I can look ahead 20 years and the job's going to exist. It's just the nature of how the technology delivers on it is what gets better.

**Lenny** (00:43:51):
Awesome. And it sounds like Intercom and Basecamp also are very early Jobs to Be Done adopters?

**Bob Moesta** (00:43:57):
Very early, yeah.

**Lenny** (00:43:59):
So I think with Sherom, something that I read between the lines is he worked at Twitter for many years and I think Twitter attempted at Jobs to Be Done framework, and I don't know if it went well and I think it just caused a lot of people to think this is a terrible framework.

**Bob Moesta** (00:44:10):
This is where I think there's different flavors of it. And what I would say is that one flavor is really what I call very supply side driven, where it takes the underlying technology and then looks at it and says, "All right, what else can we do? Where can we be better? Where are things that are important but we're not satisfying on them?" And being able to prioritize. And so there's a very systematic approach that's hundreds of steps and very, very prescriptive in nature.

**Bob Moesta** (00:44:38):
The method that I have and that I've been using mostly because I've been in the startup world and doing new to the world type stuff is it's very, very qualitative, organic, and it's a combination of a process, practice and skills. So every company actually has its own innovation process based on who they have, who they're serving, the underlying technology. And so, in my opinion, to have a very predictive one process that fits across everybody, I think there are principles, but I don't think there's one process. And so I think that's what they used at Twitter.

**Bob Moesta** (00:45:16):
The other thing is that I think Jack was actually a big fan and he worked with Clay on a couple of things, but I don't think they worked on the method part of it, they worked on the thinking part of it. And so it was more about, so one of the most dangerous things you can do is sit in a room and hypothesize what the jobs are because I will guarantee you you're 100% wrong. And so this is what happens, by the way, this is the gift of dyslexia is I'm not an A student and so most A students don't start until they know the answer, most D students start because they don't know the answer. And so you start to realize we're wired very differently to do that. And so I always say that the A students have a disadvantage against the D students and entrepreneurship because we just go start and we learn right that in there. We don't have to hypothesize everything first because we actually don't know how to do that.

**Lenny** (00:46:09):
So your advice there is essentially people often get Jobs to Be Done wrong because they just sit around and think about the Jobs to Be Done and aren't actually doing the work to interview and understand?

**Bob Moesta** (00:46:21):
Yeah. They think more about the outcomes and they think about what's the best outcomes we can get for people. And what you start to realize is that there are trade-offs people make. And ultimately there's some irrational piece, some irrational component that makes everything twist around. The irrational component is like, why in the world do people eat Snickers when they're hungry? It's a candy bar. Well, it turns out when you bite it, it masticates into a ball and it sits in your stomach and it absorbs the acid that's causing you to say, "Hey, I got to eat something." And so part of it is the roll of the peanuts and the roll of the nougat is actually to masticate it together. The caramel should be sticking it together versus in a Milky Way, the melting temperature of the caramel is so light that you take a bite, it's liquid, you drink it down, you swallow it like it's a drink, it has nothing to do with food.

**Bob Moesta** (00:47:13):
And so you start to realize that it's connecting the experiences to the context and outcome. It's connecting the supply side with the demand side, but it starts with the demand side first. Struggling moments and opportunities all exist before there's a product.

**Lenny** (00:47:31):
You're making me hungry.

**Bob Moesta** (00:47:34):
I bought a couple, but I didn't use them, but I bought a couple. And I mean, you go deep into it, you start to realize that this is the crazy part, everybody thinks they compete, but if you literally go back to a moment when you picked up a Snickers bar, you were not thinking about a Milky Way. You weren't thinking of half the candy aisle, you were thinking of like, "Do I want a sandwich, or do I want a Snickers?" Half the reason why they picked Snickers is it's 300 calories, I can eat it in three bites, it's done, it's not messy, and I can keep working. It's mainlining food.

**Lenny** (00:48:05):
I don't know if I've ever had a Milky Way to be honest.

**Bob Moesta** (00:48:05):
That's right.

**Lenny** (00:48:05):
So I don't need that comfort.

**Bob Moesta** (00:48:09):
That's the funny part is you go to all the big tech hubs in San Francisco and the Snickers are all empty and the Milky Ways are all full.

**Lenny** (00:48:17):
Yeah, I get that. You mentioned that there's two different approaches or many different approaches to the Jobs to Be Done framework, and this is a question someone actually asked that there's maybe a framework by someone named Tony Ulwick, and then there's your approach, and then maybe Clay Christensen maybe has an approach. So can you just help clarify?

**Bob Moesta** (00:48:34):
So Clay and I collaborated on it. So I was lucky enough to have Clay as a mentor for 27 years, I met with him once a quarter for 27 years, and at some point I shared with him the hack of how I was thinking about this and what I was doing, and at some point he said, "We need to turn it into a theory." To me, it was more like my work around because I couldn't read and write, "Let me go talk to some people, I'll figure it out." And ultimately we turned it into a method. So if you look at Competing Against Luck, it was written with Tady Hall and Karen Dillon, Dave Duncan, but I helped on that book for 16 months. Some of the clients in there are my clients. I think Intercom is in that one. So Clay and I are aligned in that. Clay was more about turning it to a theory and I would say I'm more about having it be a method. So his is like a thinking framework and a philosophy and a strategic kind of frame where mine is very tactical about how do we get it and then what do we do with it.

**Bob Moesta** (00:49:31):
Ulwick's comes from a very different perspective, and again, I think it's very valuable, but it comes from the notion of functions and it's more like, what can our product do? What jobs can our product do? As opposed to the way I look at it is basically only people have jobs, products don't have jobs, people have jobs, organizations don't have jobs, people in organizations have jobs because that's the irrational part. And so fundamentally there's that two different views of how do we look at it, but ultimately I would say Clay's approach and my approach are derived from the same dataset where Ulwick's is derived from a different dataset and a different set of experiences.

**Lenny** (00:50:13):
That's super interesting, I had no idea about this. And your sense is in the case of Twitter, for example, maybe it's closer to Clay's just think about it approach.

**Bob Moesta** (00:50:20):
Yep, I think that's right, I think that's right. And again, I think Ulwick's is very valuable, especially in some companies where there's lots of risk, there's regulation, there's lots of moving parts, very complicated systems, but at the same time it's so many steps. You have to have a very disciplined organization to follow it.

**Lenny** (00:50:40):
If someone wanted to start actually following through on this, which book would you recommend they start with to help them understand how to apply your approach?

**Bob Moesta** (00:50:47):
I would have them read Demand Side Sales, and it basically is starting from the theory of why do people buy and how do we actually understand how to flip the lens from trying to sell people things to help them buy? And ultimately it has the entire method around it kind of frame for product and for founders.

**Lenny** (00:51:05):
Awesome. Is Jobs to Be Done ever not the right framework for people to figure out what to build?

**Bob Moesta** (00:51:11):
Oh yeah. So couple places, one is when there's no choice or there's no real choice. So what's interesting is think about is why do you know more about your car insurance than your health insurance, right? And most of it is because your health insurance is given to you by your employer and you only utilize it when you're sick. But the car insurance, you have to pay for it so you have to sit down and decide what are the different trade-offs you're going to make where when you do it for the employer, it's good, better, best. And it literally is like, where am I my life? Have I been sick? There's some basic things, but there's no real choice there.

**Bob Moesta** (00:51:48):
And so you start to realize where there's no real choice or where people want to make the choice obvious, it doesn't work. You have to be able to accept how people see you as opposed to how you want to be seen. So when companies will come to us and say, "All right, I want you to find these jobs for us," like, "Nope, I can't do it because it doesn't work. I can tell you what the demand side is asking for and then we can see how your product fits to it and what you have to modify to it, but if I try to help you build the case to make the jobs what you think they are, it doesn't work."

**Lenny** (00:52:21):
In those cases, is there a different framework you recommend or is it just like you don't really have a lot of options?

**Bob Moesta** (00:52:26):
In a lot of cases to me, I'd do some ethnography, I'd literally figure out kind of where there's frictional points in the system. I might do some prototyping around kind of different alternatives, but typically it's more about what I would call the little hire or how do they use, for example, the health insurance as opposed to why do they buy the health insurance.

**Bob Moesta** (00:52:48):
The other example I could use is chewing gum. If I talk to people about buying a pack of chewing gum, most people can't remember at all when they bought a pack of chewing gum, even if it was in the last week like, "Uh, I think so." But if I asked them when they chewed gum, they can tell me about when they chewed gum. And ultimately that will then imply when they buy gum. If you go to something that it doesn't register, it's so deep of a habit that they don't really know what they're doing, you'll never going to be able to get that information out of them. Again, the habitual stuff is very hard to see the job. It's only when people change do you see, it's like you can reveal the entire iceberg but if I've been using Tide for 20 years and I ask you why do you hire Tide, you just make it up. You have no idea why you Tide. But if you switch from Tide to Gain or Gain to Tide, you can tell me that story very detailed.

**Lenny** (00:53:41):
There's a reader who has the really interesting question, Maria Delano is her name. She's wondering, with a framework this well known, you're bound to get people misinterpreting it and repeating inaccurate information about the framework, and she's curious what misconceptions most frustrate you that you just hear again and again about Jobs to Be Done?

**Bob Moesta** (00:53:59):
The first thing I want to say is actually, in doing it, I've explicitly made it very accessible because the moment you make it too copywritten, too patented, too whatever, people just move by it. So part of it was being able to make it in the public domain so people could have conversation and try it and do different things with it.

**Bob Moesta** (00:54:21):
What I would say is there's enough people that have used it and have worked with it and have had great success with it that at some point in time, most of the people who are trying it and not using it well, it's obvious. And so it'd be lik, how do you double down into it? I think one of the biggest misconceptions around Jobs to Be Done is this notion that it's pain and gain as opposed to context and outcome. And that I think one of the other ones is it's purely about the outcome and not just about the context and outcome together.

**Bob Moesta** (00:54:51):
And again, I think the biggest mistakes I've seen made is because they do it in a conference room and they don't go talk to people. They don't actually find the contradictions, they don't find the irrational parts. What's really interesting is when you hear somebody's story and it seems irrational, like we'll have people go, "Oh my God, that's an anomaly. That doesn't happen." But what you realize is that the context makes the irrational rational. So the moment you hear a story and you go, "I can't believe that," nine times out of 10 it's because you don't have the rest of the story. And so part of it's being able to understand the rest of that context that would drive somebody say, "Why would somebody cut their arm off?" Well, if they're in this situation and this and this and this, there's nobody who would say they want to cut their arm off, but in certain situations you'll do it.

**Bob Moesta** (00:55:37):
And so that's what we're trying to do is find where will people change behavior? Most people are studying the momentum of where people are and what's the momentum of their direction, but the reality is what we're trying to do is study what causes people to change their direction. And that's where innovation happens. Innovation happens when people change.

**Lenny** (00:55:58):
What convinced you to spend your time and life working on Jobs to Be Done and helping people implement this framework and what keeps pulling you back?

**Bob Moesta** (00:56:08):
That's a great question. So I think I started out as I just love to build things. My mom would take me, basically we have something around here called Big Trash Day is where they throw out the dishwasher and they throw out the old mini bike and all these different things. And my mom would basically say anything that we could fit in the trunk, we could bring home. And so I've been building things my whole life because I've been just always fascinated with how things work. So that's the first thing.

**Bob Moesta** (00:56:38):
The second part is I love to help people. One of the things I realized is I can't build products for myself, and I've done seven startups, but I realized that I have to build for others. And so to me, building for others was where I started product. And then I realized that I'm a method builder and that I really help people innovate. And so I exist to help make the abstract concrete. So that phrase has helped lead me to becoming now a teacher and a professor and writing books is something I never wanted to do because I hated books. Clay convinced me that I had to learn how to speak and I had to write books.

**Bob Moesta** (00:57:18):
So here's a really good one is that this is in 1990, so one of the things that happened was when my youngest kid moved out and basically moved out of the house, I had my notebooks from almost 30 years of every project on everything I worked on any company, and this is from one of my mentors, Dr. Taguchi, he said this in 1990 when I was living in Cologne, Germany. He said, "Write a book." So I opened this 30 years later, I'm like, "Oh, dang it. I got to write a book because he told me to." So it's just one of those things where I realized I really like helping people, I like creating methods. I'm very curious, sometimes annoyingly curious, but that's kind of the triad of things that I love to do.

**Lenny** (00:58:06):
Amazing. Bob, is there anything else you wanted to share or touch on or make sure we cover before we get to our very exciting lightning round?

**Bob Moesta** (00:58:14):
There's three big things to take away. One is struggling moments is the key and it's struggling moments that people take action on. And what I would say is they're everywhere. They are freaking everywhere in our lives and there's only certain contexts when all of a sudden we realize we have to do something about it. So study struggling moments because at some point that's where we need the innovation the most. The second thing is think about the progress people are trying to make. What is their standard, not your standard? What is that context? What is that outcome? And the last thing, the way I phrase it is choose what to suck at and figure out the trade-offs that you need to make and make sure that your trade-offs map the trade-offs of the customer. Because nine times out of 10, most products that fail is because they made a trade-off that the customer didn't agree with.

**Lenny** (00:59:06):
Awesome. Well, with that, we've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Bob Moesta** (00:59:12):
Yeah, I'm ready. Always ready for these.

**Lenny** (00:59:14):
Perfect. What are two or three books that you've recommended most to other people?

**Bob Moesta** (00:59:19):
Shape Up by Ryan Singer, it's phenomenal. The other book I would say is End of Average by Todd Rose. I listen to it every single year. I get something on it every single year. I've been listening to it for probably eight or 10 years. I literally called Todd, I've become friends with Todd. We interact on a regular basis. It's an amazing book.

**Lenny** (00:59:39):
What is a favorite recent movie or TV show?

**Bob Moesta** (00:59:42):
I love Big Bang. I watch it every... People would say that I'm Sheldon, I think I'm more Leonard, but I can see there's days that I come across as Sheldon, I don't mean to be Sheldon. But I like Oppenheimer. I think any of the science type, I'm not really a science fiction person, but it's more about, I'll say historic documentaries, I love them all because they help me understand the science.

**Lenny** (01:00:10):
What is a favorite interview question you like to ask when you're interviewing people?

**Bob Moesta** (01:00:14):
What are the top three things you struggle with in your business today that if you could solve would fundamentally change the business?

**Lenny** (01:00:22):
Love it. What is a favorite product you recently discovered that you just really like?

**Bob Moesta** (01:00:28):
I recently purchased a massage chair, and it's one of those things where I've been getting massages for a while, and as I get older and I'm working out more, I've lost almost 100 pounds. And so I'm to the point where I'm working out more and God, nobody told me I'm going to be cold all the time, I'm sore all the time and I'm hungry all the time. And so it's like, "Okay, I need a way in which this..." So I would get a massage every two weeks or so, and now I can get a massage in 20 minutes on demand. And it's pretty freaking amazing.

**Lenny** (01:00:57):
Man, my wife has wanted one of these and this might be good for her.

**Bob Moesta** (01:00:59):
Oh, I will tell you, it's a life changer. It is one of those things where we'll do interviews and I can go do an interview and a debrief, pop in and do it. And I'm brush as I can be. It's better than an app.

**Lenny** (01:01:15):
Is there a brand you want to throw out that you found to be your favorite?

**Bob Moesta** (01:01:18):
Kyoto is the one that I have.

**Lenny** (01:01:18):
Kyoto.

**Bob Moesta** (01:01:20):
I got it from Costco. It's fabulous.

**Lenny** (01:01:23):
Okay, we'll be looking into that. What is something relatively minor you've changed in how a company has implemented Jobs to Be Done that has had a big impact on their ability to do it well?

**Bob Moesta** (01:01:33):
There's two. One is Intercom. So the way that Intercom really took off and why it did so well is actually, it was Des Traynor and Eoghan McCabe who were the two founders, they actually studied, they came to one of my workshops in the beginning, but they studied it and they tried to do it, and then we talked about it. But then they brought Matt Hodges and Paul Adams and Sean Townson and the executive team, and they did the interviews. And when they did the interviews, they understood what to do and it literally all went downhill from there. And they knew how to ask the questions.

**Lenny** (01:02:09):
Downhill in a good way?

**Bob Moesta** (01:02:10):
They knew how to do the interviews way. It was kind of amazing. And Paul Adams and Matt Hodge's first day at Intercom was in my office in Detroit. So that to me is one of the key.

**Bob Moesta** (01:02:23):
The other is to find a place in a very large organization where a group is struggling, they can't deliver product, they can't move fast enough, they keep getting the wrong insights, they say it's going to be this big, and literally focusing on a very small area and giving them a little space to demonstrate the use of it, and then it will spread with a case study or two. And so most companies, if they start small case studies and sharing it with people both when it works and not works, or starting with the top.

**Lenny** (01:02:56):
Two more questions, one is, someone asked me to ask you the dining room table story. Does that ring any sort of bell?

**Bob Moesta** (01:03:01):
Yeah. So one of the things I did is I built houses. So before I built houses, I was running a venture capital, private equity firm. We had about 100 million. I was doing 25 transactions and just traveling too much, I had four children. And so my wife and I kind of had the conversation that I wound it down and I said, "What am I going to do?" I wanted to try and find a business I could work in and be part of and own part of so I joined a building company here in Detroit, and we ended up building a thousand homes here in Detroit and had 14 sites. And one of the things we did is we built for downsizers like your parents. And one of the things they constantly told us was, "Look, we're downsizing. We're not having the holidays. We're done with that. I don't want a dining room table, so we can't even have people over. If we're going to do it, we're going to go somewhere else. I don't want the dining room table."

**Bob Moesta** (01:03:50):
And so we made, it's a two bedroom, two and a half bath, first floor laundry, gourmet kitchen, kind of amazing condo. But what we realized is people, if they didn't know where the dining room table was going to go, they weren't going to move. And so it turns out that the dining table was the emotional bank account for their entire life. And so if you weren't going to take it or your sister wasn't going to take it or your brother wasn't going to take it, the reality is they weren't going to give it the Goodwill, it was not going to go in the basement. It might go into the storage unit, but for the most part, people would literally stay where they are until they knew where the dining table's going to go.

**Bob Moesta** (01:04:25):
So I did the opposite of what they told me to do, which is I built a place to put the dining room table. You could never eat at it, it was never big enough to actually pull the chairs out of it, but it was still a symbolic of what it was and they would use it for puzzles and that kind of stuff. But I sacrificed the second bedroom suite to basically add that, and it increased sales 22%. So this is a case where you learn, again, that irrational contradiction that says, "They've said this, but you did that. That doesn't make any sense." That's what jobs helps you with, those kinds of really important, small but subtle and important insights.

**Lenny** (01:05:01):
Last question, you showed me this very cool camera setup you have in one of the views was your heroes on the wall?

**Bob Moesta** (01:05:06):
Yeah, yeah, yeah.

**Lenny** (01:05:07):
Can you show that and share who those folks are?

**Bob Moesta** (01:05:09):
Yeah, so at the end of the night, I have this philosophy that I have the energy in your body and your brain literally you need to use every ounce of it every day because you wake up the next day with a full bank account and you can't really save it. So every night I paint. And so these are paintings of my mentors and they're above me, but Dr. Deming, Clay, Dr. Taguchi, and Dr. Willie Moore, I wrote about him in a book called Learning to Build, and the five skills that they taught me to enable me to kind of work on so many different things in different areas.

**Bob Moesta** (01:05:45):
And so Deming I met when I was 18, he took me to Japan. I worked for Ford and I was responsible on the front lines to help reduce product development cycle time at Ford from 72 months to 36 months. So that's where I learned a lot of tools and methods and things like that from Toyota. And then I learned Dr. Taguchi's method, which is amazing around designed experiments. Dr. Willie Moore was my first boss at Ford, and she was a PhD in particle physics and she taught me empathetic perspective of how to see things and frame things and really amazing, amazing individual.

**Bob Moesta** (01:06:20):
And then the last one was Clay Christensen, which is I just walked in his office and he had a sign outside his office basically saying anomalies wanted, and I walked in and I said, "Look, I'm an anomaly. I don't really know if you want anomalies, but I am." And we sat down and started talking, and ultimately I asked him, "What's your research and how can I help?" He had been there maybe about a year, and it was one of those things where he got kind of somber and it was almost like he had a tear, and I was like, "What's going on?" He goes, "I've been here a year and everybody's asked me for things, but nobody's ever asked to help me, and you're the first person." And so that was the beginning of the relationship, and I had four hours a quarter for 27 years with Clay with no agenda, which is kind of amazing.

**Lenny** (01:07:05):
That's incredible. What a beautiful way to wrap up our chat, Bob. My job to be done for this interview was to help people understand Jobs to Be Done. I think we accomplished our goal as much as we can in one hour. Two final questions, where can folks find you online if they want to reach out and maybe ask you a question?

**Bob Moesta** (01:07:21):
Yeah, LinkedIn is probably the best place, and I post most of the stuff there. And then I have several different companies, but one is called The Rewired Group, and I've had that for about 14 years, and that's a design consultancy agency around helping people build and launch products. And we do everything from Fortune 100 to not-for-profits, to startups and different ways. And then I have something called Laser Ventures where we actually work for equity and we also put money into investments as well. And that's called Laser Ventures with Andrew Glazer. And we have a podcast called The Circuit Breaker, which it's more or less all these different concepts in 20 minute format of me and my partner just riffing around what is the empathetic perspective or what are the forces of progress? Or just small little things that basically help people learn along the way, and it's just long enough for a commute or a walk or something like that.

**Lenny** (01:08:18):
Last question, how can listeners be useful to you?

**Bob Moesta** (01:08:20):
To be honest, I was so excited for this podcast. I was excited, one, because I'm a fan, but two is to see your post and then get all those responses. I think I said, "Boy, I think we need more than an hour. This is amazing." And so to be honest, posting questions, asking questions, letting the community kind of interact. And what was so interesting is it was people who had questions, but then there were people like Des and Jason who reached out and said, "Oh, this will be awesome. You'll love this." All those kind things.

**Bob Moesta** (01:08:51):
So to me, just keep being a community. And what I would say is, as this is posted, just put more questions up there. The hard part for me is actually answering questions in a written form. My request would be is that if we can figure out a format so I can answer them more in a conversation where we almost like a list of things where there might be a follow-up of some sort, but if your listeners could literally help me by being more articulate, that would be great.

**Lenny** (01:09:18):
Okay. Let's figure out if we can do some way of doing that, that would be amazing.

**Bob Moesta** (01:09:21):
That would be great.

**Lenny** (01:09:22):
Bob, again, thank you so much for being here.

**Bob Moesta** (01:09:25):
Thanks. Thanks for having me.

**Lenny** (01:09:26):
Bye everyone.

**Lenny** (01:09:30):
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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## [12/20] An inside look at Deel’s unprecedented growth | Meltem Kuran Berkowitz (Head of Growth)

**Meltem Kuran Berkowitz** (00:00:00):
... early days, it's very important to just go back to the basics, build the skeleton before you put on the makeup. So the first question I would ask is, do you have a website? Is it fast? Do the search engine knows that it exists? Okay, great. The next step would be, can people find it? If they can't find it, do you need to write content to make sure that people can find it? Only after all of those questions are answered, should you then consider, do I have money? Can I put it behind some paid ads to make sure people come to my website? You can't run a successful paid ads program if you have a website that's loading in four plus seconds. So really going back to the basics and starting from a good experience at the core and then expanding step-by-step from there.

**Lenny** (00:00:47):
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 Meltem Kuran Berkowitz. Meltem is head of growth at Deel, which is arguably the fastest growing SaaS business of all time, possibly even faster than Ramp, which we delved into in a previous episode. They went from $0 in revenue to a mind-boggling $300 million in revenue in three years, while also staying EBITDA positive.

**Lenny** (00:01:15):
**Meltem Kuran Berkowitz** (00:04:26):
Thank you for having me, I'm very excited to be here.

**Lenny** (00:04:28):
I'm more excited that you're here. So you're head of growth at Deel. For people that aren't familiar with Deel, can you just give us a sense of what does Deel do briefly? And then also can you just share some stats around the trajectory of Deel? It feels like it's been this extraordinary journey, and I'm curious just to hear some of the stats of just how extraordinary.

**Meltem Kuran Berkowitz** (00:04:46):
Yeah, so Deel is payroll, HR, and compliance platform for global teams. So essentially we help companies expand globally with tools like Deel HR, immigration, employer record hiring, independent contractor hiring, payroll, both global and US. So whether you're trying to hire someone as a full-time employee in Japan or you're trying to make sure your contractor in Germany has everything they need on day one, our platform allows you to take care of everything all in one place.

**Meltem Kuran Berkowitz** (00:05:13):
And when I joined Deel, actually that was around July, 2020, we were less than a million dollars in ARR. And then over time, within the first year on January, 2021, we were at $4 million ARR. We finished 2021 with 57 million. April '22, we were looking at a hundred million. And then we started off this year with $295 million in ARR. And what we're particularly proud of is that we've been EBITDA positive. So that's something that we are very, very proud of on top of the ARR growth.

**Lenny** (00:05:48):
Amazing. And you said that you were super early at Deel. Can you give us a sense of just how early and what that was like?

**Meltem Kuran Berkowitz** (00:05:54):
I was the second hire to the marketing team, and I was I believe either employee 19 or 20 on the overall Deel team.

**Lenny** (00:06:02):
We had the head of product from Ramp on this podcast, and it feels like there's this little bit of which company grew faster early on in the trajectory of the two, but we don't have to debate it. It feels like these are maybe the two fastest growing SaaS businesses in history. Does that sound about right?

**Meltem Kuran Berkowitz** (00:06:16):
That's true, yeah. So Ramp was the first one to be crowned the fastest growing, and then we took that crown from them. So I think we're both right, in that at a certain point in time we've each been the fastest growing. But they're amazing.

**Lenny** (00:06:34):
What I want to start with is something that I heard about you, which is that you specialize in cheaper growth channels, and that's actually the reason that Deel ended up hiring you, is they wanted to find ways to grow cheaply. And so a couple of questions. One is just, what did you find worked really well from that perspective at Deel? And then two, what are today's maybe cheaper growth channels that you think people are under investing in? Whatever you're willing to share there, I don't know if you want to give away all your secrets.

**Meltem Kuran Berkowitz** (00:06:56):
I'm happy to give away all and everything. So I think before we dive into the list of cheap channels, which I will get to, it's very important to notice, especially in the B2B world, most of the businesses are started because there's an active problem. And so when you go out to the market and try to answer people's questions, people don't want to be sold to, they want their problem solved. So those cheaper channels are often places where people are just trying to get an answer to their question. So whether that be search engine optimization through the articles that you write for people, looking onto Reddit where people are asking these questions in communities, forming partnerships with other groups that are trying to answer these questions, existing communities where other business leaders are connecting with each other and looking at their peers to find answers to shared problems that they're having, or places like Quora. That's, when you think about cheap channels, that's a really good place to start, is just add value to people, answer their questions.

**Meltem Kuran Berkowitz** (00:07:54):
And when you answer their questions and present your solution, if it's a fit to what they're looking for, that ends up being a cheap channel for you. You don't necessarily have to advertise, when you go to Reddit and you set up those keywords to be tracking when people ask certain questions, you're not paying any money to do that. You're just seeing, oh, someone has this question, I have the answer to that, here you go. And connecting with them, it takes time. But early on, those were a lot of the things that we invested in.

**Meltem Kuran Berkowitz** (00:08:21):
And I think a lot of people jump that because they think, "Oh, it's one person here, two people there." But when you start helping people, that combined with word of mouth, and guess what, these are digital places, you provide one answer and your answer lives out there for other people to repeatedly refine. As long as we're not talking about a closed Slack community, maybe a conversation happening in DMs. So when I think about cheap channels, I think about where are people asking the questions, that might be Google or that might be Reddit or any other channel, and providing them the answers, so they know that your solution exists.

**Lenny** (00:08:59):
Okay, this is awesome. So this Reddit example is that, which you actually did, you set alerts for when people have questions about HR hiring internationally I imagine, and then had someone go in there and give them some advice?

**Meltem Kuran Berkowitz** (00:09:10):
Yes, exactly that's what we did.

**Lenny** (00:09:12):
Wow, I love that.

**Meltem Kuran Berkowitz** (00:09:12):
It's important to notice that if you're looking at a subreddit of about a thousand people, recognize the upper size of this audience, you're not going to win 5,000 businesses through that Reddit community, but you're maybe going to win 10% of the people there that are having this problem. So it's very important when investing in these cheap channels to focus on what's the upper limit of the audience size.

**Meltem Kuran Berkowitz** (00:09:36):
And also I see a lot of people sometimes go blindly into SEO. They're like, "We're just going to write content," which I'm a huge fan of SEO, happy to discuss that later, but if people aren't asking this question to Google, you can write all the content you want, it doesn't matter, nobody's going to find it.

**Lenny** (00:09:52):
I love this so much, because it connects with something I find again and again, is one of the more effective early growth channels is tapping into an existing community and piggybacking off of what they've already built. Airbnb is a little bit of an example where they went to Craigslist. Actually most people pull people off Craigslist, Uber pull people off Craigslist, Lyft, so many companies just piggybacked off Craigslist and built up their own company.

**Lenny** (00:10:13):
But what you said is so important, which is you can't just go into a community and be like, "Hey, everyone, check out what I've got." You need to add value to people and add value to the community, otherwise no one's going to pay attention to you, they're going to kick you out.

**Meltem Kuran Berkowitz** (00:10:25):
Exactly.

**Lenny** (00:10:25):
And so I think that is a really important insight is if you're trying to say piggyback off of a community, the most important thing is you need to add value to the community.

**Meltem Kuran Berkowitz** (00:10:34):
Yeah, be someone people actually want to talk to.

**Lenny** (00:10:37):
I love that. Is there a tool that you found for that Reddit strategy of just how to know if someone's talking about hiring say internationally?

**Meltem Kuran Berkowitz** (00:10:45):
I did a very janky assistant setup, I'm not proud of it, but it works. Someone else out there built it and I just plugged in the keywords we were looking for into it.

**Lenny** (00:10:57):
I know it wasn't just Reddit, and I'm curious what else you found was worth your time, but how did you figure out that's where your potential community and potential users were spending time?

**Meltem Kuran Berkowitz** (00:11:06):
Well, I think over time Reddit became the place that you go to when you want peer answers, whether that peer is someone right next to you or someone halfway across the world. So it was a very obvious place for me to go to understand, what's top of mind for my audience? But also there are so many subreddits, whether it's founders or HR managers, that people are just asking their community. Because oftentimes they have very specific questions. You can't just ask that to Google because they have one thing that means that they might not be able to qualify for the exact solution that is what's most used out there. So Reddit just became the place over the years for people to ask their specific questions semi-anonymously and get answers from their community, and multiple answers to be able to judge which works better versus didn't. So it was one of the first places that myself and my team went to.

**Lenny** (00:11:58):
And is this something that worked really well, mostly at the beginning to kickstart growth or how early was this? And then how much of your growth would you say came from this sort of strategy early on?

**Meltem Kuran Berkowitz** (00:12:07):
I believe I set up that little keyword tracking within the first day of me starting my role at Deel. So it was very, very early. And we still do this by the way. We still provide answers across Reddit, Quora communities. We're still out there connecting with people. Over time, of course, it went from maybe being 15% of our funnel to less than 5% of our funnel because the rest of our funnel has grown a lot. But the next number of people that we get to share our solution with through those channels have continued to grow over time.

**Lenny** (00:12:43):
Coming back to something I asked that I want to touch on is, in today's world are there any cheaper growth channels that you are excited about? Or is it essentially the same idea? Look for where your potential users are and ideally asking questions that you could help answer? Is that roughly how you think about it still?

**Meltem Kuran Berkowitz** (00:12:58):
That is still roughly how I think about it. I would add social channels to that as well. I think Twitter's a great place, people ask questions oftentimes, so there are communities. And when someone has answered that question, other people piggyback off of that. But anywhere where someone is asking a question, I would consider to fall into this category of a cheap channel.

**Lenny** (00:13:17):
What's an example of answering a question in a value-add way versus a maybe less effective way in your experience?

**Meltem Kuran Berkowitz** (00:13:25):
I would say the least effective way would be, "Hey, we've solved that problem, check out our website." Okay, cool, if you have five seconds, do that. But the value-add way would be explaining what the solution to that problem is. Because the reality is there are a lot of people out there who can probably solve this, and then providing your solution, but answer their question first, and then let them decide if they want to come with you or go with someone else. But the whole point of someone asking a question isn't to be sold a solution. It's like, "I just need an answer." So genuinely treat this person like a friend of yours, answer their question, be like, "Yes, it's doable. No, it's not doable. Yes, you can do it, but you need to consider X, Y, Z. If you want to learn more about it, you can chat with us."

**Lenny** (00:14:04):
And these were people on the team or you answering these questions, it wasn't some automated system?

**Meltem Kuran Berkowitz** (00:14:09):
It was never automated. It still isn't today. We would never automate our interactions with people. So early days, it was myself, the other people on my team, our co-founders, which to this day they still do by the way. So it's a lot of people on the team. Every single person on the team has access to these. And whoever is the first person to jump in will flag it. And sometimes you'll see on a Twitter, someone will write a question, there's three people from Deel team has answered. We're like, "Okay, I think enough of us have provided value here."

**Lenny** (00:14:41):
That's amazing. And I'm spending a lot of time on this, but this is such an interesting and important tactic that clearly worked to help you all start and it's cheap. And most, at least B2B, companies could probably leverage this. So when people are thinking about where to go, maybe do this, you mentioned Twitter, maybe Reddit, maybe Quora. Is there anything else, just like the sphere of potential places founders can go think about whether maybe people are asking questions they could answer there?

**Meltem Kuran Berkowitz** (00:15:06):
Yeah, there are a lot of closed communities, so there are still ... they could be Slack communities, Discord, places that founders choose to connect with other founders. Or we have partnerships with places like the Y Combinator, where once you go through a certain program or you qualify to be in the club, whatever that club may be, you get to get access to this community where you can talk to other people. So those are considered closed communities. It's not as easy to gain access to. But if you can find a way to gain access to those communities, they're also great places to be.

**Lenny** (00:15:37):
And then step number one is add value, right?

**Meltem Kuran Berkowitz** (00:15:40):
Yes.

**Lenny** (00:15:40):
You can't just get in the community, "Hey, check out Deel everyone."

**Meltem Kuran Berkowitz** (00:15:42):
Otherwise you'll just get kicked out. You can try not adding value, you're not going to last very long.

**Lenny** (00:15:47):
Yeah. If you think about the pie chart of how growth happened at Deel early on and then today, what would that roughly look like? What percentage of early growth came through this versus SEO or whatever else worked, and then today? Whatever you can share of where growth comes from.

**Meltem Kuran Berkowitz** (00:16:03):
Today, roughly about I would say 50% of our growth continues to come from what we would consider non-paid channels, through whether it be partnerships, SEO, these kinds of moderations. So early on that was more close to 80% to 90%. But that number has grown. Again, the net number has grown, but the percentage of the overall value has shrunk because other channels have also grown significantly.

**Lenny** (00:16:29):
Awesome. Okay. So let's talk about SEO. First of all, how important has that been to the success and growth of Deel? And then also just what have you learned about what is important to get SEO right?

**Meltem Kuran Berkowitz** (00:16:40):
Yeah. So I would say for SEO, the biggest mistake people make is they will just shove keywords. They're like, "Okay, these are the keywords people are searching for, I need to make sure I mention it five times." Obviously do that, make sure that the content that you wrote answers the question. But the main thing to think about it is, is the Google search over? If someone reads your content, if they typed in something to Google, and then they read the article that you've published, are they going back to Google to continue reading more or is the Google search over? Because ultimately that's what the search engines care about is, I want to make sure this person gets their answer quickest way possible.

**Meltem Kuran Berkowitz** (00:17:16):
So when you think from that perspective, it's much easier to actually write things that people want to read, and you're not just meandering and going on and on, shoving a bunch of keywords that people are just like, "I'm bored, I'm bouncing, I'm going somewhere else."

**Meltem Kuran Berkowitz** (00:17:30):
So asking that question of, is the search over is a really good place to start, instead of just shoving keywords. And our content team is amazing. I would say they're more of an operational team than they are a creative team. The way they run things, the way they publish the articles, there's a very clear framework that is used to decide what gets published when and what doesn't get published by the same token. So all of those things are very important to consider, instead of just being like, "Oh, this keyword has 10,000 monthly visitors, I'm just going to write a bunch of things about that."

**Lenny** (00:18:02):
What's an example of a page that you wrote that ends people search and gives them what they need?

**Meltem Kuran Berkowitz** (00:18:07):
A lot of people wonder what an EOR is because that's an employer of record. They tend to be confused about exactly what that is. So we do very well in explaining to people what EOR is and isn't and what its limitations are. Because the first question that you will have after the EOR question's answered is, okay, what's the downside? When do I need to not use it? So for us, that's one of the content pieces that does very well.

**Lenny** (00:18:32):
I'd love to spend more time on this operational element of the SEO team. Maybe one question is just what is that bar that tells you that it's ready to publish and worth going out versus it's not ready?

**Meltem Kuran Berkowitz** (00:18:42):
Yes. So I can't take credit to this, this is all of our team's work. But we have this framework that we call the traffic light system. Essentially we go, whenever the team is going to do a content series, they will go and find up to 700 keywords. These are keywords that are related to what we do. So they might be closely related, they might be distant related. And then those set of keywords get ranked by highest volume to the lowest volume. So then you have an Excel sheet, keywords on the left, volume on the right. And then you go one by one. This does take time. And then say, what is the intent of someone searching this keyword?

**Meltem Kuran Berkowitz** (00:19:22):
Is this a university student looking to write an article and they're never going to become our customer? Or is this someone that is actually looking to solve their existing solution and they are going to become our customer? So with that, you get the green light ones, which is the intent is very high, this person wants our solution. The yellow light is intent, could be they are a 50:50, maybe they're looking to buy our solution, maybe it's not soon enough. And then the red is, this person is not looking to buy our solution, they're just doing this search for any other reason. So when you do that, then you go from the greens, highest volume to the lowest volume, yellows, highest volume to the lowest volume, and oftentimes you never get to the reds.

**Lenny** (00:20:03):
I love that. And then once you have say a keyword, say a green, I guess, it's a green keyword where it's high intent and high volume, what is the process to actually put together an article that works for SEO?

**Meltem Kuran Berkowitz** (00:20:16):
So step one is understanding the search intent. Why is someone typing that? What are they trying to understand? And a part of that is going to Google and figuring out, what is Google servicing today? So one of the examples that I always give people of when you type EOR into Google, it doesn't give you employer of record, it gives you enhanced oil recovery, because most of the people typing EOR to Google is looking for that solution.

**Meltem Kuran Berkowitz** (00:20:43):
Now, if my team blindly went in and said, "We're going to rank for EOR," we're never going to rank for that because that's not what Google gives people because that's not what people have been looking for. So first is understanding, what are people looking for? And creating a content piece that answers those questions. Oftentimes the bottom part of Google where it says, the next questions that you should be asking is a really good place to go to understand, okay, after someone's done with this search, what's the next question that they ask? And the next one and the next one.

**Meltem Kuran Berkowitz** (00:21:11):
So figuring out what do people want to get out of this? And then there are a myriad of SEO solutions tools that you can use out there to ensure that the content you've written is in a simple enough language that someone with a fifth grade reading level can understand. That you actually did the right things, you put the right keywords in the right places. I almost think of keywords as like, that's your address, that's how you give Google, please send people my way. So you can use many tools.

**Meltem Kuran Berkowitz** (00:21:38):
We use Clearscope, we love it. So those are the tools that you use. And then it gets published. And oftentimes those tools will give you a score to say you're an A plus or you're a C minus, you need to make your language less sophisticated, currently it's at university level and we need it to be at fourth grade reading level.

**Lenny** (00:21:55):
What is the structure of the content team at this point, how many people is it, and what are their rough focuses?

**Meltem Kuran Berkowitz** (00:22:00):
Fun fact about our content team, the person that leads it was one of the earliest employees at Deel, I want to say number two or three. So the person there is just so special to our entire company. And so the structure of the content team for us is, it is led by our director of content. We have one person that is in charge of all of the operations. So that is working with our freelancers, making sure that the briefs are sent out, making sure that the fact checking is done on time, that the articles are published on the website, and tracking and everything, they run the machinery on the backend.

**Meltem Kuran Berkowitz** (00:22:33):
And then we have different people focused on different areas of content because you need to have expertise that you build over time to write properly. So we have one person looking after certain product lines, another person would be focusing on [inaudible 00:22:46] behind different product lines. And very recently we've set out a team for different types of content because content isn't just written article, it's also video, it's also education. There's a lot of different types of content that we want to tap into. So now there's a team that is focused on those new mediums for us.

**Lenny** (00:23:04):
Awesome. So how many people total full-time that run this operation?

**Meltem Kuran Berkowitz** (00:23:08):
Right now the team is about eight people total.

**Lenny** (00:23:11):
And it's like, I don't know if it's exactly 50% of it, something like half of your growth essentially is coming from this team?

**Meltem Kuran Berkowitz** (00:23:17):
Yes.

**Lenny** (00:23:18):
Is there anything else you found that it's really important or effective for thinking about making SEO work?

**Meltem Kuran Berkowitz** (00:23:23):
The biggest mistake people make is SEO is one of those things that, you can try and automate it, you can do a lot of things that save you time, but it never stops being time-consuming. And to do it well, it is going to be time-consuming. So oftentimes people just get over it or they think it's below them to be going over and doing keyword research and doing all of those things one by one. And that's oftentimes where people lose out is they try to cut corners. And when you cut corners, you just don't create a good quality resource. That's what it comes down to. It's like, is your resource good quality? Yes or no?

**Meltem Kuran Berkowitz** (00:23:55):
So when you try to just be like, I want to rank and cut all those corners, your content is not going to be great. Nobody's going to want to read it. And your program is not going to go anywhere. So I think it's one of those things that people as they become more senior think it's below them. And I think that's the biggest mistake.

**Lenny** (00:24:11):
It's interesting, and that's exactly the same advice for writing a newsletter, the thing I do. Where if a newsletter isn't working, it usually means the content isn't valuable enough to people. It's such a clear meritocracy of, if it's useful, people will read it, subscribe, share. And if they're not, they won't subscribe. And then Google basically figures that out based on people's behavior.

**Meltem Kuran Berkowitz** (00:24:30):
Yes, exactly.

**Lenny** (00:24:31):
To give people a sense of the operation, how many articles are you putting out a month, a day, a week, whatever you can share there?

**Meltem Kuran Berkowitz** (00:24:38):
We used to put out about 10 articles a week, that's net new. Whereas now we are doing more of five new articles and five article updates. Because the type of content we write, regulations change, things change all the time, so we need to make sure that even if something was published two years ago, it's up-to-date. So we have a team that is responsible for continuously fact checking. So we do about five article updates and five net new articles written. And of course we do it across many different languages. So what started off as English only operations is now in other languages as well. So there's no shortage of work to go around.

**Lenny** (00:25:15):
Something that I go back and forth on a bit is, if SEO is something every company should be doing and will work for them? And in my experience, there's certain products that are really good for SEO, especially if there's user generated content or there's just a bunch of data like say Yelp or Glassdoor, where they can generate tons of pages in all these different ways. Do you have an opinion on what sort of business and company is best suited for SEO? Or is your feeling everyone should probably be doing SEO in some form? And even if it's not a huge part of your growth strategy, it'll help.

**Meltem Kuran Berkowitz** (00:25:47):
I don't think everybody should be doing SEO. I think if you are in a space where people are looking for a solution, you should be doing SEO. But if you are a direct to consumer company selling people lipstick, which I'm a huge buyer of, you probably shouldn't invest in SEO all that much because people don't go to Google for that. They go to Instagram, they go to influencers. And even if someone types in the best lipstick of 2023, chances of your website ranking, because you're not a third party objective comparing to other people, is very low. So it really depends on the solution. But if you are in a space which most B2B products tend to be, that you're solving an active problem very specifically, then I would say SEO is a good idea. If you're a consumer good, maybe a little bit less effort should be put towards it.

**Lenny** (00:26:39):
Makes a lot of sense. Going back to the early days, you were hired as head of growth at Deel, there's a lot of things you could do. I'm curious how you decided where to prioritize your resources and what to do in the early days? Versus what you started doing down the road and what you could almost not worry about early on? What have you learned about that early prioritization exercise?

**Meltem Kuran Berkowitz** (00:26:59):
Yes. So I would say early days, it's very important to just go back to the basics, build the skeleton before you put on the makeup. So the first question I would ask is, do you have a website? Is it fast? Do the search engine knows that it exists? Okay, great. The next step would be, can people find it? If they can't find it, you need to write content to make sure that people can find it.

**Meltem Kuran Berkowitz** (00:27:24):
Only after all of those questions are answered, should you then consider, do I have money? Can I put it behind some paid ads to make sure people come to my website? So going step-by-step. But you can't run a successful paid ads program if you have a website that's loading in four plus seconds. So really going back to the basics and starting from a good experience at the core. And then expanding step-by-step from there is how I would suggest everybody starts. And that's what I would do if I was to get hired all over again.

**Lenny** (00:27:54):
I love that. So what are some of the steps? So step one is, do you have a website? Step two is make sure the website performs and people can actually have a good time when they're experiencing it. I imagine part of it is also, do people understand what you do, like tweaking maybe the pitch and the [inaudible 00:28:07]

**Meltem Kuran Berkowitz** (00:28:06):
Yes, exactly. And speaking of the pitch, our copy team does an amazing job at this. In the B2B world, it's very easy to come up with statements that could so easily be applied to another business and it would work just as well on their website. And it sounds good and you and your team feel really good about it. But then if your one-liner can also work for another business, please don't let that be your one-liner. Make it so that people actually understand what you do. Because right now there's a lot of statements out there like, 'we do the complex things so you can focus on what you do best', what does that mean? And you can give that to 90% of the B2B businesses out there and it would apply to them, which means it's not good enough.

**Lenny** (00:28:51):
Is there anything that you remember you changed in those early days in terms of the website or the positioning or anything along those lines that was a big improvement?

**Meltem Kuran Berkowitz** (00:28:57):
Our website was hard coded, so the first thing we did with the help of the dev team was to move it to a platform that it was easy for me to access and edit, so that we could continuously A/B test things. And outside of that, we worked really hard on testing a lot of value propositions to explain to people exactly what we do, explain problem first, solution first, and time savings, cost savings, putting a lot of those against each other and rapidly A/B testing.

**Lenny** (00:29:24):
Once you got past that phase, where maybe you started doing some paid ads and other things, where did you find you could invest more resources?

**Meltem Kuran Berkowitz** (00:29:32):
Once we covered the basics of your big four or five ad platforms, we started looking into the long tail places. So those are the platforms that individually never contribute a significant enough chunk for you to individually care about it. But if you add them up, it diversifies your lead flow such that it ends up being about 30% of your overall lead flow that's coming in. Those could be things like review sites or much smaller outlets that could also run ads, newsletter ads, podcast ads, all of those things.

**Meltem Kuran Berkowitz** (00:30:06):
When you run an individual podcast ad, yeah, you're probably not going to get 2000 customers from one podcast. But you run 10 of those and then it starts adding up. So really long tail is where we focused on. And we started going very niche with websites that have maybe 50,000, a hundred thousand visitors a month, which isn't all that much when you're thinking about your paid ad strategy. But all of those places add up and they're oftentimes overlooked because they're not as easy, you have to take the time to set up from scratch to run it on everything. Our paid ads team, they spent just as much time running Facebook and Google ads as they do running those third party, much smaller platform ads. It takes the same effort, but you need to have a diversified source of your leads.

**Lenny** (00:30:54):
Huge fan of podcast ads over here, and maybe this would be a good time to cue the mid-roll ad, maybe, I don't know, it happens.

**Meltem Kuran Berkowitz** (00:30:59):
Sounds perfect.

**Lenny** (00:31:01):
**Meltem Kuran Berkowitz** (00:32:36):
I'm not a huge fan of early awareness campaigns for B2B businesses specifically. So if you are a consumer goods founder, you can skip this part. But the reason I don't like awareness early on is because to do a proper awareness campaign, it takes time. You need to have teams that are doing the strategy, doing the creative work, and they don't always hit. You don't know if they're always going to resonate or not. And then you look back, and you've worked on this thing for a whole month and it hasn't resonated and you've wasted a full month.

**Meltem Kuran Berkowitz** (00:33:07):
Because B2B businesses uniquely are started because there's a very real need and there's a lot of people that are ready to convert, first tap into the bottom of the funnel, and then go out and start speaking to the masses. But I promise you it'll probably take you six to eight months minimum to tap into that bottom of the funnel of people that are ready to convert today before you have to start doing awareness ads out there. That's not to say never do awareness ads, but it's oftentimes the shiny, cool thing that you want to do and it just ends up being a waste of time early on. Because people don't really even understand what you're doing, you haven't really even figured out what's the messaging that resonates, but you've done this creative campaign and people are like, "This looks cool, but I'm just going to go ahead and continue looking for a solution for my problem."

**Lenny** (00:33:53):
Is there an example of a marketing campaign or an awareness campaign that comes to mind that you thought was like, "Okay, this is ... if you do it this way, maybe it's worth doing"?

**Meltem Kuran Berkowitz** (00:34:01):
I've seen Notion do a great job with their out-of-home ads. They didn't do it early on, they started doing it much later in their journey by the time when everybody that was working in tech knew what it was, and it was really to drive home the message continuously rather than to introduce themselves to the world. So by then when you saw that layout on a billboard, it made sense, you're like, "Oh, I know what they're talking about."

**Lenny** (00:34:23):
So what is it about Notion that you think was great, it was timing and then also the actual ad itself you thought was great?

**Meltem Kuran Berkowitz** (00:34:30):
Yeah, the ads that I'm recalling right now were showcasing their product interface. So they needed enough time, and this is my obviously hypothesis, if someone from Notion wants to jump in and say that wasn't the reason why we did this, go ahead, but I think they needed enough time for people to get familiar with the interface. Because Notion has a very specific interface that when you see it, you recognize it, it's not like any other product. So unless people built that awareness and recognition, doing an out-of-home ad with that layout wouldn't have made much sense because just with that layout they were able to communicate what product they're talking about. If they did that day one, people would be like, "What is this thing that I'm looking at?"

**Lenny** (00:35:07):
So we've been working through all the ways that Deel has grown, we've talked about SEO, community, you mentioned partnerships. Is there anything interesting there to mention around just what partnerships have done?

**Meltem Kuran Berkowitz** (00:35:18):
Yeah, I would say it is very important to know who you should partner with. So there's two groups of partners. People oftentimes end up partnering with any company that has a shared audience. Decent place to start. But just because you share an audience doesn't mean your audience goes to your partner for guidance when they have this problem.

**Meltem Kuran Berkowitz** (00:35:35):
So in our case, venture capital partners was a huge one because when you get money from a new VC, they ask, they're like, "Okay, thank you for giving us this money, now we want to expand our team with the money you gave us. What are your other portfolio companies using? What is a platform that you trust that you would recommend?" So people go to their VCs for that kind of question. But there might be another tech company out there that is tapping into the exact audience that we are, but people never go to them to ask that question. So our partnership with them will likely not work just as well. So it's important to not only recognize the importance of an audience overlap as well as whether or not those people are seen as a trusted resource for the solution you are putting out there.

**Lenny** (00:36:16):
I really love this idea you keep coming back to, which is where are people asking this question that you can help them answer. And to make that even more concrete for people, what are some other examples maybe of questions people ask that Deel can help them with? So that it could help people think about, okay, maybe our product can help them answer these other sorts of questions

**Meltem Kuran Berkowitz** (00:36:35):
Since the early days, and it continues to happen, compliance is a huge question that gets asked. So when you are an HR leader or a finance leader or a legal leader in a company that works let's say in America, but you want to hire someone in another country, you don't know what you don't know. So it's very important to have people that know what they're talking about in context of your country of origin as well as the country that you're trying to hire from. So compliance has always been a huge part of what we did and what we've always answered for people. That's why we have in-house experts that answer those questions, that constantly provide updates if the answer to that question has changed over time, which regulations constantly change. An answer we provided a week ago may change, and you need to be very proactive in communicating that.

**Meltem Kuran Berkowitz** (00:37:18):
Taxes is another one, especially in the space that we're in, payroll, hiring. Taxes change from country to country. You need to know when you need to pay what taxes, when you need to not pay them, and what types of work people do. So those are some of the types of questions that get asked.

**Meltem Kuran Berkowitz** (00:37:34):
So for us, they're very nitty-gritty and use case specific. The taxes you need to pay for someone who is an engineer that's a full-time employee might be very different than who is a designer who is a contractor. So those are the kinds of specifics that we get into with people.

**Lenny** (00:37:50):
Got it. So it's like, how do I pay taxes for an engineer I'm hiring in Turkey? And then you give them, "Here's the answer," and then it's like, "If you just want us to take care of it for you, then go check out Deel."

**Meltem Kuran Berkowitz** (00:37:59):
Exactly. Rarely the question is what's the best payroll solution? It's like, okay, that's good to make sure what you're leaning towards isn't shit and that other people agree with you. But ultimately it was like you need the best payroll solution because you need to make sure that things aren't going to go wrong.

**Lenny** (00:38:15):
Speaking of answering questions in content, something that you told me is that you wrote a blog post that the IRS ended up linking to as the definitive answer to a question. And I don't think this was at Deel, but can you share that story?

**Meltem Kuran Berkowitz** (00:38:28):
Yes, actually it was at my previous role. And the person who wrote that article is today at Deel. So he came over to join us there too. But yes, it was right around when Covid happened and the US government rolled out the PPP program. And there was a lot of questions about, do I qualify? If I qualify, how do I apply for this?

**Meltem Kuran Berkowitz** (00:38:51):
And at the time the company that I was working for had a lot of customers that were like, "What do I do? I need to gain access to this, but I don't know what to do." So the team there took the time to truly understand how the system works, whether you qualify, what to do. And created this resource for our own customers because we just wanted to help them. And then it ended up being such a good resource that it was linked from the IRS's website being like, "If you have questions, check out this article," which was a great moment of pride. And it just went to show that when you do your best to answer questions and other people don't have the time to do it, no matter who it is, they're going to send people back your way. And it was at the time, it happened to be a big moment of growth.

**Meltem Kuran Berkowitz** (00:39:33):
It was a very unfortunate instance, we wish we never had to write that, that it never happened. But yeah, that was the story around IRS linking to the company's resource.

**Lenny** (00:39:44):
That's the ultimate sign of the question is answered and you're done with it, the IRS decides to link to it. So you're saying that was actually a big driver of growth, IRS traffic. I'm curious how many people actually go read that?

**Meltem Kuran Berkowitz** (00:39:57):
So that was huge for that short duration of a few week time when people were trying to apply for PPP. And then it died out, as did PPP.

**Lenny** (00:40:05):
Makes sense. One last question around paid, and then I want to move on to a different topic. Is there anything you've learned about what it takes to be successful at paid growth from your experience at Deel?

**Meltem Kuran Berkowitz** (00:40:15):
Yeah, so a few things. Our paid team spends a lot of time on both the messaging aspect of things as well as the optimization. So optimization is the technical way in which you set your bids, make sure that you don't go over budget, whether or not you can afford that.

**Meltem Kuran Berkowitz** (00:40:31):
And then messaging is making sure that if someone sees your ad, whether it's on Instagram, Twitter, Google, that it makes sense for them. So creative fatigue is a real thing. When you put an ad out there that works for three weeks, people get tired of seeing that, you need to constantly update that. So our paid team is actually updating the ads we put out there on a monthly basis with the exception of a few Google ads, which need to be straight to the point. So staying ahead of creative fatigue. Making sure that your messaging also keeps up with your product, even if the ad is working really well, you need to make sure that as your product has evolved, so has the messaging alongside that.

**Meltem Kuran Berkowitz** (00:41:07):
And also recognizing, not just looking at the amount of leads that you generated from a campaign, but how many of them actually became a client, and how much money did you actually make from those clients to understand things around payback. Because oftentimes marketers just tend to think about, "Oh, this is a great lead channel and I get so many leads from it." But then you ask that question to sales teams and they're like, "Yeah, I'm busy, but none of these are converting." So it's really important to look at not just the volume that you bring in, but what is the journey of that volume with your business one year out. How much money do you actually make from them to be able to properly decide how much can I spend to win this customer?

**Meltem Kuran Berkowitz** (00:41:44):
And the way that we've done it is we've worked with our data team to set up a dashboard that tracks that in real time. We know an average customer that comes from a Facebook ad, at what rate do they converge from a lead to a qualified opportunity to a closed on.? And then on average, how much money do we make from that customer one year out. So that we can decide, is this a worthy channel for us, do we not want to invest there or are we reaching that peak and we can't continue to invest there.

**Lenny** (00:42:11):
Something that I should mention as we talk through this is we're talking about all these ways to grow the product, but at the core is a great product that people actually find valuable and want to keep using. And maybe a question there is just how that plays into this whole growth strategy, actually making the product something people want versus all these acquisition channels?

**Meltem Kuran Berkowitz** (00:42:29):
Acquisition channels just straight up don't work if you have a product that doesn't live up to the expectation. I think I personally have been very spoiled and lucky because from the day I joined Deel, the product was top-notch. As I was joining an early stage company, I joined right after series A, I was expecting certain things to be duct taped in the back, it happens. And I was like, "Oh no, the engineers and the product team are, if they say a product can do something, it can do that and more."

**Meltem Kuran Berkowitz** (00:42:59):
So early days of my team pitching Deel was people were like, "I don't think you guys can do all of that. I don't believe you." And it was almost like we had to tamper down our messaging so that people would believe us. But you can be the best marketer in the world, if when people come to your product, even if your sales team does a good job at convincing them to become a customer, because you can do that, if the product doesn't live up to the expectations, especially in the B2B world where people aren't going to put up with crappy products, they're going to leave. That's going to get out and people are going to know it's not a worthy product. So that really sits at the core of everything that we do.

**Meltem Kuran Berkowitz** (00:43:35):
I think it's very easy to take it for granted when you're at a company that has an awesome product, you're like, "It is like this all the time." But one of the things I would encourage anybody looking to join a young company is, ask them what their team breakdown looks like. When I joined Deel, most of the team was product and engineers. So that told me that the core of this business was going to be solid. And then we built out those supporting things like marketing, like sales, like data to surround the product. But if you are talking to an early stage company that's a B2B product and they have six salespeople and two engineers, their product probably isn't going to be great for that much longer.

**Lenny** (00:44:12):
Especially if it's an outsourced dev shop doing the product, they're like, "Oh, they'll take care of the product, we'll just sell it." Something else that I think is important to talk about is Covid was an important element of your growth. And so I guess, one, is that true? And then two, just what did you lean into and lean out of in terms of growth during Covid to help people discover Deel when they needed it most, which is basically people going remote in a lot of ways in a lot of companies?

**Meltem Kuran Berkowitz** (00:44:39):
So Covid, actually a lot of people think Deel was started as a response to the pandemic, we actually got started before the pandemic and then the pandemic happened. So as sad as it was, it did force people into a pilot program of the vision that we had for the world. It forced people to work remotely, whether that means you're working remotely from someone who lives a block away from you or you are working remotely from someone in Germany. So we did benefit from the fact that everybody was at least forced to test out this hypothesis of, does it work to not be in the same room as the people that you're working with?

**Meltem Kuran Berkowitz** (00:45:17):
And one of the questions that we were getting early on as the Covid was coming to an end was, "Are you worried, Covid is coming to an end, that people aren't going to use Deel anymore?" And our response to that has always been, we are not a remote work platform, we're a global work platform. So a lot of these businesses have gone back into offices. We have a lot of customers that asked people to go back to their offices, but now they have offices in Germany and in Canada and in the US and in France. So we were never a remote work company, we were just a global work company.

**Meltem Kuran Berkowitz** (00:45:49):
And remote work, because there was a lot of news coverage happening around it, we just became synonymous with that. So I do think early on we did benefit from being able to provide that solution. And a lot of people saw the reality of like, "Hey, I work just as well with this person as I did when I was in an office with them. Well, the best person that I'm looking for, the job may not be within my region, so let me go ahead and hire them regardless of where they are." People got comfortable with that and more and more companies started moving in that direction.

**Lenny** (00:46:20):
And is there anything that ended up being really important in terms of helping Deel grow through that? Like a channel that's just like, "Let's go big on this channel because it seems to be working really well"? Or is it just word of mouth basically and people are just like, "Oh shit, I really need to solve this problem, my hair's on fire, what's out there? Let me go find an answer"?

**Meltem Kuran Berkowitz** (00:46:36):
I wouldn't say it was word of mouth, maybe very, very early on it was word of mouth, but within the first few months of our operation that stopped being true. Or at least the word of mouth stopped being a smaller percentage of the way in which people discover us. But it's always that people needed a payroll solution, they needed a way to hire independent contractors overseas, and we just were the answer to that. So we consistently put ourselves in front of them and said, "Hey, if you're trying to do this, or if you're already doing it and you're not doing it legally, we can help you do that legally."

**Lenny** (00:47:10):
I want to chat about team building, something that I've heard you're exceptional at. And my first question is, early on when you were building the team, the growth team specifically, at Deel, what skills did you find were most important to look for? And what skills and experiences did you find wasn't as important early on that you could sacrifice and wait until later to get?

**Meltem Kuran Berkowitz** (00:47:30):
Early on one of the first questions I would ask people is, what are the KPIs that you're willing to commit to? So if someone's only willing to commit to lead numbers, that's not good enough. They need to be able to commit to closed one revenue KPRs to really show that they care about the business's bottom line. So it was those people that were willing to commit to the full funnel.

**Meltem Kuran Berkowitz** (00:47:53):
And also oftentimes people tend to hire from the big companies that they want to become like because the brand name is appealing. But if you're a team of 35 people, and you're trying to hire the director of whatever from a huge company, you need to ask the question of, when did this person join that huge company? Did they join when the company was already 5,000 people and from day one they had all the resources at their disposal? Or were they actually one of the earlier employees who helped that growth? Because oftentimes the mistake I see people make is they'll hire someone from an amazing company that have accomplished amazing things, but they're not used to operating with 10% of the resources that they had. So they're not willing to get down and do the dirty work.

**Meltem Kuran Berkowitz** (00:48:35):
And at Deel we have this concept called 'little hands'. I think it's loosely translated from French, someone can correct me on that. But it basically means that no matter who you are, where you sit within the organization, you need to be willing to get into the little things and do the nitty-gritty work and not shy away from it. And it's very important too, whoever we hire at any level, it's like, "Are you willing to do the tiniest of jobs?" And if the answer is yes, that's great. And some people are like, "I would build a team for that." And of course in the future, maybe you should, but that shouldn't be your first answer. Your first answer should be, "Yes, of course I'll do that." And if someone's not excited about that, then they're not a good fit for at least a company at our stage right now.

**Lenny** (00:49:18):
That is an amazing expression, little hands. You talked about how you check that people are willing to commit to revenue goals. Is that in the interview or is that ... how do you ... because won't everyone just say, "Yeah, yeah, I can commit to anything you need me to commit to, I'm going to go make this work"? How do you get a sense if they're the kind of person that would do that?

**Meltem Kuran Berkowitz** (00:49:38):
It happens within the interview process. So one ways to find out is what are the KPIs that they have committed to in the past in their roles. So if they've never committed to a revenue goal or a bottom funnel goal and they're saying they're willing to commit to it, that's probably not correct. And I always say, if they haven't, I say, "What are the KPIs that you have today and what are the KPIs that you think you should have?" Because sometimes they're just not given those, but they still think they should have been given the more bottom funnel. So that's something that I would look for in the interview process.

**Meltem Kuran Berkowitz** (00:50:06):
And a really good way to also test for that is, this is more on the case study process, but asking someone to come up with a strategy with $0, with $10,000 and maybe a hundred thousand dollars to see if they're going to be able to scale with you. And to see how are they thinking about with different levels of spend and what are they willing to commit to at different levels of spend. Because if someone's throwing up their hands and saying, "At $0, I can only do social media monitoring, we're not going to get much because that's what makes sense." Well, you probably know that they're not going to be comfortable committing to those bottom of funnel metrics until you give them all the resources that they need.

**Lenny** (00:50:46):
And it sounds like the way you goal teams within Deel also is revenue, growth teams basically have revenue goals. It's not, like you said, leads or traffic or anything like that.

**Meltem Kuran Berkowitz** (00:50:55):
Yes. That's why we're called growth instead of marketing, we care about the revenue growth. And of course we track leads and SQLs. Those are leading indicators to know whether or not we're going to hit the ultimate number that we all care about. But at the end of the day, that's not what we consider success.

**Lenny** (00:51:12):
In terms of team structure, how you thought about structuring the early growth team, what did that look like and what was the reporting lines and buckets of investment?

**Meltem Kuran Berkowitz** (00:51:21):
Yeah, so very early on, we always seek to bring in one leader to manage a part of the organization and then let them grow their teams. We don't love the idea of hiring people based off of a hypothesis that something is going to work. That's a really good way to have to do layoffs because the plans you thought were going to work didn't work. So we always hired one person, prove out a theory, and then let them grow their team.

**Meltem Kuran Berkowitz** (00:51:43):
So the first hire we made to the team was actually a product marketing person. To this day they lead our product marketing team, and they were the ones who sit between the product team and the go-to-market teams and really set the messaging. And quickly we realized this person needs more help in setting the messaging, the tone. So then the second person we hired was a very talented copywriter. And that person today leads our creative teams.

**Meltem Kuran Berkowitz** (00:52:08):
And then the third person we actually hired onto the growth team was a data analyst because the sentiment was we're not willing to spend a dollar if we don't know where that money's going and what it's doing for us. Which a lot of people would assume that's a very early hire for ... data is too early to hire as number three. But I still think that we did the right thing there. Now we have a whole data team, but back then we didn't.

**Meltem Kuran Berkowitz** (00:52:32):
So those were the three teams that we started with on top. And then the content person was already at Deel by the time that I joined, so that was the person I mentioned that was early employee. So that's how we originally set it.

**Meltem Kuran Berkowitz** (00:52:45):
Now the teams have changed. So now we have a different structure, slightly different structure, which is we have regional teams and functional teams. The functional teams are basically subject matter experts. They're good at what they do and we don't care where they are based in the world. So those are teams like product marketing, content, community, events, paid advertisements, brand. If we are looking for the best graphic designer in the world, I don't care where they are, they can sit wherever in the world. They are basically functional teams.

**Meltem Kuran Berkowitz** (00:53:16):
And then we have regional teams. Because we are selling into a lot of different regions, we need to make sure that we have local expertise as well. So we have marketing managers for different key regions for us that then work with our functional teams to bring the strategy to life. So that's how we've set it.

**Meltem Kuran Berkowitz** (00:53:33):
I've seen businesses who build out a regional team that has their own paid ads team and their own content team. But what we have found is when you take people away from their group of expertise, so if you take a paid ads person, and if you have a team of paid ads people and you separate those five people and give them to different regions, instead of letting them sit together and be a tight team, the best practice is learning and the leveling up of the skills doesn't happen as fast as they would if all of the technical roles are sitting together. So we are continuing down the road of functional and regional setup.

**Lenny** (00:54:09):
So say someone in Turkey wants to run paid ads, they convince the paid growth team to invest in resources in growing Turkey?

**Meltem Kuran Berkowitz** (00:54:16):
Exactly. So they would work with our central paid ads team to say I would like to run paid ads in Turkey, this is the audience I want to go after. And then they work together to execute on that strategy.

**Lenny** (00:54:28):
How does that team decide who's going to get their time, is there a rough approach to that?

**Meltem Kuran Berkowitz** (00:54:32):
So it depends on the total addressable market in a region, what are the opportunities we're seeing, what's the competitive landscape like. So chances are if a market is what we consider to be tier one, and it's a place that we have seen good growth, we will invest our resources into it. And then along the way we learn and we decide if we're going to double down or pull back a little bit.

**Lenny** (00:54:53):
Awesome. I want to chat a bit about culture, culture at Deel. We had Jeff from Ramp on, and their culture is described by one word, velocity. Also one of you being the fastest growing business of all time, I'm curious how you'd contrast your culture and broadly how you think about culture at a startup and how you help create the culture at Deel?

**Meltem Kuran Berkowitz** (00:55:12):
Yeah, so I would say culture is made up of two components. One is, what do you bring to the company as a team member, and what does the company give back to you? So what we expect the team members to bring to us is, our version of velocity is something that we call 'Deel speed', is that we want to make sure that we act with urgency. It doesn't matter how big the team has grown, we want to act with urgency on behalf of our customers. If a customer has a problem, they're not going to wait two weeks to get an answer for that. They're going to get that answer within 24 hours. If we need to build out a product because many customers are asking for it, that product is going to get built in one-tenth the time that any of our competitors will likely build it in.

**Meltem Kuran Berkowitz** (00:55:51):
So 'Deel speed' is very, very important for us. And that's something we expect from our team members who are committing to it. To say, what's the quickest way I can solve this problem properly? And to repeatedly push themselves to act with urgency.

**Meltem Kuran Berkowitz** (00:56:06):
We also care that we remain positive. We have default optimism because we are in a new space, so if someone's going to come into Deel and they're going to be pessimistic and they're like, "I don't think that's going to work for X, Y, Z reasons," they're going to just slow things down. We need people to ask the question of, "I think it's going to work for these four reasons, now let's see what are the risks associated with it and let's seek to solve those risks." That's again something we expect from our team members.

**Meltem Kuran Berkowitz** (00:56:31):
And then the last one, well, not the last one, but one of the third important ones is, fully giving a shit about your customer. At the end of the day, the product that we have, we are dealing with humans, we're dealing with their livelihood, the way they get paid, we're dealing with the way companies hire. It's so incredibly personal if someone doesn't get their paycheck on time or if someone gets into legal trouble because their contract wasn't set up the proper way.

**Meltem Kuran Berkowitz** (00:56:57):
So recognizing that it's not a software and a platform that we're trying to make it the best, but it's like, no, it's a business trying to pay a human so they can live their lives and the business can continue growing. So that care is something that we need people to bring to the table.

**Meltem Kuran Berkowitz** (00:57:14):
Now in return of those things coming, what we give back as a company is, outside of obviously your pay, your benefits package, et cetera, is we offer people the flexibility to choose how and when they do their job, they get to decide on where they work from, what hours they work. So we basically give people all the freedom to set up their life how they want to as long as they come to the table giving us what they need. So I would say we do have an intense culture, and that's expected, we share that openly with people. But at the end of the day, that's also what sets us apart.

**Lenny** (00:57:48):
I love this 'Deel speed'. Are these core values basically within Deel, these are values that you come back to?

**Meltem Kuran Berkowitz** (00:57:54):
Yes, exactly. And these are values that we publicly share as well.

**Lenny** (00:57:58):
How early in the lifecycle of the company did you all come up with these values? That's something that a lot of startups think about is, when should we actually crystallize these values?

**Meltem Kuran Berkowitz** (00:58:06):
So we came up with them, I believe it was about a year in, but we didn't sit around the table and say, "What should we call our values?" 'Deel speed' was something that our CEO would tell people. He'd be like, "Okay, I want you to do this, but I want you to do it at 'Deel speed'." And one of the early jokes was, let's have company swag that's Deel speedo and things like that. It's just like, it was already used so frequently with people that we were just like, "Okay, we keep saying this, let's also define what it actually is for us and set it in stone and share it with people." So we did go through that exercise probably about a year in into the company existing, but the culture happened well before we established that.

**Lenny** (00:58:49):
Reminds me, at Airbnb, there was a team that came up with the core values, I think it was four years in probably, and there were six of them. And then a few years later they realized two of them aren't actually true, they were aspirational. And there was this recognition that values should be who you are not who you hope to be because it just doesn't click. And so they actually cut those values and they ended up having just four values. And maybe one day they'll bring them back. And so I think that's a really good lesson is you want to see who you already are and then just represent them in a really interesting, creative way.

**Meltem Kuran Berkowitz** (00:59:22):
Yes, exactly.

**Lenny** (00:59:23):
There's a version of, what did you call it, default optimism. Airbnb's version of that was 'embrace the adventure', which is just like, this is going to be crazy, just go for it, embrace it, this is what it's going to be like.

**Meltem Kuran Berkowitz** (00:59:38):
Exactly. And try and see how can I solve this, how can this be done instead of why it won't work.

**Lenny** (00:59:43):
Yeah, I love that. And this urgency piece comes up again and again in these interviews I'm doing. What I think of is Frank Slootman, I think is his name, the founder of Snowflake, has this book called Amp It Up. All about just how they made Snowflake work. And something he comes back to is just you need to constantly have a sense of urgency because when you don't, people get bored and they actually end up liking their job less because it's just like, I don't really know what I'm doing, things are moving along. And there's actually a lot of value in moving fast. Jeff talked about this as just like, you have less burnout when people feel like things are getting done and out the door.

**Meltem Kuran Berkowitz** (01:00:18):
Yeah, it's incredibly fulfilling. I look back and sometimes things when, for example, when the SVB was going through the issues they were going through, the entire team had to work on a Sunday to communicate with our customers of like, "No, we're good, don't worry about it." But I remember that Sunday I had to miss out on a theater I was so excited to see, but it just felt like, oh my God, we're in this, it was like a war room, we're doing it. And that felt good. I didn't necessarily show up on Monday feeling already burned out, but it was more like, yes, I felt alive. And I think the right people will feel that way.

**Lenny** (01:00:52):
Yeah, and as long as it's not constantly for years just endless late nights and weekends.

**Meltem Kuran Berkowitz** (01:01:01):
It can't always be war time.

**Lenny** (01:01:01):
I find that those end up being the most memorable, meaningful moments is when you're working really, really hard on something that you're excited about. And it has to be something you're excited about and are proud of.

**Lenny** (01:01:10):
Last question. I saw on Twitter, you shared this photo of your home office, and it was this incredible view out the window, and then you took a photo facing your desk and it was an ironing board. And two questions there. One is just how did that all happen? And then two, I think you mentioned somewhere that you didn't even meet a lot of your coworkers for a year and a half after joining Deel, it was very remote forward. So, I'm curious also just how you made remote work work for you in that environment?

**Meltem Kuran Berkowitz** (01:01:36):
Yeah, so I'll explain the ironing board first. So that was because I was actually visiting my family in Istanbul, and in the setup that we have, there's one desk. So my husband and I go rock, paper, scissors, and we'll see who gets the desk and who gets to come up with a secondary solution. And he won the desk, so I had to come up with a creative solution. And because the view behind me was stunning, of the Bosporus, every meeting I joined, people were like, "Wow, I love your view, this is amazing." And I was like, "Oh, no, no, you guys, I'm sitting on an ironing board right now." And to me that was both funny, and I wanted to do a reality check with people to be like, "Come on, this is not as glorious as it looks." But at the same time, it really in that moment I was like, "This is awesome, I work at Deel."

**Meltem Kuran Berkowitz** (01:02:22):
Previously when I wanted to go visit my family in Istanbul, and I live in Canada, I would have to use my days off to go. And for me it just meant a lot to be able to do my work regardless of where I am. I had a full day of work and meetings and everything. And my work just continued and I was also be able to be with my family. So it was a moment of Deel's promise coming true in a very real way in my life. And I thought it was hilarious. My dad thought it was so unprofessional that I shared that with the public then. He hasn't fully wrapped his head around the startup world. So it was just one of those moments of sharing that, yeah, work can be remote and it can be whatever you want it to be. So that's the the story behind it. In this moment as we're recording this, I am in a proper home office with a desk and a back supported chair. It changes all the time.

**Meltem Kuran Berkowitz** (01:03:16):
And in terms of, going back to your second question of, early days not meeting the team members. As I said, I joined Deel in July, 2020, pandemic was at its peak, me being based in Canada, Canada had very strict restrictions of, you can't leave the country, we won't let you back in. So I had to stay put. And I worked for a year and a half at Deel before for the first time where I met our team members was at a conference in Lisbon. And I showed up and it was this surreal moment because I've worked with them for a year and a half, we'd accomplished so much. Our revenue was already way past $50 million and I was seeing these people for the first time. So that was very funny.

**Meltem Kuran Berkowitz** (01:03:58):
But if I look at the early days of Deel, there's a lot of little stories like that, where we forgot to create swag until we reached a billion dollars. And it was actually when our photo was going to be on the NASDAQ and we wanted to take a team picture that we were like, "Guys, we need to have t-shirts. Can someone please run to a store in New York and print our logo on something?" So a lot of those things just by the nature of being a pandemic business came a little bit later.

**Meltem Kuran Berkowitz** (01:04:25):
But the thing that allowed I think for me in Deel to build the culture early on was, because we all work from home, we've been like that from day one. We have the option to go into WeWorks and co-working spaces if that's something that you choose. But we all get to show up as our very authentic selves. So people have met my pets and my partner well before they would have if I was showing up to an office. So there's that sincerity that comes with being in someone's home that we really relied on early on.

**Meltem Kuran Berkowitz** (01:04:56):
And as a company, I never felt the pressure to show up in a certain way or dress up for meetings or anything. So just being able to show up as yourself, and whether you're an introverted person who never likes to turn on their camera or you're someone who's going to be like, "Here, meet my dog." That just naturally built a team culture and comradery well before we could be together in person.

**Lenny** (01:05:20):
Clearly it has worked out. Meltem, is there anything else that you want to share before we get to our very exciting lightning round?

**Meltem Kuran Berkowitz** (01:05:26):
We had a really good conversation. The one thing I would tell people is, most of growth, people assume is very difficult. I'm not necessarily saying it's easy, but it's relatively straightforward when you go back to the first principles of just figuring out where are the people at? How can I add value? As long as your product is there to actually bring them value. So I would say people should just recognize that it's much simpler than they think it is, it just takes a lot of discipline to execute on it, it's not rocket science.

**Lenny** (01:06:01):
Quite an empowering statement, I love it. With that, we've reached our very exciting lightning round. Are you ready?

**Meltem Kuran Berkowitz** (01:06:07):
I am ready, let's do this.

**Lenny** (01:06:09):
What are two or three books that you've recommended most to other people?

**Meltem Kuran Berkowitz** (01:06:13):
From the nonfiction world, How Will You Measure Your Life by Clay Christensen, that's one I recommend. He takes the business learnings that he's had and applies it to your life. It's a very short and easy to get through book. Outside of that, I constantly recommend fiction. I think at one point it became uncool to read fiction that every moment you have needs to be productive and you need to learn something. I don't care what fiction it is you read, you can read Judy Blume for all I care, but just read fiction, be creative, do something with your brain other than reading nonfiction and learning things all the time.

**Lenny** (01:06:48):
I've had to make that shift myself, and it's been great, but I still get drawn to nonfiction. But good reminder. What are some favorite recent movie or TV shows you've loved?

**Meltem Kuran Berkowitz** (01:06:58):
Favorite recent movie, I think along with everybody else, was Oppenheimer. I thought it was great. I do wish they explored a little bit more of why he was the person that drove everybody to excellence. But overall loved the movie. Did not think I could sit through three hours without peeing, but I did. And favorite recent TV show was The Summer I Turned Pretty. I absolutely love it. I don't care that it's actually designed for teenagers, I enjoyed every second of it.

**Lenny** (01:07:28):
What is a favorite interview question that you like to ask candidates when you're interviewing them?

**Meltem Kuran Berkowitz** (01:07:28):
What would your siblings say about you? It's very telling. If they have siblings, if they don't, I will say, what will your parents say about you? But it's very telling what you think other people think of you.

**Lenny** (01:07:41):
What do you look for in their answer that gives you a sign that they're a good candidate or not?

**Meltem Kuran Berkowitz** (01:07:45):
I look for sincerity and self-awareness. Your siblings are never ... I mean, I love my sister, but she'll probably shit talk me a lot. And being aware of that is very important. If someone was like, "My siblings will say I'm very organized and that I'm the one that brings our family together." That's probably a bullshit answer. But if they're like, "Oh yeah, they'll say these weird things about me," that shows a little bit of self-awareness and humbleness that I want to see in a person.

**Lenny** (01:08:11):
What is a favorite product you've recently discovered that you really like?

**Meltem Kuran Berkowitz** (01:08:14):
Oh, this is a dangerous one. So two, one was NuStrips, they're caffeine strips. I find caffeine pills and everything or when I drink coffee is like, accidentally I'll have 300 milligrams and then I'm buzzing. But these are 50 milligrams each, so it's very easy to stop yourself. And they don't taste bad. So those I like for when I just need a little boost.

**Lenny** (01:08:32):
So they're just strips that you put in your mouth and they give you caffeine?

**Meltem Kuran Berkowitz** (01:08:32):
Like LISTERINE strips.

**Lenny** (01:08:36):
What?

**Meltem Kuran Berkowitz** (01:08:37):
And you put it on your tongue and then it also doesn't give you the jitters and it's just 50 milligrams, which is a very mild cup of coffee.

**Lenny** (01:08:45):
Microdosing caffeine.

**Meltem Kuran Berkowitz** (01:08:46):
Exactly.

**Lenny** (01:08:47):
Beautiful.

**Meltem Kuran Berkowitz** (01:08:48):
And the second one is, I recently was gifted a personalized library stamp, which I love. Because I love to give books away, so I stamp them with my library stamp. And I like to think that one day in a secondhand bookshop I'm going to run into it.

**Lenny** (01:09:03):
That's amazing. There's a camp at Burning Man that's a library, and you can borrow books and you have to return it in a year, the next year when you come back to Burning Man. Which is amazing. And then there's a guy that has a megaphone, he is just like, "A book has been returned." Makes a whole scene about it. What is a favorite life motto that you often come back to or share with other people, either at work or in life?

**Meltem Kuran Berkowitz** (01:09:27):
The world is run by insecure overachievers. I used to think my insecurity was a downfall and I would just hide it and try to pretend it's not there. And then someone that I really look up to told that to. I'm like, "Okay, so I'm not the only one." And it's just, I do think world is run by a bunch of people that have something to prove for a good reason or not, but it's better to embrace it than to pretend you're all confident and you're just doing this because you're brilliant.

**Lenny** (01:09:54):
Oh my God, so good. Final question, what is your favorite Canadian food? You live in Canada and thus the question.

**Meltem Kuran Berkowitz** (01:10:02):
Okay, it's not particularly food, but Caesars, they're basically Bloody Mary's with clam juice.

**Lenny** (01:10:08):
Oh, Bloody Caesar, is that what they're called? Or just Caesar?

**Meltem Kuran Berkowitz** (01:10:10):
They're called Caesars.

**Lenny** (01:10:11):
Just Caesar.

**Meltem Kuran Berkowitz** (01:10:12):
But the American equivalent would be a Bloody Mary. It's so much better than a Bloody Mary. It's not vegan. And then the reason I qualify it as food is when you order it in Canada, it comes with pepperoni strips and pickled asparagus, and they'll shove a whole meal in there. And it's just amazing and something that America should definitely adapt too.

**Lenny** (01:10:28):
I think I've had one, I think I prefer Bloody Marys, but a good pitch for the Caesars. Meltem, thank you so much for being here. We talked about growth strategy, team building, 'Deel speed', default optimism, so many things. Really appreciate you making the time. Two final questions, where can folks find you online if they want to reach out? And how can listeners be useful to you?

**Meltem Kuran Berkowitz** (01:10:49):
So they can reach out to me on Twitter at MeltemK, I'm the fastest to respond there. Please don't reach out to me on LinkedIn, I never respond there. And the way readers can be useful to me is if they, one, we're always looking for feedback on Deel. If you see something out there that you think could be better, let me know, and I'll make sure to communicate it to the team, whatever that may be. And also, if anybody has tips that they think I would benefit from or any good fiction book recommendations, I'm always open to them.

**Lenny** (01:11:19):
Amazing. Meltem, thank you again so much for being here.

**Meltem Kuran Berkowitz** (01:11:23):
Thank you so much for having me.

**Lenny** (01:11:25):
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.

---

## [13/20] Inside Etsy’s product, growth, and marketplace evolution | Tim Holley (VP of Product)

**Tim Holley** (00:00:00):
When the CDC mandated face masks in early April 2020, that's when essentially we went to sleep one day with our typical April traffic, typical April sales, and then it was Black Friday overnight. And in part, because nobody knew where to find face masks. Our sellers are incredibly astute business people. And if you had been making wedding dresses, and you know how to sew, and you've got material, and you've got a bit of time, making a mask is quite a simple task. And so we just saw this huge surge of demand, and then supply rising to meet it. 
**Tim Holley** (00:00:37):
And we did something that as far as I know, we've never done in Etsy's past, which is we put out a call to our sellers to say, "Now's the time. Now's the time to make face masks if you can." And so it felt like this is our time to shine, to really help sellers continue to make sales, to help buyers find this critical item that they were looking for. 
**Tim Holley** (00:00:57):
And then from there, things kept going, and we really worked hard to make sure that the story was not just about face masks for our buyers, that they understood that Etsy's a place for so many different categories and so many different items.
**Lenny** (00:01:12):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard win experiences, building and growing today's most successful products. 
**Tim Holley** (00:04:28):
Thank you for having me on, Lenny, really appreciate it. Looking forward to it.
**Lenny** (00:04:30):
I'm looking forward to it even more. So you've been at Etsy for I think over 10 years, although I did notice that you left for a year and ended up leading product at SoulCycle. So first of all, what is that about? What happened there?
**Tim Holley** (00:04:43):
Yeah, at the time, I'd been at Etsy for over six years, and I just had the itch. I wanted to go work on a different product, build different things, experience different industry. Along, had a theory that working on the proactive side of healthcare, meaning fitness and wellness, is how you achieve better outcomes. And it felt like SoulCycle was a really interesting way to do that. Pretty well-known brand, high street presence in many cities. Could you affect change through that? 
**Tim Holley** (00:05:12):
Ultimately realized it wasn't a place that I wanted to spend a ton of time and energy. And so through a lot of soul-searching, grown, I know I found my way back to Etsy, really anchoring on three things. One, working on a product that you care about that adds value to other people's lives. And so what we do every day at Etsy is we help our sellers make sales, and that's really meaningful for the vast majority of them. It's reaching an audience that they wouldn't be able to reach. And so that feels like a really great thing to get up every morning and work on. 
**Tim Holley** (00:05:46):
And so that's maybe the business and the product side, and the other side is people. It might sound a little twee, but just working with people who you can learn from and who you respect, and ultimately can have fun working with, it matters a ton. We spend a lot of time of our days and our lives at work, and so doing it with people who you really value, it's awesome. 
**Tim Holley** (00:06:05):
I have one memory that we used to have an engineer who used to be a standup comedian, and so that really pushed the boundaries of what a standup meant every day. And it was always a little fun, a little exciting. You never quite knew what you were going to get. And so just little things like that, they make the work life really, really great.
**Lenny** (00:06:25):
That's hilarious. I never thought it that way. I feel like every standup needs a standup comedian in their standup. Sounds like that should be part of agile. We should need to change the manifesto. 
**Lenny** (00:06:35):
So I've always seen the Etsy journey from the outside, and so there's a few things that I've always wanted to dig into. One is I just remember this New York Times story back in the day when your current CEO Josh Silverman joined, and it felt like a huge moment in the history of Etsy, where it feels like it just kind of transitioned from this touchy feely, everyone loves each other moment to just like, "Hey guys, we got to build a real business here that's sustainable." And it feels like many startups have to go through that transition where it's like, "Nothing's ever going to change. It's going to be so we're all family here," to just, "Things have to change. This isn't working." I'm curious what that was like living through that. 
**Tim Holley** (00:07:15):
Yeah, I mean the first thing I'll say is it was a hard transition, and I was personally fortunate in the sense that the transition you're speaking of in 2017 also happened to coincide with rounds of layoffs. And I was super fortunate that I didn't lose my job, so I don't want to presuppose that my version of hard is the same as another person's version of hard.
**Tim Holley** (00:07:38):
But I think a lot of us, and myself included, we had a lot of our identity tied up in Etsy and what we're doing, a really deep passion for the mission of the business and what we're trying to achieve. I just mentioned helping small independent sellers. And just to be clear, that hasn't gone away. I think that that's something we've been really successful at pulling through as a line that was true 10 years ago and is still true today. But it was a time when we were really forced to rethink a lot of how we worked and what we worked on. 
**Tim Holley** (00:08:12):
Just to use a small example, we had had a pretty entrenched consensus-based culture, where we would really debate a lot of decisions and a lot of features. And on the one hand, I think that that does lead to good outcomes, right? Thoughtful products that have a lot of viewpoints really baked into the core of the thinking. 
**Tim Holley** (00:08:33):
On the other hand, not fast. When you have your identity tied up in the company and what you do, and then you're kind of being asked or you realize that you need to change how you're working, it can feel pretty existential. It's really cutting to the core of who you are and things that you hold really true. 
**Tim Holley** (00:08:53):
The reality is it's a business, and we needed to get faster at launching features, improving the experience, and ultimately, having a predictable way to drive GMS, gross merchandise sales, which is our north star KPI. And so it definitely took some time to work through that, but we got to a good place, and the results over the last few years to some degree speak for themselves. But it was a testing and trying time for sure.
**Lenny** (00:09:20):
I'm always curious how these changes play out and what works in making change. Is there something that you remember that Josh did well or that leaders did well to help that transition? 
**Tim Holley** (00:09:29):
One thing that is just such a standout is having... And I mentioned GMS as our north star KPI, just having that, being absolutely front and center, being the drumbeat that we talk about in every meeting, the measuring stick that we measure the success of launches against. And maybe it's a bit surprising, but we didn't have that type of clarity in the past.
**Tim Holley** (00:09:51):
And so rallying everyone around that. And you might not pay into it directly. You might pay into it through one or two levels of abstraction, but you're still clearly aligned with what the company's trying to achieve. And that was something that was a really stark difference, and I think that helped.
**Tim Holley** (00:10:09):
It helped the prioritization discussion a lot. If you can't really articulate why this thing matters to driving GMS and the type of timeframe that we're talking about, be it a quarter or 12 months out, and different projects will contribute in different ways. But that was just one huge standout, and that's been a drumbeat over the years that let's continue to stay focused on that as a metric. 
**Tim Holley** (00:10:32):
The other thing to me is bringing an outside in perspective, really benchmarking against your competitors and your competitive set. Don't get me wrong, I think Etsy is a unique marketplace. Our sellers are independent sellers. They sell unique items. The reality though is that our buyers are shopping all over the internet. They're shopping on High Street, they're shopping in different places. And so we have to be aware of the broader context of where they're spending their dollars helps us make better decisions over time.
**Tim Holley** (00:11:04):
And so on the one hand, there is no one-to-one direct competitor to Etsy. But there are other businesses and other brands that are competing for eyeballs or wallets that we need to be aware of. And bringing that into the discussion was a really helpful one that helped ground us in the overall dynamics of what buyers are doing,, where they're spending their money, and how they think about us.
**Lenny** (00:11:28):
Is there anything else you took away as a leader from watching that shift, that you bring to making change, transitioning people to working in a different way?
**Tim Holley** (00:11:36):
Definitely focus on a clear KPI that the teams can rally around. That's one. The other is... And I respect Josh immensely on his ability to tell a really clear narrative and use that consistently over time. The old adage of you need to say something three times before people understand it. I would wager you need to say it another three times before they internalize it.
[NEW_PARAGRAPH]And having that be part of the day-to-day conversation, it seems like such a small thing, but it adds up to having clarity on goal, the KPI point, and then clarity on why, the narrative point. If you can marry those two things, I think that's an incredibly powerful combination.
**Lenny** (00:12:15):
While we're on this topic, I'm curious what Etsy's values are. I imagine you've codified a few, we call them core values at are Airbnbs or something like that at Etsy. And if so, I'm curious what they are.
**Tim Holley** (00:12:26):
We call them guiding principles at Etsy. We have a few of them, and I won't go through all of them, but just to give you a flavor, one of them is around digging deeper, and that really speaks to aiming to really understand the why behind a change, to really push on the insights that we're learning through qual or quant research, or other inputs that we might be looking at in order to make the best decision possible with the information we have at the time. 
**Tim Holley** (00:12:52):
Another example of a principle is minimizing waste. It aligns with how we think about product development, which is, we want to know, is the work we're doing adding value to the customer and the business? And so something that isn't working out a lot of times in product development we're wrong. And so being able to say, "No, this is no longer valuable, we need to move on to the next thing," has been something that's served us really well.
**Tim Holley** (00:13:17):
Ultimately, we are quite a small team. There's just over 2,000 people in the business, and if you then scale back to engineering and product, we're not big. And so we have to be really diligent about how we're investing our time and our resources in order to be successful.
**Lenny** (00:13:31):
Awesome. Okay, so another big moment as an outsider that it feels like Etsy went through is during Covid. There's this huge transition to e-commerce, and I think Etsy was a big beneficiary of that. People wanting to buy more stuff online, go to stores less. And it feels like it was a huge accelerant for the business. I'm curious just what that experience was like leading the product team through that.
**Tim Holley** (00:13:51):
It was quite wild, I'll say that. And to be more specific, as many or all of us did in probably the world of tech at least, we went home not knowing what the next weeks or weeks as we thought would bring, turns out years. But when the CDC mandated face masks in, I think it was early April 2020, that's when essentially we went to sleep one day with our typical April traffic, typical April sales, and then it was Black Friday overnight.
**Tim Holley** (00:14:26):
And in part because nobody knew where to find face masks. Our sellers are incredibly astute business people. And if you had been making wedding dresses, and you know how to sew, and you've got material, and you've got a bit of time, making a mask is quite a simple task. And so we just saw this huge surge of demand, and then supply rising to meet it.
**Tim Holley** (00:14:47):
And we did something that far as I know we've never done an Etsy's past, which is we put out a call to our sellers to say, "Now's the time. Now's the time to make face masks if you can." And so it felt like this is our time to shine, to really help sellers continue to make sales, to help buyers find this critical item that they were looking for.
**Tim Holley** (00:15:08):
So it was a very, very exciting couple of weeks while we were kind of adapting to that change. And we were just really... Every day there would be standups. "What's happening? What do we need to change?"
**Tim Holley** (00:15:20):
I remember distinctly, we were worried about certain sellers not being able to meet the demand that they were seeing. And so we did the old-fashioned thing, of not personally, but we called them and we said, "How are you guys doing? What can we do to help?" And some people said, "We've got this, don't worry. This is squarely in our wheelhouse. We can absolutely meet the supply." And others said, "Actually, we need a little bit of help. We need to take a pause for a moment while we catch up with all these orders, and then we can come back to taking more."
[NEW_PARAGRAPH]And so just getting back to good old-fashioned know your customer, what do they need from you at that moment was just a really kind of powerful thing that took away from that time. 
**Tim Holley** (00:16:03):
And then from there, things kept going, and we really worked hard to make sure that the story was not just about face masks for our buyers, that they understood that Etsy's a place for so many different categories and so many different items. And that was then the next phase of the challenge. We got a huge influx of new or reactivated buyers. How do we keep them around? How do we make sure that the product does a little bit more work to retain them, and can really have hooks that bring them back time and again? And so that was kind of the journey that we then went on mid-2020, to probably the subsequent 18 months or so.
**Lenny** (00:16:39):
Is there anything you learned as a leader working in leading teams through that time? It must've been a pretty surreal experience, a lot of stress, people worrying about their own health.
**Tim Holley** (00:16:46):
I was one of the fortunate ones back then. No kids, worked in an industry that was clearly critical at the time. So I am in awe of how parents worked through that time. So stressful yes, but not to the extent that other people experienced the stress of Covid. 
**Tim Holley** (00:17:05):
We just tried a lot of stuff. I remember early on, I think we had maybe even daily, but at least three times a week coffee chats with the team, just like, "How are you guys doing? What's going on?" And at a certain point we realized all we're talking about is exactly the same things. Nobody wants to be on more calls and more video video chats. And so we just continued to evolve, and really try to keep a pulse on what the team needs.
**Tim Holley** (00:17:29):
And that, like I said, given context of being parents or whatever, differed pretty dramatically person to person. So definitely wasn't a one size fits all solution. That's more on the people side.
**Tim Holley** (00:17:40):
I think on the product side, as I mentioned, we were really starting to get focused on driving retention, or maybe said slightly differently, driving frequency. And that was a newer topic for us. We've long at Etsy been a really, and maybe rose-tinted glasses speaking a little bit, but a really great experiment, A/B testing driven culture. And so when you think about things like retention, you can absolutely test, course I'm not saying you can't, but you're looking at a different time horizon. Instead of someone making a purchase in that visit or in a week, you're looking at do they come back in 30 days, in 60 days, in 90 days?
**Tim Holley** (00:18:19):
And so that forced us out of our comfort zone to some degree in terms of how we understand, how we measure change, how long we're willing to wait to see it show up. Back to the incrementality point on minimizing waste, is this actually adding value to the business? And so those were great challenges to tackle, of course on a pretty heightened degree of intensity and focus from the business. But that was an exciting time.
**Lenny** (00:18:46):
Okay. So speaking of that, I want to chat about the marketplace and the marketplace you've built and things you've learned from building. I think it's one of the, I don't know, maybe top 10 marketplace businesses in the world, somewhere in there. And first of all, I'm curious just broadly, what have you learned is really important to just building a really successful thriving marketplace? And then I'll dig into more details. But just broadly, is there anything that comes to mind?
**Tim Holley** (00:19:09):
This narrative is still there, but I think we really focused heavily on the seller side, so the supply side of the business early on. And we really immersed ourselves in who sellers are, what they need, and how what they need maybe differs from what the solutions that they can find elsewhere.
**Tim Holley** (00:19:30):
Back in the day, we were doing studio visits with sellers. We were going to their workshops, we were going to their homes. We were seeing how they make items, we were seeing how they package and ship them out. We were bringing them into the office when we were running hack weeks to say, "Hey, we've got this crazy idea. Is this interesting?" So trying to involve them in the product development process to the extent that it was reasonable or feasible. 
**Tim Holley** (00:19:57):
And so I think that served us really well. We have a very deep and rich understanding of our sellers. And then the next phase and the more recent phase has been, how do we create a world-class buyer experience that ultimately drives sales for our sellers? Because when you have over 100 million items, all of which are unique, you've got a different challenge than when you have 10,000 SKUs that you could kind of find anywhere or on many retailers.
**Tim Holley** (00:20:22):
And so topics like structured data, topics like how do we help you gain confidence? Buyer this thing will meet your needs from a seller who you may never have heard of. They don't have a brand that you you've ever encountered before. And so we have some kind of somewhat unique challenges on that front where we need to lean into themes that other marketplaces absolutely touch on. 
**Tim Holley** (00:20:45):
For example, customer reviews play a big role in our experience, but they play a heightened role given the things I mentioned, right? Unique inventory from a seller that is maybe an independent person who is a single entrepreneur, it's one person. 
**Lenny** (00:21:04):
So you mentioned that initially, the focus was on sellers, which is really interesting because a lot of marketplaces, first of all need to figure out which side do we focus on? Who do we cater to most? And the way you described it is initially it was how do we make sure the sellers that are joining at Etsy are most well-served? And then later on it became more of a focus on the buyer side?
**Tim Holley** (00:21:22):
Yeah, I guess I'm painting it as a linear approach. It certainly was not. Because if you've got supply without demand, then you don't really have a marketplace. If you've got demand and no supply to meet it, then you also don't have a marketplace. So there's this flip-flop between, do you have enough supply to satiate the demand you have? And playing that out is certainly, I feel like art, not necessarily strictly science.
**Lenny** (00:21:48):
Yeah. So I'm curious how you all think about that actually. So at Airbnb, there's always this thinking of, who do we prioritize if we have to make a decision? is it host or guest? And it's shifted over the years at Airbnb. How do you all think about that as a, "Here's who we're going to prioritize if we really have to make a decision"?
**Tim Holley** (00:22:06):
And maybe to your point, that's also evolved at Etsy. And the place we're in at the moment is the job of a marketplace, even pre the technology definition of a marketplace is a seller will go there to make sales. And if they're not making sales, they probably won't go to that marketplace. And so we really see it as paramount that we have a qualified set of buyers who are looking for the items, the type of items our sellers are selling, and that we can help them make a purchase decision, and therefore a seller maker sale. 
**Tim Holley** (00:22:41):
That doesn't mean that every single team is working on building features for buyers because it doesn't work. Not least because you have a limited piece of real estate marketplace. And if you have too many teams working on it at one time, you'll end up getting in each other's way, and you won't be that productive. And so of course, we have a team that's laser focused on improving the seller experience. How do they list their inventory? How do they manage their sales? How do they fulfill their items? As one example.
**Tim Holley** (00:23:08):
But really back to the GMS is the north star, GMS represents a buyer buying from a seller. So it doesn't necessarily say build only for one of your audiences or one of your customers, but it says that that's really the job to be done here is helping facilitate that transaction.
**Lenny** (00:23:24):
That's exactly the same transition Airbnb went through. Initially it was focus on hosts, make sure hosts are the happiest people, and do everything we need to make them happy. And then eventually the business is the customers buying the product, and you have to make sure that they're the happy people. And sometimes you have to push hosts to do things they're not as excited to do for the good of the guest side.
**Tim Holley** (00:23:47):
And I think it's also the fact that we as the marketplace, and I'm curious if this was true at Airbnb as well, but we have the insight into information, into data, that an individual seller won't. And so we can help them make hopefully better decisions that lead to sales, leveraging the insights that we have. 
**Tim Holley** (00:24:06):
If you put an item on sale during this time period, chances are it's going to resonate with buyers, and you might get an incremental sale. And so trying to be really data-driven in how we help and guide sellers to take actions that we really believe will be valuable for them and their business, because simply, they're either a small business owner and so they don't have time to do that level of digging. Or it's simply not accessible to them because they have the worldview of their business, and we're looking at the entirety of the marketplace.
**Lenny** (00:24:37):
Maybe on this thread going a little nerdier, how do you think about supply constraint versus demand constraint? Is that something that comes up? I imagine maybe it's per category.
**Tim Holley** (00:24:45):
At the high level, we have 100 million items. So if you take that number at face value, you would think we do not have a supply constraint. We want to drive buyers to that supply. When you dig in maybe a more category, subcategory, sub subcategory level, that's where we do start to see pockets where, maybe we want to increase the type and the amount of inventory we have in wall decor. Seeing something behind you, that might not be the right example. But that's where we then start to focus and say, are there areas where we want to lean in?
**Tim Holley** (00:25:21):
Ultimately, really thinking about, how do we help buyers choose? Because that's when you have 100 million items and even in a sub subcategory or for a specific search query, you still generally have a lot of results to choose from. How do you distinguish one item or one seller from another, based on the needs that you have? When is it going to arrive? How much does it cost? Is it this size or that size? So really trying to lean into those types of things. And again, to some degree that's econ 101. But given the scale we're at, it is a pretty unique challenge.
**Lenny** (00:25:55):
What are ways you encourage your sellers to offer the things that you think you're lacking?
**Tim Holley** (00:26:01):
Back to that data-driven point, right? If we can clearly articulate that if you show more photos, you will help buyers understand your item in new ways, in deeper ways, then you're more likely to make a sale. That's maybe a somewhat reductive example, but those are the types of things where we generally know either through the data that we observe based on activity on the marketplace, and/or through the research we're doing, that this will be valuable. The challenge is often, we have so many things that we want our sellers to do. What's the most important thing for them to do right now? 
**Tim Holley** (00:26:37):
And that maybe changes somewhat seasonally. We're slowly starting to get towards the holiday season. And that just has a heightened purchase. It's a heightened time of purchasing. And contrast that with when it's around Mother's Day, maybe different type of inventory works really well. And so we need different inputs from our sellers. Because ultimately, they're business people. They have limited time in the day, and they want to spend time making. So how can we make sure that the time they spend on Etsy, managing their inventory, offering customer support is as valuable as possible?
**Lenny** (00:27:09):
So essentially in product messaging and recommendations that you're showing to the sellers is the way you communicate to them?
**Tim Holley** (00:27:16):
Yeah. And to some degree, we use the buyer experience to kind of signal what matters, right? When we're clearly highlighting photos, then that's obviously a very overly simple example.
**Lenny** (00:27:29):
Sellers [inaudible 00:27:30] here's what the search experience is highlighting.
**Tim Holley** (00:27:33):
As an example, yeah. And then really thinking about some of the signals or the snippets of information that we highlight. What goes into that? We know that great customer service a seller, they'll be responding to... We call them convos, but messages on our platform. They'll be responding really quickly. And that's something that we then highlight in the experience, and that if you're meeting that criteria, then we can start to signal to a buyer that, yes, this person offers really excellent customer service, and we can set your expectations accordingly.
**Lenny** (00:28:06):
Awesome. Yeah, we saw the same thing at Airbnb. One of the things that I worked on, that was one of the bigger shifts in the marketplace was shifting Airbnb to an instant buying experience. And many hosts didn't want that, because they really wanted to vet the guest and make sure they are happy with them. But it ended up being so important to conversion that we just encouraged them to turn it on. 
**Lenny** (00:28:25):
And one of the ways that worked best is exactly what you shared, where in the search experience, when someone came and searched, we just defaulted the search results to only show you instantly bookable listings. And hosts started to realize, "Oh shit, this is where things are going. I think I got to really take this seriously." And that worked really well.
**Tim Holley** (00:28:42):
Yeah, interesting. 
**Lenny** (00:28:43):
Pulling that thread a little bit more, I'm curious what you've seen as some of the bigger conversion wins on the buyer's side in terms of experiments you've run that have had some of the bigger impact.
**Tim Holley** (00:28:53):
I won't say we're consistently, because that suggests that we don't know what we're doing we do. We're often surprised by what works in an outsized way and what we think is going to be a knock it out of the park success, ends up being of minimal value. But coming back to maybe some of the themes alluded to earlier, reviews have long been really important. 
**Tim Holley** (00:29:13):
And when you're reviewing an item like I said, that's unique, that's from an independent seller, the type of information that another buyer is looking for is maybe a little different than other marketplaces, or even platforms that they might be shopping on.
**Tim Holley** (00:29:27):
And so really trying to lean into, well, what does it look like in a buyer's hand, in a buyer's home? Maybe that gives the next purchaser a bit more confidence that it's the right size, it's the right color, whatever it might be. And so that's long been a track that has been very fruitful for us, and continues to be something that we iterate on, that we focus on.
**Lenny** (00:29:47):
Just I understand, that essentially it's recommending to sellers, "Here's the photos you should have on your list."
**Tim Holley** (00:29:52):
Rather, collecting from buyers. So a seller will give us the photos that they're going to take, and then we can augment those with the, we call them buyer review photos. But ultimately, the experience the purchaser is having either through photo or video is super, super valuable.
**Lenny** (00:30:12):
Great. Okay, cool. So adding specific photos that you find help buyers convert. Keep going.
**Tim Holley** (00:30:18):
And then the other side is really leaning into maybe more the behavioral economic tactics of just helping buyers make decisions. Signals and nudges is how you'll see it referred to in literature. And we've seen great success in elevating little snippets of information that really help a buyer understand, "There is actually only one of these. Well, that's good information to know." It's something that then fits into their decision-making process that might've otherwise been buried.
**Tim Holley** (00:30:48):
And so really leaning into the quick summaries, the easy glanceable information that enables a buyer to gain enough confidence to say, "Yep, out of these 100 million items or the results for this search query, this is the one that I feel best about buying." We've seen lots of success on that track as well. 
**Lenny** (00:31:10):
That was a track at Airbnb as well. One of the ways they did this is they called it a rare gem, which is something that's available right now, that's very popular, and they created this kind of iconography for it. And engineers on the team ended up for Halloween dressing up as a rare gem. It became a whole thing at the company. And what's funny about Airbnb is every home is a one of a kind. There's only one left always, and there's always jokes about, "We should always be one left, you better book now."
**Tim Holley** (00:31:36):
I believe it was introduced... I don't believe. I know it was introduced as issue or a bug. But we ended up showing four stars and the fifth star when it was a half star, got rendered as a horse emoji. And so for a second there on Etsy, we had four stars and a horse showing up for some of our review ratings. And that spawned a huge amount of internal fun. And then back to your point around Halloween, we had a few teams being four stars and a horse. It was pretty interesting. 
**Lenny** (00:32:15):
Was it like five people were four people were a star and there's a horse person?
**Tim Holley** (00:32:18):
Yeah, exactly.
**Lenny** (00:32:21):
**Tim Holley** (00:33:47):
Yeah, we have similar learnings around that exact example. Oftentimes I think about effort and reward. So it might be a smallish GMS win or conversion rate win, but it was a one line text change. And we've seen those where we add a small snippet of, maybe we feel like it's almost marketing copy, and it ends up having an outsized impact. 
**Tim Holley** (00:34:13):
We had one example where we added some text to the cart experience, and we just saw huge uplift that we really, really didn't expect. It was more us communicating our values as a business, and it was something that really seemed to resonate with our buyers. And so that drove conversion. We've got examples where it's a one line copy change, and it's quite shocking the impact that that can have.
**Lenny** (00:34:37):
I'm curious what that change actually was, the text change that had that much impact, if you can recall.
**Tim Holley** (00:34:42):
We've long and continued to invest in sustainability, and the text change was in our cart where we call out Etsy offsets carbon emissions from every delivery. And just adding that simple line of text was something that, like I said, really resonated with our buyers and the type of customer that comes to Etsy, and really drove conversion.
**Lenny** (00:35:03):
I had Ronny Kohavi on the podcast who's one of the lead experts on experimentation, and he had the stat that 80% of experiments fail at each company on average. Does that sound about right in terms of how you guys find experiments working out? 
**Tim Holley** (00:35:18):
Yeah.
**Lenny** (00:35:18):
Awesome. Okay. What is your just general philosophy and experimentation? Does everything run as an experiment? Do things sometimes not run an experiment? How do you think about that at Etsy?
**Tim Holley** (00:35:28):
Right now, the vast majority of our changes do. And to be perfectly candid, I think that's one of our growth edges as a product org, and maybe even as a company, is bringing in different ways to validate changes. Because to some degree, or maybe the way I think about experimentation, that's the highest bar. That proves with near absolute certainty that there's a causal relationship between the change you made and the KPI that you want to move.
[NEW_PARAGRAPH]But I think that it maybe misses the point in some changes or some areas where you are working towards a bigger net new thing or this specific change won't really be indicative of the greater whole you're building towards.
**Tim Holley** (00:36:14):
So like I said, I mentioned earlier, we've long been a very A/B testing driven organization, not least because Etsy's background and history has deep, deep roots in an incredible engineering culture. And so that's really tried and true. So the vast majority of things are tested in that way. 
**Tim Holley** (00:36:33):
We're expanding how we think about looking at cohorts over time. I mentioned retention earlier, that to some degree, it necessitates a different type of test. When we look at our SEO work, you can't think about it in exactly the same ways.
**Tim Holley** (00:36:46):
But the through line is, is the change that we're making adding value? And that's what we want to try to understand. A/B testing is a great way to do that. There are others, some of which we're starting to employ, others that we we'll continue to investigate and think about how we can leverage.
**Lenny** (00:37:02):
Is there an example of anything? And if there's not, that's totally cool, of something that you shipped that was maybe negative on an experiment results, or you just didn't want to write as an experiment.
**Tim Holley** (00:37:12):
When we're collecting inputs from sellers, we just simply don't feel it's appropriate to not either show or honor. We talk about a tried and true practice of sales and discounting. If a seller offers something on sale, then we need to show that. We are really curious about how that actually drives buyer behavior. And there's ways that we can kind of construct pre-post analysis and things like that to try to understand the impact. But ultimately, those are the kind of areas where we err on the side looking at our data in different ways. And so we have maybe a slightly different degree of confidence in the value, but we're still confident that it does help the marketplace as a whole.
**Lenny** (00:37:55):
That's a great example. Yeah, I'm not sure what I do there. That is tricky. So we've been talking about conversion. I'm curious in terms of acquisition, what you've seen work. And just generally, how do people find Etsy? How do you drive top of funnel for Etsy?
**Tim Holley** (00:38:06):
Yes. There's two sides to Etsy, right? There's the seller and the buyer. Getting in the Wayback Machine, on the seller side, we would be at craft fairs like Renegade and other places where our sellers were selling in person and really letting them know that Etsy exists. And so that was very boots on the ground, let's get out and try to acquire sellers into the marketplace. Some of that predates me to some degree. We were probably doing it on the tail end when I joined.
**Tim Holley** (00:38:37):
And then we have a lot of great word of mouth through our sellers. A seller probably knows other people who are similarly inclined to be incredible craftspeople, who want to sell their items. And so we've seen some success with our... We have a Teams platform where sellers can come together, ask each other questions, and the word of mouth type of growth through that.
**Tim Holley** (00:38:56):
On the buyer side, we really leveraged the fact that we have a ton of inventory. And to some degree, it ends up being quite a long tail of inventory where we can meet really niche and specific needs. And so that lends itself really well to thinking about SEO, lends itself really well to thinking about Google Shopping, where someone is not on Etsy, but is often looking for something either somewhat or very specific. And we can really meet their needs in a really meaningful way by showing them not only just a single item, but maybe that and then other options that they might find that are of a similar vein, in a similar, sub categories in some cases. And so those have been long tried and true areas that we've invested in, and we've seen really great success in driving new buyers to Etsy.
**Lenny** (00:39:44):
I've researched and written about that story of how Etsy started with sellers and craft fairs. And so that's a really classic story. And I think there's also an element of the early sellers drove the early buyers, because they're just advertising their listing page, "Here's where you could go buying," which is a really unfair rare, opportunity to grow the marketplace by just focusing on sellers.
**Tim Holley** (00:40:04):
I mean, yes, and a seller is a buyer. And so if they're making something that they've poured their heart into, chances are they will value that exact same behavior in someone else. And so if they're selling an item, they're looking for other things in maybe not their exact category, but in adjacent categories, and they become buyers. So it is a nice dynamic when that starts to work.
**Lenny** (00:40:29):
Yeah. So many natural advantages to getting this marketplace off the ground. How cool is that? You mentioned word of mouth as a big part of how Etsy started spreading. I imagine even today there's a lot of just, "Hey, you should check out Etsy." Is there anything you've done that accelerates word of mouth or build on word of mouth, referrals comes to mind? Is there anything along those lines?
**Tim Holley** (00:40:46):
Yeah, we dabbled with referral programs a while ago, probably eight some years ago. What we saw, it was a different time. And so I think we maybe didn't value a new buyer, for example, in the way we do today. Because to some degree, you're unlocking future value. They make a single purchase, and then the bet is over time they'll go on to make subsequent purchases. We didn't necessarily have that as deep an understanding then as we do now. So our buyer referral program ultimately wasn't a huge success.
**Tim Holley** (00:41:15):
But on the seller side, this was back in the days of Dropbox referral program being a huge, huge driver of their growth, and the whole get concept that was really prevalent back then. And on the seller side, one of the things that we really leaned into was, on Etsy, for those who aren't familiar, it costs 20 cents to list an item.
**Tim Holley** (00:41:36):
And that may seem like a very small financial outlay to get started, but it's a little bit of a barrier. And the more we can do to remove those, the higher chance that someone will either become a seller or list more items.
**Tim Holley** (00:41:51):
So we really leaned into that as the currency for the seller referral program. And coming back to what I said around Teams, that was a really great way to supercharge some of that activity that was either happening, but more of it could happen, or really helping a seller understand, "Oh yeah, there is a hook here. If I offer this person, I refer them, they'll get some listing credits. It'll be easier for them to open their shop. And then when I need to list more items, I also have credits that I can apply." So that was one small area. I wouldn't say it was a huge driver of growth. But in certain markets, in certain pockets, we saw it work pretty well.
**Lenny** (00:42:27):
Awesome. That also helps with fraud, which is a huge problem with referral programs where the credit is just, you can list on Etsy. It's not like you can steal a lot of money away from the business. So that's clever.
**Tim Holley** (00:42:39):
Yeah.
**Lenny** (00:42:40):
Okay. I want to talk about one other part of the funnel, retention. Is there anything you've learned that has been really effective to help with the retention?
**Tim Holley** (00:42:46):
We have long had features that are retentive in their nature. Things like, on Etsy, we call them favorites. That might be liking or a similar action on other places. But how do we think about the habit loop of if you take an action, what's the trigger and then what's the reward? 
[NEW_PARAGRAPH]And so using a favorite as an example, you favorite an item. That's a pretty strong ish... Of course, adding it to your cart or maybe purchasing it, that's the strongest of signals, but you've shown intent. 
**Tim Holley** (00:43:21):
So what can we do with that information? We can then say, "The seller put it on sale. You should come back and check it out. This is selling out. There's only one of this item left. You showed some intent, you might want to come back and get it." And that's just one example of trying to close those loops.
**Tim Holley** (00:43:35):
And that's where we've worked on things like, we call it the updates feed, essentially a feed of activity that you've taken, that we're demonstrating how it's changed, what's new, and then pulling in the tried and true tactic of push notifications to make you aware of that, such that you're using your phone all the time. You see that show up. That's a pretty great notification to get right. "The thing that I really liked is now on sale. I want to check that out."
**Tim Holley** (00:44:00):
And so those are examples where really leaning into that habit loop framework has helped us understand, we've got a lot of this activity. How do we close the loop? How do we make it really valuable for our buyers?
**Lenny** (00:44:11):
Zooming out a little bit, it's kind of wild that Etsy can exist in a world of eBay and Amazon. And I'm just curious what it is that you think the founders and the team did early on to carve out this space of, I know you could buy things from people, you can buy things on Amazon really quickly, to create a world where Etsy builds this massive business that continues to thrive. What do you think was done so well to carve out the space?
**Tim Holley** (00:44:36):
I think that to some degree, resolves down to... And maybe that's a little too extreme, but a key component is the brand. The brand stands for something in people's minds. And that helps understand you're not going to get the same inventory on Etsy. You shouldn't expect the same inventory on Etsy as you might be looking for on eBay. It doesn't make sense to our buyers. The items that our sellers sell are unique. 
**Tim Holley** (00:45:07):
And so I think that as the core nugget, combined with how we think about policies, and our way to some degree, maintain the integrity of the marketplace, those two things combined do set us apart. And I think if you ask many people, certainly here in the US, what they think of Etsy, a very specific image will be conjured up. That may be one that we want to evolve and build on, but it feels quite distinct. 
**Tim Holley** (00:45:37):
And it's not the same as eBay and it's not the same as Amazon. And I think there's real deep value in that. And I wasn't here at the very beginning, but it's certainly something that was there at the very beginning of Etsy, that is still a through line to where we are today.
**Lenny** (00:45:53):
That makes absolute sense to me. On the other hand, I also don't know how that happens. Is there anything that you think about, of how the team did that and how they built that brand? What are some of the important elements? Is that a specific aesthetic? Is it a certain type of supply that you stuck to? What do you think was so important to building that brand?
**Tim Holley** (00:46:12):
I think it is the supply. If you think about the marketplace, the vast majority of content is maybe what we might consider UGC. It's either the item is from the seller. Or as was mentioning before, the buyer review is from the buyer. And so just being really clear about what's okay to sell and what's not okay, I think does really differentiate us. 
**Tim Holley** (00:46:38):
I also think over the years, our brand, and our aesthetic, and how we position ourselves has evolved, will continue to evolve as it should. But to the point where we are now, the statement we have is keep commerce human. And that feels really simple, super pithy, easy to remember, but has lineage when you go all the way back to where we started in terms of really valuing the unique, valuing the handmade. And so that does permeate decision making, how we show up, the type of features we work on, the things we would prioritize. Maybe never say never, but an item getting dropped off by a drone and a person never touches it, that doesn't feel very Etsy. That's not something that we might lean into.
**Lenny** (00:47:22):
It's interesting how many parallels Etsy has to Airbnb, because Airbnb is the same general idea. People's homes, people making things. And then also, I think the tagline for Airbnb early on was travel like a human. So it was actually a really similar concept.
**Tim Holley** (00:47:35):
Yeah.
**Lenny** (00:47:36):
Which touches on a question I wanted to talk about, which is many marketplaces as they grow, become supply constrained. And then there's this pressure to add different types of supply. In Airbnb's case, it was, "We should add hotels, we should add property management, vacation rental companies on here. We should have everything people want to book, because we're losing business. They could book anything here, they should be able to." But the tension is, then we become like everyone else. And then what is Airbnb in that case? 
**Lenny** (00:48:04):
And I think you went through that experience where there was a lot of cheap products from overseas, and it was kind of being flooded. Is that true, I guess? And then just how do you think about that limit, and where you draw that line?
**Tim Holley** (00:48:17):
Yeah, I think it does come back to some degree to the brand and the policy point from just before. And we take enforcing our policies really seriously. It's not an easy job at our scale, and that means we need to continue to invest and continue to make sure that only the best items, the most relevant items are on Etsy. That job is never done. The team that that works super, super hard, and is always looking for new signals to understand what maybe doesn't meet our criteria.
**Tim Holley** (00:48:49):
Generally speaking, supply is something that we have in spades for the most part. Back to the point we talked about earlier, one of the things that we grappled with was around, how can we help sellers scale? They sell great inventory, but maybe they just don't have enough of it, or they can't meet the demand, because they're making everything by hand.
**Tim Holley** (00:49:10):
So one of the things that there was an evolution, was leaning into what today we call production assistance. And the way I think about that is you still need to understand the provenance of your item. If you are saying, "I have this design, I'm just going to throw it over the fence to a manufacturer that I've never met, that I don't know. I don't understand their processes, I may not agree with them," that doesn't meet our criteria. You need to understand how it's being made, who is making it, have a relationship with the person who's helping you scale your business. But that's something that we saw from people who maybe gravitate more towards being designers than being able to actually make the thing. They have this excellent idea, they just can't see it come to life.
[NEW_PARAGRAPH]And so they need some help. And that was something we leaned into to be able to, like I said, help sellers that maybe weren't able to make a thing and sell it on Etsy. Or for sellers who were reaching the limits of what they could supply, really take it to the next level, and make more items such that they could make more sales.
**Lenny** (00:50:10):
So it sounds like essentially, this is just evolving definition of what a supplies allowed on Etsy, a team that stays on top of that. Imagine there was just a hard decision at one point of just, "We will limit supply, and here's the supply that we want on the platform. Everything else we're going to take off."
**Tim Holley** (00:50:25):
We would limit the type of items, the number of those items, that as we talked about, there's a lot of them. But really having that clear definition. In some cases, it's easy. Some things, they violate legal definitions. And those things, that's the easy stuff to think about. It's where it's a little more gray, that it gets a little trickier.
**Lenny** (00:50:47):
That reminds me, so my wife is actually a designer, and she produces these hilarious charts about life stuff. And people take her designs and just sell them on every platform on Zazzle, and probably Etsy, but everywhere. And she's always trying to hunt them down and get them to take them off. But it's such a pain for a small designer. It's not an Etsy problem, it's just a general internet problem.
**Tim Holley** (00:51:08):
Yeah. And back to the, we have teams hard at work thinking about IP, and how to police it, how to enforce it. 
**Lenny** (00:51:16):
It's tough.
**Tim Holley** (00:51:17):
Not a domain I will suggest I'm an expert in, really, really tricky stuff, but we've got to be beyond that.
**Lenny** (00:51:23):
Yeah. Another I think problem that's sort of unique to Etsy, something that I think people call the graduation problem. Which is where you join Etsy, things start to grow, you become really successful. And then you're like, "Why am I paying Etsy all these fees? Why don't I just make my own website and just sell it directly, and not pay any fees?" And I think you guys went through that. And so if that's true, is there anything you've learned about just how to avoid getting people to want to leave?
**Tim Holley** (00:51:48):
I think the core thought there is, our fees are generally low and highly competitive. So from that perspective, there's a reason to stay on Etsy. What we've seen and what we know, our sellers are really smart business people. And so if they can distribute their products through another channel, that might be their own website, another marketplace in person. Probably going to try to do that. They want to make more sales. Not all, but many of them are wired to want to grow their business.
**Tim Holley** (00:52:21):
And so really understanding the role that we play in that construct of distribution channels to make it a little reductive is really helpful to understand. And to some degree, we want to be the place that not only they make sales on, but they love to sell on, because our tools are really catered to the needs that they have.
**Tim Holley** (00:52:42):
So there is some degree of stickiness. I mentioned Teams earlier. There are places where sellers go to congregate, share ideas, share grievances in some cases, but ultimately support each other. And so there are reasons to stick around. I'm sure there certainly sellers who scale out of Etsy who realize, "I want to build my own website," to the example you cited. The reality is that's neither cheap nor fast. It's hard work. It's hard work to build, hard work to maintain, expensive to drive traffic to. And so that may be a part of the way they want to take their business, but oftentimes, Etsy still does play a role in how they're thinking, about where they make sales, and ultimately where they're going to see growth from.
**Lenny** (00:53:24):
The cool thing that I saw online about you, is that you built a marketplace essentially within Etsy called Etsy Studio. And I'm not sure if that's around anymore, but I'm curious what the story there was, and what you learned from that experience, and current status.
**Tim Holley** (00:53:40):
Yeah, well researched. Because no, it is no longer around. The white space we saw with studio was essentially saying, on the one hand you've got Pinterest fails, right? You've got all these great inspiring items or projects on Pinterest, and then you have people who've no idea how to make them, and they get so frustrated.
**Tim Holley** (00:54:01):
And then on the other hand, you've got a marketplace like Michael's, or these other places where you might go for craft supplies. They have stuff, but they don't necessarily have inspiration. And how can we play in that intersection of the idea and the items and the tutorials to see that idea come to life?
**Tim Holley** (00:54:21):
So the genesis of the idea, felt from a brand perspective, super aligned. We stand for creativity, we stand for makers. And so we saw it as a big opportunity. The launch happened to coincide with the pivot in 2017, to really focusing on the core marketplace or refocusing on the core marketplace, maybe I should say. 
**Tim Holley** (00:54:41):
And so it became clear that when we laid out what we're optimizing for, which is driving sales in the short term, marketing dollars being as ROI positive as possible, having teams focused on the core marketplace, it didn't check any of those boxes. And so really, really tough decision and hard to manage through, but that was ultimately the right call for the business to say, "This no longer makes sense given the new constraints that we're operating in, given the new goals that we have."
**Lenny** (00:55:10):
Makes sense. Also something that happened to Airbnb a lot, trying new things that they didn't work out, had to move on. 
**Tim Holley** (00:55:15):
Yep.
**Lenny** (00:55:16):
That's how it goes. 
**Tim Holley** (00:55:17):
Yep.
**Lenny** (00:55:18):
Shifting a little bit to just product leadership and writing the product team, and just a few more questions, what's something that you've found to be really important to having a productive, well run, well executing product team?
**Tim Holley** (00:55:31):
Yeah. One of the things that's certainly not completely novel but I think we have a pretty unique interpretation of is how we collaborate between functions. You'll often hear the three legs of the stool where you've got product and engine design,, and we've evolved that to five legs of the stool. And I fully recognize that a five legged stool probably is not a very stable thing, but go with the analogy for a second-
**Lenny** (00:55:56):
I think it's even more stable. Is that the most stable stool or is it less stable with five legs?
**Tim Holley** (00:56:00):
You probably need a really flat surface. 
**Lenny** (00:56:02):
That makes sense.
**Tim Holley** (00:56:03):
Regardless, of course we've got product eng design and we've got our insights partners. So research and analytics, and we've got our marketing partners really working in a tight team to build the best products possible. And so I think that we can continue to get better absolutely, at how we make decisions and how we bring the various viewpoints together. So to some degree it's not the easiest path, but it's the best path I think, where you're really incorporating different viewpoints, different constraints, different considerations into the features and the products that we're building. And treating that as the core leadership team I think is really valuable.
**Tim Holley** (00:56:45):
And maybe that's partly because generally, we don't subscribe to this idea of PM as the mini CEO. You're up there directing from on high that we're going to build that feature and we're going to do that. And that's just not the type of culture that we have, and generally speaking from what I've seen, doesn't lead to good decisions or the best features or product being built. And so collaboration is something we really value and that we try to live through how we structure our teams, how we make our decisions. Is it perfect? Like I said, absolutely not. I think it's the way that we've found being really successful building product.
**Lenny** (00:57:21):
Do you give the PM just a little more say in decision making and ask? Because with five people in the leadership team, you talked about how back in the day, it was like too consensus driven maybe, and I wonder how you navigate that with five decision makers.
**Tim Holley** (00:57:35):
Yeah, we're always looking to clarify, or re-clarify, or restate who ultimately is accountable. And in many cases it is the PM, right? You are the one who Nick, our CPO like to say you don't have to have the best ideas, but you have to choose the best ideas. And so really figuring out how you're selecting what you're going to build and then living with the consequences.
**Tim Holley** (00:58:00):
Of course ideally, successful. In many cases, back to your 80% stat that 80% of experiments don't work, owning what's next, right? Okay, did we learn from that? If we did, what are we going to do about it? That definitely does fall to the PM. It doesn't give you the permission to ignore other viewpoints or make decisions in a vacuum. It's certainly not that. But ultimately, when we need to move forward, it is the PM that is on the hook for those things.
**Lenny** (00:58:26):
Awesome. So essentially, the PM can make the call if there's an unclear consensus?
**Tim Holley** (00:58:33):
And given so many places are, but we're so heavily led by the insights either qual or quant. The decision in many instances is clear. When it's not, that's when we need the product person to step forward and say, "We're going in this direction." Don't know if it's going to work out, but we'll certainly learn and we'll move forward.
**Lenny** (00:58:50):
Awesome. And then just to go on this topic a little bit more, your teams are cross-functional dedicated teams. I imagine it sounds like there's these five leads for each team. Is that roughly how you organize?
**Tim Holley** (00:59:01):
Yeah. And the fifth leg, if you will, of marketing, that might be product marketing in some cases, that might be brand marketing in others. And so there's kind of different flavors of marketing that we pull in, based on the specific needs of the project. But that's generally speaking how we try to structure our teams from kind of the group level all the way down to the individual squad. We can't always have a dedicated research, and a dedicated analyst, and a dedicated product marketer to every single team. So it's certainly not perfect, but that's where we aspire to having at least coverage on those roles.
**Lenny** (00:59:37):
Got it. So most teams have dedicated marketing person or a product marketing person. That's crazy. That's really rare, but interesting.
**Tim Holley** (00:59:43):
Some teams-
**Lenny** (00:59:43):
Some teams that I imagine are most in need of marketing support. Got it. Are you able to just paint a rough picture of the way the teams are laid out at Etsy? I imagine there's a buyer side and a seller side. How does that look for people to make sense-
**Tim Holley** (00:59:57):
Yeah. The way that we think about the structure right now, and the org design should ideally follow strategy. And if your strategy is always evolving, then your org design is always evolving. We call it the product stack. And so we've got our core customer teams, who are unsurprisingly thinking about buyers and sellers. And so they're the ones on the front lines with the customers.
**Tim Holley** (01:00:26):
Then we have, we call them our partner teams, and so they are working directly with the end customer. So think an organization like payments where they have clearly a way to capture payment from a buyer to remit funds to a seller, so they're really on the front lines with the customer. They also have other constraints working with the payment networks, and card providers, and things like that, so they just have a slightly different model. So core customer, partner teams, enablement teams that are really in service of helping deliver the best possible experience. That might be through our recommender systems or through our design system, in order to make developing that little bit easier, a little bit faster, a little bit more standardized in some cases. And then the foundation of it all sits with infrastructure, and the teams that you might expect that are much more technical in nature, that really, without that, we wouldn't have a website.
**Lenny** (01:01:20):
When you're hiring a product manager, is there anything that you found to be really important or interesting, or maybe a unique insight into hiring teams?
**Tim Holley** (01:01:28):
The three things that I come back to time and again, is one, the collaboration piece that we talked about earlier. Not only a willingness, but a real excitement to do that. It's not everyone's bag. I get that. Some people just want to be in a make fast decisions and move forward place. We aim to make fast decisions, but you need to consult. That's one.
**Tim Holley** (01:01:49):
Two is being decisive. We have tons of data, but it's not always clear exactly what to do with that, or we're using a new input. Maybe back to the point mentioned earlier of looking at competitive insights, let's make a decision, let's move forward. Let's ideally learn. Even if we're not making progress against our goals, we're at a minimum learning. 
**Tim Holley** (01:02:10):
And then the third point is just curiosity. Because we're a relatively small organization with... Everyone says, "If only we had more people," but we are quite small. 
**Tim Holley** (01:02:20):
So there is a lot of change. There's a lot of new priorities that crop up, and that means there's a lot of opportunity for the right folks, right? If I want to be in this space, and only this space, and this is my specific domain, and I just want to be in it forever more, that might be a little more challenging, because you might be asked to work on something net new. And so just having that curiosity mindset of saying, or maybe said differently growth mindset of, "Okay, there's something to learn from the thing I'm being asked to do, let me really lean into that."
**Tim Holley** (01:02:47):
And to some degree, I'm not describing anything that's atypical of great product people overall. But I think we have either a slightly different flavor or we need it in a slightly different way here at Etsy.
**Lenny** (01:02:59):
Awesome. Last question, before we get to our very exciting lightning round. Is there a framework or a process that you find really useful, that you find yourself coming back to, that you think listeners would potentially find really valuable?
**Tim Holley** (01:03:11):
I won't pretend to know whether listeners find it valuable. But the thing that I do a lot, that we do as my team, that others do to some degree is a simple exercise of weekly focus. What are you focused on this week? And then reflecting on, did you get done the things you were focused on last week? Seems super simple, but just the exercise of thinking about what matters, writing it down, and having a little bit of social proof or articulating it out to others creates some degree of accountability, is something that is very, very easy and simple to do.
[NEW_PARAGRAPH]And if you do it consistently, you start to see some really great patterns of, "Those types of focus areas take me longer than I think. I should budget more time." Or, "These are the type of things that crop up. At this time of year, I might need to start thinking about making some space for them." So I've just found that to be really, really, really helpful in the day-to-day.
**Lenny** (01:04:06):
I love that. How do you operationalize that? Is it like a Slack channel people post these in, is it a Docs?
**Tim Holley** (01:04:11):
Yeah. In our buyer experience product channel, on Mondays, everyone's kind of sharing what they're focused on. How last week panned out, was it done? Is it still in progress? Things like that. It's very, very lo-fi, but it worked pretty well.
**Lenny** (01:04:25):
So it's kind of like a standup that happens once a week, and it's higher level essentially is what it sounds like?
**Tim Holley** (01:04:30):
Exactly, exactly. Trying to think about the priorities and not tasks. And that is a blurry line. I fully recognize that. But anchoring in those I think is certainly for me, personally more helpful.
**Lenny** (01:04:41):
And is the comedian person in these and sharing funny things in the standup-
**Tim Holley** (01:04:46):
No, unfortunately, or fortunately, he's now actually a comedian.
**Lenny** (01:05:52):
Are you serious he became a full time comedian? That’s amazing. And with that, we've reached our very exciting lightning round. Are you ready?
**Tim Holley** (01:04:58):
Hit me.
**Lenny** (01:04:59):
What are two or three books that you've recommended most to other people?
**Tim Holley** (01:05:03):
Couple that come to mind Team of Teams by Stanley McChrystal has been, I think is just A, really fascinating read, and B, helped me think a lot about how you trust teams and how you think about disseminating decision-making to the right folks, tech language, push decisions to the edges. But thinking about it in the context that he describes there is really fascinating, and it just shows that it can work even in the most egregious world of military, which you think is top-down command and control, shows that there's a different way to approach problems.
**Lenny** (01:05:42):
I was actually a fan favorite at Airbnb also.
**Tim Holley** (01:05:45):
Oh, cool. Other is back all the way to the top to what I love to do. Surfing and being outdoors. Let My People Go Surfing by Yvon Chouinard, the Patagonia founder. Incredibly fascinating read of someone who just had a deep, deep passion, turned it into a business, struggled, iterated, came out the other side really successful. So the business side, but also just how they think about treating their employees and the culture that they've built I think is to me personally, really inspiring. There's a theme here around trust and how you engage with people to make their day-to-day work lives, is really fulfilling. So that's another favorite.
And then in a super different direction, Power Broker by Robert Caro. That is an absolute tone. It is huge. It took me probably an entire year to read because I'm an extremely slow reader and/or I fell asleep a lot. But it is so fascinating, especially living in New York, of how one human had such an incredibly outsized and probably terrible impact on the city. Access to waterfronts, really thinking about communities and tearing them apart. Just such a fascinating read.
**Lenny** (01:06:56):
I have that book, and I've never read it. It's very long and intimidating. I think it might be back there, maybe in a different-
**Tim Holley** (01:07:01):
I would chunk it out. Do a couple of chapters at a time, otherwise it feels insurmountable.
**Lenny** (01:07:07):
It's like infinite Infinite Jest where you're intimidated. Amazing. Okay, next question. Favorite recent movie or TV show?
**Tim Holley (01**:
07:15)
So my wife and I talk about this a lot. I think we're Western Files, if that's a thing. I'm from Europe and so it's a whole new world, different world for me. We've loved Yellowstone and all of the, I guess they're prequels. They've been just really, really fun to watch for people who are curious about that culture and that world.
**Lenny** (01:07:35):
Awesome. It's also been hard to find where to even watch it. It's on the weirdest channels.
**Tim Holley** (01:07:39):
It is one of those where the old world of, we cut all our cords and we only needed Netflix. Suddenly you need all these really random providers of content that you're like, "I have to subscribe to that now to watch this show?"
**Lenny** (01:07:51):
Don't understand where this even is. Just take my money. Favorite interview question you like to ask candidates?
**Tim Holley (01**:
07:58)
I'm a big fan of case studies, live case studies. I think you learn a whole boatload about how someone thinks on the fly, how they react to constraints. So we use those. I've used those a ton. We use them pretty heavily in product interviews. So I love those modulated for the type of business you're in, what you're actually trying to understand.
[NEW_PARAGRAPH]The other one I like to ask is around something that people have taught themselves, tried to get at a growth mindset. I think Julia, who was on the podcast a while ago, said something similar. But you get a ton of insight into someone. Ideally, you get a bit of passion and you often get something to go research. She's like, "I don't know anything about that topic. I want to learn a little more."
**Lenny (01**:
08:40)
What is a favorite product that you've recently discovered that you love?
**Tim Holley** (01:08:44):
You as a new parent maybe resonates when... So it's not new, because our kids too. But when I was looking, being in product, of course you want to track data. And so I was looking for apps that would be good at doing that, and they nearly all look like hideous medical charts where I just don't want to engage with that. 
I found this one app, I think it's called Nara Baby or Nara something. Super simple, allows both parents to enter information. Probably grandparents too. We only tested it with two people. Seamlessly syncs. Really easy to use. So at 4:00 AM when you can't see and you just want to say, "I fed the baby," you can do that really easily. Just really, really simple, fit for purpose product. So that resonated with me.
**Lenny** (01:09:31):
I'm going to be downloading that right now. I've been using Huckleberry, which is both awesome and not awesome, and so awesome tip. Great. What is a favorite life motto that you like to repeat often or share with other people, either in work or in life?
**Tim Holley** (01:09:44):
One of the things I talk about maybe internally more than anything else, but all or nothing. Go all in. Go do the thing. In German [German 01:10:08]. I grew up in Germany, so that's something I say to myself a lot is if you're going to do it, do it properly. I think those are often helpful words to live by.
**Lenny** (01:10:04):
I love that. Final question, what's a favorite item you recently discovered on Etsy?
**Tim Holley** (01:10:10):
I recently bought an engraved whiskey decanter for my wife and myself, or for the home. Super beautiful, so cool. Got it personalized with our names. Just such a cool, cool item, that I wasn't expecting to find that kind of thing. I'm not even sure exactly how you engrave a whiskey decanter, but it was really cool. And the other thing, I'm always on the lookout for greeting cards. If anyone has great greeting card seller recommendations, I'm all ears. I love giving out physical greetings cards to folks, so that's another always on Etsy favorite of mine.
**Lenny** (01:10:51):
Tim, we've talked about growth, culture, surfing, cabins, leadership. Thank you so much for being here. I'm downloading the Nara app right now as we speak. Two final questions. Where can folks find you online if they want to reach out and maybe learn more, and how can listeners be useful to you?
**Tim Holley** (01:11:06):
Yeah, yeah, find me on LinkedIn. That's probably... Well, not probably, is my most professional platform. Instagram, like I said, is a farce. And being useful. Yeah, send me things that you're excited about in the Etsy product. Send me feedback. We're always really keen to learn how folks are experiencing the things that we build.
**Lenny (01**:
11:26)
Amazing. Tim, thank you so much for being here.
**Tim Holley (01**:
11:28)
Thank you for having me, Lenny. Appreciate it.
**Lenny (01**:
11:30)
Bye everyone. 
**(01**:
11:34)
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.

---

## [14/20] An inside look at Figma’s unique GTM motion | Claire Butler (first GTM hire)

**Claire Butler** (00:00:00):
We had Coda. They were our first user, and they were based in Palo Alto. Dylan and I drove down and demoed the product to them, and they were the first ones. Their designer, Jeremy was like, "Yes, we'll take this on full time." And I remember we were both like, "What? Really? You will?" That was the first person who said yes to us. And so, we were so excited. This was a huge milestone. We were just so stoked. And then we got back to the office, and I think Dylan gets a text from Jeremy being like, "Oh yeah, I tried to share this with Philippe, my engineer, and he can't get the file to open, so I guess we can't use it." And we're like, "What is it? What happened?" Finally got someone. And I remember Dylan was like, "Everybody drop everything. We have to fix this."
**Claire Butler** (00:00:37):
And after some looking at the servers and things, they were like, "Nothing's wrong." And then they realized there's a problem with Philippe's MacBook. And Evan down only had a car, so Dylan had to drive Evan down to Palo Alto to fix the MacBook of Philippe just to get them to use the product.
**Lenny** (00:00:55):
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 Claire Butler. Claire started at Figma while they were still in stealth as their 10th employee and their first ever marketing hire. She led their original launch and go-to-market and also their branding and positioning and messaging work. And eight years in, she continues to lead their go-to-market and bottom-up growth motion along with community events, social advocacy, and Figma for education teams.
**Claire Butler** (00:03:54):
Thanks, Lenny. I'm excited to be here.
**Lenny** (00:03:56):
You've been on my wishlist of guests for a long time, and so I'm really excited to be finally chatting. You were the 10th employee at Figma, which is now worth tens of billions of dollars depending on which valuation you look at, and probably thousands of employees. I don't even know, but many, many. And you joined before the product even launched. And so, I have a million questions I want to ask about how Figma grew and all the things that went into it. I'm curious what it was like to be early days at Figma. Is there a memory that comes to mind that's zany, funny, fun, tangible of just what it was like to work at Figma in the early days?
**Claire Butler** (00:04:33):
Yeah, totally. No, that's a good question. We were right downtown on New Montgomery and Minna, and I think the thing that sticks out to me is actually two competing stories that talk about just how much at that time you'd oscillate between these really high-level strategic decisions and then total current work.
**Claire Butler** (00:04:50):
So my first day at Figma, I come into the office and we're going through some stuff. There's like 10 of us in the office, we're chatting, and I look at some of the plans, some of the things they're working on, and I see that they were actually had some branding and positioning and things that the products, Figma, was going to be named Summit, that was the name. So the company was going to be Figma, and then the product suite, the product design tool was going to be Summit with the idea that eventually we'll have other tools and that could be like mountaintop or I don't know what the rule, they had a whole thing around the different things that could be for the future product set.
**Claire Butler** (00:05:27):
And I remember my first day, I had an immediate reaction of like, " We cannot make this thing Summit. That's not going to work. We can't have two brands. Summit's not ownable, we can't build equity and multiple things. That's just never going to work. We kind of have to just stick with one." And I think Figma is ownable and makes sense and we should just go with Figma. So we kind of should probably kill the Summit thing. And Dylan said to me, he was like, "Oh, that's interesting. How about you make a presentation and present it to everyone tomorrow?" And so I did that. I was like, "Oh, okay, I guess this is what I'm doing the rest of the day." So I went and made a little presentation about how we couldn't build all this equity in two places and all of the things, and then the next day we decided to kill that name.
**Claire Butler** (00:06:05):
And so we went with Figma for the name of the product instead of Summit. And that's how fast things moved, right? And how much you just ran with it and how to ownership. I compare that to the first meetup we had, which was probably just 10 people in the office, honestly. But I remember I was in charge of that, so I had to get all the food and everything there, and I just Instacarted some things and ordered some pizza, but I'd forgotten ice. And so I had to go walk down to the nearest corner store, which was three blocks away or something, and get ice. And I got four bags. And I remember I was walking down the street down probably third street with three bags of ice and it was really heavy. And I remember thinking, "This is so hard. This is so heavy. I can't carry all this ice." And it's just like that's... I did that too probably the next week.
**Claire Butler** (00:06:50):
And so, I think it was just this oscillation between like, "Oh, we're making these high level strategic decisions and someone else has to go by the ice." So that's what it was like at Figma in the early days.
**Lenny** (00:06:59):
That's incredible. That's almost a metaphor. Someone's got to go carry the ice.
**Claire Butler** (00:07:04):
Almost got to the ice for the meetup. Yep.
**Lenny** (00:07:06):
That's so interesting about Summit, I had no idea that was [inaudible 00:07:09]-
**Claire Butler** (00:07:09):
That wasn't a good name. So if you liked that better, I'm sorry because I killed that.
**Lenny** (00:07:13):
Who could like it better now that everyone loves Figma and that's just what it is? Do you think Figma would've been as successful with that name, looking back?
**Claire Butler** (00:07:21):
I think we probably would've changed it later. I think we just saved ourselves some time and without having to change it.
**Lenny** (00:07:27):
And then how many days or weeks into your tenure was that happening?
**Claire Butler** (00:07:32):
The name change or...
**Lenny** (00:07:32):
Yeah.
**Claire Butler** (00:07:34):
The first day. No, that was literally my first day.
**Lenny** (00:07:36):
The first day.
**Claire Butler** (00:07:36):
No, no, no. That was my first day and my second day. Not even kidding. My first day, I made the recommendation, the second day, give the presentation and the decision was made.
**Lenny** (00:07:45):
Wow. I was going to ask you what the most stressful memory of early days Figma was. I'm guessing it's the same story.
**Claire Butler** (00:07:50):
It's not actually. So I think the most stressful thing, I was thinking about this, was when we launched out of stealth. So I come into Figma, I had lots of experience. I'd been in another startup before that, I launched stuff, but I was still kind of junior. I had done these things, but I didn't have a ton of cycles, and I never ran the whole thing from like, okay, messaging and positioning. This was a forcing function for us to do our messaging and positioning. And I remember there was more than one day where we locked ourselves in a conference room and I made Dylan and show at the time have this positioning up on the big screen and made them agree on it word for word. We'd just never done that before. But then I'd also never run PR press and all of a sudden, I had to run press and PR.
**Claire Butler** (00:08:36):
And I think the hardest part there and the most stressful part was I didn't have anyone to talk to. It was just me. And I didn't at the time have enough cycles to have the confidence that the decisions I was making were the right ones. And so it was hard not to second guess myself sometimes in that position. And I think that's some of the hardest times of being at a startup, especially when you're the only marketer, the only go-to-market person is, you don't have anyone to talk to, to like got check stuff with. And so it does take this immense confidence in yourself, but that's stressful when you don't have the cycles. And so that was very stressful for me for sure.
**Lenny** (00:09:12):
How did you overcome that? Did you find people to work with and run ideas by? Did you just do it and figure it out?
**Claire Butler** (00:09:19):
I mean, I had Dylan, but we just did it, right? Especially in those early days. I remember there were a couple of freak out moments where I would try to get our VCs to help us. I remember Greylock was helpful at least over there, but ultimately, they help a lot, but they don't know your business as intimately as you do. So at the end of the day, that's something Dylan's really good at is trusting his intuition and gut. And so, he was helpful on the decision making, but then also you just got to go for it. And I think that that's something that I learned at that time that's helped me throughout the rest of my career is building that confidence or that trust in yourself because it wasn't something that I necessarily immediately had.
**Lenny** (00:09:55):
Next question I wanted to get into briefly is, you joined Figma really early, became one of the most successful, loved companies in history. What did you see early on that convinced you that Figma was the company to join and ask? Because a lot of people today are looking for places to join and trying to decide what to do. Clearly, you made a good choice. What did you see?
**Claire Butler** (00:10:14):
So I had been another startup before Figma, a little bit bigger. I think I joined at Series B and then got through on acquisition. And I had a sense that I wanted to do something early. And I'd already made that decision that I wanted to go early stage. So I'll take that decision making part out. But then from there, I was talking to a couple different companies, and when I went to Figma, there were three areas that stood out the most to me.
**Claire Butler** (00:10:36):
The first was, it logically made sense. And I know maybe that sounds basic, but I was talking to just a drone company or a SaaS tech, like ad tech company, and I just didn't get it, honestly, it didn't intuitively make sense to me or I didn't understand the technology or something. But at Figma, the basic premise immediately logically clicked for me like, "Oh yeah, I use Google Docs, I use Asana, I use all these online tools. That's so weird. That design's not online. Why isn't it?"
**Claire Butler** (00:11:06):
And as a marketer, I'd worked with designers and sent feedback and emails, and that's really inefficient. And it made a ton of sense to me that yes, that should be online and collaborative. So that was the first thing that I was like check the box. And the next one was, I knew people who believed in it. So I got introduced to Dylan via Index. They were an investor at the last company I was at, and Danny Rimer specifically. And my old boss, Greg Smearon, who was an EIR there. And I trusted them a lot and they invested in it. I also met John Lilly. I didn't know who he was. I had to Google him, but he seemed really smart. And when they Googled in, he was very impressive, and he believed in it. So that was great.
**Claire Butler** (00:11:43):
And then I think the third thing was, I remember when I was trying to decide, Dylan really didn't take no for answer. He's very persuasive. And I remember he'd calling me and text me and then I'd have all these concerns or things and he would just pick them apart one by one of reasons why they weren't real concerns or things to get over them. And so I think that that was the third thing is, that's just who he was and that's how he is with everything. And so, if that's how with me, that's how he is with any obstacle that he has. And so, when I looked at that, I was just like, "All right, let's give this a go." And I didn't know. I didn't know. I had no idea it would be as big as it is today. So some of it was luck too, for sure. But those are the three things of how I made my decision.
**Lenny** (00:12:24):
So what I took away there is, one, you just believe in idea, obviously. Make sure you actually think this could be really big, two is some social proof people you trust really believe in it. In this case, it was really smart investors, they knew. And then the third is, it sounds like you were also just impressed with Dylan.
**Claire Butler** (00:12:40):
Yeah, totally. I believed in him.
**Lenny** (00:12:42):
So you joined Figma before it even launched, it was still in stealth. You joined as the first go-to-market hire. You helped launch Figma, you continue to lead go-to market at Figma. And so this is a good segue to where I want to spend most of our conversation. I essentially want to try to unpack what worked to build Figma into the business that it is today from beginning to even now. You're also there for eight years. So you saw a lot of what worked and didn't work. And so let's start with the beginnings of Figma and the go-to-market motion that you developed and how you actually implemented it. So maybe to start, if you could just talk about just what is a bottom up go-to-market motion? And then you also shared somewhere that Figma has a very unique bottom-up go-to-market motion. So maybe just those two areas, just broadly, what is bottom-up go- to-market motion, and then two, what is unique about Figma's approach?
**Claire Butler** (00:13:33):
I've reflected back to get to some of these answers. I think in the moment, so much of what we were doing was influenced by gut, by trying to connect with people, listening to them. But when I look back is when I'm like, "Oh, this is a repeatable motion." So when I look back at it, I would say that if I were to define and think about how I define our go-to-market motion, and we've said it, we've called it a lot of things over time. We called it product-led, we called it community-led. The way I think about it now is this bottoms-up motion, that really is focused on ICs. So it's all focused on like, "Okay, so you have this core audience." For us it was designers and they're largely individual contributors, so they're people who are practitioners who are using your tool. For us, it's like eight hours a day.
**Claire Butler** (00:14:17):
If you're a designer, you're in it all the time. And they love you, and you build this relationship with them within the product, but it's beyond the product, right? It's also believing what the product can be in the company and the brand. And they love you so much that they're willing to put their social capital and themselves in the line and spread the product throughout whatever their communities are. And the one that's connected the most to revenue is companies.
**Claire Butler** (00:14:45):
And so that's where the revenue model really clicks in is you have all these individual contributors who love you, but then they also work at these big companies and these big orgs, and they become these internal champions who spearhead adoption within their organizations and eventually turn into large amounts of revenue. And I think of that as our bottoms-up motion. And that's different from tops-down. And a lot of SaaS is tops-down where you go straight to a VP or an executive buyer, they then agree to buying a tool and then that goes down to their organization. I think with technical tools especially, this becomes really important. The practitioners have to love it. And also, sometimes I wondered as an executive care, you know what I mean, what tools people are using?
**Claire Butler** (00:15:27):
And so for Figma, what that looks like and why this is so efficient of a go-to-market motion for us is, we actually didn't have a sales team for the first three years. So all of our revenue, it was paid, but it was all self-serve. And so we'd work with these. We weren't worried about things. I mean, you cared about security, but all of the org features that people need and want when you're working with procurement, we were just focused on technical features for users mostly. And then the individual contributor or maybe the manager would just put them on their credit card. That was the way that things grew. And so there was no sales team for a long time. We did have one eventually, and I'll talk about what that looked like.
**Claire Butler** (00:16:04):
But then the second thing was, once we did have a sales team, and even up until now, so much of our revenue and our sales and our MQLs, our marketing qualified leads come from our free tier. So it's people, they're using it, maybe they use it for free. We have a very robust free tier. Maybe they use it for pro, which is on your credit card. And then once it's widespread and they've gained the confidence, then they're ready to bring in sales work with procurement. And they actually come to us and they're like, "Hey, I work at this company. I really want to get my whole company to use it, but security's not letting me. Can you help me unblock it with them?"
**Claire Butler** (00:16:39):
We didn't spend that much money, any money really programmatically on paid or programmatic marketing because all of our leads for sales would come in through a form on our website, which was current users either free or pro wanting to upgrade. And at that point, it's a very different sales conversation to unblock someone or to just help them implement Figma when they've already have an internal champion who's bought in, and they're really the one leading and driving the sale within their organization. So I think that that's made us really efficient as like this is a really efficient model and has really powered so much of our growth over time.
**Lenny** (00:17:14):
Somebody listening to this that has a saying, B2B SaaS companies like, "Oh, okay, I just need to get people to love my product and it's going to be great." And so I want to unpack that just like what you did because it wasn't obviously an accident that people loved Figma. But before we get there, you talked about that there's a unique approach to the way you did bottom up. What do you see as what the typical bottom-up go-to-market motion is that other companies try to play that you think Figma did differently? Is it this obsession with ICs on teams or is there some other element of it?
**Claire Butler** (00:17:43):
I think there are other people who do bottoms-up and who do it well. I think for us it's unique because the individual contributor spends so much time in the tool, and it's so important to them. I think about things that we focus on where it might take one click off of someone's workflow, and that seems like a really small update. You have to click one time instead of twice to do something.
**Claire Butler** (00:18:06):
When you're a designer and you're in a tool eight hours a day, saving that one click is huge. And so I think the obsession with quality and with craft within the editor for us, for Figma, is maybe the difference. And I think about other go-to-market tools that maybe focus so much on the collaboration side or the product-led of the expansion. And that is a huge part segue, don't get me wrong, but the tool itself, the editor, that's where it all starts and that's what these people love. And then the collaboration is like, yes, it's the thing that's like our differentiator, but it's actually like you stay for the collaboration. You don't want to talk about it or learn about it. Nobody wants talk about collaboration. You just want it to work, right? You care about the tool and that the tool's working well. And so I think that maybe that's the difference is the obsession with the tool itself.
**Lenny** (00:18:52):
Awesome. Yeah, something I learned recently is that multiplayer wasn't even a part of Figma at launch, [inaudible 00:18:56] a year later.
**Claire Butler** (00:18:58):
I know. We can talk about that, and we want to know making a decision of when to go to self because we almost didn't because it didn't have multiplayer.
**Lenny** (00:19:04):
Oh yeah, let's talk about that.
**Claire Butler** (00:19:05):
Yeah, that was a poor differentiator and we can't not have it, but then we did anyway.
**Lenny** (00:19:10):
Yeah, let's take a tangent there actually. Just that decision to go from stealth. So Figma was in stealth three years or four years before [inaudible 00:19:17] idea.
**Claire Butler** (00:19:17):
Gosh, three, I guess. I think is 2012 that they started, and then we launched in at the end of 2015. So between around there, yeah, around three or four.
**Lenny** (00:19:27):
Cool. And then you joined right before they launched. We're going to come back to what we were talking about, but just what did you see about that decision of now's the time to launch?
**Claire Butler** (00:19:34):
Yeah, I think it was a couple things. So I think the first thing is that the team had been building quietly by themselves in isolation for three years. And that's hard. I think that that was a very real part of the decision to get out of stealth was that people had been building for such a long time. We needed momentum. We needed to have a milestone that we were working towards. We could have just kept building it quiet for a long time more, but it was very demotivating. So that was a very big part of this. So there was a desire holistically to get out of stealth. But we didn't want to do it until we knew it'd at least be successful. But that was a key thing for me. I was working on that messaging, positioning that I was telling you, like we would have this.
[NEW_PARAGRAPH]I still have the doc actually where I was like, projected on the screen and Dylan and Sean and I picked apart every word of it and sharing with a link and multiplayer is the biggest thing. That's the core differentiator. It's really funny. I remember Ivan from Notion's early days, he stopped by and was chatting, and he's like, "Wait, you can't launch with that multiplayer." And I was like, "I know." So I was like, everybody was like, that was the core thing.
**Claire Butler** (00:20:36):
But the idea was that we wanted to get out of stealth. We talked to Evan, our CTO, and knew it would take about another year for him to build it. And for me it was like, "Well, is there enough here to get people excited to start and to get users, get more feedback?" Because Evan was kind of building multiplayer. I don't know enough about the engineering if he was doing it on his own or not, but he was the key person doing it. But there are a lot of other things too that were being built or could be built through that year. And we wanted to get more feedback from people and to start really get started.
**Claire Butler** (00:21:05):
And so to me, the things that I wanted to see before just deciding like, "Okay, so we don't have our key feature. Can we still launch, or is there enough fear for people to get excited?" At least my first three months, especially before we get going for the launch with the product, and probably even after that, I would just go around with Dylan and pilot or demo Figma to companies. That was a lot of what we did. So we'd go to these companies and we'd show them Figma and we'd get their feedback, and I would be driving around in Palo Alto, around the city doing that with Dylan. And sometimes people didn't care. They were just like, "What is this? I don't want to design online," things like that.
**Claire Butler** (00:21:47):
But what we wanted to see, what I wanted to see was that designers were excited when they saw the tool. And once we got enough features, and I saw this pretty quickly actually when I joined Figma, is that the people that we showed it to were really interested in it and cared about it. And I remember after Vector Networks came out, after some of our other core features, there were enough things where people, I remember, they would take the laptop out of Dylan's hands when he would start showing it because they wanted to play with it. And to me, when I started seeing designers do that, even if I wasn't sure if they'd use it as a team, even if I wasn't sure if they'd buy it, we weren't selling it yet. They wanted to try it and they were excited about it.
**Claire Butler** (00:22:28):
And that kind of emotion, no reaction of wanting to play with it in these demos was really what gave me confidence that we were ready to launch. And we had a couple teams, small numbers, and happened to talk about metrics and how hard it is to deal with metrics of this size, but very small numbers. But we had teams who were using it full-time. So we knew that some people were using it full-time and people who weren't were really excited to try and were very impressed with the technical feat of it all and interested. And to me that was enough confidence that like, "Okay, it's worth it. Let's get out of stealth."
**Lenny** (00:23:02):
That story of the-
**PART 1 OF 4 ENDS [00**:
23:04]
**Claire Butler** (00:23:00):
... let's get out of stealth.
**Lenny** (00:23:02):
That story of the potential customer pulling the laptop from Dylan is such a good metaphor for product market fit, which people describe as you feel pull. Someone's literally pulling it from your hands. You talked about metrics that you maybe could share. What could you share there?
**Claire Butler** (00:23:19):
At these early days, especially with bottoms-up and with all these things... And people ask me all the time, "How do you measure things in an early stage situation?" And I maybe have a controversial point of view here. I don't think you can, from a metrics side. Your numbers are so small. One of the quotes I always like to say, and I say this now too, when we're doing stuff, because we're launching new products [inaudible 00:23:40] and it comes up a lot, is you can't optimize your way to product market fit. I don't care at the early stages if something's optimized by 5% from an email.
**Claire Butler** (00:23:50):
That doesn't fundamentally tell me if something's working or not, so I think metrics are really hard and signal is actually way more important. Can you get a couple people who love it, not a slight improvement of a conversion of a landing page. And so I think that metrics are really hard in that way. They can help you, but when the numbers are so small, you have to, again, trust yourself a lot more and have more intuition, but then also find more signal of the things that are working, whether it's anecdotal, talking to people, examples, and that becomes much more useful than hard metrics are sometimes.
**Lenny** (00:24:26):
I'm working on a post around product market fit and a step-by-step somewhat of our guide to help people down this path. The way you described it is the way I'm thinking about it, is step one, get one company to use your product.
**Claire Butler** (00:24:37):
Yes.
**Lenny** (00:24:38):
Step two-
**Claire Butler** (00:24:38):
What do they want? That was step one, and then that's not easy. That's not easy.
**Lenny** (00:24:42):
Right. And then it's like, get them to continue using your product.
**Claire Butler** (00:24:42):
Yes.
**Lenny** (00:24:46):
And then it's get two companies to use your product.
**Claire Butler** (00:24:46):
Yes, exactly.
**Lenny** (00:24:49):
And then get someone to pay for your product. Yeah, so there's all these major milestones. Along those same lines, I saw an interview with Dylan talking about product market fit, and he had this interesting quote about how he realized first that they had product market fit a year later, which is when Microsoft, I think, was like, "Take our money. We want to pay for Figma." And he's like, "Okay, maybe this is going to work." Does that sound about right?
**Claire Butler** (00:25:11):
Well, it's interesting, and that goes up to the bottoms-up model that we could talk about. I think the difference, if you think about a company like Microsoft and what this looks like, this is just a really good example of this bottoms-up motion in market. Here's a funny story that I want to add. Our first meeting with Microsoft actually came, and this is the scrappiness of working in an early stage startup, because I slid into the DMs of my friend's ex-boyfriend. That's how we got our first meeting with Microsoft.
**Lenny** (00:25:41):
Well done.
**Claire Butler** (00:25:41):
I know, I know. I saw that they had signed up for Figma, and I was like, "Wait a minute. I think I know this person." And that's how we chatted with them and first got feedback from them, so that's just a funny anecdote.
**Lenny** (00:25:53):
This could be a new strategy if everyone's going to try to-
**Claire Butler** (00:25:55):
You literally do whatever. Uber driver, shared Lyfts, we can talk more about that. But yeah, you got to do whatever you can to get early people to try your product out and get really scrappy. But for Microsoft, over time, we would have, I think it was... What was the team that got acquired that we went into Microsoft? I'll have to remember the name, but it was a small team within Microsoft and they were... Xamarin, it was Xamarin. They were to ones who were using Figma first, and we saw that, so they were that patient zero at Microsoft. And then we had, slowly over time, more pockets within Microsoft using the tool.
**Claire Butler** (00:26:28):
But again, we've never gone through Microsoft procurement, Microsoft security. It just started popping up throughout the organization. And we have these really cool Node graphs that show this too, where you'd have these little pockets of people and then it would jump to another, like they'd have one more collaborator and then jump from another pocket. There were these really cool maps of how that spread within the organization. And eventually, we got to the point where that was a very comprehensive Node graph that had this massive thing of all of these people from Microsoft using the product.
**Claire Butler** (00:26:55):
But still, it was only on credit cards. I don't think we even had an enterprise product at this point, and so there was no salesperson for them to talk to. And Microsoft was like, "Wait a minute. We need to organize this. We need security. We need account management. We need procurement involved." And I think that that's what it was. They wanted to pay for it and they wanted us to have this enterprise product, because they had these requirements and they wanted to have a better control over it, because it was just popping up within the organization without their control. And so that's probably a good example of what that looked like as this bottoms in motion just spread to a really large organization.
**Lenny** (00:27:34):
This Node graph thing, is that a tool you built that's showing, helping you visualize within a company how it's all clustering? Or what is that?
**Claire Butler** (00:27:41):
Well, our data science team built it. I don't know if it's like... Yes, I'm sure it's an internal tool. I just remember there was a website in Node or something that we would use, and you could type it in an organization's name. You still could do this. It's within our data analytics system. You type in the name of an organization and it just pulls up everybody. And it shows, because Figma spreads through new users, but also gen one, gen two, these people invite people. And you can see these Node graphs of how somebody started Figma, maybe at the center, and then they invited someone else, and then it shows how that spread.
**Claire Butler** (00:28:16):
And so you get these clusters, and you can see the clusters are teams, but then you can see someone invited someone in a different org to a file and then that started a new center of a cluster. They're really interesting. And you can pull up, you can type in any org, any org at Figma and see what that Node graph looks like. But they're super interesting to see how those spread.
**Lenny** (00:28:37):
That is super cool. And I imagine that also informs how you go to market by figuring out who spreads to who and who's often [inaudible 00:28:45].
**Claire Butler** (00:28:44):
Totally, and that's when these internal champions, that's what the key is. And that's maybe the takeaway of how important these internal champions are, because you just need someone to land there and then them maybe passing it up. You could hover over and see this person's at the center of this Node graph and all of these people that spread from this one person at the company. And that, I think, was the unlock to be like, "Oh yeah, these internal champions, they're really the key to all of this."
**Lenny** (00:29:12):
I remember it spreading at Airbnb early on. I think Airbnb was one of the early customers and it was just one designer, a few designers starting to spread to the product managers. I was just a member on the team being like, "Goddamn it, we just switched to Sketch. Are we going to switch again to a new product?"
**Claire Butler** (00:29:25):
That was the hardest thing to feel like I don't want to switch twice. That was definitely something we had to get over.
**Lenny** (00:29:29):
But it happened for good reasons. Okay, one last thing that you mentioned that I wanted to follow up on. You said something about shared Lyfts, and maybe that's a funny story of some sort.
**Claire Butler** (00:29:38):
Oh, I don't know specifically. Actually, Dylan specifically is such a hustler, especially in those early days. And he would just, really anyone that he would meet, he would talk about Figma with them. I don't remember who it was, but there was definitely a situation where he met someone in a Lyft and then they became one of our users. He used every angle he could to try to get introduced to new designers, especially in his pre-launch days where we didn't have as many connections to just get people to try it out and get more feedback.
**Lenny** (00:30:06):
Okay, cool. Let's get back on track. We were talking about the go-to-market motion that you executed and modeled at Figma. There's two steps, right? Step one is get ICs to love you, and then step two is help it spread from that person, right?
**Claire Butler** (00:30:21):
Yep, yep.
**Lenny** (00:30:23):
Okay, cool. So, let's start with step one.
**Claire Butler** (00:30:25):
Okay, cool.
**Lenny** (00:30:25):
Like I said, obviously, it'd be awesome if somebody loved your product at a company. What did you actually do to make that happen in the early days?
**Claire Butler** (00:30:31):
Yeah. It's really interesting when you think about the early days too, because you're like, "All right. We don't exist." How do you get them to love you when literally, they've never heard of you before? Also, like you were saying, in your situation, "Oh, I used Sketch. I was maybe in Photoshop before that, something else. I just made the switch over to this new tool. We finally got it working. I really don't want to move tools again." You have that inherent thing against it there. Especially I thought about this, and I think there are four main areas that we focused on to make this start, to get it going, and then we kind of still do this stuff today.
**Claire Butler** (00:31:05):
The first thing is all about credibility. I think in the early days especially, credibility is so important in establishing that initial credibility, again, especially with a technical audience like designers. The second is actually building the product with your users. And I know you had Sho on your podcast and he talked a lot about this too, just the customer obsession that we have the care of, especially that editor tool.
**Claire Butler** (00:31:28):
The third is finding a place where you can, in a way, that you can build this relationship over time. Maybe that's specifically through a channel where they don't have to come to you, because they don't really care about you yet and they're probably not going to convert right away or start using you right away, so how do you get them to stick with you over time? So, find out the channel where you can do that and then continue to build that relationship with them. And then the four is just being extremely transparent and honest to build that relationship with people. I know those all sound really fuzzy, so maybe we can go into them specifically.
**Lenny** (00:31:28):
Absolutely. I was going to ask.
**Claire Butler** (00:32:04):
Because they sound really fuzzy when you talk about them. A lot of this stuff is hard like that, where you're like, "Oh, that just sounds like buzzwords." I can give you some examples of these four things, so maybe it helps to give some color to it.
**Lenny** (00:32:13):
Great.
**Claire Butler** (00:32:14):
Let's start with the first one, credibility. Okay. I was the first marketer at Figma. I think one of the things I learned right away, very quickly was that designers don't want to hear from marketers. They don't want to be marketed to and they have an extremely high bullshit meter. You use a word like efficiency, collaboration, all of those buzzwords, and they're just like, "I don't want to hear this." Traditional product marketing kind of stuff just doesn't work. They wanted to hear technical features. They wanted to understand how technical features work. They want to hear, "How am I going to use this?" And then they'll see the benefits, but they don't want to hear from marketers and they don't want to be marketed to.
**Claire Butler** (00:32:55):
And so I think especially with our audience in the early days, one of the things that I did was really try to not market. And that's so funny as a marketer to say that, but that was really core to build authenticity with people. And so the way that we did that in the early days was what we had was the tool, and that's pretty much what we had, and we had a design team and we had an engineering team. We did some cool stuff in the tool. First of all, the tool itself was a technical feat. It was the first time it used video game technology, WebGL. Evan's a prodigy. The fact that he got a design tool to work on the internet was just amazing, and so there was a lot of engineering interest there, credibility building of, "How did you get this to work?"
[NEW_PARAGRAPH]I got him to make technical content and that, I think, went to number one on Hacker News, that people were just interested in him. And then we had a design team, and our design team was our target audience. And so we talked a lot about how we chose to build features, all the things that went into it. And so many of the primitives of design tools have been like that forever, and so we changed the stuff. One of them would be how we did grids or how we did vector networks, and we'd go into these really deep details of how we chose to make those product decisions, all the craft decisions that went into it.
**Claire Butler** (00:34:08):
I remember one of my bars were deciding if something would hit this or not, if they would be interested was, "Did I understand it?" You know what I mean? And if I understood it, it was probably too basic, or if I could have written it myself, it was probably too basic. I remember we did one on grids in the early days, and we went really deep on Joseph Muller Brockmann and his influence on grids. And now, I very much know who Joseph Muller Brockmann is because I work with designers, but at the time, I had to Google it. I was like, "Who is this?" But that was one of my bars for if something would be good enough for our technical content, was if I could have written it, it's not good enough. And so that was key for us in building credibility, because we had this design team.
**Claire Butler** (00:34:47):
And then when six months after we launched, I actually got to hire someone to do marketing with me, the first person I hired was actually a designer advocate. So it was not a marketer, it was someone who was a designer. The designers and the engineers that I was trying to get to help me with stuff also had to design and build the product, so they didn't have a ton of time. But this designer advocate was working full-time with me on this stuff, and he came from our user base. He was one of the very few people in the early days who just loved the product and was very passionate about it. And that became his full-time job was to represent, to meet with users, talk to them, to write content and create content, and to bring that back to the product, and that was what he did.
**Claire Butler** (00:35:32):
And that designer advocacy positions actually scaled with Figma, and we still have it today. It's extreme. I think it's the magic dust, we call it, that we sprinkle on go-to-market to make a lot of our go-to-market function work. But yeah, we didn't focus on marketing, or traditional marketing. We're very focused on the technical aspects.
**Lenny** (00:35:50):
There's so many little lessons there. The designer advocate hire reminds me of something that Datadog did, where they hired engineers to write their blog posts.
**Claire Butler** (00:35:59):
That's a great idea. Yes, exactly what we did. Yes.
**Lenny** (00:36:03):
So, ways you build credibility, just kind of mirroring back what you just shared, one is writing content. Basically, putting out blog posts that designers would be like, "Oh, wow. This is really interesting," and start to feel like, "Oh, Figma keeps coming up in these really interesting pieces of content."
**Claire Butler** (00:36:15):
Yeah, even if they were using it, and I think that that was important. When we launched, people wanted to test it because it was cool and see what it is, but then they bounced. They're like, "All right. This isn't advanced enough. I'll come back later." Which is why we're give them reasons to come back, being like, "Oh, yeah, but the pen tools always worked like this, but we did it like that. You should test that out." And so we kept giving them these nuggets of reasons to come back in. Remember, this was also before multiplayer, and so we couldn't collaborate, so it was use the tools to do these things. That really helps people come back into the tool and spend a little bit more time in it.
**Lenny** (00:36:49):
How many posts would you say you put out in that first six months, just to give people a sense of here's how much? It's probably not a ton, right? It's probably some few really good ones.
**Claire Butler** (00:36:57):
They took a long time. Also, I had to work with an engineer or a designer to do every single one. Maybe 10 at most. But those ones that went out, we tried to get on Hacker News. We tried to get on Designer News at the time. Twitter, we can jump into that, but it was also extremely big for us. And so it was more about quality than it was about quantity.
**Lenny** (00:37:19):
Awesome. Okay, so one is put out great content. People are like, "Oh, wow. Figma's got some new ideas and maybe I should pay attention." The other is having someone that's that function actually talk to them.
**Claire Butler** (00:37:28):
Yes. That was when we started accelerating this much, much more is when we brought in that designer advocate to help us with this full-time.
**Lenny** (00:37:35):
Cool. Okay. Let's move to the next one, which I think is building with your customers.
**Claire Butler** (00:37:39):
That one, I know you talked to Show, he talked a lot about this, this idea of customer obsession and of building with your customers. And it also goes back to that whole decision that we talked about earlier, about when to come out of stealth. You can only build so much with your customers when you're in stealth, because you don't have that many that know about you. But especially, even in the early days when we only had a couple people, we really did listen. And back to also what you were saying earlier about those steps to product market fit, get one person to use it. That's really what we were focused on, especially in the very, very early days.
**Claire Butler** (00:38:10):
I remember the first one, I think I've told this story before, but was that we had Coda. They were our first user and they were based in Palo Alto. Dylan and I drove down and demoed the product to them, and they were the first ones. Their designer, Jeremy, was like, "Yes, we'll take this on full-time." And I remember, we were both like, "What? Really? You will?" That was the first person who said yes to us, and so we were so excited. This was a huge milestone. We went to Oren's Hummus in Palo Alto on the way back to the office to bring some back for the team to celebrate. We were just so stoked.
And then we got back to the office, and I think Dylan gets a text from Jeremy being like, "Oh, yeah. I tried to share this with Philippe, my engineer, and he can't get the file to open, so I guess he can't use it." And we're like, "What is it? What happened? We finally got someone." And I remember Dylan was like, "Everybody drop everything. We have to fix this." And after some looking at the servers and things, they were like, "Nothing's wrong," and then they realized it was a problem with Philippe's MacBook. Evan [inaudible 00:39:08] had a car, so Dylan had to drive Evan down to Palo Alto to fix the MacBook of Philippe just to get them to use the product. So anyway, get them to stick around. That's the first one.
**Claire Butler** (00:39:17):
But the building with people, the way that we did that was largely through just each person. We really cared and listened to their feedback, especially when there were only a few people. One way we did that was, I remember we implemented Intercom back in the early days, and there were so few users and so few of us that everybody was on Intercom all day too. And so we'd get a chat and I would jump in sometimes. Dylan would jump in, an engineer would jump in. And he'd open up a chat with people and they'd actually debug the product with us live. They'd be like, "I have this bug," and this engineer would be like, "Let me QA it right now." And so that was one example. We all did support back in that day, and the engineers would talk to users directly, get their feedback, and then go immediately fix things like bugs.
**Claire Butler** (00:40:02):
And so those are just examples of in the early days, what that looks like, and that just scales a lot over time as you're growing and you're talking to more people. That advocate ended up helping us a ton when they came on board, because some of this stuff, I mean, none of this stuff scales. Your engineers can't do support forever. In the early days, that becomes really important. But when we brought that advocate in, their whole job was talking to users, getting them to try to use the product, but then taking their feedback back when it wasn't something that wasn't working.
**Claire Butler** (00:40:34):
That helped us scale a lot, so that became really essential, and then telling people, "Oh, we fixed this." It made them feel more ownership of the tool too, being like, "Oh, yeah. I asked them to do this. They did it." That's just another way where you just build a strong relationship with people, because they feel very invested in your journey with you.
**Lenny** (00:40:54):
Which goes back to building credibility.
**Claire Butler** (00:40:55):
Absolutely, absolutely.
**Lenny** (00:40:57):
There's so many important lessons there. You talked about scaling this, but interestingly, this is very much doing things that don't scale; driving to their office, fixing their wifi on their laptop.
**Claire Butler** (00:41:08):
Early days, nothing scales in the early days. You just have to do it anyway.
**Lenny** (00:41:10):
Just as a tangent, we're talking about getting people to love your product initially. Why is love so important? That's a really high bar, and I imagine you have an interesting insight on just why it needs to be that level of appreciation.
**Claire Butler** (00:41:23):
Yeah, and it doesn't have to be over time. These are all things that maybe they just use it first or they're interested, but by the time you're getting to the organization level, or I'm spreading this to my other spheres of influence, like my community, people I know, you're kind of putting yourself on the line. You're taking a risk when you're doing that, especially if it's your job. You're bringing other people in, and you're not going to do that unless you really believe in something. And so just using it isn't enough to get someone over that stage of going from just a user to a champion. And so I think it is this love thing becomes important, because you just don't get the scalability and spread of someone doing this for you unless they have that level of passion.
**Lenny** (00:42:09):
That's an awesome lesson. I hope people are taking that in. You shared this story of Coda and Sho. Actually, he wasn't on a podcast. He wrote a newsletter and he shared all this stuff.
**Claire Butler** (00:42:18):
I read it. Yes, yes, yes.
**Lenny** (00:42:19):
Yeah. People often confuse the two. They assume it's kind of the same thing. But he talked about how when he joined Figma, this happened. Dylan's like, "We need to fix this problem." He's like, "They're not even paying us. Who is this? We have real things to build. Why do we have to hop on this bug?" And then later, he realized why that was so important, and that was a big lesson he learned from Dylan of just this needs to be taken really seriously. If someone's trying to use your product, help them actually be successful.
**Claire Butler** (00:42:45):
And we didn't have very many of them, but it's like, yeah, back to what you were saying earlier, how do you get one person to actually use it? And so we very much cared that that one person stuck with it and didn't bounce.
**Lenny** (00:42:55):
**Claire Butler** (00:44:20):
Oh, the next one is, this can take time. I think that's a big one. And also in the early days, they're not going to necessarily use you right away, and so it might take time. And then also, when you do get a couple of people who start to use your product, they're going to also start wondering what other people think about your product. And when you're the only marketing hire, and this is something marketers ask me a lot when they're the only marketer in an organization is, "How do you focus and prioritize, because there's so many things you could do? How do you decide what to do?" And so the thing that I think about a lot in this early phase, in thinking about ICs is, "How do you get to them, and where can you go where they already are as opposed to making them come to you?"
**Claire Butler** (00:45:00):
Because I'm a firm believer, I think now, we have spaces where people can come to us, but in the early days especially, they're not going to come to your space. They don't know you. They don't care about you. They don't want to go to your Slack channel or something. You have to go to them. And so for us, Dylan really identified immediately that Twitter was the place where that existed, and that had nothing to do with us specifically. The design community existed on Twitter way before we did, and that's something that they just did on their own and that grew over time. They had this large network on Twitter of influencers, and that's also how people learned about things.
**Claire Butler** (00:45:38):
Also, design's changing all the time, and so people would share best practices, things that they were doing, resources, and that just became kind of a home for designers. So, we really went all in on Twitter. That really became a key, our channel that we focused on, and really only focused on one. That was it, and we got pretty advanced on how we did this. Dylan is also a great engineer, if you don't know that about him, or a scrappy engineer who-
**PART 2 OF 4 ENDS [00**:
46:04]
**Claire Butler** (00:46:00):
A great engineer if you don't know that about him, or a scrappy engineer who could figure things out. And he had this idea and he built this tool or this scraper where he identified a couple influencers in the design community. People he thought were people he wanted to learn from and to talk to. And he inputted them into this scraper thing that he made. And then back to this, another node graph, he figured out who followed them and who followed those people and also the influence that these people had over other people, and made this massive node graph of these pockets of different topics of design. And when he looked at it, you'd see a cluster. So you'd have the cluster of iconographers, graphic designers, product managers, and you'd see them all there and you'd see who the influencers were in those areas. And what we did is we found who were most influential to start.
**Claire Butler** (00:46:51):
And that was another source, back to using whatever you can to get people to try your products. That's who we asked for feedback in the early days too. Just DMed them. We were like, hey, Raji, we'd love feedback, your feedback on Figma. And that was one of the ways we got to people, but that's also people who we followed, people who we tried to build this connection with on Twitter in the early days. And that's also where we pushed out that technical content that I was talking about. And then we tried to just drive and spur a conversation about these things. First it was our launches, but then later it was this technical content or whatever it was that we were producing so that we could go to people instead of making them come to us just in their feed. And that became super important to us. We'd also interact with people. So Dylan has a huge presence, and especially in the early days and now even has a huge presence talking to users, we all did show too our engineering team. And so it wasn't just the brand handle, it was the people. And I think that that's really important to put a personal face behind things, connect with people, answer questions for people, live there. And over time, we just built this very engaged group of people on Twitter with Figma. And that's still a huge place for us where the design community lives and where we get a lot from our users too. And I think the focus on that, and I think why it's so important is it allows people to passively follow you over time without having to invest in you, within the tool. So it was our way, especially because we knew it would take a while to build a product and get to a place for people to switch full time for them to follow along with us and build that confidence with us over time and keep coming back to the tool.
**Lenny** (00:48:24):
That Twitter graph story is so legendary. I think Dylan even shared the code online. I'm going to try to find that tweet.
**Claire Butler** (00:48:30):
Yeah, it's so good. We still use it. We used it again when we were launching another product, we were like, oh, can we go pull that Twitter graph for another audience? I don't know if we ended up using, how much we ended up using it, but I definitely looked at it and I was like, oh, this is so interesting to see for developers or whatever it was that we were looking at.
**Lenny** (00:48:46):
And also what you just mentioned is really interesting that he wasn't using it to go sell people on the product. It was first get feedback on the product, which ends up selling them.
**Claire Butler** (00:48:54):
Oh no, we never heard sold the product. It was always about feedback. And I think that that's so key to all of this is all about feedback.
**Lenny** (00:49:02):
Awesome. There's so many lessons here. There's a fourth bullet I think, around building relationships with users.
**Claire Butler** (00:49:08):
Oh, just transparency and authenticity. So I think that that really comes into when you get to the scale part, I'm talking about early days, being transparent with your users, and a lot of that does come down to the stuff we talked about too, about downtime, about what that looks like. And we just did that naturally with people one-on-one in those early days. But I think where it gets harder, and we stuck with it because it's in our DNA and how we act, is when you get to scale and you have to still do that stuff with a lot of people who care and who do these things with you. But I think it's just so important that you are honest and also you don't hide behind the brand. That you're human and authentic and transparent with people. And we can pull up the examples. I think the better examples are probably at scale than even in the early days because that's when it gets harder to do that.
**Lenny** (00:49:52):
So let's chat about that. Just... So this is about getting started.
**Claire Butler** (00:49:56):
Yeah.
**Lenny** (00:49:57):
How do you do this at scale? Or does it change completely? Do you continue doing this in a different way? How do you approach it as the company grows?
**Claire Butler** (00:50:02):
You just totally still do it, right? I think that that's just so important, that's how it stays, right? In the early days you do this stuff and you kind of get the flywheel going. You get these people, you have these people who love you, but today that's still how Figma spreads the most, right? We're going into new markets, we're going into new places, we're launching a new tool, and that becomes so important to how we still drive adoption. And so some of those things, the tactics, look a little bit different, but the themes are still the same and what that looks like at scale. A couple of just examples of that are those advocates, right? That's I think a huge one. When I was a marketer that advocate was just my partner. He gut-checked everything that I did. He'd be like, no, that's too thirsty here.
**Claire Butler** (00:50:46):
You're using a fluff word again. You know what I mean? Also, he was how we pitched the company. He was the people we talked to, he'd go to lunch at Etsy or whatever and just get feedback on things. And that function has really grown with Figma. So now that's a whole team at Figma, it's a large team and it's scaled with us with every product that we launch. So now we have developer advocates, FigJam advocates, and regionally. So we go into a new region and they're part of the landing team. We're in Japan, we need to find the Japan, now we have two of them, it's the Japan designer advocate because it's just so core to how we do things and we've scaled that. So I think on the credibility side, I think that those advocates and scaling those advocates are the magic dust that, I always call them the magic dust, that make sure that we are able to build those relationships and stay authentic around everything we do.
**Lenny** (00:51:40):
And these advocates, again, they're just, their background is designer, and then they end up being an advocate designer?
**Claire Butler** (00:51:45):
It's now developer, FigJam person. But they're passionate that... Their profile is, they're passionate users who oftentimes they find us more than we find them, right? You couldn't just post this job online and go source for it. It's like this will emerge from the community and then they love it so much and they know the product so well. They're technical experts. But yes, they were, for the designer ones, they were all previously product designers.
**Lenny** (00:52:10):
Awesome. Is there anything else you want to share around at scale, how these things change? You mentioned transparency ends up being really important. What else there do you think is really important?
**Claire Butler** (00:52:18):
I think there's two examples. The one is building with users. Because I think this is a good one that I like to get into because you're like, how do you scale that? You get so many bug requests, you go to our feature request page on our forum, and it's just so many. But also as you're building product, you're always like, oh, well I could go do all of these fixes and bug updates, but I also have to go build new stuff to grow. And that's always a tension with any company as you're looking at a roadmap. One of the ways that we've done that and still continue to focus on things that people care about that's so related to the craft of quality is through we do quality weeks with engineering.
**Claire Butler** (00:52:53):
And then we decided a couple years ago, we had this idea where we were like, oh, what if we package all of those quality updates up into one thing and launch them together and we could even show the tweet or the forum request that spurred us to do this. And that was where our idea of little big updates came, which is a launch that we do every year. Figma, they come from these quality weeks with engineering, that's where the engineers can just go and look at Twitter, talk to our support team, get all these small things that annoy people to fix them, and they just fix them all and they get so many done. And then we launch them all together. And that's one of our most popular launches that we do because people are like, yes, I care about this. This improves my quality of life every single day.
**Claire Butler** (00:53:37):
Back to that discussion of two clicks versus one click and things like that, they're that small, but we still do it. And I love that little big updates when I think, Airbnb did something like that too, with the a hundred updates thing on their website.
**Lenny** (00:53:49):
Airbnb has shifted fully to that, which is only big launches, just wait twice a year and launch a bunch of stuff. That's exactly, that's fully how they operate.
**Claire Butler** (00:53:58):
That's another way that we do the building with, and I think that even giving the engineers, we give them the ability to pick them, right? So they're like, oh, yep, this tweet, I want to fix this bug.
**Lenny** (00:54:07):
That's got to be so satisfying.
**Claire Butler** (00:54:08):
Yeah, exactly. And in the marketing even, we'll pull examples like, oh yeah, that for one, the person who said that. So that one's big. And then on the transparency side, I think where this gets hard at scale is all of a sudden you have a lot of people who care about your products. And I think it's really easy as a brand because you are a brand at this point, as you're getting bigger to be like, oh, I can hide behind my handle or the Figma handle, or do I really have to say something about this? And so just two examples of things like that where you just, we've chosen to be transparent when we didn't have to be or you might not, or downtime. Downtime is always a big deal. And I remember there was a specific instance, I think it was last year, maybe two years ago, where there was this issue with these servers and an AWS cluster went down and we didn't know what was going on.
**Claire Butler** (00:55:01):
And so we had downtime multiple times in a week and people were pissed, right? Things were not going well. Again, back on Twitter, we built... The double-edged sword of Twitter is you build this strong communication channel with your users and they communicate right back to you if they're not happy. So it's inundating us. And I remember we did a public postmortem and we always do that. If something happens or something goes wrong, we're like, yeah, that was bad. Here's what happened and here's the technical reason and here's how we fixed it. And then we tweeted that and promoted it and took just full accountability for it. And we always choose to make those choices when they're hard. And that was just one example. But I think the hardest example, and back to your question of the most stressful days at Figma, the true most stressful day Figma, for me, was the day that we announced the acquisition.
**Claire Butler** (00:55:52):
That was probably one of the harder moments of my career, where... My brand is social, that's my job, is running social. And all of a sudden you have this onslaught on social and you have to figure out what to do. And I remember the way that we announced it was we just retweeted Dylan. That was all that we had said
**Claire Butler** (00:56:07):
Raji on our team, I remember I was talking to him about it and he was like, "We've got to talk to our users. We just have to talk to them directly. We have to show we're the same company. We just have to not hide behind the brand." And he was totally right. And so I remember we decided that day that the next day we just had to have an open public forum where we could talk directly with our users and let them ask us any questions. And so we'd held the Twitter space the next day with Dylan and Cho and Raji and Tom, and we just had it open and people could ask us anything they wanted and we were able to be just really honest and transparent with them about everything that we could.
**Claire Butler** (00:56:44):
And I think that that is just a really good example of how even when it's really, really, really, really hard, you still have to just be transparent. And I think that that's when the tide started to turn of people giving us a chance to prove that everything would be great, even when it's the highest stakes and the hardest thing of still listening to people, maintaining that connection and not hiding behind the brand.
**Lenny** (00:57:06):
It feels like transparency is core to the values of Figma. Have you codified your values and is that one of them and is there anything there?
**Claire Butler** (00:57:18):
Interesting. We have codified our values. It isn't explicitly listed out, which is interesting, but I think of it as our value, especially with our users. We think about our values a lot as have fun with it, build community, love your craft, and all of those definitely come through, play, but maybe that should be one because I think it's so core to how we make decisions and our framework of when we have a decision which way we're going to go.
**Lenny** (00:57:43):
And also we mentioned Cho a couple of times, but on Twitter, he is always asking people, what do you need in the editor? Here's what's going great.
**Claire Butler** (00:57:49):
Absolutely. It's still how we get so much feedback is talking to people directly and Kris will come on when people have bugs and just respond to them. He's our CTO. People are just actively on there, listening to people, fixing bugs, responding.
**Lenny** (00:58:06):
I want to shift to kind of the second step of the go-to-market motion, but before I do that, I have a couple of things I wanted to touch on briefly. One is you haven't mentioned Config, this conference that you ran, which is a good example I think, of scaling a lot of the things you're talking about. It used to be Twitter, social graph, find people on Twitter. Now it's like this epic conference that I think people just love. I was on Twitter the days of Config, and it's just my whole feed was just like, oh my god, Config is the best thing. So many talks and so many people.
**Claire Butler** (00:58:34):
Config is such a good example. I remember, I can happily talk about Config. The way that we do Config, I think... I'd never run a conference before, maybe that's probably part of it. And I brought somebody on who had, but she and I were both sitting together and being like, okay, so we're doing a conference. How do we get the content for this conference? What do we do? And we didn't know. And so we just decided, oh, so much of what we do is listen to our users. Let's put out this call for proposals and see what they want to talk about. And so that's how we got and get a lot of our content for the conference. And a lot of it comes back to what I was talking about earlier, which is very technical deep content that targets individual contributors for the practitioners of the tool.
**Claire Butler** (00:59:20):
And through that process, we build these relationships with these speakers, our advocates help them shape their talks. And then I think that we do produce really strong technical content through that process and through Config. And we're also able to, with these people that we work with, help them grow their own profiles and that also helps them stay more connected to us, helps them become thought leaders in their own right. And so I think we're able to just draw so many different people who are the practitioners and the ICs because we're not just putting thought leadership out there. We're talking directly to how to use the tool and the things that individual contributors are still dealing with.
**Lenny** (00:59:58):
Yeah, it's kind of a lot like this podcast and my newsletter. It's like how to actually do stuff, not just a bunch of big ideas.
**Claire Butler (01**:
00:03)
Really. Yeah, no fluff.
**Lenny** (01:00:04):
I remember seeing a tweet about it where someone filmed being inside of and they're like, it's a rock concert, it's not a conference.
**Claire Butler** (01:00:10):
Oh, that too. We also just have fun. That's another big part of it as well. I remember literally saying, how can I make this more fun? So that was a big part of it.
**Lenny** (01:00:19):
Sounds like another value.
**Claire Butler** (01:00:20):
Yes.
**Lenny** (01:00:21):
Okay. Let's talk about step two of this go-to-market motion that you've developed, which I think if I were to just simply describe it as help people spread it within the organization. Is that right?
**Claire Butler** (01:00:31):
Yep. Yep.
**Lenny** (01:00:33):
Cool. All right. How do you do that?
**Claire Butler** (01:00:34):
All right, so again, I've got four things here and I'll list them out and then we can go through them. The first is make it easy to try the tool and to share it without a lot of gates so that you can do this. The second is those DAs. I want to talk about how those DAs work in our sales process.
**Lenny** (01:00:50):
Oh, Designer Advocate.
**Claire Butler** (01:00:51):
Yeah, sorry. That's our acronym for them, designer advocates, because they are so core to how we sell and how this works. The third is finding the operational thing that allows you to scale. For us that's design systems, the thing that was the biggest blocker to somebody using Figma and turning it into your biggest reason to adopt. And then the last one was still about maintaining and growing that connection with those internal champions over time. So those are the four things, and again, it looks different, similar concepts with different ideas when you look at that in the early days versus what we do today with it with scale.
**Lenny** (01:01:30):
Awesome. Let's get into it.
**Claire Butler** (01:01:32):
All right, cool. So the first one's making it, the products easy to try and share. So we talked about this a little bit, but if you go to figma.com today, it's very easy to sign up for a free account. I have a free account myself on my personal side for designing my house, which is a thing I used to before, but you just go and you can try the tool. And I think that's so important for us to allow someone to use it over time for a long time until they have confidence enough to be able to want to spread it within their organizations. But then it's also pretty easy to create a free team and share stuff with your organization. In the early days, you could just share a link and that was it, and you could use the tool and everything was free. Once we implemented pricing, which was about two years after we launched, we had this thing called a starter team.
**Claire Butler** (01:02:21):
And this is actually something that was switched. So initially the way that it worked was our starter team was that you could have unlimited files but only collaborate with two or three people, and that was the starter team and you wanted to add more people to collaborate with, and then you hit the paywall. We realized that wait a minute, that's hurting us. And so we switched it and now it's like you can have something like three files, but unlimited collaborators. And that was huge for us. And that's a place where you can see it in the metrics very clearly, where it's like, oh, this is really easy for people now to share before they have to start paying. This is huge.
**Claire Butler** (01:03:01):
And so then you get people to start using it for free with their teams and the teams get confidence in it before then they all have to start uploading it to their procurement team or whoever it is to start paying for it. So not introducing payment too fast and giving people that time to build that advocacy and to try it out with their teams, with people before they have to pay, I think is huge there.
**Lenny** (01:03:24):
That's such a good and important topic that I want to pull a thread on a little bit. So what you discovered there is you don't want to get in the way of the growth engine of the product. If it's going to grow through people spreading it, you don't want to cut it off at three. That seems like a monumental decision that changed everything. Any sense of just how you came about to realizing that? Or was it just obvious, okay, of course we need to change this?
**Claire Butler** (01:03:45):
Well, I think it was intuitive and it was more about the change management process of how to do that when people... At this point people were using the tool and using that starter tier and setting people or what that looks like. And for a long time you could also get around that and just collaborate with people in drafts and just share a link too. And we wanted to shut that down. So it was a bigger decision on just change management, but I think we intuitively knew it and it was much more about to the change management of how to make that happen.
**Lenny** (01:04:13):
Is there anything else you learned about what should be in free and paywall versus what should be in freemium? Just broad thoughts.
**Claire Butler** (01:04:21):
Well, I think the other interesting thing is too, and I think I said this, but so much of ours is, so we have a couple tiers. We have a free tier and then we have a pro tier, and then we have our org tier. And the free tier, free tier includes this free starter team. And so you can just do that, go to figma.com, and go do that. Pro is all enter credit card, and then org is you talk to sales. Org and enterprise, you talk to sales. And so I think the other key thing here is we get a lot of upsells to org from pro. And so it's also a thought of what you put in org versus pro. So that's the other decision because pro is also relatively inexpensive, so that grows a lot too really quickly and it's still very important to us, but still most of our marketing qualified leads that are sales leads likely come from pro or from free.
**Claire Butler** (01:05:11):
And so it's the decisions that we think about are like, okay, what do you want to sell on? And to go from free to pro, it has to be pretty natural because you don't have any people involved. And so it's like they have to just do that on their own. And then when you go from pro to org or enterprise, it's more about the organization and the scale. And that's where that design systems conversation comes in that we could talk about. But that was the thing that we really indexed on for org and enterprise of why you would want to upgrade from pro to org. So it is this multi-step process, but it's also nice because you can increase your investment in the product as you're building your own confidence in the tool.
**Lenny** (01:05:51):
The other really important nuance in the way that you structured pricing, it's unlimited viewers, but it's just editors that you charge for.
**Claire Butler** (01:05:56):
Yes. So true. So many people, especially if you're a designer and you're working with our product manager, you can comment and so much of this is to yes, you can spread it and you can use Figma for free for a really long time because you can just comment on the tool. And it also gets us through many more places with the organization and helps us be more useful to more people because yeah, viewers are free.
**Lenny** (01:06:21):
This one topic could be a whole podcast. And I have so many questions. Let me ask maybe one more and then I'll move on. How often do you revisit the packaging and pricing at this point? And do you have any advice there?
**Claire Butler (01**:
06:32)
Yeah, I mean it's interesting because the product's still growing. We just launched variables and dev mode back in at Config this year, and that influenced pricing and packaging and still is, right? And so FigJam too. And so I would say the core foundations aren't something we revisit a lot, but we're continually adding new features and we have to think about what tiers should they go in, what does that look like? So those things influence that all the time.
**Lenny** (01:06:56):
By the way, I recently upgraded to the non-free pack because I hit that limit of three with the designer that I work with.
**Claire Butler** (01:07:02):
Yeah, it's also just kind of annoying because you have to keep moving things in and out drafts.
**Lenny** (01:07:06):
That's exactly what it is.
**Claire Butler** (01:07:07):
It's like, oh, this is worth my $12 a month or whatever, just to not have to bother with it.
**Lenny (01**:
07:11)
Yeah. Once you realize, okay, yeah, it's not that much in the scheme of things, I'm just going to, but it's interesting how it's not that much, but I still like, nah, I don't really want to pay that if I don't have to.
**Claire Butler** (01:07:20):
Oh, for sure. We all do that. Right? Especially because so much of pro, so many people have individual pro accounts, right? Because not necessarily a business or maybe it's a small business or you're an individual and it's very different from an organization where someone else is paying for it.
**Lenny** (01:07:33):
Yeah. So funny. Okay, step two is around designer advocates. Talk about that.
**Claire Butler** (01:07:39):
Yeah, so I just think these DAs, so sorry, I keep calling them DAs because that's what we call them internally.
**Lenny (01**:
07:44)
It's cool. Now we know.
**Claire Butler** (01:07:45):
Advocates are just so special and such a big part of Figma. And like I said, it took us so long to start charging or bring in a sales team. And when we first hired our first salesperson and our first sales rep was the same day that our next designer advocate started, who... Eventually the first designer advocate left and did something else. And we brought in another designer advocate and he started on the first day that the sales team started. And at this point, more people were using Figma. We'd had that pro tier going for a while, and Tom, who is still here today and is leading that team, Tom Lowry, he was a passionate Figma user, but he was a passionate Figma user who brought Figma to his organization. But the first one, we were so early, he didn't have an organization to bring it to, he just loved the product. But Tom, he brought...
**PART 3 OF 4 ENDS [01**:
09:04]
**Claire Butler** (01:08:27):
He really didn't have an organization to bring it to. He just loved the product. But Tom, he was the internal champion at his company, who got his company to adopt Figma. So, when he joined Figma, that was really the mindset that he brought to this, was also like, "How do you use this as a team?"
**Claire Butler** (01:08:42):
And why I think this is so special, and was so foundational that they started together, is that they would go talk to users together, and they would bring him into the sales process. But he was never a salesperson. Never had a quota, doesn't live on the sales team. Technical expert who has such a deep passion, and a deep, deep, deep, deep understanding of the tool, that he would come in and just help explain the product to other designers.
**Claire Butler** (01:09:08):
And it goes back to that same theme that I talked about earlier with marketing, where I realized that I would never have the credibility with designers that a designer has. Same is true with sales. They're never going to know the product as well as a designer will.
**Claire Butler** (01:09:21):
So, Tom being there, and Tom being able to be like, "Oh, I understand exactly what you're talking about, and what your problems are. Here's how this works." Or "Here's where you're blocked," or "Here's an idea or best practice how to use this."
That just became so powerful and so useful for them and for the sales team, that they ended up calling it the Tom Factor, [inaudible 01:10:15]. So, it wasn't necessarily a structured process at the beginning. They'd just like, "Hey Tom, can you come help talk to this company with us, or help show them how this works?"
But then they called him the Tom Factor because he was so powerful, and their deals were so much more likely to close if he joined the calls. But it wasn't his full-time job either. He also is connected to the products. Because he's this special person who was a designer, was a [inaudible 01:10:40] user of the product, and then talks to hundreds of customers. So, he has the best way of synthesizing product feedback, and then bringing it back to the product team because he has all of that context. So, I think that that role is just so special, and it's something that we've actually chosen to scale because it's just so valuable. In the same way it's valuable for marketing, it's valuable for sales.
**Lenny** (01:10:29):
I think we're going to spur a lot of companies building these teams with this conversation.
**Claire Butler** (01:10:32):
I can't speak highly enough about it. Marketing, we think about it, as we're scaling this role, we're marketing product and sales. That's where these people come in. And I think when you have a technical IC audience, I don't see how else you could build any credibility or get anywhere with people if you don't have someone who deeply understands it, integrated in marketing and in sales.
**Lenny** (01:10:52):
Who does this team report to?
**Claire Butler** (01:10:54):
Me.
**Lenny** (01:10:55):
Awesome.
**Claire Butler** (01:10:56):
Yeah.
**Lenny** (01:10:58):
Okay. So, we're talking about how to help your product spread within an organization. Talked about developer advocates. You talked about making it easier to spread. What else?
**Claire Butler** (01:11:06):
Let's talk about design systems. Let's say you're a designer and you're designing an app, and you need a button. Rather than going in and making a new button every single time, you need a library of the button ... with the color, the spacing, the padding, all that stuff already predefined.
**Claire Butler** (01:11:24):
Maybe it's tied to code, maybe it's not. But you just want to pull that in. And then, maybe there's someone on the design system, and maybe there's a brand designer or someone who's like, "Oh, we changed this from this font to that font." That you know that, and it just updates everywhere. Or a padding change, and it updates everywhere.
**Claire Butler** (01:11:38):
And that's the most simplistic version, is a button. But this stuff gets way more complex. This turns into, "Here is our welcome screen. Here is our header bar." All of the different components that then become whole pages. And it's a huge efficiency.
**Claire Butler** (01:11:54):
If you have a very robust design system, you're just pulling in all of those components, instead of having to design those from scratch every single time. And it's consistent. If you have hundreds of designers in an organization, they're all making buttons, they're going to be slightly different. And then engineering's like, "Wait. What patenting do I use?" It's very inefficient. So, a lot of organizations use these design systems, and they become very advanced over time. But Figma did not have design systems in the early days. Or if we did, they ended up having them at the file level. But you couldn't share them with other people.
**Claire Butler** (01:12:25):
So, that was a huge blocker for us for a really long time, was these big companies were like, "Oh, yeah. This is cool, but I need a design system. How else am I supposed to work with engineering?” Because this is so big in engineering, too. Because when you're able to identify all of these different buttons and these components in advance, you could tie them to code. And then it's easier for them because they don't have to inspect it every time. So, it's way better for everybody. It was our biggest blocker. But then we decided, "No, we're going to focus on this." And in the early days, that was just meetups still. And it was like, "We need to do design systems meetups." And we were all like, "What are design systems?" Or that I'm just like, "What is design systems?"
**Claire Butler** (01:13:03):
And then I went and read a pattern way of thinking and Brad Frost's atomic structures design systems, and started learning about it. But anyway, in the early days, we just literally brought … There's a community of design systems people, and we brought all of them together. Met with our product team, met with Dylan, started just having these really informal meetups around design systems to learn from these people and start just learning, hearing from them. And then they started building out more features from it. And then we just started really leaning into the technical aspects of how companies use and scale design systems. Because, while design systems are so important, it's also very hard to get an organization to do it. Because it's like an efficiency thing that they also have to invest in, that is immediately connected to a launch that day.
**Claire Butler** (01:13:43):
Every company is at a different phase of maturity of where their design system is. But we really leaned into the content, into the features, into eventually showing how people do it in Figma. Both at the beginning level, but then at the very advanced level, to really lean into that. And then, that also went into marketing. That was ... We have DesignSystems.com, it's a Figma property. We had a whole conference around it in the fall called Schema, where we just bring in these advanced design systems practitioners and they just show you how're they're working. And that's so important, too, because design systems are one of the main reasons you upgrade from pro to org or enterprise, is you're at this phase where you're getting more organized. You're more advanced, you're a bigger company, so that's one of our big gating features for upgrade, so that became just the key thing we leaned in on.
**Claire Butler** (01:14:30):
And that's bottoms up specific, because the people making the design systems are not like the VP, still. The next phase of bottoms up are the ICs, and then the design systems people. And now those internal champions are largely the design systems people, too. They're either the biggest blockers or the biggest champions, depending on if you can win them over.
**Lenny** (01:14:51):
I love just that lesson of the thing that is blocking you from being adopted, see if you can turn that into an advantage.
**Claire Butler** (01:14:57):
Totally. Totally.
**Lenny** (01:14:58):
Feels like, looking at Figma, it's like, wow, with so many advantages for a product to spread ... It's single player, you can use it on your own. It's got multiplayer, you could invite people. It gets better as more people are using it.
**Lenny** (01:15:09):
Versus, I don't know, a company like Slack, where it's useless on your own. Is there anything there about just, these lessons you're sharing are most helpful for a product that is useful on its own? Or could it be useful for all kinds of products? Anything there?
**Claire Butler** (01:15:25):
That's what I was talking about with the IC. An IC has to get a lot of value out of this on their own. And I think it has to be technical. Or, that's a hypothesis that I have. It's certainly easier if it's a technical product. They get a lot farther, because people want to talk much more about the product.
**Claire Butler** (01:15:41):
They care so much about the craft, and they want to spend a lot of time learning and understanding it. And I think that's true with designers, that's true with engineers. That's not true with every audience. Not every audience is ... deeply cares about wanting to learn the craft in the best way possible for a specific thing. So, I think that one of the ... I don't know about requirements, but things that makes this a lot more likely to be successful, is that your IC, there's a tool, and they can use it on their own. And it's technical. I think that helps a ton.
**Lenny** (01:16:12):
Coming back to the strategy of helping Figma spread within an organization, I think you mentioned there's one more item around champions?
**Claire Butler** (01:16:20):
Oh, yeah. Just the last thing there is, you have to keep that relationship going with those champions forever. Because they don't go away. And sometimes they get mad at you, too. I remember, there's one. I think it was at one of our companies, one of our bigger companies. And he was upset about something, and he tweeted it.
**Claire Butler** (01:16:41):
And then we immediately had to go talk to him and understand what he wanted, and what was wrong. They don't go away. But then also, I think a lot about how, through the process of maintaining a relationship with those people, we're actually able to help them, and what they get out of it beyond just the tool. Especially over time, especially as we have a larger platform, I think a lot about how can we help them grow. Whether that's growing their careers. Like they, because they brought on Figma, they get a promotion, or whatever that looks like.
But we have more direct control over things like, "Oh, you're going to speak at one of our events. We're going to amplify you on social. We're going to promote you and make you a thought leader.” And it works really well for everyone. Because these people also have the deep technical expertise to show other people, "Here's how I've flip my design systems. Here's how I do this." And [inaudible 01:18:03] people who want to learn from them. And we have the platform to be able to amplify them. So, I think a lot about, "Yeah, how can we help these people grow in their own careers, and get something out of this, too, beyond just the level of the tool?"
**Lenny** (01:17:42):
And then that builds back into building credibility for Figma, because now there's all these additional designers talking about Figma.
**Claire Butler** (01:17:48):
Totally. It's all a circle. It's all [inaudible 01:18:23].
**Lenny** (01:17:49):
Flywheels within flywheels. What a business you've built over there. Maybe just the last question along these lines ... What changes as you scale? A lot of these are things you did early on. What changes as you grow as a company, in this bucket of helping the product spread?
**Claire Butler** (01:18:02):
Yeah. I think the key thing is that you have to keep doing it. One of the things that I feel like, at my role now at Figma, that I think a lot about, is how I can keep advocating for this stuff when we are starting to implement more top down motion, and having to really prove ROI. Or thinking about, "How do you scale the sales team?" And all those things.
**Claire Butler** (01:18:24):
So, a lot of what I'm doing, too, is thinking like, "Okay. How do we keep this going and keep this model successful as the company is still growing?" Because it's not necessarily as intuitive as you are starting to add in more of some of these more traditional methods and motions. So, that's something that I think about quite a bit. Things like that conference that I talked about, Schema, that's a big one. Config, that's a big one. Scaling our DA team, and really having them grow with the company across regions and across products, is really big. So, it's how do you keep protecting those things. Because it's not immediately obvious when you bring in just a ton of new people.
**Lenny** (01:19:03):
Right. It's easy to break the thing that was working.
**Claire Butler** (01:19:04):
Totally. And you have to do new things, too. You have to layer on new things. But how do you not just walk away from this thing that got you to where you are, as well?
**Lenny** (01:19:14):
Is this a fit for everyone, this sort of approach? Let's say every B2B SaaS company, what are maybe prerequisites for who should apply this sort of approach and this motion?
**Claire Butler** (01:19:25):
I thought about this a lot myself, actually. Because Figma also has new products. So, I think to myself, "Oh, can I replicate this?" Like FigJam. FigJam's one of those examples. And Dev Mode, all of a sudden we're working with developers. So, I've thought about this a lot. And I don't know if there's like, "Oh, you have to have this, or you have to have that." But I think there's certainly things that make it easier. And they're both true on the market side, of the type of the audience, and also on the team side.
**Claire Butler** (01:19:50):
Within the market, I already mentioned it. But I think it really helps if people are technical. And you have this technical audience of people who really care about the craft, and they get a lot of value out of the tool by themselves. Because that just allows them to really learn something and really build confidence in something, before they have to spread it or start collaborating. And it gives you something to talk about with them that's not collaboration. Because, like I said, no one wants to talk about collaboration. Nobody wants to talk about it. So, you have other things you can talk about. Even though collaboration's so important, no one wants to talk about it.
**Claire Butler** (01:20:19):
So, being technical is important. And caring about your tools, that's another one that I think a lot about. As a marketer, I don't know how much I care about my tools. Some of them I do, but a lot of them I don't. If you're like, "Oh, Claire, you have to move from Dropbox Paper to Google Docs," I'd be like, "Fine." Maybe that's their personality. But designers, specifically, and I think engineers are the same way, just as examples, have deep passions for their tools. Probably because they're in it eight hours a day, so they're using them all the time. So, it certainly helps if you ... These people already care, care deeply, about what their tools are.
**Claire Butler** (01:20:55):
Another thing that helps is that you have a community that exists within the target audience already. We had that with designers. Yes, we grew it a lot, and have grown with it a lot. But like I said, that Twitter community, that existed without us. That was there before we were there. So, it made it a lot easier for us to get started, because we didn't have to make something to bring people to us. We had a distribution channel already in place that we could work through. That helped a ton. And then I think the last one was that that core IC audience has a lot of connection points within the organization. Designers are so collaborative. Like you were saying, as a PM, you were working with designers. They work with everybody. If you're building something, you need comments, you need feedback. So, it was really natural for them to be a super-spreader, because their role was such that they were collaborating with a lot of people.
**Lenny** (01:21:44):
And again, when people are hearing this, they're like, "Of course Figma did so well. They had all these advantages." But I think people forget how many disadvantages that also [inaudible 01:22:24]. Like convincing a designer to switch to a new tool ... very hard.
**Claire Butler** (01:21:54):
One of my favorite stories there is that when we launched Designer News, which was a popular forum back in the day, the first response was, "If this is the future of design, I'm changing careers." Because designers do not want to be collaborative. There was this process where people were like, "Oh, no. I want to do my work on my own, and then present when I'm ready." It was a massive shift in getting them to think in a different way to do this. So even to me, it was intuitive. But of course, you'd be collaborative. But designers did not want to be, all of them, right away.
**Lenny** (01:22:23):
I think it's only a clearly successful product after the fact, only after the fact. This reminds me of another story [inaudible 01:23:02] shared with me about Uber, which was also very classically not collaborative and very siloed. And there was a big push to adopt Figma to help encourage more sharing, because that was against the culture.
**Claire Butler** (01:22:40):
Yes, yes. That was a key problem. And it's still a key problem with a lot of design organizations, is that they're siloed. And it's an organizational shift to get people to be collaborative.
**Lenny** (01:22:50):
What sort of team do you need to have in place to approach growth and go-to-market in this way? What did you find was really important?
**Claire Butler** (01:22:57):
The most important thing there is that you have an executive and a leader who believes in this. I did not start this; Dylan started this. He was the core person who believed in this, and who drove a lot of this. And he continues to. And he's built this up to be a culture of our team.
And since he believes in it, he's able to help bring more people on board and make everyone believe in it. And then, I think the other thing is, through that, is that thing that we were talking about earlier with metrics. I think so much of this is people being like, " That doesn't scale. How do you measure this?” And yes, we are [inaudible 01:24:05]. We are working on all those things. But it's not immediately clear. The metrics don't immediately show you if something's working or not. It goes back to signal over metrics. And I think that that's so important.
**(01**:
23:43)
And having leaders who believe in that, too, who are able to trust their own intuitions and their own guts, is so important. And it's so interesting, too, because I was just thinking when I was ... Just now, that I was talking about earlier about how trusting yourself and trusting intuition is the hardest part, the most stressful part in the early days. But even here, it's the thing you need the most to be successful. So, I don't know how that connects back, but it just feels like that's just so important in this type of model. And with just being at a startup, is that you're able to believe in it, and have the confidence and the trust in yourself.
**Lenny** (01:24:16):
I'm going to quickly summarize this model just for people to have a very clear, succinct explanation, and then comment on anything I'm forgetting and missing. I'll keep it really brief. And then we'll get to our very exciting lightning round.
**(01**:
24:28)
So, the idea here, basically, is step one, make individual contributors at a company love your product. Step two is get them to help spread you within the company. And to get people to love your product, the four keys that you shared is: Build credibility for your product, build a product with your users, focus where you can connect with your users, one to many. In your case, it was Twitter. And build a relationship with users so that they can start to trust you. And transparency is a big part of that. Before I move on to step two, anything I missed there?
**Claire Butler** (01:24:56):
Nope, that's it.
**Lenny** (01:24:57):
Okay, cool. And then step two is help them spread that product within the organization. And what you found was really important there. One is make it easy to share the product and try it for free. Two is designer advocates being involved in the sales process, have the Tom Factor. Find and target the operating thing that spreads adoption. In this case, I think it was design systems, you mentioned mostly. And then the final piece is shine a light on champions, and help them be successful. Make it help them in their career.
**Claire Butler** (01:25:25):
Yep, that's it.
**Lenny** (01:25:26):
Awesome. Well, with that, we've reached our very exciting lightning round. Are you ready?
**Claire Butler** (01:25:30):
Yes.
**Lenny** (01:25:32):
What are two or three books that you've recommended most to other people?
**Claire Butler** (01:25:35):
I recommend management books to lots of people. The other piece of this that we didn't touch on at all is scaling a team, and all the things that go into management.
**Lenny** (01:25:41):
That'll be our next step, our next podcast.
**Claire Butler** (01:25:44):
Teaching, and also growing new managers. So, Radical Candor and Dare to Lead, to be honest, are the ones I recommend the most. Because I do a lot of [inaudible 01:26:26] coaching new managers and helping them learn how to manage. And those are the first two I start with, because they're so good.
**Lenny** (01:25:58):
What is a favorite recent movie or TV show that you've recently watched and really liked?
**Claire Butler** (01:26:02):
I just watched 100 Foot Wave on HBO. And I watched it because I'm going to Portugal next week, and that's the place where they have the biggest waves in the world. And it was just really interesting to learn all about this, Nazare and Portugal, and all the waves and the surfing culture that's grown there. That was just a fun one that I watched recently.
**Lenny** (01:26:21):
And is your plan to do a 100 foot wave?
**Claire Butler** (01:26:23):
No. Because I am expecting, so there will be no surfing for me.
**Lenny** (01:26:32):
Oh, wow. Congratulations.
**Claire Butler** (01:26:28):
Yes, I know. I will be doing yoga on the beach while my partner surfs.
**Lenny** (01:26:32):
Amazing. We just had a kid. That's a whole other podcast. This podcast, just, parenting starts to come up again and again. It's interesting. Okay, we'll keep going. What is a favorite product that you've recently discovered that you love?
**Claire Butler** (01:26:48):
Okay. You might cut this because it's a little promotional, but FigJam. In the last couple of months, especially, I've spent a lot of time having to create strategies and files and explanations, and I've spent in meetings. And I spend all of my day in FigJam, literally, all of my day. And I work with Figma. I use the product. And I was using Figma for a long time. But FigJam for me, in my role, literally use it every single day. And now I cannot imagine living without it. It replaces so many different tools for me.
**Lenny** (01:27:20):
Great pitch. We will not be cutting that. I'm also a big fan of FigJam.
**Claire Butler** (01:27:23):
Great. It is true, it's very true. I'm in there all the time. I think I'm the most active FigJam user. [inaudible 01:28:01] validate that in the metrics. But I'm in FigJam all the time.
**Lenny** (01:27:31):
Next question, what is a favorite life motto that you like to repeat to yourself, that you share with people? Something that comes up when I ask that.
**Claire Butler** (01:27:39):
When I was younger, I really was ... I've always been motivated. But like, "Oh, I have to get this thing right now." Whether it was in my career, or I was an athlete growing up. I really wanted to perform and do well in things. And I just put a ton of pressure on myself.
**Claire Butler** (01:27:53):
But I recently got, or not recently, in the last maybe five years, got this motto of consistent pressure over time as being more of my motto. And taking some of the pressure off of having to do things immediately, or get to a certain place too fast. Maybe it's more of like Atomic Habits, or things like that. But I'm just much more in this mode of like, "You're not going to get everything done. It's a startup. But career, whatever, it's not going to happen immediately." You just have to keep working at it, and not giving up. And having that grit to keep going and keep pushing over time, is way more important than any immediate accomplishments.
**Lenny** (01:28:26):
That is so good. I just added this question to lightning round and these answers are so good each time. Consistent pressure over time. I so get that. Reminds me of how I think about the newsletter. It's just like, "Keep at it, keep at it. It doesn't have to be the best thing ever, every single time."
**Claire Butler** (01:28:40):
Just don't give up.
**Lenny** (01:28:41):
Great answer. Final question, what's your favorite use case of Figma that you never expected?
**Claire Butler** (01:28:46):
I think I mentioned this a little bit, but I use it for home renovation, FigJam especially. I renovated a house with my partner, and we're doing another one right now. And I couldn't do renovations without it. I copy and paste. I start with Pinterest, get ideas. But then I pull them all to the mood board on FigJam.
[NEW_PARAGRAPH]And then I circle things, and this helps me communicate with my partner. I'll send it to him and get comments from him on stuff, links. So, yes. We also will draw out rooms and model things up, and have them on the iPad. Yep. Interior design and home renovations on FigJam.
**Lenny** (01:29:23):
Claire, we've talked about making people love your product. I think people will love this episode. Hopefully, they'll also spread it within their organization. Thank you so much 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?
**Claire Butler** (01:29:37):
I guess Twitter. I'm not active, per se, but that's probably ... I don't look at LinkedIn, so Twitter. That'd definitely be the place. Just Claire T. Butler there. And then, helpful to me, you can tell me your feedback on FigJam and Dev Mode. That would be really helpful to me. And then I guess the other thing is parenting tips with work. I'm a little nervous about that. I love my job, love my career. And I'm going to be a mom soon, and need to figure out how to make that work. So, I want to hear how other people have done that.
**Lenny** (01:30:06):
I can give you two quick tips right now. One is, there's a guest post during my Pat Leave, that Tamara ... I forget her last name, wrote. Which is basically a leave guide, a guide to setting yourself up.
**Claire Butler** (01:30:16):
Oh, I need this. I'm working on this right now. I need this.
**Lenny** (01:30:18):
Okay. I will send this to you, and I'll link it in the show notes. Also, right before I went on Pat Leave, I had Noah Weiss on the podcast, who was just leaving Pat Leave.
**Lenny** (01:30:27):
And he gave me this awesome advice of "Don't over-extrapolate every moment." This is less about getting ready for paternal leave, and more just being in it. Which is, "Don't over-extrapolate things that are going on." That one thing that's bothering you or is a problem, is not going to continue, necessarily.
**Claire Butler** (01:30:43):
Let it go. Good one. I love it.
**Lenny** (01:30:46):
All right. Well, that's a parenting podcast, a little bit, which is totally cool. Claire, thank you again so much for being here. I'll let you go.
**Claire Butler** (01:30:55):
Thank you. That was really fun.
**Lenny** (01:30:56):
That's my KPI for this podcast.
**Claire Butler** (01:30:59):
Great, great. Great.
**Lenny** (01:31:00):
Bye, everyone.
**Lenny** (01:31:02):
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.
**PART 4 OF 4 ENDS [01**:
31:58]

---

## [15/20] When enough is enough | Andy Johns (ex-FB, Twitter, Quora)

**Andy Johns** (00:00:00):
There are day-to-day stresses that are normal and we just have to put up with, but then there's the other stuff that's the flashing red alarm. Again, you can go back to animals. It's like when their fundamental functions, when their core behaviors of diet, exercise, playfulness, socialization, sleep, when those things get disrupted, it's a sign that there is something going on here that you need to take a look at. 

**Andy Johns** (00:00:27):
So the same is true with people. If your sleep always sucks, if your relationships are constantly strained or frequently strained, if your physical health is failing, there's so many ways that that can be measured. So there's really no excuse for that to say, "Oh, I just didn't know." I'd say it's to look at those things. When those are suffering or when they're really out of whack, it's undeniable that there is something that is detrimental to your wellbeing that's going on right now, and your body is telling you, "Stop. Something needs to change."

**Lenny** (00:01:03):
Welcome to Lenny's Podcast, where 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 Johns. This is going to be a very different type of episode and maybe the most meaningful and important episode of the podcast. 

**Lenny** (00:01:21):
Andy was a legendary product and growth leader at Facebook, Twitter, Quora, and Wealthfront, where he was VP of Growth and VP of Product, and then President, and as you'll hear, was in line to be CEO of Wealthfront until he came to realize that this path was not right for him. After a lot of internal reflection and hard self-work, he changed his entire life's path to becoming a mental health advocate and helping burned out high achievers and also veterans with their mental health journey. 

**Lenny** (00:01:48):
In our conversation, Andy shares his personal story, what true burnout looks like, and when you should pay attention to your mental health. Talks about the process of deep personal transformation and the four steps involved in making lasting change in your life. He also shares how to actually allow change to happen in your life, tactics for moving down this path, and a lot of advice and real talk on mental health and tech.

**Andy Johns** (00:04:53):
Thanks, Lenny. Happy to be here.

**Lenny** (00:04:54):
So I've been both looking forward to our conversation, but I've also been dreading it a little bit because I know it's going to be incredibly valuable, but I also think it's going to get very heavy, and I think it's important to get heavy sometimes, especially with the stuff we're going to be talking about, but just wanted to share that.

**Andy Johns** (00:05:09):
Yeah, and I'm looking forward to that. I think one of the things that has been a change for me over the last several years is that I prefer to move forward in my life being completely honest with who I am, not hiding any aspects of myself, including the stuff that in the past I'd be afraid to share. 

**Lenny** (00:05:29):
Well, on that topic, I'd love for you to just walk us through the path that you've taken. Basically, you're like me in a sense. You're helping companies build product, drive growth, worked with some of the best companies in the world, and then things took a turn. So could you just start with a brief overview of what happened? 

**Andy Johns** (00:05:48):
Sure. So the short background is I spent about 17 years working in the world of startups. I think on the whole, it was a successful experience. I managed to land at a handful of really good companies and had a great experience, but along the way, despite having built somewhat of an impressive resume, I guess you could say, I was also struggling quite a bit in terms of my emotional, psychological, and spiritual health. So in some ways, it feels like the cliche that as my career reached its pinnacle, that from a professional, from a financial perspective, I was at my highest, but when it came to other aspects of my life, I was arguably at my lowest or close to my lowest. 

**Andy Johns** (00:06:43):
So even though I had those successes, there was a lot that I needed to work through that was under the hood, which I eventually came to understand very, very deeply as a result of turning inward and doing a lot of work on my own path towards self-understanding and healing some deep emotional wounds.

**Lenny** (00:07:04):
In a post that you worked on for my newsletter back in the day, you shared this story of, I think maybe it was at Wealthfront where you were giving a big presentation. Maybe share that story?

**Andy Johns** (00:07:14):
Sure. I can share that. It actually goes back to ... This is 2010. I was at Twitter at the time. I was in my late 20s. Again, my career was going really well. I was starting to string together a series of successful experiences, and I was suddenly hit with near constant panic, panic attacks, depression. I was having a very, very difficult time sleeping and just managing my emotions as a whole. It got to the point to where there were several occasions while I was at work where I could tell that I was about ready to have a breakdown of sorts, and I would just grab my laptop, throw it in my bag, and pretty quietly just walk out of the office even if it was 10:00 AM and I'd only been there for an hour or two. That happened on multiple occasions. 

**Andy Johns** (00:08:07):
There were some occasions in which I was set up to go and speak to the entire company during an all-hands session, and it was something where I just had to come up with an excuse and bow out of it because at the time, I was already completely overcome and overwhelmed by this near constant panic I was experiencing, but I had a really good poker face, I don't think most people could see it.

**Andy Johns** (00:08:34):
To give a little bit of an explanation and to tie first question together with this, there were two major things that contributed to me having a pretty acute case of burnout and needing to step away from my career as I knew it. The first was just the slow and steady accumulation of the pressure, the stresses, the anxieties, the emotional ups and downs that came from having such a strong commitment to my career, and frankly an addiction to achievement as a way to feel good and to feel whole, but I was so focused on my work that I had slowly become the frog that was boiling in the pot, the typical analogy of you don't realize how bad things are getting because it's happening to you slowly until it happens quickly, right?

**Andy Johns** (00:09:38):
So on one hand, I was not only struggling emotionally and psychologically because of the pressures of the career and climbing the ladder and just the common existential angst that comes with being at a startup and not knowing what the future holds. What I later came to understand was that I was also starting to experience and to address old emotional pain that I'd buried for a very long time, stemming back to the death of my mom when I was 10. She was severely mentally ill. She was bipolar, had bouts of psychosis, and had spent time in and out of psychiatric hospitals. I can remember going to those hospitals as some of my earliest memories as a kid.

**Andy Johns** (00:10:33):
So there was a lot of disruption in my childhood, a lot of neglect, some occasional abuse, and then it culminated with the loss of the most important female figure in my life when I was 10. Of course, like anyone else after that, I was in a lot of pain emotionally, but as a kid, you don't have the tools or even the capabilities to effectively process something as significant and traumatic as an experience like that. 

**Andy Johns** (00:11:11):
So my mind did what the mind of most children will do, which is it finds a way to bury it or to ignore it. The thing that I had latched onto that made me feel better was that anytime I hit a home run or scored a goal or got straight A's and was just basically a stellar student and a stellar athlete, I was showered with love, not only from my family, which is fantastic, but from society at large, especially within the world that we live in.

**Andy Johns** (00:11:44):
So I learned very early on that if I wanted to feel good, I needed to achieve, and that if I wanted to love myself and be considered lovable by others, I needed to achieve. That pulled me out of a darkness that I was in for several years as a kid, and I'm glad that it did, and it led to an excellent experience in high school, in college, and then well into my 20s, but eventually, those emotional wounds are going to come to the surface. They're going to come up for error, and when they do, it's going to be difficult, and that's what happened with me. 

**Andy Johns** (00:12:24):
So it was really two things coming together at the same time. It was the growing pressures of an escalating career within the dynamic industry, but then also, I think, the natural maturation of my mind and of adult development such that it was time for that old pain to come to the surface, and when it did, it was very disruptive and it's something that I'm still continuing to work on to this day.

**Lenny** (00:12:55):
I imagine many people listening either resonate with some of this or just like, "This is exactly the life I'm living." I know you work with people now helping them through these challenges, especially in tech. So two questions there. One is just you've done polls around this. Just what percentage of people in tech have you seen struggle with these sorts of things on some degree?

**Andy Johns** (00:13:16):
For the last two years, I've been doing a lot of writing, and most of my writing has really just been me opening up and sharing this personal side of what was going on behind the scenes. Along the way, I've been able to connect with, at this point, hundreds of folks in the tech industry who are dealing with their own forms of burnout or their own deep existential questions that are coming to the surface and they're trying to understand them.

**Andy Johns** (00:13:48):
So from some of the surveys I've put out from my own anecdotal experience and from some proper research that's been conducted by experts who focus on entrepreneur and high performer wellbeing, I'd say that it's a fair estimate to say that at least 50% to 60% of tech employees who have, just to give it a bit more nuance, who have been in the saddle, so to speak, for a minimum of five to seven years, they're experiencing some form of psychological and emotional distress. It may be minor enough such that they think it's just day-to-day anxiety, but it's often much more significant than people realize because, again, it creeps up on you slowly and then all of a sudden it hits you quickly.

**Lenny** (00:14:42):
We're going to dive into what this looks like and ways you've found to be helpful to people. One last question before we get there. You walked away from a pretty senior incredible role, and in the post that you wrote, you shared the salary you gave up in that giving up. Can you just talk about what that last role was and then what you had to give up to change career paths and [inaudible 00:15:05]

**Andy Johns** (00:15:04):
Yeah. So one of the things that I did towards the tail end of my career as I became a consumer or founding partner of the consumer arm of an early stage venture capital firm, and most folks know that especially once a fund gets big enough, it can be a high paying job. Suddenly, I found myself in a position where I was making high six figures per year into early seven figures. When I look back on it in retrospect, I had put in so much effort to get to that point really going back to when I was 10 years old, having always been the straight A student and captain of whatever team I was on. 

**Andy Johns** (00:15:46):
From the age of 10 to basically 35, I was switched on, constantly seeking to perform at the top of whatever my field was. So I gotten to that point first as an executive at a high growth startup, that was Wealthfront, and I became president and was next in line to be CEO before I had a health scare with my heart that led to me stepping away from the company because I knew I couldn't take on the CEO position. Then here I was six or seven months later, again, very subconsciously driven by the desire to succeed because underneath that was the sense that I wasn't lovable unless I was succeeding. 

**Andy Johns** (00:16:30):
Here I was after a heart attack scare at the age of 35 sweeping that under the carpet like I'd swept so much stuff under the carpet and choosing to join on as a founding partner of a venture capital firm, which is not an easy job at all, and especially when you're starting a new firm up, it's, in a lot of ways, it's a company in and of its own. So it was another startup. It was my sixth startup in a row. 

**Andy Johns** (00:16:59):
So three years into that though, even though I was working on my own mental health and my emotional wellbeing, I had convinced myself repeatedly for so many years that everything was okay and that I could continue to put my head down and run through these walls, these professional walls and keep going, but it got to a point to where that was no longer the case. 

**Andy Johns** (00:17:32):
In fact, it was the culmination of conversations with my doctors and with the experts that I've been working with where I ended up actually spending 45 days in a mental health institute myself. It was something that was extremely difficult to do. It was something that certainly contributed or was really the tip of the sphere of me stepping away from my career of realizing that the only reason I was continuing to push forward despite how poorly I felt on the inside was because of stuff that had happened to me when I was much younger and because of the fallible nature of the human mind and how it wants to interpret experiences and ways that can become so self-critical and self damaging.

**Andy Johns** (00:18:32):
So that happened for me roughly three years ago. Needless to say, my life has changed quite a bit since then, and I'm happy to chat more about that, but that was a difficult decision to walk away from my career at the peak of it, but I guess the takeaway, and then I'll stop for a bit, is it's important for people to understand that there are formative experiences in our lives which put us in positions to where we form adaptations in order to survive, just like my attachment to achievement and how my self-worth was entirely tied up in that.

**Andy Johns** (00:19:14):
I needed that when I was younger because I was heartbroken, I lost a parent, and that adaptation that I formed saved my life when I was young, and it gave me a great childhood after that, and a great next couple of decades, but these adaptations, if you're unaware of them and if you're unaware of the subconscious drivers that are responsible for them, they run the risk that they go too far, and that these adaptations, which were initially beneficial to you and to your life, they reverse course in a sense, and they become detrimental to your present state and your future development. 

**Andy Johns** (00:20:04):
So my stepping away from the career, stepping away from the high salary, and stepping away from everything I'd worked so hard to obtain was an action that I took in recognition of the fact that that early life adaptation had now gone awry and was responsible for my life heading in a negative direction and it was time to change.

**Lenny** (00:20:30):
The gift of your experience going through all that is that now we can all benefit learning from that. You spend your time these days helping people get over a lot of these challenges that they have. Can you just talk about what it is you spend your time on specifically? Then let's unpack the process that you've come up with to help people through this.

**Andy Johns** (00:20:52):
Now, when people ask me what I do, I say I do mental health advocacy, and I do it in a few ways. One is I sit on the board of a nonprofit called Heroic Hearts Project, and what we do is we raise money so that we can pay for military veterans with PTSD to get access to alternative therapies, namely psychedelic assisted psychotherapy. It was started by a handful of veterans. I was lucky enough to meet a few of them a couple of years ago. Given my own personal experience with PTSD stemming from my childhood experiences, I was bonded together with these men and women of the Armed Forces who had, in many cases, not only their own personal trauma, but also war trauma. So that's one organization that I'm thankful to be able to work with and help out. 

**Andy Johns** (00:21:48):
I also write my newsletter and have created a new website that I'm toying with. In general, my writing and the content that I've put out is focused on the unhappy achievers, the other folks like myself who are out there, which there's quite a few of us. I write in order to express my personal experience because I think there's many others that can relate. So those are the things that I've been working on and a little bit of coaching with some of the high performers as well.

**Lenny** (00:22:23):
Throw out the website in case people want to check it out while we're talking.

**Andy Johns** (00:22:26):
The website that I'm playing around with is called Clues.Life, clues as in questions, clues, not truth dot life or facts dot life. I called it Clues Dot Life for a reason because if there's one thing that I've learned in my own personal journey, it's that given the immense heterogeneity of the human population and how we're all born unique and then we're made further unique through our own individual life experiences, the thing that's clear to me is that if somebody is going through their own struggles, at the end of the day, they have to find the philosophies, the tools, and the methods that work for them. 

**Andy Johns** (00:23:08):
You can read plenty of studies, you can read the books, you can listen to what others are doing, but at the end of the day, you got to personalize it to yourself. So that's why I called it Clues Dot Life because I'm building this library of mental health information that allows people to navigate all of this information in search of their own clues.

**Lenny** (00:23:28):
Awesome, and we'll link to that in the show notes, but it's an easy URL to remember. Something you spent a lot of your time on as you've talked about is helping people through deep personal transformation. That's the way you describe it. What is involved in that process of someone going through a deep personal transformation?

**Andy Johns** (00:23:47):
I love this question. So most of the conversations I have are with folks who are going through significant change. Now, what's involved in that? It can happen on a spectrum where everyone's process is unique. We all change and unfold in identical ways. Some can go through subtle shifts. I've heard this referred to as a micro transition, where, for example, they may be working at a tech industry or at a tech company, but this specific company they're working at, they have no real values connection to it. So part of their suffering is the fact that they feel that the work that they're doing doesn't really matter or they don't feel a connection to it. So switching to work at a different company that's aligned with something that's consistent with their values, that may be enough for somebody to go through a small transition and then find themselves in a happier place. 

**Andy Johns** (00:24:52):
The transitions that I talk about are the big fundamental ones like the transition that I've been going through myself. Now, what's involved in that? I think that there are four parts, just to give it a simple general framework. Step one is it begins with suffering. These large transitions in life rarely take place in the absence of suffering. So step number one is suffer. Usually, the deeper somebody suffers, the more significant the transition that may follow. There's a reason why in the 12 steps community like Alcoholics Anonymous, Narcotics Anonymous, you name it, there's a reason that rock bottom is in the vernacular because rock bottom tends to proceed somebody getting sober. So step one is suffering. 

**Andy Johns** (00:25:53):
Step two is seeking the truth behind why we suffer. Once the suffering gets so bad in somebody through some spiritual intervention, a legal intervention, the intervention of friends and family, whatever it may be, they decide to change, and in order to change, you have to understand the truth as to who you are and why you are the way you are and why you're suffering. The answer lies in understanding the truth, and that is usually a long process. Digging through the subconscious mind, digging through your history and your past, digging through your relationships, that takes a lot of time. It takes a lot of time to remove the mental blocks that we might've spent decades developing such that we don't even see these patterns that we play out regularly. 

**Andy Johns** (00:26:51):
So first, you begin with suffering, and then second, you seek the truth for your suffering. What I have found, and that leads to step three in the process, is that once you discover the truth of your suffering, the real root cause of it and where it came from, that's when you move to step three, which is you begin to experience and to practice self-compassion and self-love because inevitably, what you discover through this process of seeking the truth is that your suffering isn't necessarily your fault. Maybe you're suffering because of things that you experienced or had to go through of which you had no control over.

**Andy Johns** (00:27:44):
Nonetheless, it's common for the mind, especially the mind of a child, to interpret those less than nurturing experiences as, "This happened because of me." So what sits at the core of their suffering is not only a low sense of self, but a shame, a shame regarding who they are and who they believe themselves to be. 

**Andy Johns** (00:28:08):
When you dig deep enough into your own self-understanding, eventually you'll discover that that's not true, that it isn't your fault, that these things swept you up like a wave, and you were just along for a ride of which you had no choice. When you understand that and you start to feel a sense of forgiveness and to begin to love yourself for the first time, you make this switch where then you're willing to live in a way that is more consistent with self-love and self-compassion. 

**Andy Johns** (00:28:45):
So me, for example, stepping away from my career, at the end of the day, I wasn't running from something, I was running back towards myself. That was an act of kindness towards myself. Going into a 45-day hospitalization, that was an act of love. So what ends up happening is the truth fuels that process of self-love, and when you begin to live in a way that is consistent with valuing yourself and understanding that it's not your fault, then that's when you move to step four, which is compassion towards others because by understanding yourself and realizing the true nature of why you are the way you are and forgiving yourself because you understand it's not your fault, guess what? You see the same thing in everybody else. 

**Andy Johns** (00:29:46):
This is what is meant when folks sometimes say we're all adults or we're all children walking around in adult bodies, right? We're just acting out the things that were done to us in the past because when I think of the human mind, there are many ways that you can describe what the brain is, but one way that I describe it certainly is that it's autobiographical. It tries to predict what's going to happen next based on what happened in the past. It's a prediction engine. That's what it does, and that's why I say it's autobiographical because the way that you present yourself to the world as an adult is a reflection of what happened to you in the past, the messages you were told, the ways you were conditioned by society, maybe the traumas you experienced. 

**Andy Johns** (00:30:36):
So that's the process as I see it of deep, deep, deep transformation. It's that four-step process of the suffering, the seeking of truth, the living in a way that is compassionate towards oneself, and then living in a way that is compassionate towards others. When you do that, you change. Think of that as the horizontal foundation to which the rest of your external life is built. The place you choose to live, the partner you choose to have, the friends you have, the career you have, all of these things are erections on top of a foundation of identity, and that identity is what is completely rewired when somebody goes through that four-step process, and as a result, everything that's built on top of that identity, it doesn't necessarily have to change, but it might.

**Lenny** (00:31:41):
That feels like a reason somebody wouldn't want to go down this journey of, "I don't want to change everything about myself."

**Andy Johns** (00:31:48):
Yes, and this is the power of the human mind at work or what someone referred to as the ego. As soon as the ego senses that something wants to challenge it and to undermine its authority, it finds a way to push it away. It finds a way to ignore it because it is a very difficult process. I now understand what some philosophers described as death before dying. In this process of change that I've been going through, it's been the death of the old me, the death of Andy whose identity was entirely attached to succeeding, and that old Andy doesn't want to let go. It's been around for a few decades. It believes that it's there to protect me. 

**Andy Johns** (00:32:46):
This is a survival mechanism that's somewhat gone awry within the context of modern life. So it doesn't want to let go, but that's what I've been doing. That's the process I've been going through is slowly but surely finding a way to take my fingers off the steering wheel and to let that old sense of self die, and then in doing so create the room for what's next, whatever that may be. I'm three years into the process of discovering what that will be. So we'll see.

**Lenny** (00:33:24):
Thinking through these four steps, suffering sounds like people will just do that naturally, potentially, and I feel like it gets hard at the understanding the source of that suffering. I guess, one, is that true or do people try to resist that suffering and are just like, "Nah, it's okay, it's okay," and they white knuckle it?

**Andy Johns** (00:33:45):
I think you're pretty spot on with it. This dips into a lot of the ancient Eastern spiritual traditions of just this recognition that life involves suffering. One way or another, there's going to be suffering. I think of it as there's two types of suffering. There's the necessary suffering like we're going to get old and our bodies are going to hurt and we're going to have physical ailments and toothaches and shit's just going to happen and we're going to lose the people we love, all of us, and the 80 to a hundred billion homo sapiens that live before us gone through the same thing. 

**Andy Johns** (00:34:29):
So there is necessary suffering in life or the mandatory suffering, and then there's the unnecessary suffering, which is the suffering that is almost entirely, and I think the argument could be made that it's entirely made up in our minds. This is the superpowers of the human mind gone awry again in the modern context. So there's going to be a lot of suffering one way or another. I think if there's a goal or objective, it's to minimize the unnecessary suffering, but the seeking of the truth part is very difficult. It takes years.

**Andy Johns** (00:35:10):
There's a reason that, again, in some of these spiritual traditions, let's take Buddhism for example, there's a reason that there's so much structure and discipline and there's a daily method that they adhere to because it turns out it takes daily practice. In the same way that if you want to get extremely fit and climb Mount Everest, that's not something you do by just getting off the couch, right? It takes a dedication to it. I think that the seeking of truth takes that dedication, and that's, again, why I believe that the first step is almost always suffering because to undergo that process of personal transformation, which can be very difficult, and it can feel like you're in a life raft and you've just pushed away from the shore completely untethered, uncertain of where you're floating. In order to work up the courage to get to that point, things typically have to get pretty bad.

**Andy Johns** (00:36:09):
You say, "I can't fucking do this anymore. I'm not going to live like this. Something's got to change." So much of that seeking of the truth is actually at first driven by intense fear, fear of going back to how bad things were and feeling that bad again. Eventually, the process changes tone when you move past the fear stage and you understand yourself enough and then you start to look forward optimistically towards the future, where instead of just being driven by fear, you're also pulled forward by a vision for the future that inspires you. So that eventually comes, but to begin with, yes, this process of discovering the truth is very, very, very, very difficult. It requires a personal commitment. It's not something anyone else can do for you.

**Lenny** (00:37:02):
With that context in mind that it's very difficult, I imagine many people listening are like, "Yes, I have a lot of suffering that I'm going through. Life is hard, work is hard, work is too crazy," especially product managers and founders that listen to this podcast.

**Andy Johns** (00:37:19):
I know. To all the VPs of Product out there, I'm so sorry. I've been in your shoes.

**Lenny** (00:37:24):
So with that, say someone wanted to go down this path and understand the truth of what is the source of this suffering that you even described as unnecessary and made up, what would the first couple steps be of knowing that it's going to take years potentially of how to actually try to understand this?

**Andy Johns** (00:37:40):
Commonly in the West, the first step that makes a lot of sense is you turn to somebody who's trained in helping you figure out what those truths are, which is a therapist or a psychologist or a psychiatrist or a counselor. Sometimes people turn to religious or spiritual leaders because they can be quite gifted in this as well. That's the most common step. 

**Andy Johns** (00:38:02):
That's the first step that I turn to when I was just completely stricken by panic and terrified that I might harm myself. I said, "I got to figure out what the hell's going on because I can't live feeling like this," and all I knew to do was reach out to a therapist, and that is a wonderful first start because if anything, they're not going to have all the answers, but they can act like a router, where as they're helping you understand yourself and they're really understanding you, they're thinking about, "Okay. Who might this person also benefit from speaking with? Let's route them to this person that specializes in body-based work, somatic work. Let's send this person to somebody that specializes in nervous system management through breath work or other things." So seeking a therapist is a pretty good first step.

**Lenny** (00:39:00):
Any advice on how to figure out who the right therapist or wrong therapist is for you? I know you've actually shared somewhere on LinkedIn once that there's also a lot of disagreement within the mental health community of what is the right approach and what's the right solution.

**Andy Johns** (00:39:13):
It's like speed dating at first because I would argue that the most important factor is that you feel safe. Animals can teach us so much about what it means to heal ourselves. Imagine going to the pound and you go in there and there's a bunch of dogs that have been picked up off the street or that have been abandoned, and the vast majority of them, they're a nervous wreck, right? Their tail is down in between their legs. They're hunched over and they might be shaking. Their nervous system is completely overwhelmed. That is not the time to teach a dog tricks. When the dog still can't come out the corner of the kennel is not the time to teach it how to sit. Once that dog can make it into the arms of an owner that it feels safe with and loved by, that's when you see the dog transform and change, and that's when you can teach it a lot because it's open and receptive to it.

**Andy Johns** (00:40:21):
So that's number one in my advice is speed date if you've got the opportunity to and try out a few therapists and just go based on intuition, what just feels right to you, and you're going to want to fall into that feeling of comfort. Now, a quick asterisk on that. Of course if you're in real distress, if you're in a bad place, just see whatever professional you can as soon as possible. That's what I did. I was fortunate to where the first one that I saw was also fantastic. I ended up seeing many other specialists over the years, but that first one, she was wonderful.

**Andy Johns** (00:41:05):
So it's essential that you feel comfortable with them. I would also say, this one's a little controversial, but you're going to want a therapist that is at least as intelligent, if not more intelligent than you because I think part of that openness to learning from them and to feeling somewhat comfortable but also feeling inspired and looking forward to it as if sometimes they say things that make you say, "Oh, shit. Wow. Wow, I never thought of that. That was smart," or, "That was a wonderful insight." I don't think if you respect their intellectual abilities, then it's going to be difficult for them to help you. They may not be able to communicate on the same wavelength. So you really want to look for that intuitive feeling of something that is safe and comfortable. Ideally, if you can find somebody with some intellectual horsepower that matches your own, honestly, I think the rest after that is just implementation details.

**Lenny** (00:42:11):
If someone maybe isn't ready for a therapist and that's something about that just holds them back, is there another route that you would recommend people take or is it just go straight to a therapist?

**Andy Johns** (00:42:23):
Absolutely. Absolutely. If you're not in a state of distress, but you feel like there's something to be figured out, there's an ancient technology known as pen and paper. At the end of the day, the seeking of the truth involves the seeking of a deep sense of self-understanding, and if you can get into the daily practice of being able to sit down with pen and paper and write to yourself, to ask yourself questions, to really sit there and evaluate the thoughts that are running through your head, it is possible for somebody to, and I'll use the term, I won't get into it, but to reach some state of bliss or enlightenment or some real spiritual awakening, it is possible for somebody to do that entirely on their own with just pen and paper and a quiet room. 

**Andy Johns** (00:43:20):
I know people that have arrived at a deep place of self-love and self-understanding through those methods, and I know a lot of others, including myself, where the writing to others was really the writing to myself 15 years ago as a way for me to continue to understand myself more deeply. So I think pen and paper is deeply, deeply overlooked and underrated in this process.

**Lenny** (00:43:48):
Say you get a pen and paper, is there some guide or framework or something you'd point people to you to think through what to think about and how to approach this?

**Andy Johns** (00:43:58):
Yeah. There are different ways of doing it. Some advocate for a completely unstructured approach because what you want is you don't want to turn it into assignment. You want to feel your way into it. If something is bubbling up in your mind, just spit it out. Don't analyze why it's coming up, just allow it to flow. That method certainly works. Sit down with no agenda. On some days you'll write one sentence and that's enough, and on other days you'll write 10 pages and that's also enough. There's some magic to allowing the human mind to just work and to not interrupt it through some analytical process. 

**Andy Johns** (00:44:40):
On the flip side, if you want a little bit more structure, one thing you can do is I'd like to start with if the goal is to understand oneself, then one of the quickest ways of doing that is to quickly write down a list of simple bullet points of the most recent situations you can think of where you became most acutely reactionary and emotional. You could have been having a political conversation with somebody and they said something that really just you felt like you just wanted to reach out and strangle them. You could have felt deeply insecure in a social setting. 

**Andy Johns** (00:45:24):
Just run through those scenarios where something disrupted what might've been your current state of presence and calmness. When you identify those situations where there was some strong reaction, that is very revealing because that wasn't a conscious thought process that led to the reaction. That was a knee-jerk reaction. That was a reflex. If there's a reflex, then there's something that's underlying the reflex, and the question to then ask is, "Why did that happen?" 

**Andy Johns** (00:45:58):
Then from there, it's an unstructured process. Keep asking, keep digging, keep asking, "Okay. If this happened, why did that happen? Well ..." and then write a little bit, "Well, is that really the reason why? Was there something else?" Just keep working at it until you hit the truth, and you'll know what the truth is because it always feels either deeply uncomfortable or it feels like an epiphany.

**Lenny** (00:46:26):
Wow. For you that was recognizing that it was about your mom.

**Andy Johns** (00:46:32):
There were many parts of it. At its core, at first it began with a simple truth, which was I went into the therapist, I was describing what I was feeling, I was describing the uncontrollable thoughts and mental imagery that I was experiencing, and my sleep disruption, and my pounding heart, and everything else, and she said, "Yup, you're having panic attacks," and just knowing like, "Oh, there's a thing and it's called a panic attack," starting at that basic truth was enough in the moment to just take a little bit of the edge off. 

**Andy Johns** (00:47:18):
So this journey along the way is there are dozens of truths and then hundreds of truths, and then every now and then it's punctuated by the big, "Oh, holy shit. I never saw that coming," kind of truth. It's just what the experience is. I had many, many truths about myself that I discovered before I hit some of the fundamental ones that were at the core of my subconscious.

**Lenny** (00:47:48):
Following in that thread, what are signs that you're in need of this transformation versus, "Work is just stressful. Things are hard. I have some challenging meetings," which a lot of people go through on and off? I've had a lot of those. What are signs maybe you're boarding out or something that requires, "Wow, I really need to dig a lot deeper"?

**Andy Johns** (00:48:09):
There are day-to-day stresses that are normal and we just have to put up with, but then there's the other stuff that's the flashing red alarm. For me, and a lot of the research and literature supports this too, is, again, you can go back to animals. It's like when their fundamental functions, when their core behaviors of diet, exercise, playfulness, socialization, sleep, when those things get disrupted, it's a sign that there is something going on here that you need to take a look at. 

**Andy Johns** (00:48:49):
So the same is true with people. If your sleep always sucks, if your relationships are constantly strained or frequently strained, if your physical health is failing, there's so many ways that that can be measured so there's really no excuse for that to say, "Oh, I just didn't know," I'd say it's to look at those things. When those are suffering or when they're really out of whack, it's undeniable that there is something that is detrimental to your wellbeing that's going on right now, and your body is telling you, "Stop. Something needs to change." So that is number one to look at. Look at the fundamentals.

**Andy Johns** (00:49:43):
Reflecting on my own situation, I almost had a heart attack at 35, and I got the classic talk from a Stanford cardiologist saying, "You're just going to be another 40-something-year-old CEO with a broken heart." The years of really poor sleep, the number of teeth that I had broken that I had to have fixed multiple times because for years my grinding was so bad that I had to, now two times over, had to completely redo all the teeth, all my molars, and then most of the front teeth as well, and I just continued to move forward even though my body was, again, throwing out all the signals.

**Andy Johns** (00:50:31):
For anyone who's listening to this, especially for the folks who haven't, go get the book, The Body Keeps the Score by Bessel van der Kolk. He's a expert clinician who's worked with trauma patients for decades, and the entire book is basically one big message saying, "Hey, when mental health presents itself, look to the body because it's the body that is keeping the score." It's the body that's the scoreboard, and it's the body that is actually holding on to all of this shit you've been carrying for years, and eventually, the body breaks in the form of chronic disease and illness and so on and so forth.

**Lenny** (00:51:12):
**Andy Johns** (00:52:56):
It's likely this deeply internalized self-belief. You can think of that as one of the deepest grooves in the neural pathways in your mind. Now, that was the case for me, so deep that you don't even realize that it's there, it's omnipresent. It's going to take time to rewire that because what you're effectively trying to do is take an internal narrative and edit and rewrite that thing, and this internal narrative is probably at a foothold in you for years or decades. So it's reasonable to believe or to understand that, "Okay. If I have not had a high opinion of myself for 30 years, that's not going to change overnight." 

**Andy Johns** (00:53:50):
For some people, it miraculously does. That's not the norm. For most others, including myself, it starts with that truth stage because with truth is the awareness, "Okay. I understand that I have a low sense of self-worth, and I understand that it plays out in all these ways, and I have the awareness of it that now when I'm doing something that is a conditioned behavior or a conditioned response born out of that deep self-belief or that negative core belief, then when I spot it, there's an opportunity for me to intervene," and it starts in the simple ways. 

**Andy Johns** (00:54:31):
For example, I had a boss once where he would come over and he would give me praise all the time. He was wonderful human being, and I think I was doing a good job. One day, he swung by, he said, "Hey, amazing job," and my response was, "Oh, yeah, I did my best," and then he looked at me and he said, "Hey, say thank you or you're welcome. That's it. When somebody gives you a compliment, just say thanks, accept it." So it's become a pattern of mine now that if somebody gives me a compliment, I look them in the eyes and I say, "Thank you," and I really try and embrace that little moment because it's in all of those ways where you identify these little patterns, you intercept them, and you choose to make a change to how you're conditioned to behave in that moment. If you do that consistently enough and you keep practicing it, and you keep it up every day, then you're developing a new internal narrative through all those little actions, and it accumulates in ways that are pretty powerful. 

**Andy Johns** (00:55:43):
Every now and then, there's things that you can do that are more of a brute force method of driving that home. Some may find it through a Vipassana retreat, a seven to 10-day silent retreat, which is agonizing if folks haven't tried to be that quiet that long. Things bubble up, you confront the stuff in your mind that in our day-to-day, it's easy to just keep it under the hood. Some find that through psychedelics. Some find that through somewhat extreme physical feats. 

**Andy Johns** (00:56:22):
There was a period in time where I didn't realize this at the time, but not only was I building my career, but I was running ultra marathons. Looking back at that I was like, "Yeah, there I was, another desperate attempt to feel worthy," but I also recognize now that that was medicine for me, that me going out onto a remote mountain range for five hours every Saturday and just running well beyond the point of discomfort was consistently cathartic for me. I would cry at the end of almost every single one of those runs. So it's just a recap. It's in those little moments and sometimes in those big moments too, but it begins with the awareness based on truth and then the daily practice.

**Lenny** (00:57:17):
How long does this process often take for people that you've worked with?

**Andy Johns** (00:57:21):
There are some famous figures that you can turn to. For example, Eckhart Tolle. He wrote The Power of Now, which he's probably most famous for. He's a great Western spiritual teacher of Eastern traditions. He went through immense suffering himself. Actually, the suffering was so great that for him it led to a somewhat sudden and spontaneous collapse of his sense of identity. Doctors would probably say psychosis, and what he actually had was a spiritual liberation, liberation from his mind, but he describes it himself. In reading his book and listening to some of his lectures and talking about his own journey, he wrote this at, I think, in the first chapter or the preface of The Power of Now when he described the suffering that he was experiencing and the sudden collapse of this sense of identity, and then waking up the next day and feeling this deep sense of peace and freedom for the first time in his life.

**Andy Johns** (00:58:28):
Then his journey continued to unfold. He eventually started to research to try and understand, "What had just happened to me? What experience did I have?" and dot, dot, dot. Seven years later, he woke up one day and realized he was now a spiritual teacher, seven years. It's not that the journey had ended, but to use a metaphor of two mountains and a valley, that first mountain in his life when he got off of that mountain and he entered this valley, between the first mountain of life and the second mountain of life, the valley that he was in that sat between the old sense of self and then this new sense of self as a spiritual teacher, that valley was seven years for him. 

**Andy Johns** (00:59:22):
There are many other examples I can pull up like that, including Siddhartha Gautama, Lord Buddha himself. That wasn't a couple weeks or a couple of months, his journey towards liberation from his own mind. If I can recall, that was also a seven or eight-year journey. So these big shifts on a cosmic universal scale, it's instantaneous, right? On the scale of-

**Lenny** (00:59:50):
[inaudible 00:59:50] context.

**Andy Johns** (00:59:50):
Yeah. On the scale of 13 billion years, it's instant, but from our perspective, it's not. It feels a lot longer than that.

**Lenny** (01:00:00):
I want to close the loop on these four steps that you shared, and the one we haven't talked about yet is the last one, which is building compassion towards others. How do you go about that just broadly? I know we're not going to solve that problem for people in the podcast.

**Andy Johns** (01:00:14):
For me, my experience was that it happened automatically. When you do the first three, it is the result. It's the thing that comes out of step number three itself because, again, when you dig deep enough and you keep searching for the truth, you're like Captain Ahab going down with the white whale in Moby Dick. That is what that book is about. It's not about a fisherman going after a whale. This is the author himself through a story talking about his own journey of emotional and spiritual liberation. 

**Andy Johns** (01:00:57):
There are many people that would, experts and historians that might disagree with that, and I would disagree with them that it's a story of seeking the truth at all costs to liberate oneself, including being willing to die for that whale, metaphorically, because at the end of the book, they don't really reveal. Did Ahab actually go down with the whale and never come back? Maybe he did, maybe he didn't. 

**Andy Johns** (01:01:27):
So when you have suffered enough and the search for the truth becomes the only thing that matters and that truth leads you to understanding that, "It's okay. I can accept myself for who I am and it's not all my fault," when that has been done in earnest and when you feel those moments of love for yourself, it suddenly changes how you see everybody else. For me, step four was the easiest because it just happened. It happened after eight years, nine years of my own on and off mental health journey, but it finally happened.

**Lenny** (01:02:19):
People who are listening to this say they're a VP of Product and they're like, "I don't want to become a spiritual teacher. I want to stay on this path. I want to have a successful career. I want to continue to make a bunch of money." How often do you find there's a path to stay on that path with a rejiggering of how you see the world or does it, if you're suffering enough, does it almost always lead to something completely different in your experience?

**Andy Johns** (01:02:46):
Again, it's a spectrum. What I've experienced is that the vast majority of people who feel some tug to undergo a process of change, I'd say 90%, 95% of the time pretty confidently I can say that those changes are more of the micro transitions. It's, "Okay. Let me change my job. Let me downsize my house. Let me break up with my partner." Still hard things, and for them, that may be all that is needed and necessary. There's no moral judgment on my side about everyone's got to dive into the deep end. That's certainly not the case, and I'm not advocating for it. I honestly don't even know if it's a choice. There's a part of me that, based on some of the experiences I've had, believes that it was somewhat preordained and that this was going to happen for me, but it's in the minority of cases where the radical transformation of one's sense of identity takes place. It's not common. My general sense is it's definitely less than 1% of the population, and I suspect that's just the way things are.

**Lenny** (01:04:11):
One of those ends up being Buddha, and one of those ends up being Andy Johns.

**Andy Johns** (01:04:16):
Yeah, or another popular figure in Western spirituality is Pema Chödrön, who she's got a lot of great books. One of them is titled When Things Fall Apart, some of the first books I read when things fell apart for me. Her story, actually, she used to live in Berkeley, I think, but an American woman. She was married. First marriage didn't work out. She got married again. Second one didn't work out. It ended in somewhat sudden and expected and catastrophic fashion. Here she is with a few children and a broken heart again and deep emotional suffering, and that suffering was so great that it led her to ultimately say, "I must pursue these teachings and this spiritual tradition that I'm starting to wake up to in the Eastern traditions," with Buddhism in particular because she had suffered so much that she needed to find liberation from that.

**Andy Johns** (01:05:25):
In her case, that even meant separating, not all the time, but a significant portion of her time away from her own children who, if I recall correctly, were early teens timeframe. Now, I think that Pema Chödrön is the only female Buddhist nun in all of North America and is a very well-known spiritual teacher. I also think her journey was somewhere around seven or eight years. Again, that's just the valley between two mountains. Truthfully, the journey continues for the rest of your life, but just another example I wanted to share.

**Lenny** (01:06:06):
There's some obvious reasons why going down this path is difficult, why making change is hard. What else would you say holds people back from making a big change in their life, and maybe on the flip side is just how do you allow change to happen?

**Andy Johns** (01:06:20):
A significant thing that holds people back from change is the inertia of civilization because we all experience a fundamental conflict in our life because when we're born, we have many needs, but there are two substantial needs that are immutable in everyone, especially children. The first need is the need for love, acceptance, and connection for mammals. We have one of the longest gestation periods of the entire animal kingdom, and even when we're born, we're helpless, we can't survive. We need nurturing for many, many more years afterwards in order to survive. 

**Andy Johns** (01:07:13):
That goes hand-in-hand with our need for connection. So we're biologically hardwired to need to be accepted and connected because it is perhaps the most essential thing to survival, more essential than water. So we're born with that need. Yet at the same time, we're also born as unique individuals. 

**Andy Johns** (01:07:37):
I read a study where the scientists estimated the probability that two sperm or two egg would be genetically identical. For context, I think the average man generates in their prime somewhere around between 10 to 100 million sperm a day. So we generate a lot of sperm in our lifetime. The math that they came up with was that the probability of two sperm being identical is roughly 10 to the 15th power, which is a million times greater than the number of stars in the Milky Way galaxy. There's somewhere between 100 to 400 billion stars in the galaxy. So it's a million times greater than that. So all that is to say is when you were born, you were unique. There's never been a you before ever, and it's going to be a really, really long time or another dimension before another one of you shows up again. 

**Andy Johns** (01:08:32):
Then further through the socialization of life, we all have unique experiences, and those experiences are passed through this unique prism of our own mind and genetics to where we're further accentuated as individuals. So we're born with this fundamental need to be connected and to be loved, but we're also born with this need to be ourselves and to express ourselves. What ends up happening though is the world that you're born into eventually conditions you away from the unique individual that you were, and that is the function of society. 

**Andy Johns** (01:09:09):
Society operates because enough people choose to agree on the same beliefs and ideas around the style of education, of raising children, of city planning, of millions of things. So the substrate of society or the adhesive of it is shared belief. So that's why I say the inertia of civilization or I should have said the inertia of society is because you're born into a world that begins to condition you at a very early age to act a certain way and not act a certain way, believe some things and don't believe others. 

**Andy Johns** (01:09:48):
Why am I a San Francisco Giants fan? Well, because I grew up in a Giants family. It's not like I was two years old and I picked the Giants. It doesn't work that way. What ends up happening then is, and this begins, again, really young. You're two, three, four, five years old and the world around you, namely the adults in the world, start telling you who to be, and it begins to challenge or run into conflict with that individuality, but because our fear of not being accepted and loved is so great that what do we end up doing? We choose to push down our individuality in exchange for being accepted by the pack, beginning with our parents, and then our friends, and then our teachers, and then our bosses, and all of the other dimensions of society. 

**Andy Johns** (01:10:42):
So we lose who we were before the world told us who to be. It's actually a Carl Jung quote, "The world will ask you who you are, and if you don't know, it'll tell you." So I would say that that is the number one reason why transformation doesn't take place. It's because a long time ago, we made that exchange to forego our individuality in order to be accepted by others because of that deep primal need for love and acceptance. In order to undertake that process of personal transformation, one of the truths you have to realize is that truth, that truth that you are in large part the way you are but because of what the world told you to be, and it's making the choice consciously to then say, "Fuck that, and I'm going to go against the grain and I'm going to now tell the world that I don't want its influence on me anymore, and I will, like Moby Dick or like Ahab going down with the white whale, I am willing to die to return to my individuality and to break free and to be who I want to be in the face of the currents around us regarding the messages around how we should think, live, act, and feel." 

**Andy Johns** (01:12:11):
So that is the thing that prevents transformation. The simple thing is you could say fear, but what is the fear? That is the fear. It's to say, "I'm going to walk my own path now and I'm going to be who I want to be, and I'm going to discover who I was before the world told me who to be, and by doing so, I run the risk that I'm not going to be accepted anymore." That's terrifying.

**Lenny** (01:12:44):
Because it's so terrifying, I imagine that's why the suffering is so important to really feel that because, otherwise, why would you go down that path? It feels very hard.

**Andy Johns** (01:12:57):
Yeah, and that gets to my point earlier around I'm not entirely convinced that this is an act of free will on my part. There have been moments of me intervening and acting with free will, but I believe that there are also undercurrents that would fall into the realm of superstition for a lot of folks that this is the path that was laid out in front of me even before I was born.

**Lenny** (01:13:29):
Along those same lines, you wrote in one of your writings that at the end of the day, you're on your own to find what ends up alleviating your psychological suffering. Can you speak to that?

**Andy Johns** (01:13:41):
Yeah. That really ties in with this point of the uniqueness of people. You have to find what works for you. For some people, it's going to be the ice bath thing. For others it's not. Last year, a quick anecdote, I spent a month working at an animal sanctuary in northern Thailand for abused animals and neglected animals. This place is amazing. They take in anything and they say, "We'll find a way," and that's what they do. So they have hundreds and hundreds of animals, including a large herd of elephants, which is pretty amazing. 

**Andy Johns** (01:14:24):
There was a worker there who I met, and just by the expression on his face, I could tell that this was a liberated man. This was somebody who had figured out something that was contributing to his deep sense of peace. So I went to talk with him. I said, "Hey, something tells me that you figured out the secret to life and I'd like to chat." So we talked, and it turned out that half the time he was a farmer, he had a small little farm, an acre up on a hill in the mountains, and he'd work at his farm half the time and the other half he would then go and work at the animal sanctuary, and he was a practicing Buddhist. 

**Andy Johns** (01:15:15):
One of the things he said to me really stood out. He used a simple analogy. He said, "Everyone's trying to make it to Bangkok. The problem is they're getting to Bangkok by following somebody else's road. The whole point is to find your own path to Bangkok." He was making that same point or a similar point of you've got to find your own way. That is the message. For me, I take that as maybe the most fundamental message in looking back at the story of the original Buddha himself was, sure, the teachings, the traditions, everything that's formed around his teachings has power and merit to it, but I look at what he did. He was born as a prince into a royal family. Something wasn't right, and he was seeking the truth behind this anguish and this unfulfillment, and there was something inside of him that said, "I must seek the answer because growing up in this sheltered life as a prince, this can't be the answer." 

**Andy Johns** (01:16:31):
So he left it all behind, including his wife and child, and then he lived as an aesthetic for years, nearly dying close to starvation. He did that for years. Then eventually he realized, "Well, that's not the answer either." Then he famously made his way to the Bodhi tree and sat under it and meditated for 40, 41 days. I can't recall what it was, a long time. Then he had his enlightenment, and out of that came one of the teachings, which is known as the middle way. It's not about being a prince, it's not about being poor. There's something in between. He found that was his path to Bangkok. You could walk that path and maybe it'll teach you something or it'll lead you nowhere because it's not your own path. I think that's the point.

**Lenny** (01:17:32):
Andy, what a beautiful way to wrap up our conversation. Before we do, is there anything else you want to share that you want to leave listeners with? Then also, I'm just curious how you're doing these days.

**Andy Johns** (01:17:44):
Sure, sure. Well, let me answer the first one, a message to leave to folks. I would imagine that there's a lot of high performers, successful folks out there. Some of you, you may feel like you're on the verge of answering a call towards a new chapter in life or towards finding a way out of whatever situation you're in that you don't want to be in anymore. The thing I guess I would say to you is that having undergone some change myself, all I can promise you is that it's going to be in some ways the best thing that's ever happened to you, but also the worst thing that's ever happened to you, but those are the experiences that define a life. 

**Andy Johns** (01:18:36):
If you feel that call inside of you to seek a new way of living, just know that you're not the only one out there doing it. There are others out there such as myself and that I can always be reached. So I wish you a happy journey and just know that things are going to be okay. Now, the second question, what am I up to nowadays? Is that-

**Lenny** (01:19:03):
How are you doing? How are you doing on this journey?

**Andy Johns** (01:19:06):
I'm good. I still have my ups and downs. I've arrived at an interesting part in my journey where it's something that I'm practicing now and I still don't quite have the hang of it. I'll use one more metaphor. I think the way that I approached the first part of my life was as if life was a big mountain to be climbed, where you're trying to head up Everest under this assumption that once you get to the top, you're going to have this bliss that will persist or that will make you feel that you had a life well-lived, and that that was the answer, but what I experienced was that once I got to the top of one mountain, then I had to find the top of another and another and another. Although you see and do some amazing things along the way, at some point it's too exhausting. At some point, you may really get yourself into trouble and you might not survive. 

**Andy Johns** (01:20:13):
The vast majority of people who die on Mount Everest actually die on the way down, not on the way up. You don't save anything for the return home, I think is the point. Instead of pursuing my life now as a mountain to be climbed in the hopes that reaching the top will make me feel good again, I'm instead trying to float down river. So for example, if you go whitewater rafting, they'll give you a little safety crash course at the beginning. They'll say, "Here's how you paddle. Put your vest on." One of the things they'll ask you is, what do I do if I fall overboard, especially if I fall overboard into the rapids or the cold water? This is maybe the most important thing they teach because commonly what happens if you're in sizable enough rapids and you fall overboard, the tendency is to freak out and to fight the current. When people freak out in the water, especially when the water's choppy, that's when they get in trouble. 

**Andy Johns** (01:21:20):
The thing they teach you to do is instead you go into mummy mode, right? You lay back, you cross your arms across your chest, and you stick your feet out like you're a mummy, and you do the opposite of fighting the current. You allow the current to take you where it's trying to take you. For me, I actually find that I believe that that's a more fitting metaphor for life. It's possible that there's something amazing for us downstream so long as we're willing to surrender and just let go, to turn off the intellectual mind a bit, to quit trying to plan as if you can predict the future, to quit thinking about all the edge cases and trying to optimize our life, which I think is a bunch of bullshit. It's possible that if you just relax and you instead pay attention to the signals around you, you feel where the current is trying to take you, maybe towards a potential life partner, maybe away from an oppressive work environment, maybe towards a place to live that is more calm and peaceful, whatever it may be. 

**Andy Johns** (01:22:33):
If you really tune in with yourself and pay attention to that current and you relax into it, you'll arrive at a destination that you were meant for. In a sense, that's what I did that has brought me to this conversation today. Instead of talking about investing in companies and what have you, I'm instead trying to connect with people on an entirely different level and help them make their own way downstream, so to speak. 

**Andy Johns** (01:23:11):
So for me nowadays, that's how I'm living at the moment. I'm actually in Vietnam. Just got here about 10 days ago because it seemed like the current of life was taking me here right now. It's likely that it's just the next lily pad towards wherever else I'm heading to, but I guess I'm in the mindset now where I'm willing to just surrender and see how it unfolds.

**Lenny** (01:23:35):
The metaphor for that is they lost your luggage on the way to Vietnam, and we had to push back this recording a week.

**Andy Johns** (01:23:41):
Yeah, that's right, that's right. My luggage was half a world away from me, and so when that happened, what could I do? I just said, "Okay. Well, I have shorts and a shirt on me that I can wear for the next three or four days," and that's what I did.

**Lenny** (01:24:00):
Amazing. Andy, I think this might end up being one of the most meaningful episodes of the podcast. I think it's going to end up being a Trojan horse for people are coming here for advice on optimizing their product and growth, and they'll opt up rethinking their whole life, hopefully in a good way, maybe cause some suffering, maybe help people through suffering. Thank you, Andy, so much for being here. Two final questions. You said people could reach out if they're going down this path and maybe need some help or advice. So what's the best way for people to reach out, and then how can listeners be useful to you?

**Andy Johns** (01:24:31):
Sure, a couple ways. You can find me on Twitter, my username is Clues Dot Life, so C-L-U-E-S-D-O-T-L-I-F-E. You can also find me on LinkedIn, search for Andrew Johns, you'll find me on there. You can check out my website Clues.Life. It's a basic MVP, but it's an art project that's in process. So those are a couple of ways that you can reach out. In terms of ways you can help, you can't always tell who you're helping. When I sit behind my laptop and I write and I send my messages out into the world, other than getting some thumbs up here and there, you don't always know what impact you're having. 

**Andy Johns** (01:25:22):
Sometimes it's good to hear because, again, for me, this is part of me rewriting that internal narrative where I'm trying to do more work for the benefit of others as opposed to what it does for my bank account. So if part of this message has been beneficial to you, it would certainly put wind in my sails to hear that. So that would be one way to help.

**Lenny** (01:25:50):
What a great answer. So let's blow up the YouTube comments and send you some DMs and LinkedIn messages if people find this valuable. Andy, thank you again so much for being here.

**Andy Johns** (01:26:02):
Lenny, I appreciate it, man. Thank you.

**Lenny** (01:26:04):
Bye, everyone. 

**Lenny** (01:26:07):
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.

---

## [16/20] Picking sharp problems, increasing virality, and unique product frameworks | Oji Udezue (Typeform, Twitter, Calendly, Atlassian)

**Oji Udezue** (00:00:00):
Products who try to be viral just for what I call synthetic virality that fail. Because in the end, if you're synthetically viral and people get to the product and it sucks, that's it. Slack wasn't even viral, there was no synthetic virality. Slack couldn't even connect to organizations for the longest time. You could be working on the third floor, and someone using Slack on the fourth floor and you would have no clue, there's no way to share it with them. But what happens when you went to lunch? People are like, "We got Slack and this is amazing." And people on the third floor are like, "Holy shit, when can we get it?" Boom, boom, boom. This is the bedrock of virality. Build a great product that solves a sharp problem.

**Lenny** (00:00:37):
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 Oji Udezue. Oji has helped build and grow products at Microsoft. He worked on Windows, outlook, Hotmail and inner Explorer, at Atlassian where he was head of product for all their communication tools, at Calendly, where he was chief product officer, at Twitter where he was head of product for creation and conversation. He's currently chief product officer at Typeform, which I am a happy customer of. Oji has one of the broadest and most interesting careers in product, and he's also one of the most thoughtful humans I've met. In our conversation, Oji shares some of his favorite product frameworks and also why you should be really careful applying frameworks at your company. We dig into what he's learned from Calendly and Atlassian and a Typeform on how to do product led growth successfully, and also how to get really sharp with your ICP or ideal customer profile.

**Oji Udezue** (00:03:12):
Thank you, Lenny. It's a pleasure to be here.

**Lenny** (00:03:14):
It's my pleasure. You've been a PM and a product leader in so many amazing and also just very different companies, all with very different approaches to product and growth. And I think you have this very rare broad perspective on what works in product and growth across a lot of different ways of doing it. And so I have a bunch of questions for you. I hope you came ready for that.

**Oji Udezue** (00:03:34):
I am ready.

**Lenny** (00:03:35):
Okay.

**Oji Udezue** (00:03:36):
Yes, sir.

**Lenny** (00:03:37):
I love it. Okay, so I want to start with frameworks. You've written and shared a bunch of really interesting frameworks for how to think about product and growth, and so I just want to dig into a couple of them. And one of them is around how to find big B2B SaaS ideas and it's around finding the right workflow. Could you just share this framework and also just how founders and also investors can use this idea to find big ideas?

**Oji Udezue** (00:04:01):
Thank you. So I think you're referring to where do you fish to find a unicorn.

**Lenny** (00:04:05):
That's it.

**Oji Udezue** (00:04:06):
And the thing behind that is people can find that on Substack and the Medium, my writings. But the premise is that there's a lot of risk in building startups, and the last decade of product management and startups has really focused on the method of building software and companies. We talk about the lean approach, we talk about fail fast, [inaudible 00:04:28] and so on and so forth. And I think that that was a necessary phase for us because a lot of innovation was just the ideas of founders unvalidated by customers, and we needed this inflection point in our discipline. People need to understand though that customer science is not the solution to everything otherwise OpenAI will never have done anything. It's also innovation. And so the problem space and the solutions to the problems space is still a big driver of success in building software companies.

**Oji Udezue** (00:05:03):
What problem are you really solving? And if you believe that the problem space is key, so what problems will predict success? In B2B SaaS especially, which is much easier to circumscribe is where I start to think about, look, how do you tell from the beginning? Because an investor as well as an operator. Now to segment this space, I think of two dimensions. One is how many departments in the company does the workflow you're trying to solve apply to? Is it just a few or is it all of them? And the second is how intense or how frequent is the workflow executed? Is it daily? Is it weekly? Is it three times a week? And so on and so forth. Now if you draw a nice quadrant of these two things, then you can start to have some predictive power. Things that are useful in every department I call every one workflows, like things like collaboration, like Slack, email, calendaring, workflows, social knowledge and Notion and so on and so forth.

**Oji Udezue** (00:06:04):
And then things that apply to single departments, I call niche and that's what I call niche. And then the intensity is about frequency. A month is not infrequent, daily is super frequent. If you divide the market or the enterprise into frequency and into how broad the workflow is, you can actually have predictive power. And what I found by looking at the biggest company is public and private in each quadrant was that every one frequent workflows intuitively are the most profitable to work on, but also the hardest to get into because they're dominated by Microsoft and Google and very, very large companies. For example, one of my friends is the CEO of Coda. And so this is interesting, because he's in that space, for him to think about.

**Oji Udezue** (00:06:58):
And then the place where B2B SaaS really thrives is niche workflows that are highly frequent. High ni is what I call it, high frequency niche. And then there are the other two quadrants that are a bit more challenging. And then you have to figure out how to navigate your way into one of the other two. If you are in one of the top two quadrants, high ni and high everyone and you solve a really important problem, workflow problem, you can probably turn into a billion-dollar company. If you do the other two, there's some challenges that you have to go through. And the framework talks about how you should navigate those places into success. And I think it's very important because if this is true, and by the way, like I said, I did some validation on it, founders can start to, before they invest years, start to think about what probability of success is. And if you're an investor like me or VC, you can start to think about how you deploy your money.

**Lenny** (00:07:57):
What are examples of companies in each of those quadrants? If you can frame this and I don't know if you have this in your head already.

**Oji Udezue** (00:08:03):
High frequency everyone workflows tend to be things that are done by the doorman to the CEO. So it's email, it's collaboration, it is writing, it is math, all the basic things. At Atlassian, we spend a lot of time thinking about this. So Word, we've had word processing forever in the workspace. Things like Notion and Confluence are huge as sort of evolution of that, Slack, email. Companies in that space, Google, Microsoft, Atlassian, et cetera. And the high ni, which is high frequency niche, you have things like Jira, you have things like tools for recruiters, you have martech, you have sales tech.

**Oji Udezue** (00:08:49):
And we know the companies behind them, Atlassian, Salesforce, so on and so forth. And then in the low frequency everyone, you have things like maybe form tools. And actually, they're not that many of them, low frequency everyone or even expense. Actually, the best expensing. Not everyone does it all the time, but everyone essentially has to do some of it, mostly, at least a lot of people. And then there's a low frequency niche, which is particular department. So planning, which is done by FPNA, but done infrequently, things like that.

**Lenny** (00:09:30):
How frequent is frequent in your experience? Does it have to be once a week at least? What do you think is that minimum bar?

**Oji Udezue** (00:09:39):
Frequent is every day really or multiple times a week. Infrequent starts to be like two times a week, once a month. And of course there's a big interregnum in the middle of that.

**Lenny** (00:09:51):
It's interesting that there are examples of companies that succeeded in those lower quadrants of infrequent, say the expensing use case. Do you have a sense of what it takes to win there? Because I imagine most startups are in that area, and I imagine founders are like, what can we do to win still?

**Oji Udezue** (00:10:05):
Well, this isn't a static framework in the sense that companies are not destined to be one of these things. The essence of strategy is to navigate from the curve of travel is essentially go from the lower to the higher. Atlassian is trying to go from high niche to high everyone with Confluence and with all the tools that they have. People below are trying to get into the high frequency niche by focusing on their core customer. So what it looks like in say low frequency everyone workflows, something like that is, well, if some people are using it infrequently, but they must use it, well that's a good thing. But then maybe you provide a module that is used by the finance department every day, and so suddenly you're moving into the high frequency everyone workflow. So it's about finding a part of the organization that considers this mission-critical and then solving their problems beyond the problems for everyone for example, in that quadrant.

**Lenny** (00:11:08):
Is there an example that comes to mind of either at Calendly or Typeform or Atlassian where you pushed it further up the frequency direction or the everyone direction?

**Oji Udezue** (00:11:17):
For example, at Typeform, now this is real for me, Typeform technically is low frequency niche or low frequency everyone, depending on how easy it is to use and how it surrounds the customer. And one of the things that I'm trying to do as part of product strategy is to move it into high frequency niche, high ni, which is a very productive place to be. So for marketers, for salespeople, I want to make sure that they think of us first. And because we are particularly good at customer facing interactions, if they think that we are the way to win new business and to make money, then a portion of our audience, not every single one of them will consider us high ni. And I think expanding that foothold is the way to navigate a business like that. You can see that with Qualtrics, you can see that with SurveyMonkey. Lots of companies are thinking about how to further unbundle that market for a very, very specific kind of customer. And that is what they're trying to do. They're trying to hit the high ni, even for that more generic workflow.

**Lenny** (00:12:27):
That's an awesome example. You also have this framework that I think you call the zone of benefit, which is around how much better does your solution have to be than the status quo? A lot of people are like, "Hey, look at this product, it's better than what you have now." And usually people are like, "Ah, whatever. It's good enough." And you've had some insights on just how much better it needs to be for people to care. Can you share that?

**Oji Udezue** (00:12:45):
Honestly, the reason I like being a product manager is on any given day, I'm drawing from anthropology, sociology, behavioral economics, leadership, communication skills. I'm trained, I have a master's in engineering, so I'm an engineer as well. I've done marketing and sales, so really pulling from so many things. And the reason I talk about the zone of benefit is ultimately what we're trying to do is impedance match technology to humans. That's it. If you really think about it, that's one essence of what we're trying to do. So the zone of benefit works as a framework because people will not pay for things that don't either really shrink the workflow that they're doing or doesn't give them superpower. So the same amount of time, but twice as much output. But the most important thing is that it has to be noticeable.

**Oji Udezue** (00:13:39):
If you do something 20% better, often people just around you, just as a human, people don't notice. And so for a product to make a difference, it has to be at least two, three more X for people to say, "You know what? This is offering enough value for me to maybe make a switch in cost," and so on and so forth. And it really comes down to look, economic theory tells us that people work for leisure, they work enough to afford their leisure. It's sort of broad, and I know some people don't necessarily do that. Especially in the tech industry, people just love to work. But that is really it, when you think about eight billion people on the planet. And there's a lot of benefit really hones in on the fact that if you're going to help me work less, make about the same amount of money, then for me to notice you, you have to accelerate me by three times for me to care.

**Lenny** (00:14:36):
Okay, awesome. So three times. So the idea there is you should feel like this is three times more productive in the thing that I'm trying to do or saves me three times, I don't know, I do it three times faster.

**Oji Udezue** (00:14:44):
Yeah, that's when people actually feel it and they feel it enough where they part with money.

**Lenny** (00:14:49):
Awesome. And I think what's cool about this is it helps you identify the ICP for your product if you're working a startup or even a new product within an existing product to figure out who exactly is going to most benefit from this. Is that part of this?

**Oji Udezue** (00:15:02):
Yes, yes. Your best customers aren't price sensitive for what you're shooting for because they get it. They fundamentally understand it. So yes, when you're shooting for ICPs, now every startup has marketing problems getting an audience problem. But once you start getting a decent audience, over 100 people or more, you should start to notice the people who are like, "You know what? This, I really care about this." And that starts to tell you a little bit about who's your target audience.

**Lenny** (00:15:33):
Would you be up for sharing the ICP of some of the companies you worked at? Just to give people a sense of what would be a good ICP.

**Oji Udezue** (00:15:40):
I think for Atlassian, it's really kind of obvious. It's developers mostly. But it's tech teams writ large because the fundamental of an R and D team is building stuff. And Jira helps the engineers who actually build stuff to track what they do and to give visibility to it so that they can be valuable to the organization. So that is incontroversial. So the ICP is really clear and have been clear for Atlassian for a very long time. Calendly is this weird company where people don't see all the value. People think it's just casual scheduling. But really the people who care about scheduling the most, and I don't mean calendaring. Calendaring is very different from scheduling.

**Oji Udezue** (00:16:25):
The people who care about scheduling the most are salespeople because it's the lifeblood of them earning money and marketers, because it's the lifeblood of them maybe learning about their customer. Recruiters, because it's the lifeblood of them attracting and scheduling the people that they need to do their job. So Calendly's ICPs were people who were scheduling with people who were not in the organization for some business reason. Typeform is marketers mostly because Typeform exists to make the web talkative, to make it more human. And with Typeform, you can brand that conversation and actually make it conversational because one question at a time, the beautiful design. And so marketers feel like we help their websites talk to each other. Product people think we help their web apps talk to people they care about, UX people feel the same way. So those are some, I think the interesting thing is Twitter.

**Lenny** (00:17:27):
I was going to ask what the ICP for Twitter might be, still.

**Oji Udezue** (00:17:33):
So Twitter is actually more fun in terms of ICP because first of all, I'll talk about the things that's not obvious about Twitter. 30% of Twitter's customer base were unseen, they were media organizations, people like the NFL, the NBA, HBO, who wanted their content to reach more people, to be in conversational spaces. And they were essentially business customers and not seen in the conversation pool, it's not obvious. But we interacted with them all the time and we rev shared ads for their videos, because we're making content all the time. And so Twitter was a way to extend the monetization of that content, that inventory that already had. But when you go to the consumer side of Twitter, who was the ICP?

**Oji Udezue** (00:18:25):
Well, actually Twitter understood, and this is sort of reflected in what Elon Musk is doing these days, that he doesn't seem to understand. And if you ask anyone who was at Twitter, you'll see the understanding in their eyes and the fact that he doesn't understand, because Twitter's ICP is bifurcated. On one side, it is the most accomplished people in the world, the people who have something to say. This is why there's neuro Twitter, there's weather Twitter, there is cancer Twitter, and so on and so forth. In fact, if something breaks, some new innovation happens in the world, it probably breaks on Twitter before it breaks anywhere else, because these are people in informal communities following each other and sharing their results.

**Oji Udezue** (00:19:10):
So basically there's this big circle of experts. We break down into celebrities, we break down into luminaries, leaders and so on and so forth. That's the ICP. Now how does Twitter work? These people attract the other 90% who listen to these people, but also they need to create their own informal communities around the things they're passionate about and have this mimetic relationship with the luminaries and the experts. And that is sort of the planet Twitter, experts on one side, humans who need to connect with the things they're passionate about, the people who are like them, that is the ICP of Twitter, the people who have something to say in those two categories.

**Lenny** (00:19:58):
Are you happy you're not working on Twitter anymore?

**Oji Udezue** (00:20:00):
I am ecstatic, I'm ecstatic. It seems like such a shitshow, no shade on anything or anyone purposely. But look, what's happening is evident. So I don't think I have much to say about that.

**Lenny** (00:20:18):
Yeah, what a wild ride over there. Zooming out on the frameworks question, when I asked you ahead of our chat about what frameworks you love and anything you think would be interesting to share, you had a really interesting response and so I'd love for you to just share your perspective on frameworks broadly.

**Oji Udezue** (00:20:34):
Yeah. Look, I'm two things simultaneously. One is actually, I like frameworks. The way that I try to express them is mental models because the essence of a framework and a mental model is that it is a shortcut. It packages some dense thinking into a way for you to approach a problem or to approach an opinion and so on and so forth. So I do collect them. But I think that what's important, I feel in product management, is to have the ability to understand the fundamentals or the empirical relationship that constructs a framework in the first place. In math, you would call it being able to derive the equation. And the reason that's important is because there's so much uncertainty in what we do. Product management isn't a science. In fact, programming isn't even a science really, because if it was, we'd treat it differently. So the art of building, say a software company that is profitable is not scientific.

**Oji Udezue** (00:21:36):
There's a lot of uncertainty, a lot of unknowns, there's timing issues. So I guess while I love mental models, while I love frameworks, what I want people who listen to me and maybe listen to you to understand is you have to go deeper. Because as situations change, as an investor and advisor to startups, I advise differently if you are just starting, if you're in the middle, and if you're scaling. In the book that I'm writing on product, I actually make that distinction a lot in the book, which stage are you? Because then the thing that applies to you is different. If you understand the fundamentals, you'll be able to use frameworks in a much more productive way because you'll adapt it to your stage, you'll adapt it to the problem. And I think that's really important. I see lots of people using frameworks very blindly, and I think that's harmful to them and harmful to their businesses.

**Lenny** (00:22:31):
What a great segue to where I wanted to take us next, which is around the book that you're writing, which is my understanding is it's product management for product led growth. And I'm on your wait list to find out when it's out, and I saw that the other day you asked people for their advice on what to call the book. Do you have any favorites at this point of what you might title it?

**Oji Udezue** (00:22:50):
Well first of all, there are two things happening with the book. One is I believe PLG is, I have maybe a different definition of PLG, but I think the way that we are basically adapting products to the consumer or to the business professional and using the product itself to sell the value proposition is really key to transitioning from what we used to do 20 years ago to today. Basically, I think even enterprise companies will tend towards a consumer type product management over the next decade than the other way around, that's my bet. And so let's call that PLG, just writ large. And also I think product management is set for growth. So obviously that's good for you, Lenny, because everyone needs to know how to do this.

**Oji Udezue** (00:23:39):
It's an integrative art within building software and software is seeding the world, the book, I want to get very practical. What matters about doing those two things well, and the best titles coming up are, my original title was Building Rocket Ships. So it's like how do you think through all the different things you need to build a really successful software company? Think about the practice, think about the business, meld those two things together. So a lot of people love that title. Well, there's a huge variation in submissions. So I think we're going to do that one more time and offer more options before we nail down the title of the book, so still TBD.

**Lenny** (00:24:22):
Cool, all right. I'm excited to see where you land. So let's just spend some time on PLG. I feel like this is your bread and butter as a product leader. You've worked at some of the most successful PLG companies and I think you have some of the most unique perspectives on what works and doesn't work. And I saw you shared a preview of what you're going to be sharing the book, and so there's a few things there that I thought were really interesting that I haven't seen other places when it comes to PLG. So I was just going to dig into it-

**Oji Udezue** (00:24:45):
Yay.

**Lenny** (00:24:49):
Absolutely. The first is this framing that you had for where to start and how to focus with your PLG problem. And you described it as starting with a sharp problem. Can you talk about what that means?

**Oji Udezue** (00:24:59):
Yeah, so I'm trying to connect dots. The sharp problem is a little bit of that whole quadrant framework, which is what problem are you going to work on? I think that problems have predictive power of success if you actually solve the problem. And this is different from, I have an idea, yeah. I think that a lot of innovation can come from inspiration, but the best inspiration comes from understanding customers and their problems. So my advice to founders is pick a problem that is materially felt by your customers, pain points that steal their time, their energy, their money, their focus, the inability to afford their leisure. If you can solve those kinds of problems, and look, I know that it's broad, because it requires insight. The best founders often are people who felt a problem, understand it, understand that it's really difficult, and understand that there may be like five, 10, 20 billion people who feel it and they don't want to solve that problem versus I feel a problem, but only 100,000 people care. In which case, maybe it's not that intense anyway, unless you can charge them thousands and thousands of dollars.

**Oji Udezue** (00:26:22):
So pick those kinds of problems. If you have the narrative in your head that if you really solve this, people will pony up. That's what I ask people to find. Too many of us just have a sharp idea. Look, I've built a startup on a non-sharp problem, and I knew how it felt. Well, I also know working in companies that are solving sharp problems how it feels, it's a huge tailwind to do that. In fact, when you work on sharp problems, it's hard to fail because you can make mistakes and the customer's obsession will carry you, but if you work on something that doesn't have a sharp problem, mistakes can kill you because essentially you're having to pay a lot for marketing, you're having to pay a lot for word of mouth. People, when they get poor, they don't care about it, like recessions.

**Lenny** (00:27:15):
Coming back to something you mentioned earlier about just how much pain it needs to be for people to care or how much pain it needs to solve versus the status quo, I think is a really important element of this. I think most founders like, no, I need to solve a problem. But usually it's not painful enough or it's not solving it enough, given either an example of something that you've tried or you've seen of just like that was a sharpish problem but not sharp enough and people didn't care, either a company worked or a startup you advised of just like, okay, it wasn't sharp enough.

**Oji Udezue** (00:27:46):
I don't want to create enemies because I know a lot of founders. But here's one, here's one. I don't know if you remember during the pandemic, this venture studio by I think one of the ex founders of Evernote created mmhmm camera, remember that?

**Lenny** (00:28:04):
Oh yeah, absolutely. Yeah, great video.

**Oji Udezue** (00:28:07):
It was fun, but I don't think it was a sharp problem. It was fun, but yeah, it didn't change the world of your Zoom camera. It didn't change the world of your collaboration. And so I think that's one example of a non-sharp problem, for example, for most people.

**Lenny** (00:28:31):
What are signs that it's sharp enough, just like in your experience? I know you talked about it steals your time, energy, money focused. What are flags that this is sharp enough in your experience?

**Oji Udezue** (00:28:43):
I think there are two ways to think about it. If you are in the trenches as a founder, the easiest way to map out a sharp problem is draw the current approximate average workflow for your target customer, at least what you think is a target, and then draw the workflow after they've used your software and see how much shorter it is, yes or no. And then try to measure those lines. If you draw them as horizontal lines, try to measure those lines and see if it's much shorter. If it's 2X shorter, 3X shorter, so let's say pre-customer, that is the best way to hone in on it. Post customer, you should talk to the people who are most enthusiastic and derive their workflow and their workflow change and try to measure that. I think that's how you figure out if it's a sharp problem or not.

**Oji Udezue** (00:29:37):
The other thing that we talk about in startup super early stage world is, I call it the whites of their eyes. When you take a problem and you share it with someone who it's going to affect their workflow, and I use the word workflow a ton because I don't use specs anymore or use cases, I think workflows are the unit of productivity. When you see people's eyes get big and they expose more whites to you, you're probably onto something. It's not enough, that's not a workflow thing, that's an excitement thing. But people often react that way when you're solving a really sharp problem for them. And then people spontaneously bring up money, it's like when can I pay? When can I... Those kinds of things give you an indication.

**Lenny** (00:30:23):
Two other versions of the showing more whites of your eyes, which I love. Two other versions of that I've heard is one is you see their pupils dilate and they're just like, "Whoa, I need this now." And then the other is someone described it as, you see this nod of as you're talking, they're just like, "Oh, I get it. I get this." And then they're like, "Okay, we need this in our company."

**Oji Udezue** (00:30:46):
I'm a little over those ones because sometimes it's just excitement and just noise. And so the things I said previously about workflow compression or capability inflation, I think those are more reliable, which is all about customer research and customer conversations. That's what I would focus on. Yeah, I'm saying all this from mistakes I've made, basically. So I feel like this is scar tissue, which is what I'm trying to pour into the book.

**Lenny** (00:31:18):
Speaking of talking to customers, another one of your big bullet points in the book is around continuous customer discovery, and I'm curious what you found to be successful in actually doing that. A lot of people talk about it when you keep talking to customers, get feedback constantly. What actually works in your experience?

**Oji Udezue** (00:31:34):
Yeah, I feel like all of park management is about discovery these days. Everyone talks about it, and I want to make a distinction. I think discovery is when you use customer conversations to understand a very specific thing that you want to optimize further workflow that you want to optimize further. And then you call the people who are most likely to be affected and you do use various research strategies to talk to them. There's a version of that also that is what I call continuous conversations, which is a Calendly and a Typeform, which we'll do more and more of. You should organize it so that your PMs, your designers, your engineering managers and your PMMs are constantly talking to customers by default. Meaning that customer conversations show up on their calendar every week automagically, without them getting involved. And then they're trained on how to have the conversation, because the death of customer discovery is friction. If you ask individuals to do customer discovery, they will not do customer discovery.

**Oji Udezue** (00:32:49):
This is the thing that dies in an innovative company because it's very difficult to actually talk to the right customer, not talk to any customer, talk list of the right customer continuously. But there's a third thing that I like to talk about, which is customer listening. In fact, I'm going to talk about this at industry in October, the PM Conference. Customer listening is different. It's not really discovery. It is the scarfing up of customer signals that are happening constantly anyway. So people are talking on social, people are talking on app stores and G2 crowd. If you have a instrumented churn survey, people are talking. If you have NPS, people are not only giving you the scores where they're putting in the verbatims. If you have a bug report, which we had at Atlassian, people are filing bugs, developers love to file bugs, so of course we have that for that audience. And then if you go to Zendesk and customer support, people are either talking about one thing all the time or a range of things, and you can see the frequency distribution.

**Oji Udezue** (00:34:01):
And of course in Salesforce, you have closed one. These are all things happening no matter what you do. Whether you're listening or not, you're getting these signals. One of the big, hairy, audacious goals of product management is being able to process these signals efficiently. We did it in a certain way at Calendly, which I drew a rig together through workflows and Slack, and then having individuals triage those things. And if you can do that hard and at industry, I'll talk a little bit about how to do it. It's not exactly discovery. It is what matters. Our job is to meld customer delight with business ambition. And it feels essential beyond discovery that you are listening and you're understanding what matters from a customer delight perspective. And I don't think many of us do this really well. I've tried to do it everywhere I've gone, Twitter, Atlassian, Calendly, now at Typeform. But it still feels like something that the industry can get better at.

**Lenny** (00:35:08):
This touches on advice that Teresa Torres teaches around continuous customer discovery. And she actually had a really good tactic, that I'll share here that stuck with me, about how to actually do this. So the way she recommends companies do this is have a little popup on your site asking visitors like we'd love to talk to you and get your feedback on our product. And it just links them to a Calendly to book a meeting, and that's how it shows up on the calendar.

**Oji Udezue** (00:35:30):
Yeah, that's what we did at Calendly. But I will say, so a couple of caveats, we did that in the community. We had community at calendly.com and we understood that that was a self-selected group. But it was still important to talk to them because they were still representative. And of course you should do it in a product. The challenge of that approach is always is it the right customer? And the pro/con of that is talking to one customer is useless, talking to 100 is super useful. And so the challenge is are you targeting the right person?

**Oji Udezue** (00:36:09):
So some intelligence upfront and who to show it to and why you're showing it to them, so that they can come is interesting. Very particularly effective by the way for growth, because if people don't activate or churn, they don't want to talk to you. But if you can present that thing in their activation or conversion journey, they might actually talk to you. And so that's really key. So I 100% agree with Teresa, that's exactly what you should do for not even, I wouldn't even call it discoveries for listening, and some of it can be discovery. Yeah, I think that's exactly what you should do.

**Lenny** (00:36:45):
As you're talking I'm realizing I'm using most of the products you help build. I'm on Twitter a lot. I use Calendly a lot. I use Typeform as my default survey tool.

**Oji Udezue** (00:36:55):
I saw that, my team is really excited that you're using Typeform.

**Lenny** (00:36:59):
You've impacted my life in so many ways, Oji.

**Oji Udezue** (00:37:02):
I think you owe me money, Lenny-

**Lenny** (00:37:04):
What do you need? How much? Give me your Venmo QR code, it's on [inaudible 00:37:09].

**Lenny** (00:37:11):
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**Lenny** (00:37:47):
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**Lenny** (00:38:32):
Getting back on track. Another important part of the book that you're writing is around onboarding. And something that I talk a lot about on this podcast is just the power of onboarding and how impactful it's to retention and so much of the eventual success of your product and how customers use it. And so I'd love to hear just your advice on what you think is really important, I guess why onboarding is so important in success and PLG. And also just what tactics have you found to be really effective?

**Oji Udezue** (00:38:59):
Let me talk about a few fundamentals. Onboarding is a substitute for sales and all these account management teams for millions of customers. The task is how do you make it approximate a human and how friendly a human is and how approachable a human is? Because if you can do that, then you can process thousands and thousands of customers very quickly. Onboarding is an exercise in understanding the mindset of a buyer, of an evaluator. It's nothing more than that. Meaning that the province of understanding is social psychology, it's not really product, it's biopsychology. And guess who knows a lot about this stuff, it's people in the offline industry. The people who stock shelves, the people who provide inventory online and so on and so forth. They are extraordinarily good at this. So the reason I say this is to divert people who are [inaudible 00:40:00] to really find where to source their inspiration from for onboarding, first of all.

**Oji Udezue** (00:40:06):
If you think about this as intentful in that way, which is people come not knowing anything about you and in a progressively developed confidence that you are the tool of choice, you then have to break it down into how does that journey go through a mind, the average mind anyway, and how do you assist each part? One is value proposition, understanding, one is trying to see if it's simple enough and provides enough value. One is kicking tires and one is making the choice that this is something I'm going to go forward with. How does your onboarding support hit all of these things? Now I think there are two parts of onboarding. One is mandatory, the setup, it has to be spare. I try not to make it more than three screens, but it's about how do you say what this does and provide the essential setup that your customer needs to be successful?

At Calendly, for example, we asked them about connecting their calendar and setting some defaults. Is it 9:00 to 5:00 or whatever that is? Those two things set up all the future success. And if we made it optional, more people would fail. So it's information and the essential setup, and it should be as short as possible. Then there's a whole other set of things that should be optional because they're not necessary for everyone to be successful, but they're beneficial if people are curious. And also, it can be what we call a random access, so people can get back to it any time they want, if they're feeling help. And so if you divide onboarding into those two things and then figure out what to put in one and what to put in the other, I think you can be quite successful. And this is just the tip of the iceberg that I get into in the book.

**Lenny** (00:41:56):
Are there any examples of really big onboarding wins, things that really helped with conversion or activation that come to mind?

**Oji Udezue** (00:42:01):
Well, I think keep it short is one big win. The fewer things, the better, that are essential, that everyone has to go through. It's unclear if all those clickthroughs go here, go here, and all those things work-

**Lenny** (00:42:16):
The wizards, yeah.

**Oji Udezue** (00:42:18):
Yeah. The wizards have had, in my experience, limited benefit. So much as just directing people to the one thing that they need to do post mandatory onboarding. Having examples, not 10, one or two of what good looks like is particularly powerful because it's mimetic. People see, oh, okay, this is exactly what I'm shooting for, is very powerful. In terms of trial and conversion, letting people understand and being very clear about where they are in the trial cycle, whether you want them to pay for it now or they need to pay for it later, after seven days. Having them understand that really clearly so they know where they are versus they feel like they're completely at sea, I think is very important for conversion.

**Oji Udezue** (00:43:07):
I think there are a few things like that, but I also want to mention that it's different for every product. Depending on where you are in the quadrant and the amount of augmentation and problem solving and how sharp the problem is, you might want to adjust your approach. And this is the kind of thing that there's some fundamentals, but it's not necessarily this one size fits all. In fact, at Typeform, we're trying to maybe invent a new twist on freemium just because of some of the things we're seeing for our particular customers. And so yeah, these are for me, some new learning as well as I go through each different product.

**Lenny** (00:43:49):
Along these lines of onboarding activation and getting a user activated is really important. And I'm curious, do you have an example of what an activation milestone was at Calendly or Twitter or a Typeform? Just to give people a sense of like here's a good example of an activated user milestone.

**Oji Udezue** (00:44:03):
I think this goes back to people, the Pendos and the Amplitudes of this world. You have to think through your aha journey. Like at Calendly and also at Typeform we have three thresholds of increasing activation. And we just try to make sure that people go through each one as many people as possible. And frankly, we try to figure the drop-off between the increasing definitions of activation. So at Calendly we want to make sure you've created your first meeting. But then if you've created five within a week, that's really much more powerful. At Typeform, it's really about have you published the form and have you gotten responses? And have you gone to look at what the responses mean in the insights page, for example.

**Oji Udezue** (00:44:52):
At Twitter it is are you following anyone or are you being followed? Because that verb, follow, is the way you start to construct your informal community. Remember what I said is Twitter is for people who want informal community around a topic that is not... Facebook is about who do you know, Twitter is about who do you want to know? Who's passionate about what you're passionate about? And so if you haven't set up your follow graph at all, you're not going to really activate. It's not going to be compelling for you.

**Lenny** (00:45:23):
Awesome, those are great examples. It's funny hearing that Twitter activation milestone out of context sounds, so creepy. Have you followed anyone or is anyone following you?

**Oji Udezue** (00:45:31):
Yeah, because a lot of people go in and then they tweet into the void or they don't feel like they have a voice. But that's not the most important thing. Most important thing is are you getting content that you are interested in that makes you want to come back and see more of it and follow is a huge part of doing that.

**Lenny** (00:45:47):
Yeah. Just on the point of Twitter, I don't know if this goes anywhere, but it's crazy how it keeps going no matter how much destruction is happening all around, employees-

**Oji Udezue** (00:45:58):
Oh, you want me to talk about that? Because I want to talk about this.

**Lenny** (00:45:58):
Please, let's do it.

**Oji Udezue** (00:46:04):
So one of the things they, I don't want to say they, one of the things I learned early on is network effects.

**Lenny** (00:46:11):
Yeah.

**Oji Udezue** (00:46:12):
Network effects, let me define it. Network effects is when you create value for passive members by other people joining the network. So I am by myself, I have done nothing. I'm at home, chilling, but one person joins the network and immediately I gain benefit, okay. So think about Facebook. If there are eight billion people on Facebook, it means that all of a sudden I can reach everyone on the planet. And so the more people on Facebook, the more it's valuable to me regardless of my effort. That's network effect. If I'm into Word, word processor, Microsoft Word, and the more people who use that file format, it means that the more Word documents I can read.

**Oji Udezue** (00:47:05):
And so I did nothing, so by increasing the people adoption of Word, I gain benefit. Network effect, that's what it is. So Twitter and then this is the mental model of critical mass, network effect is about critical mass. You hit a critical mass and sometimes that's not mathematically defined, and then you've hit network effect because people want to come because people are already there. So Twitter has hit critical mass and lots of your favorite social networks. Network effects is a feature by itself, and it's the most powerful feature. A good way to illustrate the power of network effects is Twitter did not die because Threads came about, that's the power of network effect. In fact, the last telegram was sent in 2016, over 100 years after it was invented because of network effects. It had to be manually closed down.

**Oji Udezue** (00:48:03):
I believe Friendster is still alive, so we have to be really clear that it's really hard to kill a network effects business. Now how do you actually accomplish it if you were to accomplish it? Well, the revenue side of any social network is vulnerable to attack. So for example, if advertisers stop being on Twitter, for example, they're not gone because again, network effects affects them. They want to go where the eyeballs are. But if for some reason they disappeared, while the people will continue to come, the ability to have money to improve the network will disappear. And that is a negative spiral. What is very, very hard to kill business, it's hard to kill software that's reached network effect, although you can kill businesses that have reached network effect.

**Lenny** (00:48:56):
That's a really important and interesting insight. I think what's even especially interesting about Twitter is Elon and the team have removed every other benefit of Twitter, like the brand, gone, employees, 80% gone. Every part of it is being cut off, except for the network effects, and so it's a really cool case study. Dan Hockenmaier tweeted this, was a previous guest, of just like it's a good case study of what is just the power of just network effects.

**Oji Udezue** (00:49:19):
That's right. I did a really interesting course at Berkeley Business School, asked about technology companies and so on, and this is a perfect case study on network effect. The best I've ever seen. It is incredible.

**Lenny** (00:49:36):
Yeah, it's wild Threads isn't able to get there quickly, unlike what it felt like initially.

**Oji Udezue** (00:49:43):
Threads will prosper, I believe. And again, it'll just be another click for advertisers who understand the Facebook marketplace versus Twitter ad marketplace is much harder to access. And so I think the way Threads wins is the revenue spiral versus the pure activity spiral.

**Lenny** (00:50:02):
Interesting. Where essentially they find ways to, even with lower base, generate revenue, which drives advertisers, drives more investment.

**Oji Udezue** (00:50:10):
Correct, correct, correct.

**Lenny** (00:50:11):
Awesome. All right. That'll be fun story to watch. Kind of along those same lines, I want to chat about virality a little bit. You worked on some of those viral products out there in B2C, I guess Twitter is an example, but also in B2B, which is really rare and interesting. And I know there's no silver bullet for increasing virality, but everyone's always wondering, how do I increase the virality of my product? So I'm curious, anything you could share, any tactics that you've seen work to increase the virality, especially of a B2B product?

**Oji Udezue** (00:50:36):
Well, as is my style, I want people to understand what virality is in the first place because I think people have misconceptions about it. People think virality is some Hotmails tag at the bottom that says, we'll get a free account. Virality is really when the word of mouth of a product is high quality. That's really the essence of it. Let me rephrase that. It's when customers market your product. And that is incredibly powerful, but also that's incredibly actionable, if that makes sense. There are products who try to be viral just for what I call synthetic virality that fail. Because in the end, if you're synthetically viral and people get to the product and it sucks, that's it. That's the end. Even Hotmail, for example, people talk about the viral tag. I don't know, you know what I'm talking about? Because I-

**Lenny** (00:51:32):
Absolutely, at the bottom, yes [inaudible 00:51:34].

**Oji Udezue** (00:51:35):
Well remember, it wasn't just that. It was one of the first webmail things. And webmail was revolutionary because you didn't have to have a POP3 client and lose your email across multiple devices. It solved a lot of really good problems for customers at the time for email. And so when they arrived from the free account, it was like, holy crap, this is amazing. And so let's do that. Uber doesn't have any weird viral traps, but it compresses the workflow of getting a cab so much that it's viral, if that makes sense. In fact, it was this time where Austin kicked them out for and other apps came in and filled the void, and then it came back after the year and just crushed everybody. There was no campaign, it was just viral by itself. So that's what virality is. So then the question is how do you increase it?

**Oji Udezue** (00:52:30):
Well look, fundamentally build a great product that solves a sharp problem and build it really well. If you do this, this is the bedrock of virality. If you don't do this, there's no viral tactic that will work in a sustained way. It will fizzle. But if you do this, you can lay on synthetic virality strategies for referral, strategies for coming back into the app and creating an account. Remember before Calendly, there was Acuity scheduling, there was other things. The difference was Calendly was so well-made, so simple for schedulers, so respectful of schedulers' time, not just the creator's time that the virality worked. It did not work for others who sucked. Xted AI and other places, they weren't that good. You have to be good to be viral.

**Lenny** (00:53:33):
That is such an important insight, that everyone looks at Calendly like of course you're sharing calendars with everyone, it's going to go viral. That's like what a cool trick. But your point is so interesting that there's previous versions of that, but the product itself wasn't great. The experience wasn't great. It was too complicated, it didn't work, and that's what made it so viral.

**Oji Udezue** (00:53:52):
Yeah, there may be several things I think affect virality. But I think that this is the nugget that people need to take away, that is the foundation of bedrock of all of them. Customer support actually affects virality. If you have fanatical customer support, people will love it. Viral tactics like the page that says, oh, get an account, and so on. All these signing documents, Calendly and so on and so forth. Network effects as in Calendly, you have these green dots. If you and a person have, Calendly tells you when you're free, all network effects, really high quality execution, synthetic virality all contribute to net virality. But the fundamental is exactly what we just discussed.

**Lenny** (00:54:38):
Just got to get it all right. No big deal.

**Oji Udezue** (00:54:42):
Build the best product possible, honestly, if you want to be viral. Slack wasn't even viral, there was no synthetic virality. Slack couldn't even connect to organizations for the longest time. Why? You could be working on the third floor and so on, using Slack on the fourth floor, and you would have no clue. There's no way to share it with them. But what happens when you went to lunch? People are like, "We got Slack and this is amazing." And people on the third floor are like, "Holy shit, when can we get it?" Boom, boom, boom. Great product first is virality.

**Lenny** (00:55:14):
Seth Godin has this phrase they always come back to, if you want to make your product remarkable, something people want to remark about, and that's basically the core of word of mouth.

**Oji Udezue** (00:55:23):
Yes, yes, yes.

**Lenny** (00:55:24):
I was watching a talk you did on this kind of topic and you had this great phrase that you sort of touched on, but I think it's so good, and I just want to make sure we highlight it, which is that virality is customer augmented marketing.

**Oji Udezue** (00:55:36):
Yeah, I think it is the thing that I started with first. It's when your marketing is essentially done by your customers because what it does, it affords you the ability to spend less on marketing. And you can either uplevel your marketing execution or save money that you can put in the product. Atlassian spends maybe like 10, 20 percentage points less on marketing than the equivalent competitors because it's viral and also because it's network effects at this point as well, say Jira. And so it's customer augmented marketing. Your customers are either forcing other people to adopt it or shaming them into adopting it or FOMOing them into adopting it. So yes, virality is essentially customer oriented marketing, which gives you options.

**Lenny** (00:56:28):
I love that phrase, I'm going to use it now. I have just a few more questions before we get to a very exciting lightning round, and these are kind of random two topics that I wanted to chat on. One is this concept that you call forest time. It's a post you wrote about the importance of forest time. Can you just describe what that is and why it's so important, and then also just how to do this?

**Oji Udezue** (00:56:49):
I operate, I'm an operator right now, meaning that I'm building things, I work for a company. But I also advise and invest, which is different. When I'm advising, I'm looking from above, from outside, I have a bird's eye view and I'm able to say, "You know what? This will work. This won't work. What have you done? Can I look at the results?" And then cycle the advice based on what you're seeing and what I'm seeing. When I'm operating, I'm building a team, I'm hiring, I'm managing all the things, Alina, shout out that hates sometimes. And that's what I'm doing. When you are operating, you have the tug of war. It is so intense that you don't have the attention to have a bird's eye view constantly.

**Oji Udezue** (00:57:39):
And so forest time is the idea that you make time within your week, within your month to see the forest for the trees. Most of the time when you're operating, you're seeing the tree, which is the problem in front of you. But sometimes you need to see the forest, so you can figure out it as an alternate path, different from the one that you are currently on your campaign. And so it's time to elevate, to get some bird's eye view, to see the entire landscape and see the alternative paths through the current problems that you're escaping. And I think that it has to be very intentional. And intentionality there is, I have published a workflow, a document that helps you make that step to make that elevation.

**Oji Udezue** (00:58:25):
Like what are the issues? What are alternative ways to solve this potentially that I'm not seeing? Et cetera. And what I try to do is I try to create that forest time for my executive team as well because it's not just me that suffers from this, it's most everybody. In fact, it's most PMs because PMs are so influential that the spoke of the wheel of product creation and product development that we often, it's a sine wave. You are discovering and shaping problems and then you are commanding and captaining execution. And it's endless and they're endless meetings. And so you need to create time for forest time, for elevation. If you don't, you'll become less effective over time. It's just attrition.

**Lenny** (00:59:14):
And then just to make it even more concrete for people, what are examples of forest time? Is it taking time off? Is it advising on the side? Is it-

**Oji Udezue** (00:59:20):
It is taking a day off at the end of a month, a full day or two days. And instead of just playing golf, although that's fine, it is doing a workflow, worksheet to survey the forest specifically. And sometimes managers are like, "Wait, you're giving people a day off when they should be working harder and harder?" And I think it's completely worth it. It's not about working harder, it's working smarter. It's about seeing more options than you see. And so I'm very happy to give that time to product managers, to product executives or design executives or engineering executives.

**Oji Udezue** (01:00:01):
Because I think that if they do it properly, then we'll have better execution in the long run. Let's put it this way, in product development, we aim for maybe like 10% of the time and then we execute and build for the other side. It's not just, there's more stuff we do. If your aim is off, then you are spending one, $2 million incorrectly of people's time. And so forest time should improve your aim. That's the entire point, because your aim is a precursor to a huge amount of investment. And so I think it's well worth it.

**Lenny** (01:00:36):
I love this. So specifically what you do with your team is once a month, you give them a day to do this kind of worksheet that you put together?

**Oji Udezue** (01:00:45):
Yes.

**Lenny** (01:00:45):
And then that worksheet is in this post that you wrote, that you point to. Is that right?

**Oji Udezue** (01:00:49):
Correct, correct.

**Lenny** (01:00:50):
Amazing. Okay, great. This is very practical advice. I love it. Okay, one last question before a very exciting lightning round. You worked at Bridgewater Associates, which I didn't know until I started digging into your past. That sounds creepy. And Bridgewater Associates famous for what? Ray Dalio's hedge fund, author of Principals and all these other incredible books, and it's a very unique working environment. So I just wanted to ask about your experience there, specifically one of the craziest things there is just this thing called dots I think it's called, where people just call out mistakes that people make at the company and it's public. Is that how it actually was? Any memories of that?

**Oji Udezue** (01:01:27):
Yeah, yeah. I was a senior management, what's called an SMA, which is the management layer right under Ray's team. And we were the priests of the Church of Bridgewater. Bridgewater did things like record, this is public knowledge, I'm not saying anything-

**Lenny** (01:01:50):
Yeah, he writes about-

**Oji Udezue** (01:01:51):
... before every meeting. Eventually we created a dot collector, which allows you to rate people in real time. So I'm just having a conversation with you and before the meeting closes, in front of each other, I pull up my laptop and I rate you and rate the interaction. And in theory, the idea is that if you constantly rate people across hundreds of interactions, then you build a picture of them that is fairly accurate, statistically accurate, that will transcend maybe emotional relationship as wisdom of the crowd idea. So that's a theory. In practice, it is emotionally exhausting. And like you said, the little creepy, even the recording.

**Oji Udezue** (01:02:38):
So I think there were things about Bridgewater that I understood intellectually in terms of the purpose that Ray had designed, but didn't quite work. It's like the way I think about this is the theory of the principles are really good. The practice and the execution can be quite off and not very human or not very empathetic. But I will say this, Bridgewater taught me things that I don't think any other organization in the world thought taught me. One example is Bridgewater thinks of people in three dimensions, their skills, their attributes, and their values. Most organizations think about people in terms of just their skills. But it makes sense that people have attributes and values, that people are timid, people are bold, people like to jump in, people like to stand back.

**Oji Udezue** (01:03:38):
All these other things, we think about personality and proclivity. Bridgewater tries to establish and measure them and also tries to write job descriptions that say, this is the kind of attributes we're looking for, not just the skills we're looking for. And then of course values. Are you a thief or are you a principled? And so on and so forth. Now that idea of looking at talent or people in general, both in your professional life and in your personal life, is a huge addition to me as a professional from Bridgewater. So I'm saying that there were things I didn't enjoy about Bridgewater, but things that I learned that I've learned nowhere else as well.

**Lenny** (01:04:18):
Did you take that to what you do today? Thinking of people in those three different ways and-

**Oji Udezue** (01:04:23):
100%. in my professional life, in my personal life, when I interview people, I am cognizant of those three things and I try to extract those three things, because I think it improves your success. Famously, all the weird skill-based interviewing at Google was only 50/50 predictive. And the reason is Google did not consider the other two things, I believe. Bridgewater was willing to endure 80% attrition to arrive at the best people. Now I don't think it works for them because some of their system was not empathetic of humans, like expecting humans to be computers. But I thought that was a very important insight.

**Lenny** (01:05:08):
Awesome. Oji, is there anything else that you want to share before we get to our very exciting lightning round?

**Oji Udezue** (01:05:14):
In the history of product development, we have basically started to create abstraction to guide our work versus the Wild, Wild West. So the engineers came up with agile and peer programming and all these things. The designers have come up with design thinking, design sprints, and combined with research to talk about how to do discovery of various complexity. And the question is the product abstractions, because there's code, there's product in this business. So the product and business layer, what is our abstraction? What is our crucible for organizing our work?

**Oji Udezue** (01:05:52):
We don't even have one. We don't have a name for it. And so the idea of a part system is that there's an abstraction above agile and design thinking that we have to pay attention to build solid organizations and to execute well at the product and the business layer. This is a co-creative framework with me and Ezinne. And the idea here is how do you construct a good product system? And literally, you could boil it down into a checklist of the systems you need to build a really good cohesive R and D organization. So I think that's the tee up. I'm going to have to leave you thirsty because someone else is probably going to go deep into it.

**Lenny** (01:06:35):
Amazing. And that's your wife that you mentioned who you are co-creating this framework with and who we're going to have on the podcast in the future.

**Oji Udezue** (01:06:40):
That's right.

**Lenny** (01:06:41):
What is it like being married to another product leader? Would you recommend?

**Oji Udezue** (01:06:45):
100%, you can have really productive conversations and you can redesign other company's applications in one conversation in the evening.

**Lenny** (01:06:57):
Amazing. Well, that was almost the lightning round question, but I moved it up earlier. And so with that we've reached our very exciting lightning round. Are you ready?

**Oji Udezue** (01:07:06):
Yeah, I'm ready. Let's do it.

**Lenny** (01:07:07):
Okay, great. Let's do it. What are two or three books that you've recommended most to other people?

**Oji Udezue** (01:07:13):
There's one business book that I recommend, I think it's called The Halo Effect. It's basically a book that lets you call on all these business books that tell you all kinds of stupid shit. It is how to deconstruct what is important in a business and self-help book and what is not important and what is just circumstantial storytelling with random facts and form-fitting evidence. It's called The Halo Effect. Read it. Why do you need to read it? Because garbage in, garbage Out.

**Oji Udezue** (01:07:45):
People were amazed at the Outlier Effect, Malcolm Gladwell, and then people have been tearing it down for 15 years now. But everyone ingested it and thought it was the most important thing. But how do you know what's important to take away from them and what's not? The Halo Effect will help you. And then the other thing is, I read for pleasure because I read a lot for work. And so science fiction is the thing. There's lots to recommend, but I would say that people should either read Dune, Frank Herbert or Foundation by Asimov. If you haven't read those two things and you're a science fiction person, you really should. The world building is incredible. I understand Tolkien and fantasy, but the science fiction side of it is those two books.

**Lenny** (01:08:32):
There's also a TV series of Foundation now, which I can say recommend absolutely. But it's a beautiful show.

**Oji Udezue** (01:08:39):
Yeah, no. I haven't watched Foundation yet. I just felt super weird watching it after reading it. And I could only make it through three quarters of Dune. Well one, but I will make it through them. I don't expect them... The books are glorious. If you love prose, the books are, man, crazy. But I will get through them eventually.

**Lenny** (01:09:04):
I've not actually read Dune, but the movie was incredible. I played the video game Dune where you're just mining spice all day and it's just stuck in my brain forever. Okay, next question. What is a favorite interview question that you like to ask candidates that you're interviewing?

**Oji Udezue** (01:09:18):
I try to ask two. I feel like it's going to give people a cheat sheet when I interview them. But I try to ask two questions. So I'm not a person who does favorites, so it's hard for me to pick favorites. But I ask people to introduce themselves and I think it tells me a lot about them, how they tell about themselves, what they say about themselves and the content of it. I ask people about the things they think they're truly great at and then I ask people the things they think they need to learn. The latter too is about their professional skill, their craft. I think it tells me a lot about how they communicate, it tells me a lot about how thoughtful they are. It tells me a lot about what they're proud of and what they lead into. And those kinds of things are very important to me.

**Lenny** (01:10:10):
What is a favorite product you recently discovered that you love?

**Oji Udezue** (01:10:13):
I have been optimizing my workspace a lot. So I'm on a kick right now where I use Windows. I was in the Windows PM and I still have my Windows box. But a lot of people, we use Mac at work and I've used Mac for the last few years. So even though I switched between them, I've spent a lot more time on Mac and my Windows experience is completely optimized. It is perfect. But Mac, I'm like the Windowing sucks, there's all these gaps I see. So I've been trying to figure out how to dial in my Mac experience.

**Oji Udezue** (01:10:49):
I hate the activity monitor, sucks. What's a replacement? The sound. It doesn't support sound through HDMI or sound through... I don't know, just some weird setup. So I've been optimizing that. One particular product that I like in the context of that is Unlocks. It's one man product that allows me to just look at my phone and log into my Mac when I walk up and then locks it when I walk away. And it'll actually detect my proximity. So it'll start the login process while I get close. I think that's incredible and I feel like it improves my productivity.

**Lenny** (01:11:26):
Very cool. Sounds like a lot of haterade for Macs over here.

**Oji Udezue** (01:11:30):
Well, for someone who uses it a lot, no, I think pros and cons. I'm no longer paid by Microsoft, so there are things I don't like. But there are also things that the Mac isn't perfect either.

**Lenny** (01:11:42):
Yeah, indeed. What is a favorite life motto that you repeat to yourself or share with other people, either in work or in life that you find valuable?

**Oji Udezue** (01:11:52):
I've taken to saying that there's more knowledge outside my head than inside it. And this is a plea for curiosity. I have three main things that are my North Star personally. Obviously when I say personally, I mean everything professionally. Which is originality, curiosity, and wisdom. And so this thing about there's more knowledge outside my head than inside my head is a plea for curiosity, it's a plea for skepticism. It's a plea to be humble about what you know, no matter how old you are, about the world around you, and always be listening for more. Even when you know something, let other people speak because they might add 10% more to the 90% you know. And so being an active listener is very important.

**Lenny** (01:12:48):
Beautiful. Last question, you are from Nigeria. What is a Nigerian food that you think people need to find and get ASAP?

**Oji Udezue** (01:12:57):
I'll recommend two, depending on how familiar you are. So if you've never had fried plantain with beef stew-

**Lenny** (01:13:06):
Oh man, that sounds great.

**Oji Udezue** (01:13:08):
... then you should stop what you're doing, stop work, whatever you're doing, find your next Nigerian friend and go get some, okay? This is the food that most Nigerians will basically trade years of life to have access to, okay. So that's what I would say. And then the second thing is if you want to be in the in club in Nija, as we call it, you got to try pepper soup.

**Lenny** (01:13:48):
Pepper soup.

**Oji Udezue** (01:13:48):
Now, if you all are not into spicy stuff, I'm sorry, the door is close to you. But pepper soup is really... And it is amazing. It'll make you sweat, but it's delicious and you should give it a shot.

**Lenny** (01:14:05):
Oji, I think we've solved many people's sharp problems. I really appreciate you making time 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?

**Oji Udezue** (01:14:16):
I publish on Substack when I have time, you should check it out. It's usually all about things that are beneath the surface. What's behind the thing. I believe that's how you'll find it. I'm on Twitter as well, so you can follow me because I will talk about products. How you can be useful to me is go follow me on Twitter, sign up for updates on the book. If you do, I will draw from that audience to help name the book, to help design the cover for the book. The book is intended to have a freemium because I want this book to be available to people in Africa and India, across the world. So there'll be a free version of it and there'll be premium versions with more tools, more help, and maybe even interviews with luminaries that you care and love as well. And so hopefully that will fund the free side of it as well. So come in, become part of the party, maybe join a pre-read, an early draft read. That is the best way you can help. So this is a call to all PMs and people of goodwill.

**Lenny** (01:15:29):
Amazing. What a great answer to that question. I'm going to go get some pepper soup and some plantain beef meals. Thank you so much for being here, and I'm going to go get some food.

**Oji Udezue** (01:15:41):
All right. Thank you, Lenny. It was super enjoyable and love hanging out and God speed.

**Lenny** (01:15:48):
Bye, everyone.

**Lenny** (01:15:51):
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.

---

## [17/20] How to become a category pirate | Christopher Lochhead (author of Play Bigger, Niche Down, Category Pirates, more)

**Christopher Lochhead** (00:00:00):
The point being, now is the greatest time in history to be a creator, to be an entrepreneur, to be a marketer. I've been a marketer for my entire adult life. It's never been greater than it is right now. And so here's the big thing that I would share. If you are somebody for whom you want to make an exponential difference, you want to innovate, you want to create new value where there wasn't, you want to have a legendary career where you could look back on your career and go, you know what? I was part of this and that, and I was on this team, now's the greatest time in history. And what I would say to you is, the future needs you.

**Lenny** (00:00:35):
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.

**Lenny** (00:00:43):
Today my guest is Christopher Lochhead. Christopher is a 13-time number one bestselling co-author, including books like Play Bigger and Niche Down. He's also a popular podcaster, co-creator of the excellent Substack Category Pirates, and is best known as the Godfather of Category Design. He's also an advisor to over 50 venture-backed startups, and a former three-time public company CMO.

**Advertisement** (00:01:48):
**Christopher Lochhead** (00:03:41):
Lenny, it is my absolute joy. And let me say in case my ADHD brain forgets, I love all things Lenny. You're doing a great job, buddy. I'm honored to be here. And there's so many people in the entrepreneur startup marketing world who are scam artists, shysters, pieces of shit, idiotic hustle porn stars yelling stupidities. There's a lot of idiocy in the world in which you travel and I travel, and you, sir, stand out. You are making a difference. The conversations you're driving, the content you're creating. You're fucking awesome, Lenny, and I'm really stoked to be here with you.

**Lenny** (00:04:27):
Damn, what an intro to my own podcast. I'm bad at accepting compliments. I'm just going to accept that and I appreciate that, man.

**Christopher Lochhead** (00:04:34):
No, you need to get it. You are a beacon in an ocean of crapola. You are incredible.

**Lenny** (00:04:42):
Well, enough about me. I really appreciate it. I was preparing for our conversation and usually what I try to do when I prepare for conversations is I read everything the person has written and it was very challenging with you. You have two podcasts, you have at least six books. There's probably more I missed. You have a newsletter, you tweet a lot. There's probably a lot of other stuff I didn't get to. And so you made my job very difficult preparing for this podcast, but also very worthwhile. So I'm excited to begin.

**Christopher Lochhead** (00:05:07):
I apologize for that.

**Lenny** (00:05:09):
The other thing I noticed as I was browsing your website, and it was hilarious because you have all these testimonials of your book and podcast and you have a lot of negative reviews, like "Off-putting, or, "Very disappointing," or, "Absolute crap." I'm curious why you chose to do that as your website testimonial wall.

**Christopher Lochhead** (00:05:29):
Well, and I believe, I'd have to check with Steve Osler, the founder and publisher of Podcast Magazine, but I believe I'm the only podcaster in history to run a full page ad in Podcast Magazine with just negative quotes in it.

**Christopher Lochhead** (00:05:44):
So a couple reasons. Number one, can we all just have a sense of humor about this stuff? So it's my way, and the name of our team, yet we're sort of a company, but we're more of a band, is Category Pirates. I mean, clearly if you're called Category Pirates, you're probably trying to have a little bit of fun with this stuff. And so part of it is just trying to have a sense of humor with people.

**Christopher Lochhead** (00:06:10):
The second piece of it is, for a lot of entrepreneurs, marketers, creators, innovators of any kind, we live in this fear that when we launch our thing, whatever our thing is, that we will be criticized by the world and that we will be made fun of. And if you've ever authored a book or done a podcast or done anything, built a product, a software product, built any kind of a product that you feel is part of you, and most innovators, creators, software developers, artists, of course entrepreneurs, feel that way because they put themselves into this stuff. And when somebody criticizes us, many of us are devastated. And I have been in the past too. I'm a person just like anybody else.

**Christopher Lochhead** (00:06:55):
And what I realized is, fuck them. Anybody who's trying to do anything exponential, anybody who's trying to break and take new ground, anybody who's trying to radically innovate, anybody who's trying to design and dominate new categories of the way we live, work and play, gets criticized. Picasso was called stupid. The Beatles were called terrible. Elvis was called terrible. I just wrote recently a little bit about hip-hop. I was listening to Rick Rubin on Barry Weiss's podcast, excellent episode. Excellent. She does a great job with him. And he was talking about how ridiculed hip-hop was in the beginning and it got banned. And it's the number one category of music in America today.

**Christopher Lochhead** (00:07:38):
Anyway, so that's also part of it, is to just sort of say, "Hey, look, this is some of the shit people have said about our work and my work, and I'm going to just put it on display, because this is going to happen to all of us."

**Christopher Lochhead** (00:07:50):
And then I guess, Lenny, the third reason is in the creator world, broadly, there's a lot of people who are breaking their arms patting themselves on the back. And look, I understand why we have to tell people about why they should pay attention to us, and so we use our credentials or our awards or our downloads or our books, I understand that, and I do a little bit of that too. However, come on, let's just not take ourselves so seriously.

**Lenny** (00:08:17):
Amazing. I could definitely use more of that skill of not taking negative feedback as seriously. And I love the idea of just embracing it and showing people what people don't like.

**Christopher Lochhead** (00:08:27):
Why not? I mean, look, you're incredibly successful and if somebody says something negative about you, okay, great. Fuck them. They're not your people.

**Lenny** (00:08:39):
Fuck them. There we go.

**Christopher Lochhead** (00:08:40):
I didn't know who you were until Substack, and I saw your logo, the fiery logo, and there was something endearing about your logo. And the other thing that's great about you, from a radical differentiation marketing perspective is, you call yourself Lenny. And when I talk about you, I don't know your fucking last name. I mean, I sort of know it, but I don't really, you know what I mean?

**Lenny** (00:09:04):
Yeah. It's hard to pronounce.

**Christopher Lochhead** (00:09:04):
Actually, I was at the gym this morning and I was telling my buddy that we were doing this, and I said, "Oh, I'm going on Lenny's Podcast." He says, "Lenny who?" And I said, "It begins with an R. I don't know. Everybody just calls him Lenny." And so the fact that you are yourself, you don't play a character, you're not a douche, you're just a person trying to be successful in the world and help others, right?

**Christopher Lochhead** (00:09:28):
That's a very powerful thing. And I think one of the things that is insidious about influencers, hustle porn stars, part of the business model is creating the perception of superiority, right? The reason Grant Cardone and Tai Lopez and all these douchebags pose in front of planes and all this garbage is they want you, the Kardashians are the queens of this, they want you to look at them and go, "Oh, wow, don't I wish that I was them."

**Christopher Lochhead** (00:10:03):
And so these folks are in the create and monetize envy business, and you're the opposite of that. And I think the legendary educators in the native digital world are the opposite of that. Anybody who's creating separation, anybody who's putting themselves above, anybody for whom there must be, "I must be the leader, and you must be the follower," that's the business model of a massive amount of people in the native digital world, and we reject that. And I know you do.

**Lenny** (00:10:34):
Absolutely. We've already gotten way off track, but I love it. I'll just say one thing and then we'll get back on track. The reason I called my newsletter, Lenny's Newsletter is because that was the default recommendation Substack gave me when I signed up. They're just like, "Call it this." And I'm like, "Okay," because I don't know, I didn't have no plans to actually be doing this long term. And then it just stuck. And then I brainstormed for weeks. I'm like, "I need a real name on this thing." And I just couldn't think of anything that I liked. So I'm just like, "All right, I'll just roll with it." And then when the podcast launched, I tried so many ways to call it something else so that it would push the whole naming in a different direction, it wasn't about me, but I couldn't think of anything better. So I'm just rolling with it at this point.

**Christopher Lochhead** (00:11:12):
Well, and the interesting thing is, even though the branding of the shit has your name in, it's not about you. That's the irony, right? Meghan Markle gets canceled. Why? Because it's about her, and it turns out she's infinitely uninteresting. I've consumed enough of your content to know that the cool thing is, yeah, it's called Lenny, but it's actually, you are not trying to impress all of us with how awesome you are in front of a fucking plane or a bunch of scantily clad people, or I don't know what.

**Lenny** (00:11:54):
It's true. Well, I'm enjoying this podcast. You're very kind to me. Let's talk about the meat of what I want to chat about, which is your bread and butter category creation. It goes without saying you're a big fan of creating your own category versus what most people try to do, which is try to compete in an existing category. So just to kind of lay a little foundation, can you just explain what this actually means, this idea of category creation for people that have heard this idea in this term, but don't really know what it means.

**Christopher Lochhead** (00:12:23):
It turns out that in business, most people, and in life for that matter, make a unquestioned, unconsidered, undialogued, unthought of decision that they don't know they made. And the decision they make is, "What I'm going to do, is I am going to compete in a market with demand, with a better product/service/brand, maybe a better business model, maybe a better set of growth hacking ideas that I learned on the Lenny Podcast. And when the world gets my better, the world will beat a path to my door."

**Christopher Lochhead** (00:13:16):
And if you go onto Amazon right now, Lenny, there's roughly a hundred thousand marketing books, and I think I'd have to double check, but I think there's about 60,000 or 80,000 business strategy books. And of course, me and my collaborators, we haven't read all of them, but like you and like many of us in business, we've read many of the tomes, the Bibles out there, and there's an interesting thing about virtually all of them. That's what they're about. It's about how to compete and win.

**Christopher Lochhead** (00:13:53):
Well, here's the aha. Nobody legendary ever did that. Not a one. We all know who Bob Marley is. We don't know who the 17th greatest reggae musician or band in the world is. We all know who Pablo Picasso is. We don't know who the fifth greatest cubist artist is. And so wherever you look in life, whether it's in the business world, people who drive social change, artists, creators of any kind, the people that we tend to admire the most are the people who broke and took new ground. And the aha here is the category makes the product, the category makes the brand, the category makes the company.

**Christopher Lochhead** (00:14:51):
So I'll give you the data and then I'll fully answer your question. So here's the data. We did an analysis for our first book where we studied every venture-backed tech company in the US from 2000 to 2015. And we asked a question that, to the best of our knowledge, had never been asked before. And we went to Stanford and we asked a bunch of professors this question, and they said, "We don't know this. You're going to have to do it yourselves." So we did, and incidentally had it peer reviewed and published in the HBR. And if you've ever gotten data published in the HBR, then you know what it's like to have a journalistic proctology exam.

**Christopher Lochhead** (00:15:32):
Anyway, here's the net of it. In tech market categories, on average, one company earns two-thirds, 76% to be exact, of the total value created as measured by market cap and or valuation. So not market share, which is important, market cap as measured by the value of all the companies in the category. So you take a category, you add all the companys' value together, and you say, "What percent goes to the leader, the category, queen or king? And what percent goes to everybody else?" One company, two-thirds of the economics.

**Christopher Lochhead** (00:16:12):
So the aha here, Lenny, is when we make the unquestioned, unconsidered, undialogued decision that we didn't know that we made, to compete, we have unwittingly said, "We're going to fight for the 24%." And it's the distinction or delta between create demand and capture demand. So we prefer the term category design, and I can explain why design instead of creation, we don't have anything against creation, but creation creates a confusion in people's mind. When people hear category creation, because most people in business, most people in tech, are strongly oriented to product, what they think you said is first to ship a product that has X features.

So when most people say category creation, that's what they think. They say, "They [inaudible 00:17:16] category, Myspace did." Or if you've been around for a little while longer, "GeoCities did." And so category creation, category design, does not equal first to ship a product with a set of features. So what does it equal? Here's the aha. Just like you can design a product, just like you can design a company culture or business model, you can actually design a market.

**Christopher Lochhead** (00:17:46):
And in so doing, you create a new distinction in value for people that didn't exist before. I'll give you a simple example. If I could own any product in the world right now, I think I'd probably want to own Purell. And there's a great thing about the company that makes Purell. The company's been around for a very, very long time, and they're owned by the original family that created the company. Their original problem that they were solving is, it was a husband and wife team, and they were working in a factory. This was 80 plus years ago. The company, by the way, is called Gojo Industries. Gojo. And Gojo is a portmanteau, putting their two names together. I think it was, maybe it was Gloria and Joseph, or I'd have to double check the husband and wife names, you'll excuse me, but the company's called Gojo Industries, and I think the granddaughter runs it today, if I'm not mistaken.

**Christopher Lochhead** (00:18:54):
Anyway, so the gal, the wife said, "This bar soap is disgusting. It's full of crapola, it's hairy, it's full of man nastiness." So the solution to washing your hands called a bar of soap was a disgusting, inappropriate solution for her. So she reimagined the problem, not as, "How do I wash my hands," but as, "How do I wash my hands without a disgusting bar soap?" And Gojo Industries created a whole new category called liquid soap. And in most restaurants, most corporate bathrooms, most airport bathrooms, if you start paying attention, you'll see the Gojo logo on the squeezy thing that you pull when you go to get the soap. So unlike most innovators and entrepreneurs, who get obsessed with the solution, and I understand why, we all love our shit, we all love our product. If you want to talk to me about our shit, I want to talk all about it.

We could do a 12-hour deep dive on all your content and how you built the newsletter, and you'd love it. It'd be great. We all do. If you're a creator of any kind, entrepreneur, innovator of any kind, you love the thing you're creating, of course. However, Gojo focused on the problem, not just the solution. So they stay obsessed with the problem, and then they ask a different question, which is, "How do I wash my hands in the absence of water?" And of course, the answer to that question is a new category, [inaudible 00:20:44] hand sanitizer. And the dominant brand, of course is Purell.

**Christopher Lochhead** (00:20:49):
And so the aha here is the company that designs the space and gets it to tip at scale. And when I say designs the space, what I mean is specifically gets a meaningful percentage of the world to agree with their definition of a problem set, which then leads to their definition of a solution set. The company that does that at any kind of scale, wins. And so the number one question for any entrepreneur or any creator at all is, "Do I want to compete for 24% of an existing market category? Or do I want to create my own where if I can execute, I will earn two-thirds of the economics?" That's the decision that most entrepreneurs make, that they don't know that they made. And at its heart, category design is about the most radical kind of differentiation.

**Christopher Lochhead** (00:21:52):
So most companies actively seek comparison. If you go to, well, if go to many software company's website right now on their homepage, you'll see a Gartner report or a Forrester report on their homepage. You'll see ads and/or content that say, "Here are three competitors and a list of features," and there'll be 25 features, "And then there's us," and there'll be 125 features. And they're actively inviting comparison. You even hear it in ads. If you listen to what marketers say, Lenny, we say the stupidest shit. Don't take our word for it. Anyway. And so the legendary innovators over time, they did not compare their innovation to the past. They broke and took new ground. They wanted to be irreplaceable. They wanted to be so much value in the minds of customers that not only were the switching costs horrible, switch to what?

**Lenny** (00:23:07):
To follow this thread a little bit, companies that you're pretty familiar with, maybe just a rapid fire sharing of their category to give people a concrete sense of what does it even mean to have a category?

**Christopher Lochhead** (00:23:21):
Okay, let's go.

**Lenny** (00:23:22):
It's becoming obvious that they basically all came up with a different category that they wanted to win. And so Gong comes up as an example. I don't know if you know about Gong. I think they-

**Christopher Lochhead** (00:23:32):
I do.

**Lenny** (00:23:33):
So it's basically like sales analytics is what they pitch, is like, this is the first thing you can ever do to understand how your sales team is doing. Is there anything you know more about their approach?

**Christopher Lochhead** (00:23:43):
Yeah, I know the space very, very well, and they did something incredibly smart. So they were a little later in the space than some others. And so there were a whole bunch of companies in today which you could broadly refer to as the revenue space, right? In the spirit of full disclosure, I'm familiar with Clary. I'm good friends with Andy. I know the team. I've done some work with them. So all disclosure. Clary, and a handful of others, in the beginning started to create the space that ultimately became RevOps. And the interesting thing that Gong did, very smart, was as RevOps started to emerge, they were smart enough to realize that revenue was going to be a big new important space. That CRM didn't actually do it. That ERP didn't actually do it. BI didn't actually do it. And so there was this sort of emerging set of thinking around, "We need a different approach to revenue."

**Christopher Lochhead** (00:24:44):
They were smart enough to realize that if they went for the whole enchilada, it's not credible from a startup that you're going to go build, that you're going to show up and say, "We have a suite that's equivalent to that of SAP, just for this other area." So they picked off a very tight part of a broader emerging category, and they executed incredibly, and they dominated that part. But here's the mistake they made. In all new mega categories, they start like this. This is exactly what happened in CRM. I could walk you through the history if it matters, but there were companies in support, there were companies in help desk, there were companies in sales, there were companies in marketing, and there were a whole bunch of sub-niches underneath that. There was a point in time in the Salesforce automation category, when that was a standalone category, that some of the hottest companies in that category were sales configurator companies, a further down niche.

**Christopher Lochhead** (00:25:44):
And so as these mega spaces emerge over time, no one company can fulfill the needs of a customer. And so there's all these niches. The mistake that Gong made, as well as the vast majority of others in that space, is they stayed in their micro niche. So the strategy in the beginning that was genius and exactly what you should do as a startup, all of a sudden, when they didn't expand and set the agenda, the design for the big category, they got fucked. Because now they're niched. And there's a big learning in this Lenny, which is, if you're a company that's already up and running and you're winning, and let's say you're becoming the category queen in your space, every entrepreneur, every CEO, faces a fascinating moment. If they become successful in the first five years or so, which is they realize their biggest barrier to growth going forward, is their current category, because you can only be as big and successful as your market category.

**Christopher Lochhead** (00:27:02):
And so you have to continuously expand the vision for the category and continuously build on that. And if you don't, and somebody else frames, claims, and names, the bigger agenda, as has been the case, and look, I'm biased, as has been the case with Clary, Clary's crushing everybody in this space right now, and the Gongs and all the other players are now in this horrible position, which is they basically only have two choices. One, they can stay in their niche, which is what most players do, and they argue best of breed "Oh, well, we're the best revenue carbodingulator. And you could go buy an end-to-end revenue platform. But if you do that, you won't get the best functionality in the carbodingulator space. So buy our revenue carbodingulator." That doesn't work. Microsoft proved it over 30 years ago, and we can talk about that if you want.

**Christopher Lochhead** (00:28:00):
Microsoft proved it over 30 years ago, and we can talk about that if you want. You either stay in your niche and get diminished over time, or you uplevel and you go to play for the whole enchilada. The problem is for them and all the others in this space who didn't do that, if they were to do it today, well over a year after Clari did, they're just a Clari copycat. And so basically you either go compete with Clari for who can be the category king, or you stay in your niche and get diminished over time. And if you're going to go compete with the company that is laying down the category design that's picking up the most momentum for the overall market, you better know how to do a fifth dan black belt category wars.

**Lenny** (00:28:58):
Following that thread, there's a bunch of threads I'd love to follow, but something I definitely wanted to touch on is, in this concept of the better trap, which is where most people go, where they try to be the better solution in an existing category. And just to reinforce that point, what have you seen? What have you learned about just why that is often, and maybe always the wrong approach?

**Christopher Lochhead** (00:29:19):
Let's take a very current example, Threads. We just wrote about this. When Threads came out, and I can show you all the headlines if you want to see them, New York Times, nevermind tech... All these places. Twitter killer, Twitter killer, Twitter killer, Twitter killer. And at the time there's all this discussion of Musk and Zuck having a UFC cage fight. And so there's all this buildup into the launch of Threads and there's all this supposed Twitter hate, and, quote, unquote, "Everybody's leaving Twitter." All right. So Threads comes out. What happens? Threads surpasses GPT as the fastest growing app ever.

**Christopher Lochhead** (00:30:08):
Now the headlines, Lenny, are coming. This is it. Zuck's a genius. It's incredible. And by the way, this sits inside one of the newer stupid axioms in Silicon Valley. So this is a side note, but when somebody says something in Silicon Valley that enough people think, "Yes, that's smart." They just parrot it. They don't actually think about it. There's a current thinking in Silicon Valley, and this was real loud as Threads was coming out, this was the reason why Threads was the Twitter killer. What you need, Lenny, is brand and distribution. That's what you need, especially distribution. I would assert to you that Threads had the greatest distribution advantage of any new piece of software ever launched. If there's another one that has a greater distribution advantage, I'd like to know what it is.

**Lenny** (00:31:11):
No, that seems right. Seems right.

**Christopher Lochhead** (00:31:14):
Massive distribution, incredible, easy up and on, incredible. Free product, not even freemium, free. Awesome. And Facebook Meta, you tell me, one of the 10 most powerful brands in tech?

**Lenny** (00:31:32):
Absolutely.

**Christopher Lochhead** (00:31:33):
How many users does Facebook have today, Lenny, do you know?

**Lenny** (00:31:35):
Over a billion? Might be more.

**Christopher Lochhead** (00:31:37):
How many billion person apps have there been in the history of apps?

**Lenny** (00:31:42):
None.

**Christopher Lochhead** (00:31:43):
Right.

**Lenny** (00:31:43):
I think.

**Christopher Lochhead** (00:31:44):
Legendary brand, the greatest distribution advantage in history. What happened? It cratered. It's gone. It's still there, but nobody's there.

**Lenny** (00:31:59):
They're launching the [inaudible 00:32:00] soon so they have another shot.

**Christopher Lochhead** (00:32:02):
Oh yeah. Now why, why did that happen? Why did one of the richest people in the history of the world, who's potentially one of the smartest people in the history of entrepreneurship in tech, fail so miserably when the entire world said he was going to "kill," quote, unquote, Twitter? And after the initial, quote, "success" of Threads everybody said that's exactly what was going to happen. And now all those experts are surprisingly quiet. The legendary Kevin Maney said that category design is a new lens on business. It's a different lens. It's sits next to the product lens, it sits next to the competition lens, but it is equally important. So here's what happened with Threads.

**Christopher Lochhead** (00:32:54):
They attacked an existing, well-known, well understood, incredibly well-defined problem with a direct copy. They even were celebrating that it was Twitter, just better. They said virtually those words. So known existing problem with a known existing solution that was, quote, unquote, "better" and integrated with the rest of the Meta shit. Quote, "Everybody checked it out and everybody went away." Why? Here's the aha.

Problems create categories, and you either have to A, solve a new problem, or B, reframe, name and claim an existing problem in a, I'm going to use these words on purpose, very different way. And if you reframe the existing problem such that people see it in a different way, that's when they'll be open to a new solution. But the mistake is the impasses is on the wrong [inaudible 00:34:11]. The impasses is on the product. Because we live in a world where just like the availability of oxygen, we believe the best product wins. Zuckerberg is going to blow in excess of a billion dollars on Threads and it will fail. It already has failed. Because you can't take an existing problem with an existing solution, launch exactly the same shit, tell the world it's better and have the world embrace it. Because the problem makes the solution the other way around.

**Lenny** (00:34:51):
So classic advice along these lines is, if you're, say, 10 times better than the existing product, you have a good chance at getting people to care and having success. Is there a line of just like it's the same thing but 10 times better? Or do you have to, in your experience, reframe? And I want to talk about that.

**Christopher Lochhead** (00:35:07):
Let's just look at the evidence. We could agree that Jeff Bezos is not a dumb person, yes?

**Lenny** (00:35:14):
Yes.

**Christopher Lochhead** (00:35:16):
Do you have an Amazon Fire phone?

**Lenny** (00:35:19):
I don't.

**Christopher Lochhead** (00:35:20):
Neither do I. Why not?

**Lenny** (00:35:24):
I'm very happy with my iPhone.

**Christopher Lochhead** (00:35:27):
And so, Bezos launched a better product and nobody bought it. And the reason nobody bought it is the problem. And therefore the solution that you think you're solving with your iPhone is solved with your iPhone. When was the last time you enjoyed a Red Bull Cola?

**Lenny** (00:35:48):
Not once.

**Christopher Lochhead** (00:35:50):
Red Bull made exactly the same mistake that Zuck just made with threads. What Red Bull believed was, "We built one of the greatest brands in the world." Which they have, but they didn't understand why. The category made the brand not the other way around. Energy Drink made the category, so they go, "Great, we can put our brand on anything and it'll sell. So let's make Cola." They lost a bazillion dollars. It's reported that Microsoft lost somewhere between 400 and a billion dollars in Microsoft Stores. Did you ever go to a Microsoft store, Lenny?

**Lenny** (00:36:28):
I walked by them in the mall and I don't think I've ever entered.

**Christopher Lochhead** (00:36:32):
Well, they look exactly... If you remember, they look exactly like an Apple Store. And Ballmer famously told the team, when the Apple Stores took off, he famously told the team, "Go to the Apple Stores, study everything they're doing and let's copy it exactly." Google that shit, it's out there. Well, it didn't work. Why? Because you can't attack an incumbent category queen unless you frame, name and claim a new or different problem. Because when the existing problem is well understood and the existing solution is well understood, there's no need for a new solution. Even if people, quote, unquote, "hate Twitter," didn't do anything to Twitter, and now Zuck's going to have to write off probably over a billion dollars on Threads. And the funny thing is, Lenny, this just keeps happening over and over and over. Venture capitalists in the next five years will blow at least half a trillion dollars in the AI space alone, on me too, demand chasing existing category competing startups that have a 10x better product, no one cares.

**Christopher Lochhead** (00:38:02):
And look, we're all going to sit here and watch them do it. And we, category pirates, and those of us in the category design world will say, "Told you." And they're just going to keep doing it. More importantly, because the big companies in many cases can afford to continue to fail and make this mistake. The tragedy in this is how many legendary innovative products never got to see the light of day because the inventor, the creator, the entrepreneur, believed in the product, but didn't know that every solution has to fit into a problem of value for people. And so their innovation went nowhere.

**Lenny** (00:38:51):
Let's talk about how to actually go about designing a category. You've used this phrase a few times, and that may be the best lens to approach it. If not, we can go at it from a different direction. But this idea of framing, naming, and claiming, how do you do that? What's that process like?

**Christopher Lochhead** (00:39:08):
Great question. It starts somewhere where most people don't want to start, and that is, the first law of category design is thinking about thinking is the most important kind of thinking. Thinking about thinking is the most important kind of thinking. If you're going to think about thinking, we have to define thinking. Now, the minute I start down this path, there's a meaningful percentage of people whose eyes rolling, going, "Here comes some bullshit," right? "Just tell me how to do the SEO, Lenny. Where's the SEO? Or where's the..." Whatever the tactical thing is.

**Christopher Lochhead** (00:39:47):
So the first thing we have to do is break down thinking. Roger Martin is considered to be the greatest management thinker, or certainly one of them alive today. We were lucky enough to have him on the podcast when his most recent book came out, which if I'm remembering correctly, is called the New Way to think. People call him the new Peter Drucker. And he describes it as effectively as anyone I've ever heard. And at a high level, and this is me paraphrasing, so give me some license, but he's the source. At a high level there's two kinds of thinking, reflective and reflexive. And now, this is my editorializing. What most people think is reflective thinking is actually reflexive thinking. What's reflex versus reflective? Reflex is simple. You go for an annual checkup, yes?

**Lenny** (00:40:41):
I should be.

**Christopher Lochhead** (00:40:43):
Have you ever had a doctor whack your knee with the little pink?

**Lenny** (00:40:46):
Yeah.

**Christopher Lochhead** (00:40:46):
And your knee goes whoop.

**Lenny** (00:40:49):
I do [inaudible 00:40:49] .

**Christopher Lochhead** (00:40:50):
And she's testing your reflexes. And that's an involuntary thing, when you're sitting on the doctor's table and your legs are hanging like a little kid and she goes whack, your leg just does this twitch, right? So that's a reflex. And reflexive thinking is very, very powerful. You have a driver's license, I'm guessing.

**Lenny** (00:41:11):
I do.

**Christopher Lochhead** (00:41:12):
And when was the last time you were in a vehicle, driving?

**Lenny** (00:41:15):
Yesterday.

**Christopher Lochhead** (00:41:17):
And if you're out on the road driving and somebody cuts you off, what are you likely to do?

**Lenny** (00:41:25):
I get a little upset and then I keep driving.

**Christopher Lochhead** (00:41:29):
But I would assert, Lenny, you do something before you get upset.

**Lenny** (00:41:31):
I guess I try to avoid hitting this car.

**Christopher Lochhead** (00:41:34):
Yes. And maybe you swerve, maybe you hit the brakes, maybe you do both. My point is this, the car cuts you off and we instantly, no thinking, react in order to save our lives, not damage our vehicles, not hurt anybody else. We didn't think about that. We literally just reacted. That's the way people think about most things. I say to you, Lenny, let's talk about guns and abortion and immigration rights in America.

**Lenny** (00:42:14):
No, thanks.

**Christopher Lochhead** (00:42:15):
Now you have opinions about those things, right?

**Lenny** (00:42:17):
I do.

**Christopher Lochhead** (00:42:18):
As do I. Most people don't challenge their own thinking. Most people say, "Now, why do I only think what I think about abortion? Where did I learn that? What do I really think about abortion? What do others think about abortion? Are there smart people in the world that I admire who are more educated and experienced in this field that have meaningfully different opinions than my own? There are. Why is that?" Et cetera, et cetera, et cetera. We don't fucking do that, we say our opinion on abortion is the opinion on abortion. And in the United States of America in the political domain we say, "And anybody who thinks differently is trying to kill America." That's not thinking. So reflexive thinking is, what do I really think? Why do I think that? And in the business world, most people unconsciously assume the future is a continuation of the past. That's not what legendary entrepreneurs do. Legendary entrepreneurs don't just think they know the future is going to be different, because they're designing that different future. And the problem they're focused on matters to them so much that the fact that the problem continues to persist makes them batshit crazy. RJ... Is it RJ or JR? I can't remember now... The founder of Rivian, obviously Musk at Tesla, these guys are obsessed. It drives them insane. They don't understand why we're not all in EVs already.

**Christopher Lochhead** (00:44:12):
And so my friend Mike Maples, the legendary venture capitalist from Floodgate, says, "The greatest entrepreneurs are visitors from the future telling us how it's going to be." And the reason many of them are so irascible is because the fact that the present is not already at the future that they see makes them insane. And so the point being legendary entrepreneurs and creators make the future different. They literally are in the design different futures business. Can I tell you a story?

**Lenny** (00:44:46):
Please.

**Christopher Lochhead** (00:44:50):
We're friends, and we've done some work with the guys who created Lomi. And Lomi is the first kitchen appliance in 20 years to earn a spot on the kitchen counter. A, it's one of the fastest growing new consumer items in the last 20 years. And B, if you think about your kitchen counter, do you have a toaster?

**Lenny** (00:45:19):
Yep.

**Christopher Lochhead** (00:45:21):
Coffee maker?

**Lenny** (00:45:22):
Yeah, I don't drink too much coffee, but we do have one.

**Christopher Lochhead** (00:45:25):
Any other devices on the kitchen counter?

**Lenny** (00:45:27):
We got a rice cooker and the rest is hidden away.

**Christopher Lochhead** (00:45:33):
Perfect. So what's Lomi? Lomi is the category designer of the smart home composter. Imagine a device that's one and a half or twice the size of a good size toaster. And what Lomi does is you take your food scraps, and it turns out that depending on whose numbers you want to believe, in America, we throw away somewhere between 40 to 60% of our food. And it turns out that food garbage, food waste is some of the most damaging to the environment. So what does Lomi do? You take your food scraps, you dump it into Lomi, you fill that shit up, Lomi's got a button on the front, you press that button, and what used to take three to six months to compost gets composted in three to six hours.

**Christopher Lochhead** (00:46:29):
And even, this is weird, it smells good to me. Lomi did not say that, "we're better garbage, that we're different garbage, that we're better recycling." What they said was, "We are a different way of solving this huge problem." And they use both personal motivation, nobody likes throwing out garbage, nobody likes a big mess in their kitchen, et cetera, and an altruistic vision, which is... And oh by the way, if we do this, we will do something that governments heretofore have not been able to do, which is take a massive amount of environment hurting gases out of the atmosphere. And it turns out because of global climate change that we're creating more and more sand and we have dirt traces. Lomi dirt has been shown to be amongst the most nutrient rich dirt in the world. Here is a company with a breakthrough technology that truly makes a difference in the world with a business model that allows them to build a highly profitable high growth business.

**Christopher Lochhead** (00:47:48):
And the way they got there was by designing a new category and showing the world why, by making room in your tight kitchen for this new device, you'll make a difference for your family and the world. And if all they had done was what, by way of example, Dean Kamen did when he launched the segue, which is, isn't this cool? Nothing would've happened. So my point is, the Lomi guys designed a product, a company, and a new market category. They created demand out of nothing for, I think the average price is around 400 bucks. The sum total of the market for smart home composters when they launched was fucking zero. And their vision for the new category was so compelling, Jay-Z was one of their first investors.

**Lenny** (00:48:53):
I have their site up. Thinking about this framework of, frame it, name it, claim it, they framed the problem in this unique way of... Is it the framing of the problem or framing of a solution? The framing step, best way to think about that.

**Christopher Lochhead** (00:49:09):
There's something in category design called languaging, which is the strategic use of language to change thinking. And a mistake that a lot of entrepreneurs make is they use old language to describe their new thing. And we can't use so much new language that nobody knows what the fuck we're talking about, so we have to meet the category where it is and bring them forward, but we have to create new language. Can I share with you one of my favorite, most recent, favorite category design stories in this regard?

**Lenny** (00:49:42):
Please.

**Christopher Lochhead** (00:49:44):
You've been on an elevator, yes?

**Lenny** (00:49:45):
Yes.

**Christopher Lochhead** (00:49:47):
Have you ever looked at the floor and seen a logo on the floor of the elevator?

**Lenny** (00:49:53):
I can't recall. I imagine it.

**Christopher Lochhead** (00:49:55):
Well, if you do, you'll more than likely see this name, Otis. Otis Elevator. Most people don't know why Otis is the category queen of elevators. Well, here's why. Elisha Otis invented the elevator. Now, pre-Elisha, there were no skyscrapers. Because how could you get to the top floor? How could you build the top floor, et cetera, et cetera, et cetera. So when he creates the elevator, there's no known problem for it to solve. So he demonstrates it, people think it's cool. He shows it at like fares and shit. Because the big problem with prior elevators was they would crash. And so he built this safety system to catch them if the wiring would crash. And the category name, he actually used, Lenny, he called it the safety elevator to address the current problem in the space, which is... I don't know. People still went, "That's interesting, but why do I need a safety elevator?" It's a solution with no problem.

**Christopher Lochhead** (00:51:14):
So what does he do? Languaging. And in category design, one of the breakthroughs is this thing called a point of view, which helps you frame, claim and name a problem and educate the world on why they should move from the way it is to, we call them frotos, from to, a new and different way. So Elisha has to make the market, there's zero demand. It's what many of our smart VC friends call a zero billion market, which is what you want. So what does Elisha call it? The vertical... Railway

**Lenny** (00:51:57):
Beautiful.

**Christopher Lochhead** (00:51:59):
And people understand what a railway does. It moves people and shit this way. And he said, "Great, we've now got a vertical elevator that moves people and shit this way." And if you have a vertical elevator-

**Lenny** (00:52:11):
Vertical railway.

**Christopher Lochhead** (00:52:12):
A vertical railway, thank you. You can have a new category of building. This is no different than anybody today, for example, in the technology space, who's building a new part of the technology stack for AI. So if you've got a new important security layer for AI that enables a new highly secure AI application. From a languaging perspective, if you just use existing languaging, you'll be like Elisha in the beginning where people go, "That's really cool, man. Fucking A, didn't think that was technically possible. Wow. It's like you've broken gravity, dude, incredible. Don't know why we'd ever need this. See you." And he goes, "Wait a minute, wait a minute. What if it was a vertical railway?" "Well, what could we do with a vertical railway?"

**Christopher Lochhead** (00:53:09):
This is why thinking matters. The way you think about the problem, the way you frame claim and name the problem. One of the core tenets, Lenny, in category design is listen to the words. Listen to the words. And when you listen to the words, you will hear things that you don't normally. And so he created new languaging, what in category design is called a point of view, to frame, claim and name a problem, which is, how do I move up and down versus across land? And in so doing the aperture of people's minds created what you could think of as new mental scaffolding for a whole new kind of innovation. And thanks to Elisha Otis, we have tall buildings.

**Lenny** (00:54:01):
I really like this idea of languaging. Are there any other examples come to mind, awesome examples of languaging in action that worked out?

**Christopher Lochhead** (00:54:07):
I got a bazillion of them. Another one of my favorites. When Starbucks first starts a coffee is 10 cents. You sit there and you go, "We can't make money at 10 cents." That doesn't make sense, right? Unit economics don't work for what we're trying to get done. If the ASP in the industry is 10 cents, we want to have an ASP of three bucks. Fuck. Well, here's the aha. It's very hard to charge three bucks for a thing that everybody currently pays a quarter for, if you call it the same thing.

**Christopher Lochhead** (00:54:50):
So they create new languaging, they teach, they literally teach consumers new language. That's why you and I walk into Starbucks and say, "I'd like a double grande latte, please." 25 years ago, that was not languaging that you and I used. And they use it as a mechanism for radical differentiation and radical value/price differentiation. And they made up the fucking word. It sounds kind of Italian, vente. But the truth is, by the way, it's a milkshake, but that's a whole other conversation. They're the number one milk seller in the country. They're a milk company, not a coffee company. But that's, again, a whole other conversation. The point being, if you want to charge three bucks for something that heretofore has been 10 cents or a quarter, change the language. And you know it's Starbucks language. Where I live, there's a shit ton of new hipster independent coffee shop type places. Where they paint the Mona Lisa in your latte before-

**Christopher Lochhead** (00:56:00):
... where they paint the Mona Lisa in your latte before they give it to you and all that shit. If you walk into one of those hipster places and ask for a double grande latte, the super hipster gal or guy behind the counter with the nose ring and shit is going to give you a bit of a grizzle, because you are using Starbucks languaging in their location, and that's the other breakthrough. This is really important in the technology industry, the company that creates the languaging for the category wins.

**Christopher Lochhead** (00:56:39):
Oh, you see that today, OpenAI. Not that long ago you did not hear the term large language model. Correct?

**Lenny** (00:56:51):
Correct.

**Christopher Lochhead** (00:56:52):
That was not a term we were talking about.

**Lenny** (00:56:53):
That's right.

**Christopher Lochhead** (00:56:56):
And today the entire industry is talking about LLMs. Here's another thing that they created, training data. Well, those of us who've been around for a long time, we understand what data is. We know what a database is, we know what data in motion is, we know what data at rest is. We know what structured data is, we know what unstructured data is, et cetera, et cetera, et cetera.

**Christopher Lochhead** (00:57:19):
I'm not a data expert by any stretch, but I've been in the industry for 37 years, I know some about shit data. We'd never heard the term training data, and I'm still frankly looking for a breakthrough in languaging to describe it to people, because I think when most people realize the difference between data/content and training data, there's a massive breakthrough that can occur there. The languaging is still not sufficient, but we're getting there.

**Christopher Lochhead** (00:57:53):
New languaging creates new thinking, and a demarcation point in language creates a demarcation point in thinking, which can create a demarcation point in perceived value, and she, who changes and or creates net new value perceptions wins.

**Lenny** (00:58:19):
**Christopher Lochhead** (00:59:51):
Great question, Lenny. Two things, at least. First, spend more time on the problem than the solution. There's a very early stage, security startup I'm working with right now in the AI space that's doing absolutely mind-boggling things, and the founders have incredible backgrounds with large transaction systems and deep security, just an incredible company.

**Christopher Lochhead** (01:00:21):
I had a call yesterday with the founder and some folks on the product team just getting an update on where they're at and this and that and the other, and we're sort of starting to want to talk to people externally. We've raised a seed round, VCs are coming, they're very ... Anyway, we're sort of slowly starting to want to come into the world and begin to have a conversation.

**Christopher Lochhead** (01:00:46):
The founder CEO sends me a text yesterday and says, "I'd like you to, if you're open to it, have a call with so-and-so. He's a very important person, knows a lot about our space, blah blah. Known him for a long time," dah, dah, dah, dah, dah. Great. I said, "It sounds wonderful, but why? What's the purpose of my conversation with so-and-so?" The founder literally said to me, "I would love it if you would be willing to invest some time in listening to some of our customers to hear from their perspective what the problem is and what the solution could be, not just from me and our team."

**Christopher Lochhead** (01:01:27):
That is a founder who's obsessed with the problem. That's the first piece. The second piece of advice I'll give you, I mentioned Mike Maples, he's got a very powerful way of framing this. He calls it backcasting as distinct from forecasting. You're nodding your head, you're familiar with this.

**Lenny** (01:01:54):
Yeah, I've read this in length in the show notes, it's amazing.

**Christopher Lochhead** (01:01:56):
Yeah. Here's the idea. What most people do is you and I are entrepreneurs, we have this idea for a product, this problem we can solve. We think we're going to be bazillionaires, we think we're going to help a lot of people, we think we're going to have a lot of fun, and so we have at it. And whether we realize it or not, the mental scaffolding we use goes like this: Lenny and Christopher are sitting here now, we have these big dreams. We think, let's say, five years out into the future, "What do we want to do? Oh [inaudible 01:02:32]. Why don't we go through all the dreams? Great." Then we ask ourselves, most of this is subconscious and then it shows up in business plans and other things, "What do we need to do to get from here to there?" Have you ever done any backcountry hiking, Lenny?

**Lenny** (01:01:56):
Yeah, I have.

**Christopher Lochhead** (01:02:52):
Yeah, so if you and I were going to go on a four or five-day trip in the Sierras, we would have a start point, right?

**Lenny** (01:03:00):
Yeah, absolutely.

**Christopher Lochhead** (01:03:02):
And we'd know where we were coming out, right?

**Lenny** (01:03:03):
Mm-hmm.

**Christopher Lochhead** (01:03:04):
And we'd have way points along the way, yes?

**Lenny** (01:03:06):
Yeah, probably.

**Christopher Lochhead** (01:03:09):
Because we knew we were going to be out four days or six days or whatever, we would try to plan our food appropriately.

**Lenny** (01:03:14):
Absolutely.

**Christopher Lochhead** (01:03:14):
And the whole plan would be predicated on "We're going to start here and we're going to end here," and what do we need to do to get from where we start to where we end, yes?

**Lenny** (01:03:25):
Mm-hmm.

**Christopher Lochhead** (01:03:26):
Now, when going on a backcountry hike, that's a very smart fucking thing to do, because if you've ever been on a backcountry hike and you're four days in only to realize you don't have enough food, that's an experience you don't want to recreate. Okay, turns out that while that's highly effective for a hike, it is intergalactic disaster for a startup. Here's why. Your point of reference is everything. Thinking about thinking is the most important kind of thinking.

**Christopher Lochhead** (01:03:59):
When we do it that way, mentally we are standing in the present, which is an extension of the past, and we're saying, "What do we need to do to go from this present to the different future we want, and what are the obstacles in the way?" Here's the mental scaffolding. That's forecasting, here's backcasting.

We do an exercise, we abandon everything. In category design you get taught to what's called reject the premise, so I reject everything about the way that it is, all of it. You and I now envision this future five years out and everything's gone incredibly, it's exceeded our expectations. We make that true in our minds. We write out, we brainstorm out "What's it going to be like? What kind of technology are we selling? What are we doing for customers? How big's our company? How many people will hire?" Da, da, da, da, da, da, da, da. Then we say, "Okay, standing in that future, five years out, looking back to the present, what did we do to make this different future happen?" That's category design. That's how you unshackle yourself from the past. See, one of the biggest disservices in our industry is this word disrupt. "Oh, [inaudible 01:05:26] we're going to go disrupt the engineering industry." Nah. Well, if you're disrupting something, by definition, your reference point is the something. And when your reference point is an existing thing, your reference point is the past. If we want to be able to think in unconstrained ways about a radically different future, the more we drag the past forward, the worse off we are. What reject the premise teaches us is let's forget everything we know and start fresh. My friend, a legendary designer, John Bielenberg, does this course on innovation and design with kids in university. He does this multi-week exercise and the objective of the exercise, Lenny, is design a bicycle. That's the objective. And there's only one design point. It cannot be rideable.

**Christopher Lochhead** (01:06:25):
And the reason John makes him do that, his philosophy, he calls it thinking wrong. That's his version, if you will, of reject the premise. The reason for it is when you take away the premise, it must be rideable, you open up the aperture for legendary new thinking, radically different possibilities, radically different futures. This is the mistake that many, many entrepreneurs make, is whether they realize it or not, what they're doing is incremental better and they're fighting for market share, fighting for existing demand with something that's incrementally better. And the reality is that's why most entrepreneurs fail. Now, you could fail doing it exponentially different, it sounds medically insane to say "What you want is a zero billion dollars market." However, as crazy as it sounds, it's the only thing that leads to meaningful success. And the proof is in the data.

**Lenny** (01:07:34):
Yeah. You talk about this in your writing, that on the surface it feels very hard and expensive to design a category, build a category, convince everyone this is a new problem. But your point is there's no other option really if you want to build a large business. Is that right?

**Christopher Lochhead** (01:07:49):
Correct. And the other thing is people say, "Oh, it's really expensive and it takes an amount of time." As compared to what? You've lived a lot of your life in the product world, yes? As have I. Well, if you ask smart VCs, if you ask Brian Roberts at Venrock, the number one healthcare tech investor in the world, I believe he says it's eight to 10 years for a product to really have some maturity and be really stable. And I don't know whether he's right or not, but he's a super smart guy. We know how long does it take to create a legendary culture, how long does it take to get a legendary innovative business model to really hum. "Ah, it's mainly hard." Well, so is building a product, so is building a company, so is raising VC, so is doing sales, so is doing marketing, so is doing HR. If you want to be easy, go work at the fucking DMV. That's point A.

**Christopher Lochhead** (01:08:53):
Point B is the reality, Lenny, when you look at it, the vast majority of innovation comes from startups. People say, "Only big companies can do this." Listen, my collaborator partner Eddie Yoon, is the Obiwan Kenobi of category design in the Global 2000 Arena and particularly on the consumer side. And he will tell you that most of these major companies... And he's worked for, you name a big food company, you name a big beverage company, he's worked for many of them. They fail miserably. The reality is six people with a small investment from a rich uncle can stand something up that has the potential to be worth $3 trillion dollars. That's what Apple is.

**Christopher Lochhead** (01:09:52):
And I sat there with Don Valentine and asked him about why he signed the check to Steve and Steve, and he said it was the stupidest use case he ever saw. The use case was a stay-at-home mom, keeping track of her recipes on the Apple personal computer. This is the stupidest use case ever. However, Don could see the potential in the category and in the guy's willingness to go get after it. And so for a VC, if you're going to raise money, the VCs who invest in early stage mass potential companies are the ones who see your different future.

**Lenny** (01:10:40):
Along those lines, I had this note that you had this quote around product market fit and it's this hot take that product market fit is a very dangerous idea. I'd love for you to speak to that, because I think most people are in the opposite camp that it's the only thing that matters. Why do you think it's such a dangerous idea?

**Christopher Lochhead** (01:11:01):
There's a bunch of these product myths. Product led growth is another one, but let's go to product market fit. And God bless Mark Andreessen, he's the guy that framed it. And Kevin just wrote a really super thoughtful piece on why it's backwards, and I'm happy to send that to you if you want. Kevin Maney, genius. Here's the aha, again, category design principles. Listen to the words, product, market, fit. Product market fit. Now, let's think, what there is for me to do is find a way to fit my product into a market.

**Christopher Lochhead** (01:11:48):
Pretty simple way to determine or to distill product market fit. And what product market fit has come to mean is, we're a brew pub, you and I want to start a craft beer place like everybody else on the West Coast, and we're going to make a bunch of samples and shit, and we're going to feed those samples to our friends and to our ideal customer profile that I learned from Lenny. And if enough people amongst my friend group and my ideal customer group say, "That's a yummy IPA, I like it," then we're going to build it. And then if people start buying that IPA, we have, and these are the words people use, "achieved product market fit."

**Christopher Lochhead** (01:12:43):
Okay, well, Threads achieved product market fit faster than any product in the history of the world. Here's the aha, categories make products not the other way around. What you want is you want to design a market category for your product, not fit your product into a market category. And the problem is, our industry, like many others, but the tech industry, is full of product bigots, because they really, really, really, really, really believe, like they believe in the availability of oxygen, the best product wins. They really believe it. And they believe what marketing's job is, "Could you put a demo on our website and get a demo? Can we get a viral video that's a demo? Because once people see how much better, faster, cheaper, smaller, bigger, whatever our thing is, they're going to buy it," and they don't. What they buy is a new insight around a problem/opportunity that requires a different solution. That's what they buy. Here's another simple example. This is the one I hear right now a lot, "What we need now the story, we need a story brand. The number one thing you can do in marketing as a startup founder is to share your startup founder journey. Share your journey." This is all the shit we're hearing. We've been hearing this for a while. Well, guess what? No one gives a fuck about your journey. They really don't. You know what they care about? Themselves. Their problems, their needs, their opportunities. For our book, Snow Leopard, we did the first ever comprehensive data science research ever done using Nielsen data to study nonfiction books. And we know that because what Nielsen told us, and we had to sign an NDA that would choke a horse in terms of what we can say and can't say about the data. But one of the things we wanted to understand is what categories of business books sold and which categories didn't and why. We can get into all that if you want, but here's the aha. Guess what the number one category of business books, nonfiction books is by a mile.

**Lenny** (01:15:13):
Oh my god. Sales? Marketing, marketing-sales. No.

**Christopher Lochhead** (01:15:19):
Personal growth.

**Lenny** (01:15:20):
Okay, that makes sense. Self-help.

**Christopher Lochhead** (01:15:22):
Self-help. And number two, personal finance. Biographies are way down on the list. The point being, no one cares about our product. No one cares that it's 25 mega flips faster, cheaper, whatever, they don't care. You know what they care about? Them, their needs, their wants, their problems. And categories are about customers and their wants, needs, problems and opportunities. Branding and marketing is about our product. And the greatest innovators in the world don't stop at innovating a product or technology. They design a new innovative market category where they standalone.

**Lenny** (01:16:12):
We're definitely going along, which I expected. And we've actually gone through most of the questions I had, but I have just a few more to close out the conversation. One is positioning. That's something you hear a lot about. How do you think about positioning versus categorying? Are they essentially the same thing? Is positioning just a way to phrase and describe your category? How should people think about that?

**Christopher Lochhead** (01:16:32):
What positioning today has become is essentially how do I tell a story about my shit in a unique way, in a compelling way? That's really what people mean when they say positioning. The parts they never stop to consider, again, listen to the words positioning as it relates to what? Because you, again, listen to the words and fucking think, "You position against competitors." How do we position against the competitors? That's a phrase people use. The question is, what are you positioning against? And the answer to that question almost all of the time is competition. If you're doing positioning in that context, you just decided you're fighting for 24% of the demand designed by somebody else. And we think in the tech space where one company earns two thirds of the economics, if that's your starting point, you fuck yourself from the start. To put it simply, positioning in the modern context is for losers. That is to say people who are fighting over the 24%. That's positioning.

**Lenny** (01:18:15):
I love it. Getting spicy over here.

**Christopher Lochhead** (01:18:17):
Well, it's factually correct. People go, "Oh, [inaudible 01:18:21]." Okay, so you mean to tell me that in tech one company doesn't take two thirds of the economics? Okay, believe that. And you can believe gravity doesn't exist. It does, but you can believe that Bigfoots are installing misters on 5G towers to make us all sick, if you want. You can believe anything you want, it doesn't make it true. What's true is one company wins and everybody else gets fucked. That's what's true. Look at any space you want. You want to go back to your list? We can go through the list. Positioning has become sort of category design for the cowards. It's like, "Well, I know that we could really be as radical as to create our own space, so let's just see if we can carve off our little niche over here." Okay, great.

**Lenny** (01:19:20):
A big part of positioning, just to expand on this a little bit, is differentiation. Differentiating yourself. People always talk about the importance of differentiation. Do you see that as the same potential pitfall, or how do you think about differentiation?

**Christopher Lochhead** (01:19:34):
Okay, this is really, really powerful. In category design, we don't compete, period, full stop at the brand to brand or product to product level. Category designers do compete, but not against a product, not against a company, not against a brand. Category designers compete against the status quo. Let me be specific. There's a category called cycling. You look like you might be a biker, Lenny, are you?

**Lenny** (01:20:09):
Very casually, mostly an e-bike.

**Christopher Lochhead** (01:20:13):
Those are really fun.

**Lenny** (01:20:14):
They're so fun. Mountain bike. Yeah.

**Christopher Lochhead** (01:20:16):
But you've been on a mountain bike. You've been on a road bike, you've gone out with friends, done this, right?

**Lenny** (01:20:20):
Yeah.

**Christopher Lochhead** (01:20:21):
Anybody who bikes on any kind of regular basis has been in an accident. And if you bike on a real regular basis, you've been in an accident with a vehicle that was not caused by you. That's true for every person I know that rides a bike on any regular basis, myself included. All of a sudden a new category shows up, and that new category is called indoor biking classes. And the category designer is a company called spinning.

**Christopher Lochhead** (01:20:53):
And they say, "Hey, biking's great. It's an incredible source of exercise, but you don't want to get killed doing it, so come take a class." And what they're doing when they do that, they're competing category to category, not brand or product to brand. And that's a strategy that's called damming the demand. What does a dam do? There's a bunch of water running in the direction, a dam takes that water, stops it and moves it, does something to it. Interrupts it and changes it. Here's what spinning does. They say, "Why risk your life on a bike when you can take a wonderful class and not have to worry about it and get your exercise?" What dam the demand, Lenny, is you thought you wanted this, but what you really need is that.

**Christopher Lochhead** (01:21:52):
Then what happens? The next iteration in that space comes from Peloton. Again, when Peloton launches, they don't say, "Hey, our bikes are better than spinning bikes. Our bikes are 12 mega flips, faster, cheaper." They don't do any of that shit. They don't shit on spinning, they don't attack spinning, they don't attack road biking, they don't do any of that stuff. They say, "Why drive to the gym when you could do it at home?" They dam the demand for spinning, they don't compete against it. And they reframe the problem called "How do I get a great workout in a group environment without getting killed?" And they achieve that massive success.

**Christopher Lochhead** (01:22:41):
And I can give you many other examples. The mistake is competing directly product to product. The enemy is the status quo. That is to say the way it is now. If you go back to Lomi, the enemy, the way it is now, the status quo, is a nasty garbage in your kitchen that stinks and smells and gets all over the floor that you have to drag to the green bin and then the squirrels and the fucking raccoons eat it. That's the personal upset. And the environmental one is, we're destroying the planet. No, by the way, rather than destroy the planet, why not create this super awesome compost dirt? In category design, we call that a from to a Frodo. Category designers are leading the world from the way it is to a new and different way. They're not saying, "My carbide ingulator is better than their carbide ingulator."

**Christopher Lochhead** (01:23:32):
Here's a simple example. This is another reason the word disrupt doesn't work. Les Paul is the innovator of the electric guitar. Today most guitar players have an electric guitar and an acoustic guitar. Matter of fact, most guitar players have more than one, very few guitar players, some, but very few said, "Oh, now that the electric guitar is invented, fuck the acoustic guitar." Very, very rare. The net new category called electric...

**Christopher Lochhead** (01:24:00):
So the net new category called electric guitar as opposed to the prior category, acoustic guitar, actually increases the overall guitar TAM. Doesn't disrupt shit. So in that case, you're actually creating net new demand. In the Peloton example, you're both creating that new demand and you're getting your start. And this is where I think a lot of the discussion that you have and a lot of your work, Lenny, around growth, is really powerful, because what's really going on when growth works is effective digital damning of demand. That's what's really going on, when it works.

**Lenny** (01:24:41):
I think somewhere maybe wrote this, "Damn the TAM" is an awesome phrase. If you haven't, you should use that. Damning the TAM, increasing the TAM. So you have a number of books you put out. I'm going to link to all these. Play Bigger, I think, was your first, Niche Down is the other. And your newest book, I believe is your newest book, is the 22 Laws of Category Design. So maybe just as a last question, can you just share a few of these laws, maybe two or three of your favorite laws from the book just to give people a sense of the book?

**Christopher Lochhead** (01:25:09):
I think we talked about law number one, which, in a lot of ways, is probably the most important. Another one to think about is something we call the magic triangle, which we've touched on, but maybe not explicitly, which is, in order to build a legendary company, you've got to get product, company, and category right at the right time. And so some people hear the category design discussion and they think it's somehow pejorative to product as if product doesn't matter. The reason for category design is because we love the products. Products fail because they don't get category designed. So I think the aha of the magic triangle is product, company, and category are equal in importance, and so getting that right I think is very powerful.

**Christopher Lochhead** (01:26:05):
I'm just riffing off the top of my head. I don't have it in front of me. Another example is lightning strikes versus peanut butter. So what most marketers do is they take their marketing budget for the year, they quarterize it, and maybe there's slight variance in the quarters, but essentially it's a similar amount of spend. And they do campaigns. And they do "keep the lights on" and maybe they launch a product and maybe they have a big push around the product. And they're trying to drive the funnel and they're trying to deliver sales or deliver leads, B2B, doesn't matter. And that's what they do. And what they don't realize, Lenny, is that approach, that peanut butter approach, is predicated on almost 100-year-old mental scaffolding and marketing called reach and frequency. And what reach and frequency was about, which was, I want to get my shit in front of the most amount of people the most often possible.

**Christopher Lochhead** (01:27:07):
And if you listen to a lot of the shysters and hustle porn stars, the Gary VDs, and this is of the world, "You got to release 400 pieces of content today on every platform." All this stupidity. That's just a reswizzle of reach and frequency from over 50 years ago in the new medium. Well, it turns out reach and frequency doesn't work. Because the number of marketing messages we get is massive, they're experts who say we get up to 60,000 a day, whether it's logos on coffee cups or ads on the internet and everything in between. And so it's virtually impossible to stand out in a reach and frequency mode. Now I'm not saying you shouldn't be doing keep the lights on marketing. Of course you need to do keep the lights on marketing. But, here's what the lightning strike model and category design teaches us. I'd rather matter for one week a year than be irrelevant for the rest of the year.

**Christopher Lochhead** (01:28:07):
And so what we did, candidly Lenny, was we ripped off Hollywood's model for launching movies. We said, "What if you did that as a software company? What if you launched a thing, be it a product or something else, the way Hollywood launches a movie?" And so what a lightning strike is about is getting very, very clear, if you go back to your ICP thing, "Who's our ideal customer? Where is that customer? Where does she hang out?" Ideally, in the digital world first. One of your recent episodes, I was listening to the Growth Hacker Gala, how she went on to Reddit and stuff. That's a well-known strategy and I love that strategy. Go hang out where they are, put something provocative and engaging in front of them, and matter in that moment. So the idea of a lightning strike is, if you are in our target audience for that day or that two days, we are going to be all over you.

**Christopher Lochhead** (01:29:09):
We're going to be undeniable. And so we put a disproportionate amount of our effort, if we're in B2B, probably one to two lightning strikes a year. If we're in B2C, two to three. One a quarter if you're a really big company. It's hard to pull off one a quarter if you're a smaller company. And much more than that, if not a lightning strike, it starts to blur back into peanut butter. But, that is a very powerful concept. On the execution side for marketers, that's different. The other thing I'd say and probably should have started here, so I'm a three-time public company CMO. I've advised over 50 venture-backed companies in category design and marketing. Guess what I've never seen in a marketing plan ever?

**Lenny** (01:29:59):
What's that?

**Christopher Lochhead** (01:30:00):
Word of mouth. This boggles our minds, those of us in category design, because WOM is was and always will be the most powerful form of marketing. And in the native digital world, WOM can spread in a way that was never possible on the analog world for all the reasons we all understand. So if you take the concept of a lightning strike, then you take the concept of a category point of view that is all about frame naming and claiming a problem. And then there's one other concept I'll introduce.

**Christopher Lochhead** (01:30:32):
It sits next to your ideal customer profile. It's what in category design we call super consumers. So it turns out that in most categories, roughly eight to 10% of the buyers are responsible for the vast majority of the profits. And more importantly, they are the zeitgeist. They are the thought leaders in the industry. They are the customers, the users, the purveyors of whatever the thing is that others look up to as being the ones to admire, the ones to aspire to, the best practices, et cetera, et cetera. That's a super consumer. Okay. So in category design, when you understand who your supers are, i.e. your ideal customer profile, you understand where they are primarily in the native digital world, how do we go hang out? And remind me what that gal's name was? I thought she was awesome.

**Lenny** (01:31:23):
Meltem. Meltem Kuran Berkowitz.

**Christopher Lochhead** (01:31:23):
Melson?

**Lenny** (01:31:26):
Meltem. M-E-L-T-E-M.

**Christopher Lochhead** (01:31:29):
What a name. That's a great name. Anyway, I thought Meltem was awesome. She's absolutely on point. So we know who our ideal customer, aka super consumers are. We know where they hang out in the native digital world. We have a radically compelling different point of view about framing, claiming, and naming a problem that, if we do effectively, we'll resonate with them. That's why we spend time crafting that POV. So we evangelize the problem. We participate in a native digital community where they already are. And we do it from the perspective of not a marketer, not a seller, an educator. We're teaching people about a new and different way to think about an existing problem or a problem they hadn't thought of, that when they have an aha moment, because we articulate it well with our point of view, they go, "Oh, tell me more about that problem."

**Christopher Lochhead** (01:32:21):
Right? As they do that, we take an education standpoint, mental framework to it. We open them up, we participate, and sooner or later somebody says, "Huh, tell me again what you do." And bam, away that we go. And here's the aha. When you understand supers, you understand the targeting, you understand a radically different point of view, reframing the problem, presenting a radically different solution. Well guess what? It's the ultimate growth engine. And you can grow for a very small amount of money. You could send email to 300 people and drive a breakthrough in sales.

**Christopher Lochhead** (01:33:05):
Why? Because when you take this approach, you're not just driving near-term revenue, very, very important, you are driving WOM. A big part of why you want to have a point of view that can be articulated very quickly is marketing's job is to put the right words in the right mouths and to get that WOM to scale. And so when we have a category POV, that's about them, not us. Remember, brands are about us. Categories are about customers. We care about what they care about. And so when you have a powerful category POV, that drives WOM. And then when you do that in the native digital world, you get a tremendous amount of uplift from native digital viral WOM. And category design is the only business strategy whose primary execution focus starts with WOM.

**Lenny** (01:34:06):
What an awesome way to wrap up our conversation. It's basically a very tight go-to-market strategy is what you just shared. For folks that want to dig further, I'll just share a few of the places they could learn more. And then Neil, at the end, I'll ask you where to point people. But, you have an awesome Substack category, pirates. That's substack.com. You have your books, which I think maybe the best way to, I guess you tell me, is to find them as go to your last name. com, lochhead.com, L-O-C-H-head.com. Is that right?

**Christopher Lochhead** (01:34:34):
Yeah. And of course you can go to category pirates.com.

**Lenny** (01:34:36):
Okay. Even easier. Amazing. So we have the lightning round coming up. Is there anything else you want to share as closing words or advice before we get to a very exciting lightning round?

**Christopher Lochhead** (01:34:47):
Yes, I do.

**Lenny** (01:34:48):
Okay. Let's do it.

**Christopher Lochhead** (01:34:51):
So I'm 55 years old, Lenny. I started my first company when I was 18. I got thrown out of school. I don't have a GED. And I've been in the tech industry the whole time. And the first thing I would share is anything's possible. Don't listen to anybody who shits on you. I've a chat on as much as you could possibly imagine. I have four or five different learning differences. ADHD, dyslexia, dyscalculia, blah, blah, blah, blah, blah. I was told I couldn't read. I was certainly told I couldn't write. I've written 14 number one fucking bestsellers, et cetera, et cetera. And so my point is, if you are somebody for whom you want to spend your professional time working on the exponential different as opposed to the incremental better, which I got to believe is a meaningful percentage of the people who consume your shit, if you want to work on the incremental better, incremental better is important.

**Christopher Lochhead** (01:35:52):
I want the Boeing engineers working on the incremental better. I don't want the air traffic control system that's the exponential different. No. And a lot of incremental improvement over time can be exponential. So if you're a product manager and you're running a highly successful product with a massive install base, and you're looking at your next rev, and you're trying to figure out of the 472 features that you could build. What are the 26 that really matter? And you want to go talk to your customers to find out what those incremental improvements are and to stack rank them into all that good. PRD, MRD, IUD, all that shit. There's a big place in the world for all of that. It's incredibly important. That's not category design. So with that said, I think, Lenny, we are at the greatest time in history for our industry.

**Christopher Lochhead** (01:36:48):
I think all the indicators show that the amount of innovation that is going to happen in the next five years will eclipse the amount of innovation that happened in the last 20 years. It's accelerating. AI is insanely exciting, dangerous, concerning. Do we need to focus on the downside? Do we need to be smart? Do we need to be thoughtful? Do we need to learn? Do we need to work with regulators and legislators? Absolutely. Could it go horribly? Oh, sure. But, that's always true. AI feels a little bit different, but it's always true. And for the record, the Luddites are always wrong. The point being now is the greatest time in history to be a creator, to be an entrepreneur, to be a marketer. I've been a marketer for my entire adult life. It's never been greater than it is right now. And so here's the big thing that I would share.

**Christopher Lochhead** (01:37:43):
If you are somebody for whom you want to make an exponential difference, you want to innovate, you want to create new value where there wasn't, you want to have a legendary career where you can look back on your career and go, "You know what? I was part of this and that. And I was on this team." Now is the greatest time in history. And what I would say to you is the future needs you. Most people are not working on the exponential different.

**Christopher Lochhead** (01:38:14):
And so the future of our world requires that the innovative people, that the entrepreneurial people stand up, take advantage of these incredible technologies. And a lot of people, particularly in my age group, Lenny, shit on millennials, Gen Z, what are lovingly referred to as native digitals. Absolutely not. I'm inspired by them. And I think the next generation of our entrepreneurs will be our greatest generation of entrepreneurs. So my point is, now's the time. The future needs you. Don't listen to any of the bullshit. I don't care what the boo birds say. Absolutely, go for it because there's never been a greater time to design and dominate new categories of innovation than right now.

**Lenny** (01:39:02):
I love that message. You're just passion and energy for creating and inspiring comes through really clearly in all your writing. And so I love hearing it in person. With that, we've reached our very exciting lightning round. What are two or three books you've recommended most to other people?

**Christopher Lochhead** (01:39:22):
Richard Bach, Illusions. And then in terms of business books, I'll share with you one, because I know people recommend all the same shit. I'll share with you one that I think it may still be in print, but if not, it's easy to get. Mark McCormack's What They Don't Teach You At The Harvard Business School. So on the personal side, Richard Bach, Illusions. And for one that you may not have heard of Mark McCormack, What They Don't Teach You At The Harvard Business School.

**Lenny** (01:39:55):
What is a favorite recent movie or TV show that you really enjoyed?

**Christopher Lochhead** (01:39:59):
Oh, right now we're watching Designing Anna or Inventing Anna or whatever that's called. So that's been fascinating to watch. I think it's been incredibly well done.

**Lenny** (01:40:10):
What a wild story, that one. What is a favorite interview question you like to ask candidates when you're hiring people?

**Christopher Lochhead** (01:40:18):
So there's actually two. And I'll start with the second most important interview question, which I think is the most important question. But in a job interview setting, for me it's the second most important. And that is, it there anything else? And you know this as a podcaster. I end every single one of my podcasts with, is there anything else? And the interesting thing about that question, you can spend three hours with somebody talking about very important shit. You can think you got all the detail. You could have asked all the questions about the technical architecture and the campaign and the distribution and I don't know what.

**Christopher Lochhead** (01:40:56):
And at the very end you say, "Hey, Susan, before we wrap, is there anything else?" And often, Lenny, the most important thing for that person to communicate comes out then. It happens so often, it's bizarre. I use that in medical situations. Family member is in the hospital going for an operation. "Okay, doc, tell me." I tell you all the shit. Is there anything else? I will tell you that eight times out of 10, the most important thing about the surgery with your loved one will come after that question. I will even use it during a conversation as we transition from various different points.

**Christopher Lochhead** (01:41:37):
So in an interview situation, maybe you're asking somebody about their background. You might say, "Well, is there anything else about your background you think I should know?" It's the most powerful open question. But in an job interview situation, it's my second favorite. My first favorite is, so Lenny, are you legendary?

**Lenny** (01:42:01):
You want me to answer that?

**Christopher Lochhead** (01:42:03):
You can if you like or not.

**Lenny** (01:42:05):
No.

**Christopher Lochhead** (01:42:06):
But, the answer to that question...

**Lenny** (01:42:08):
What are you looking for?

**Christopher Lochhead** (01:42:09):
... Is always radically illustrative. I'm not looking for anything. I'm looking for your answer. Some people will say, "Yes." And they'll tell you why. Some people will say, "Well, that's a big word." Whatever they're going to say. But, it is a purposely provocative question with one of, I think, the most powerful words in the English language, because I want to get a read on that person and how they respond to a purposely provocative question about themselves.

**Lenny** (01:42:42):
Amazing. Okay, just a couple more questions. What's a favorite life motto that you like to repeat yourself or share with other people?

**Christopher Lochhead** (01:42:50):
If you're lucky enough to make it to the top of a mountain, throw down a fucking rope. And for me on that, Lenny, I'm somebody who has had and continues to have a radical amount of love and support in my life. When I was young, I started with nothing and I got thrown out of school. And I didn't know until I was 21 because when I was young, learning differences weren't a thing. And by the way, the way most of the world and education system deals with learning differences is completely fucked. But, that's a different conversation. It's definitely improved, but it is nowhere near what it needs to be. And so I just think that we should never be held back by those views of others. And so we need to be unencumbered.

**Lenny** (01:43:42):
I love it. Final question. It's a dumb question. Maybe to lead to something fun. You're a category pirate. Do you have a favorite real pirate?

**Christopher Lochhead** (01:43:51):
I have actually a lot of favorite pirates. I'll tell you about one of them. His name is Tony Etherington, but virtually nobody calls him Tony. Virtually everybody calls him Doris. And Doris is a legendary surfer and surf explorer from the Gold Coast of Australia. And I went on my first ever boat tour, surf adventure in Indonesia with Tony.

**Lenny** (01:44:22):
You make this giggle.

**Christopher Lochhead** (01:44:30):
There's a horrible story I'm thinking of telling you. Anyway, you haven't been with a real pirate until you've been in stormy seas at night with Doris smoking cigarettes, drinking Jack Daniels in the bridge thinking maybe we're going to die, but this guy's probably not going to let that happen. And so Doris Etherington would be one of my top pirates of all time. And he's got the voice. And he's got the attitude. When I was having problems surfing, he would say to me, "All right, sit you down mate." Always smoking a cigarette. He's like, "I'd smoke long if we could have ciggyed up now." He goes, "You paddle out, wait for the biggest wave, lean into it, and get right up on it."

**Christopher Lochhead** (01:45:21):
And so in our world, get right up on it is has become an expression for go for it. So I think we can all heed the words of Doris and get right up on it.

**Lenny** (01:45:36):
I love that this question led to something fun and interesting. Chris, thank you so much for being here. This conversation was entertaining, insightful, spicy, fun, funny, everything I hoped it would be. Two final questions. Where can folks find you online if they want to learn more and keep reading? And then two, how can listeners be useful to you?

**Christopher Lochhead** (01:45:54):
Probably categorypirates.com is the simplest spot to go. And how listeners can be useful to me?

**Lenny** (01:46:03):
Yeah.

**Christopher Lochhead** (01:46:04):
It's what we talked about a moment ago. The future needs you. And the future needs the people who have the courage to make a difference, because the people who are different are the ones who have made the biggest difference. Every time. And we live in a world where we are rewarded for our sameness, for fitting in. Our education system teaches us what we're trying to do is find our place in the world. And listen, some of us do. I know people who wanted to be a vet from the time they were kids, and that's the path they chose. And they became vets. And they love it. And they're wonderful people. And they have great careers. And they make a giant difference. And they've always known. And fucking a. And so if you are somebody for whom you have found your place in the world, congratulations. That's awesome. And we also know, particularly in the innovator, entrepreneur, creator, marketer world, many of us, there was no place.

**Christopher Lochhead** (01:47:13):
And so my hope is that you either find your place or if you realize there's no place for you, that you further realize that you can make your place in the world. And fundamentally, that's what category design is about. It's about making a distinct, unique place in the world for yourself, for your product, and for your company. Because the people who are different make the biggest difference. And so the great thing that people can do for me is to go into the world and make a different place for themself in a way that delivers massive value to others.

**Lenny** (01:48:00):
Beautiful. Chris, thank you again so much for being here.

**Christopher Lochhead** (01:48:04):
Lenny, bless you. I love all things, Lenny. Thank you.

**Lenny** (01:48:07):
Thanks Chris. Bye everyone.

**Lenny** (01:48:11):
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.

---

## [18/20] Becoming evidence-guided | Itamar Gilad (Gmail, YouTube, Microsoft)

**Itamar Gilad** (00:00:00):
You fake it, you do a fake door test, you do a smoke test, Wizard of Oz tests. We used a lot of those in the tabbed inbox by the way, one of the first early versions was actually we showed the tabbed inbox working to people. But it wasn't really Gmail, it was just a facade of HTML and behind the scenes and according to the permissions that the users gave us some of us moved just the subject and the sender into the right place. So initially the interviewer kind of distracted them and then showed them their inbox and then the top 50 messages were sorted to the right place more or less if we got it right. And people were like, "Wow, this is actually very cool." But it gave us some evidence to go and say, "Hey, we should try and build this thing."

**Lenny** (00:00:43):
**Itamar Gilad** (00:04:40):
It's a pleasure being here, thank you for inviting me.

**Lenny** (00:04:42):
It's my pleasure. I thought we'd start with the story of your work on Google+ and Gmail and how those experiences formed your perspective on how to build a successful product. Can you share that story?

**Itamar Gilad** (00:04:57):
Google+ was my first experience at Gmail, I joined Gmail in August 2011 and the first thing they asked me is, "Let's connect Gmail with Google+." If you're hazy about the story, back then Facebook was massive. It's still massive but then it was growing like mushrooms, people were spending hours. That really freaked out Google and the obvious solution was to launch a social network of Google called Google+ and we all believe in this thing, it really caught on very well initially we all used it, we all believed in it. So our mission was to build this thing and Google really cut no costs. It created a whole new division within Google and it created a whole strategy around Google+ and we had to connect Gmail and YouTube and search to Google+ to make them more personalized in a sense and more social. So that was the idea and we went on and we launched a series of features in Gmail for a couple of years, honestly and Google+ itself became this massive project, very feature rich and with a lot of redesigns and iterations and none of it worked.

**Itamar Gilad** (00:06:09):
It turned out people actually didn't need another social network, people didn't love it, people didn't use it. Eventually in Gmail we rolled back all the Google+ integration a few years later and Google+ itself was shut down in 2019. So putting aside all the tremendous waste that went into this, all the millions of person hours and personal weeks. In hindsight, not only did Google bet on the wrong thing it missed much easier opportunities. So just not far from Google's headquarters there was WhatsApp, not very famous in the US but they actually created massive impact. Hundreds of millions of people were using their stuff and they became a threat to Facebook much more than Google was. So Google missed the opportunity of social mobile apps like WhatsApp, like Snapchat, etc and for me this story kind of was the epitome of what I call today, opinion-based development. We come up with an idea, we believe in it, all the indications show it's good.

**Itamar Gilad** (00:07:13):
Maybe the early tests show it's good, then we just go all in and we try to implement it and I made this very mistake many times as the product manager, I was the guy pushing for the ideas. So for me, this was kind of a turning point I felt we need to adopt a different system.

**Lenny** (00:07:32):
And just before you move on to the next story, how big was the team? Roughly how many years was spent on this area? Just to give people a sense of the waste as you said.

**Itamar Gilad** (00:07:41):
So there was a tremendous earthquake inside Google to create the Google+ team, teams and the entire divisions were kind of thrown apart and reformatted and I think at its peak it was about 1000 people inside-

**Lenny** (00:07:55):
Wow, [inaudible 00:07:56].

**Itamar Gilad** (00:07:56):
It was a division the size of Android and Docs and a really sizable thing, they're under their own buildings. It's taken from the playbook of Steve Jobs, create this whole secretive project inside and just run like hell.

**Lenny** (00:08:13):
Yeah. I remember though Facebook was really scared, I remember they shut everything down. It as like a code DEFCON one situation too, so it really scared Facebook at the same time.

**Itamar Gilad** (00:08:22):
Yeah, it's true. But at the end of the day, neither Google's advertising revenue was affected, neither was Facebook affected. So it turned out this idea was not that necessary after all.

**Lenny** (00:08:35):
Yeah, okay. So that's an example of something that didn't work because it was opinion based software, I think the phrase you used and then there's a different experience with tabs I think with Gmail.

**Itamar Gilad** (00:08:47):
That's right. So Google, is a very successful company. It's not for me to criticize it or to in hindsight kind of say you guys need to be better and some of the people that were behind Google+ was some of the smartest leaders and I still think they are despite this story. If you look back at the history of Google, how things started in the first decade or so. Google, was what I call an evidence guided company. So essentially it put a high premium on focusing on customers, coming up with a lot of ideas on looking at the data, looking at how these ideas actually worked out. They weren't shy about launching betas and things that were very rough and incomplete and learning from that and then they expected people to take action based on the results. So fail fast is a very famous paradigm and so you had to kill your project or pivot it seriously if it didn't work out and I think had we kept fail fast it would've really have helped Google+, if we had this mentality.

**Itamar Gilad** (00:09:56):
But for some reason with Google+, Google put this playbook aside and used a different playbook which I call plan and execute essentially. But I think inside Google the DNA still existed. So inside Gmail, the next project after Google+ was the tabbed inbox. So it was kind of the reverse of Google+, it started as a very small idea that no one believed in and we started looking what's behind the city? What's the goal? What's the problem actually we're trying to solve? It turned out that a lot of people were receiving social notifications and promotions, etc, and most of them were very passive. They weren't clearing their inbox, they were just living in this world of clutter and I came up with an idea how to fix this. I was sure it was great, I wanted to push it, plan and execute, but my colleagues were like, "Hold on, we actually tried this. We have a bunch of ideas to help people organize their inbox, they're not using it. Why is your idea good?"

**Itamar Gilad** (00:10:57):
So that sent us, kind of me and my team into researching these users into establishing a goal that was much more user-centric and then thinking of other ideas. And then we started testing them much more rigorously and basically we started testing on our own inboxes and then we recruited other dog footers, other Googlers to test the same inbox, then we put it outside for external testers. We did usability studies, we did data, we built a whole data mining team and a whole machine learning team to build the right categorization and we ended up with a solution that turned out to be very successful for a lot of these passive users. This was a surprise to a lot of people because most of my colleagues and most of the people I talk with actually know how to manage their inbox. So for them that solution makes complete nonsense, like splitting promotions and social to the side sounds like the stupidest idea. But there's about 85% of the population, 85 to 88% that absolutely love it and today Gmail has about 1.8 billion active users according to Gmail.

**Itamar Gilad** (00:12:14):
Most of these users are using this feature, so it was a pretty high impact feature as well.

**Lenny** (00:12:20):
And the feature specifically, just in case people aren't totally getting it is the promotions folder and the social I think and then the regular.

**Itamar Gilad** (00:12:27):
Yeah, there are a couple more that you can enable in settings if you like.

**Lenny** (00:12:30):
Yeah, I use it, I love it. Except it puts my newsletter in people's promotions folder, who do I talk to about that?

**Itamar Gilad** (00:12:36):
Yeah. Newsletters are a very complicated scenario for the categorization engine.

**Lenny** (00:12:41):
Yeah. We just need an exception for my newsletter and then we're good. Okay, but go on.

**Itamar Gilad** (00:12:45):
So in hindsight I was asking and saying, "Why was this project so different?" And I think the reason is that we didn't have that much confidence in our opinions. We had opinions, we had ideas but we didn't just go all in and just let's build it. We actually used an evidence guided system and I think that's not unique just to Google. I think every successful product company out there that you look at Amazon, Airbnb, anyone you will check, at least in their best periods they found a way to balance human judgment with evidence. They didn't try to obliterate human judgment and opinion just to supercharge them with evidence and they came up with very different models. Apple, is another example but the principle still holds in all of these companies.

**Lenny** (00:13:33):
Awesome. So you took that experience and all the experience you've had from coaching product leaders working with companies and you wrote this book called Evidence-Guided, which people on YouTube could see sitting there behind you. So I want to talk through some of these stories and then some of these other lessons and frameworks that emerged. But maybe just to start, what's the elevator pitch for this book?

**Itamar Gilad** (00:13:55):
So this is a book for people like us, product people who want to bring evidence guided thinking or modern product management if you like into their organizations. There's a lot of challenges, it's not simple, we all read the books, we all know the theory, we all know some parts of the system. It tries to give you a system how to do that, it's a meta framework that kind of helps you lift your organization in the direction of evidence guidance if that's what you want to do.

**Lenny** (00:14:23):
So going back to the story briefly before we get into the frameworks and lessons of the book. In the first example of Google+, basically it came top down, "Hey, we need to build a social network, go build it." Obviously that happens at a lot of companies, I don't know if there's an easy answer to this. But are there cases where it does make sense to approach it that way? Obviously Apple is a classic example of Steve Jobs, is like we need to build an iPhone. I don't know if that's exactly how it went. But are there instances where it is worth just approaching new product ideas that way based on the experience and creativity and insights of the founder? Or is your thinking it should always come from this evidence-based approach?

**Itamar Gilad** (00:15:01):
I think the founders are very important, especially in the startup and scale-ups phase. They come up with many of the most important ideas and it's super important that they have the space to express and to push the organization to look at those. However, it's not about shutting them down it's about looking at them critically. You need to create the environment in the organization where the leader comes and says, "You know what? I talked to these three customers, I figured it out. Here's what we need to do in the next five years." And you need to ask, "Where's your evidence?" And by the way, the example you give that's a classic example. Steve Jobs, he just brainstorm in his kitchen the iPhone and then just told the team to build it. That's the story Steve Jobs, told but it's not the real story at all. Now we know what actually happened and the iPhone has actually a story of discovery, of trial and error, multiple projects to do it, multitouch with phones, most of them failed.

**Itamar Gilad** (00:16:02):
Steve Jobs, was the architect. He kind of managed to connect the dots and eventually come up with this perfect device but he wasn't actually the creator, it wasn't his brainchild. He was actually against it for a while but over time as he saw the evidence, as he saw what this thing can do, as he saw the demos he was able to piece together something that was very useful.

**Lenny** (00:16:26):
That's really important insight. People that are hearing this might feel like I like this idea of pushing back and encouraging the founders to make it more evidence guided. In the case of say Google+, was it even possible? Could you have come to Larry and Sergey and be like, "Here's all this data I've gathered that tells us this is not going to work?" Do you have any advice for how to push back and encourage the founders and execs to really take the counterpoint seriously or really kind of vet their idea?

**Itamar Gilad** (00:16:58):
So another nice thing about Google is that it's a very open culture and people are not shy to tell even Sergey and Larry that they are wrong and they do this all the time. In certain forms, right? You need to know the right channels. But there was a very big discussion about Google+ and whether it's the right thing to create a clone of Facebook, there was a very public internal discussion. I think what I would change is not have this discussion based on opinions, because when you have the discussion you come with your own opinions usually the most senior person's opinions will win. That's just the way it is. If we had come with hard data and we said, "Listen, things are not actually panning out the way you guys are expecting. What can we do? Should we continue? Should we pivot this?" I think the discussion would've done better. Now I'm doing a huge disservice, I was not in all the discussions. I know probably in Google+, there were very serious discussions happening along these lines.

**Itamar Gilad** (00:18:02):
But it's just as a general trend, I find that evidence is very empowering for us smaller people in the organization or mid-level managers to be empowered to challenge the opinions.

**Lenny** (00:18:15):
Is there anything tactically you found to be useful and effective in giving people, say they don't work at Google. They work at companies where founders and bosses and execs are not as open to challenge. [inaudible 00:18:26] any tactically found about how to present a counter proposal or like, "Hey, I have this data that we should really pay attention to?"

**Itamar Gilad** (00:18:33):
I think if you come with data, if you run a secret experiment and you come back and you show them you usually get one of two results. Either they get extremely mad at you and they tell you to get back to work and to do what you were told and in that case, probably you need to start polishing your resume and look for another place either inside the organization or outside it because that person is not being reasonable to be honest. But the more common case is they're pleasantly surprised and that's what happened with Steve Jobs, as well. He was against phones but then people showed him all sorts of evidence that Apple can make a phone. He was against multitouch initially but then he changed his mind, there was a lot of back and forth. So even, Steve Jobs, given evidence was willing to flip and I say this in many organizations. So evidence is so powerful, that's why this is the principle I based the book on.

**Lenny** (00:19:28):
You have this concept of being evidence guided. People listening may feel like, "Hey, we're evidence guided, we're in experiments, we make decisions using data." Oftentimes they aren't actually and so what are signs that maybe you're not actually that evidence guided or as evidence guided as you think you are?

**Itamar Gilad** (00:19:45):
I think there's a few telltale signs that I look for, first the goals are very unclear. Either there are many or they're very kind of obscure and vague or they are about output, there's misalignment. So the goals part is not there, usually this goes hand in hand with metrics. Missing metrics or just using revenue and business metric but there's no user facing metrics. So that's another telltale sign, then there's a lot of time and effort spent on planning especially on road mapping. Creating the perfect roadmap which really can consume a lot of time of the top management and PMs, etc. Then as you go down you see there's not a lot of experimentation and if there is experimentation there's not a lot of learning and finally another telltale sign is that the team is disengaged. So the engineers are kind of getting the signal that what they need to do is deliver, they're focused on output, that's what they're measured on. So they're kind of disengaged, they're disengaged from the users, from the business, they don't care that much.

**Itamar Gilad** (00:20:57):
It's usually something that you can fix by adopting a more evidence guided system.

**Lenny** (00:21:05):
Okay. So let's dive into your approach to becoming more evidence guided. In the book, you share this model that you call the GIST model which is kind of this overarching approach to building a product that almost forces you to be more evidence guided. So let's just start with what's the simplest way to understand this GIST model?

**Itamar Gilad** (00:21:26):
With your permission, I can show a few slides.

**Lenny** (00:21:28):
Oh, let's do it.

**Itamar Gilad** (00:21:29):
And maybe that will help.

**Lenny** (00:21:32):
Here we go, and then yeah, a good excuse to go check this out on YouTube.

**Itamar Gilad** (00:21:36):
All right, you're seeing this? So this is the GIST model, goals, ideas, steps and tasks, and essentially it's tries to break the change which is a really big change for a lot of companies into four slightly more manageable parts. They're still big but each one you can tackle on its own and that's kind of the reason I kind of split it, and goals are about defining what we're trying to achieve, ideas are hypothetical ways to achieve the goals, steps are ways to implement the idea and validate it at the same time. So essentially build, measure learn loops and tasks are the things we manage in Kanban and Jira and all these good tools. These are the things that your development team is usually very focused on and just listening to this, a lot of this will sound familiar to you because GIST is not a brand new invention. It's a meta framework that puts in place a lot of existing methodologies. It's based on lean startup, on design thinking, product discovery, growth, There's a lot of all of these things here. It just tries to put them all into one framework or one model.

**Lenny** (00:22:43):
So what's the simplest way to think about what this model is meant for? Is this how you think about your roadmap? Is this how you plan? What is this trying to tell people to do differently in the way they build product broadly?

**Itamar Gilad** (00:22:56):
I would say these are four areas that you need to look at and ask, are we doing the right thing in each? In each you may need to change or even transform and as I go and explain each one of those I'll give you basically three things. In each chapter in the book I try to touch on three things. The principles behind them, the frameworks or models that implement the principles and then process and the process honestly is the most brittle part and the one that you would need to change and adapt to your company. Because not two companies are exactly the same, and it's very tempting when you write a book not to give any process but that's the part that people actually want the most. So it's included as well, but just be aware that you will have to change this process.

**Lenny** (00:23:44):
Awesome. Okay, so we're going to talk about each of these four layers. Before we do that, where do vision and strategy fit into this? Do they bucket into one of these four layers and how do you think about strategy and vision?

**Itamar Gilad** (00:23:55):
That's a great question, so there's this whole strategic context that is outside of GIST. GIST, is not trying to tackle that, it assumes it's in place, there's another huge blob which is research. GIST, is not about research it's more about discovery and delivery. But strategy is extremely important and you can use some of the tools we will talk about to develop your strategy as well. In many companies the strategy is just a roadmap on steroids, it's small plan and execute just on a grand scale and Google+ again, was a strategic choice actually if you think about it. So in the book there is a chapter where I touch on strategy and I explain how the same evidence guided methods are being used by companies to develop their strategy as well.

**Lenny** (00:24:43):
Awesome, maybe one last context question. So people might be seeing this and thinking okay cool, I have goals, I have ideas steps, I have tasks, I'm already doing this. What is this kind of a counter or reaction to? What are people probably missing when they're seeing this and they're like, "Oh, I see. This is like what we're not doing and this is the most important, this is something we should probably change." And we'll go through these in detail too.

**Itamar Gilad** (00:25:03):
I think talking about each one will help.

**Lenny** (00:25:06):
Okay, let's do it.

**Itamar Gilad** (00:25:09):
But we can talk about in each level what's actually being done. So when people say I have goals, usually they take the goals layer and use it as a planning session. They talk about what shall we build by when, what are the resources? And that's actually not goals at all, that's planning work.

**Lenny** (00:25:26):
Cool, let's talk about goals and I know part of this is OKRs related too, so I'm excited to hear your take on OKRs.

**Itamar Gilad** (00:25:33):
Oh, that's a whole different discussion. You had, Christina, the real expert over there so I doubt I can add more to that. But it's true OKR is all part of it, but let's start with goals. What's our goals supposed to be? Goals are supposed to paint the end state to define where we want to end up and the evidence will not guide you unless you know where you want to go, and in many companies what you have is goals at the top for revenue, market share, whatever it is, and then a bunch of siloed goals for each department. There's engineering goals, there's design goals, there's marketing goals, etc, and that actually pushes people into different vectors and it's really hard to decide. I would argue that in evidence guided companies, and you've worked for a few so probably you've seen this. They use models in order to construct overarching goals for the entire organization. One of the models I show in the chapter about goals is the value exchange loop.

**Itamar Gilad** (00:26:34):
 Where basically the organization is trying to deliver as much value as it can to the market and to capture as much value back, and by creating a feedback loop between these two you are actually able to grow very fast. Now, I would argue that you want to measure both of these and to put a metric on each and the metric we usually use to measure value delivered is called the North Star metric. I know you wrote an article, a very good article about it.

**Lenny** (00:27:01):
Thank you.

**Itamar Gilad** (00:27:02):
And in it you listed dozens and dozens of companies, like leading companies and what they considered the North Star metric is super interesting. I would argue that what they told you is what is the most important metrics we measure? What is the number one metric for us? But it's not what I call the North Star metric, the North Star metric measures how much value we create for the market. For example, let's take WhatsApp. WhatsApp for a very long time measured messages sent because every message sent is a little incremental of value for the sender, the receiver, it's free, it's rich media, you can send it for anywhere in the world, compared to SMS that's huge value. So if in year one we have a billion messages being sent in year two, two billion probably we doubled the amount of value. In Airbnb, I think one of your key metrics or the real North Star metric was nights booked. I don't know if it was still the case while you were there?

**Lenny** (00:27:55):
Yeah, absolutely.

**Itamar Gilad** (00:27:56):
And there are examples like this in Amplitude for example, they measure active learning users or weekly active learning users. Which are users that found in the tool some insight that was so important that they shared it with at least two other users and they consume it. So it's a very powerful thing to point at this metric and say, "This is the most important metric combined with the value metric that we want to capture, revenue, market share, whatever it is." Once you have these two, you can further break them down into what I call metrics trees. So there's a metric three for the North Star metric and there's the metric three for the top KPI, the top business metric which you see here on the left side in blue and usually they overlap. So you might find in the middle some metrics that are super, super important because moving them actually moves the needle on everything else.

**Lenny** (00:28:57):
Can you clarify again the difference between what you call this top KPI versus North Star metric?

**Itamar Gilad** (00:29:02):
So the North Star metric is measuring how much value we're creating for the user, the core value that they're getting. In this case this is some productivity suite, so this is number of documents created per month for example. Because we think that every document created maybe it's a small document, I don't know. AI is in fashion now, is a little incremental value, so that's the number we're trying to grow. The top KPI is what we expect to get, it should be revenue or profit.

**Lenny** (00:29:31):
I see, this is the value exchange. I see, one is what users are getting, one is what you're getting back from them.

**Itamar Gilad** (00:29:36):
Exactly.

**Lenny** (00:29:37):
Basically how the business is benefiting. Awesome. I think this is a really important concept, the metric tree. I think a lot of people think they have something like this in mind where they're just like, "Cool, here's our North Star Metric, here's the levers and things that we can work on to move that." But I think actually mapping it out the way you have it here where it kind of goes layers and layers deep to all of the different variables that impact this metric. Not only is it a way to think about impact and goals and things like that, but also helps you estimate the impact of the experiment you're potentially thinking about running. So if you're going to work on something at the bottom here like activation rate, say you move that 10%. How much is that going to impact this global metric? It's probably a very small amount.

**Itamar Gilad** (00:30:19):
This is a very important one and we'll talk about impact assessment shortly, this helps with it. It also helps with alignment because the entire organization is trying to move these two metrics, it's the two sides of our mission essentially. We have the mission that's the top objective of the company and these are the two top most key results if you like, the top most things. So when you go and work with another team and you say, "Hey, why don't you work on my project?" They might say, "This idea actually might move the North Star metric model in your idea." And that helps you guys align and I've seen cases where team B put aside their own ideas to jump on the ideas of team A, because of this model. It also creates an opportunity to give some sub metrics to teams to own on an ongoing basis, so it creates a little sense of ownership as well and mission within the tree.

**Lenny** (00:31:10):
It also helps you figure out what teams you should have, which teams have the biggest potential to impact the metric.

**Itamar Gilad** (00:31:18):
Another thing that happens in a lot of organizations, the team topology reflects the structure of the software or some hierarchical model where we want to organize the organization in a particular way. But if you start with a metrics tree, you can try to arrange the topology around goals and sometimes you need to readjust. It's not a constant reorg but from time to time you will realize the goals have changed and we need to reorganize, so the tree helps visualize that as well.

**Lenny** (00:31:49):
I think for people that are listening to this and thinking about this, I think the simplest way to even think about this is basically there's a math formula that equals your North Star metric or your revenue or whatever you're trying to do and if you don't have some ideally really clear sense of what that math formula is you should work on that. Because that will inform so much of how you think about where to invest, what teams to have, where to invest more resources, less resources.

**Itamar Gilad** (00:32:13):
Right.

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**Itamar Gilad** (00:33:39):
All right. So next we need to go to the ideas layer and the ideas layer is there to help us sort through the many ideas we might encounter and they may come from as you said the founders, the managers, the stakeholders, from the team, from research, from competitors. We're flooded with ideas, and what usually happens inside organization is some sort of battle of opinions or some sort of politics sometimes or highest paid person's opinion. You had, Ronny Kohavi, who invented this term in your show. What doesn't happen is very rational, logical decisions these are the best ideas, because it's really, really hard to predict honestly. There is so much uncertainty in the needs of the users, in the changes in the market, in our technology, in our product, in our own organization. It's almost impossible to say this idea is going to be the best, but we do say this because we have cognitive biases that kind of convince us that this idea is far superior to anything else and it's definitely the right choice.

**Itamar Gilad** (00:34:48):
In order to avoid this, what we want to do is to evaluate the ideas in a much more objective and consistent and transparent way. In the book I suggest using ICE, impact, confidence and ease. I think I have a slide coming on this. So impact, confidence and ease which is basically a way to assign three values to each idea. The impact tries to assess how much impact it'll have on the goals and that's why it's so important that we have very clear goals and not many. How we are measuring the ideas on the North Star metric, on the top business KPI, on a local metric of the team. Whatever it is, let's be clear about it and then let's evaluate the ideas against this thing. Ease, is basically the opposite of effort. How easy or hard it's going to be, but both of those are guesstimates, both of those are things we need to estimate. I would argue that just by breaking the question to these two questions we usually have a slightly better discussion than just my idea is better than yours.

**Itamar Gilad** (00:35:52):
But then there's the third element which is confidence, which tries to assess how sure are we or should we be about our first guesstimates about the impact and the ease.

**Lenny** (00:36:03):
It's interesting you use the word ease, because I think it's usually effort. You kind of make it positive, is that an intentional tweak you made?

**Itamar Gilad** (00:36:12):
I'm using the definitions of, Sean Ellis. Sean, invented ICE. You know Sean, I don't know if you've had him yet? But he's-

**Lenny** (00:36:21):
I haven't had him on yet.

**Itamar Gilad** (00:36:23):
Yeah. For the people who don't know him, Sean, is amazing. He's like one of the fathers of the growth movement, he coined the term growth hacking and he popularized the concept of product market fit.

**Lenny** (00:36:36):
Yeah.

**Itamar Gilad** (00:36:36):
He created ICE, he created a bunch of things that we use in product that we don't even know.

**Lenny** (00:36:40):
Wow, I didn't know he came up with ICE. Okay, cool. So the original version of ICE is ease instead of effort.

**Itamar Gilad** (00:36:45):
Exactly, yeah.

**Lenny** (00:36:45):
Fun fact.

**Itamar Gilad** (00:36:47):
A lot of your viewers are wondering where's the R because there's another variant of this culture. RICE, where there's rich as well. I prefer ICE because I prefer to fold the rich into the I for various reasons but both are valid, both are equivalent in a sense.

**Lenny** (00:37:04):
I'm in your boat, that's exactly how I think about it. I think people over complicate this stuff and try to get so many math formulas involved with estimating impact, and I feel like these are just simple heuristics to kind of bubble the best ideas to the top. It doesn't have to be a perfect estimate of impact and confidence and all those things, so I think the simpler is better and it always ends up being a spreadsheet. People always have these tools to estimate these things but it's like a spreadsheet, Google Sheets. Great.

**Itamar Gilad** (00:37:28):
So yeah, you're actually leading me to my next point. So when you come to estimate impact you will realize it's the hardest part. So sometimes it's just a gut feeling and it's a guess and sometimes it's based on some spreadsheet or some analysis and the back of envelope calculation you've done and I think that's legitimate. Sometimes these things do show you some things you didn't think of and sometimes the best case it's based on tests. You actually tested it, you interviewed 12 customers, you show them the thing and out of those only one actually liked it. You should reduce your impact based on that usually, or you do other types of tests. We'll talk about testing in a second. What happens is that people tend to just go with gut instinct and then give themselves a high confidence. They say it's an eight and I'm pretty convinced, so it's eight for confidence and I found this a bit disturbing because it kind of subverts the whole system.

**Itamar Gilad** (00:38:22):
So I wanted to help people realize when they have strong evidence in support of their guesses and when it's weak evidence, how to calculate confidence in a sense. For that I created a tool called the confidence meter, which you can see here this colorful thing and should I go and explain it?

**Lenny** (00:38:41):
Yeah, let's do it. And then again, if you're just listening to this you can check this out on YouTube and you can see the actual slide.

**Itamar Gilad** (00:38:47):
All right, awesome. So basically I constructed it a bit like a thermo meter. It goes from very low confidence which is the blue area or the upper right, all the way to high confidence which is the red area and you can see the numbers going from zero to 10. Where zero is very low confidence, we don't know basically anything we're just guessing in the dark and 10 is full confidence. You know for sure this thing is a success, no doubt about it and across the circle I put various classes of evidence you might find along the way. So for example, starting at the top right, all of these blue areas about opinions. It could be your own self-confidence in the idea, your self conviction, you feel it's a great idea. Guess what? Behind every terrible idea that was ever someone thought it was great, that gives you 0.01 out of 10. Maybe you created a shiny pitch deck or a six-page document that explains in detail why this is a great idea. Slightly harder to do but still very low confidence, maybe you connected it to some theme, it's about the blockchain...

**Itamar Gilad** (00:39:59):
Well sorry, the blockchain is out of fashion. What's hot right now?

**Lenny** (00:39:59):
AI.

**Itamar Gilad** (00:40:04):
Exactly, AI. It's about AI, that makes it a good idea? Absolutely not. Or the strategy of the company, that's another thematic support. Thousands and thousands of terrible ideas are being implemented right now as we speak based on these themes. So all these things combined can give you a maximum 0.1 out of 10 according to the tool, if you follow it then we move into slightly harder tests. One is reviewing it with your colleagues, your managers, your stakeholders the idea. They don't know it either, they don't have a crystal ball, they're usually not the users, they cannot predict. But they can evaluate it in a slightly more objective way and maybe find flaws in your idea. On the other hand groups tend to have biases too, politics group thing. So groups can actually arrive sometimes with worse decisions than individuals, there's some research to that. Next, our estimates and plans. So you may do some sort of back of the envelope calculation or your colleagues might go out and try to evaluate the ease a little bit better.

**Itamar Gilad** (00:41:07):
That gives you a little bit more confidence, but still we're at the level of guesswork at this point. Next we're moving to data and data could be anecdotal. So you find a few data points dotted across your data or you talk to a handful of customers or maybe one competitor has that same idea. In many companies I meet, if the leading competitor has this feature and we think it's a good idea validation is done. Let's launch it, that's it. It's a great idea, we need to do it. It never works honestly, you should not assume that your competitor actually knows what they're doing anymore than you do. Data could be also what I call market data. That comes from surveys, from assessing a lot of your data by doing a deep competitive analysis and there are other methods where you create a larger dataset and you contrast your idea against it. Finally, to gain medium and high confidence you really need to build your idea and test it and that's where the red area is.

**Itamar Gilad** (00:42:11):
So there's various forms of tests, we'll talk about them if we have time and they give you various levels of confidence.

**Lenny** (00:42:19):
Awesome, this is a very cool visual. We'll link to a image of this in the show notes too if people want to check it out. I think what's awesome about this is you could just use this as a little tool on your team of just like where are we along the spectrum? We think the impact of this is very high. But we're probably in this blue area of confidence and so let's just make sure we understand that and it's really clear language to help people understand. I see if we had this, it'd be a lot more confident.

**Itamar Gilad** (00:42:45):
So you can also tie your investment into the idea based on the level of confidence you had found essentially, so early on you want to do the cheap stuff just to gain more confidence and then you can go and invest more. If it's a really cheap idea, you can jump to a high confidence idea, you can test, you can do an AB experiment. Early adopter program, whatever it is and then launch it. Some ideas you don't need to test, sometimes the expert opinion is enough. If you're just changing the order of the settings, no one sees this or no one will be impacted. The risk is low, you can launch it without testing. So part of the trick is also knowing when to stop, not just trying to force your way all the way up when you don't have to.

**Lenny** (00:43:31):
That's a really important point. The other important point here is just a big part of a PM's job is to say no and to stop stupid shit from happening and this is an awesome tool to help you do that. To be like, okay, here's this idea you have, just like let's just be real, how confident are we in this? And, okay, it's going to take us three months to do this. Maybe we should think about something different, maybe we should work up the confidence meter before we actually commit to this.

**Itamar Gilad** (00:43:56):
Yeah. This is a real world usage that I hear about a lot, some people use this to kind of do... An objective way to say no and gently. Or to say we'll think about it but look at these other ideas we have and how their impacting is and confidence stack up.

**Lenny** (00:44:12):
Classic PM move, just like that was a great idea but what about this better idea? Coming back to something that we talked a bit about at the beginning, say you have a founder who's actually very smart and experienced. Say even at a startup where you don't really have the time to build tons of evidence for ideas. Do you have a different perspective on how much time to spend building confidence in ideas versus just like cool, they actually have really good ideas let's just see what happens?

**Itamar Gilad** (00:44:41):
So there's always like a trade-off between speed of delivery and speed of discovery, and that actually leads to the next layer of how do we combine the two? Because people tend to think it's an either/or. Either we are building very fast or we are learning and then we're building very slow, but I think we're using the wrong metric. The metric is not how fast can we get the bits into production, when there's a lot of uncertainty and we all face uncertainty and startup especially. It's not about getting the bits to production, it's about getting the right bits to production. It's about creating the outcomes that you need, the impact, and so it's about time to outcomes and I would argue that the evidence guided method is far more impactful. It's far faster, it's far more resource efficient than the opinion-based method. Because opinion-based methods tend to waste a lot more of your resources, building the wrong things or discovering, learning too late. Well, evidence guided helps you learn earlier.

**Itamar Gilad** (00:45:50):
Plus it is a fallacy that if you learn you don't build, good teams know how to do both at the same time and that's actually what the steps layer is meant to teach you or to help you do.

**Lenny** (00:46:03):
Awesome. So maybe just to close off that loop, say someone listening is at a bigger company, say Netflix versus a series A, series B or startup. Is there something you'd recommend about them approaching this differently? Any kind of guidance there of just how to take what you're sharing differently if you're a different source of companies like that?

**Itamar Gilad** (00:46:23):
Absolutely. I think the concept we talked about of the North Star metric, the value created versus the value captured is very important in every company. Building your entire metrics trees, maybe overkill, doing heavy weighted OKRs may be overkill for early stage. Early stage companies even don't know how they create value, so they need to iterate and their goals is really to find product market fit. Beyond that, what happens is that you need to start building your business model. So that's your goal and you iterate towards that and you need to put metrics on that and then when you move into scale, you need to try to create order because when you scale up... And all of this is covered in the book, there's a special chapter just about these questions. When you scale up, you get a lot of people and a lot of money and everything is happening at the same time. So there you need a order of evaluating ideas in a very systematic way. In a company like Netflix, by the way I don't know if they need this specific method. They're very-

**Lenny** (00:47:27):
Yeah, maybe that was a bad example. They're probably doing things pretty well.

**Itamar Gilad** (00:47:30):
One thing I discovered by the way, there's two types of companies that really benefit from this technique. One is those companies that are kind of emerging into modern product development. They have product teams, they have product managers, they have OKRs, they're starting to do Agile. But they're starting to do experimentation, but they're struggling to put it all together. Every CPO is building their own little framework and the other type is those companies that used to be evidence guided and they regressed and that happens way too often. Change of management, change of culture, and then all of a sudden they need to rediscover, to rekindle that spirit that was lost along Google+. So some of the people that actually respond to the strongest are actually surprisingly in these companies.

**Lenny** (00:48:19):
What I love about your frameworks and kind of all these things we're talking about is these are just a... You can almost think of them as a grab bag set of tools to make you more evidence guided as a company. You could start with thinking about the confidence meter, you could start using ICE more. You could start using the metrics tree and all these things just push you closer and closer to being more evidence guided, you don't have to adopt this whole thing all at once.

**Itamar Gilad** (00:48:41):
Absolutely. I would recommend that you don't try because if the transformation is way too big, you will get fatigued and you will just create a lot of process for a lot of people and you would not see the results and after a quarter you'll give up. So exactly what you suggested is the right approach.

**Lenny** (00:48:57):
What would be the first thing you'd suggest if people were trying to move closer to being less opinion oriented and more evidence-based? Which of these frameworks or models would you recommend first?

**Itamar Gilad** (00:49:06):
I recommend that they discuss internally where is the biggest problem that they're facing. If the goals are unclear, there's misalignment, we keep chasing the wrong things, start at the goals layer. Try to establish your North Star metric, your top business metric, your metrics trees, start assigning teams with their own area of responsibility. If you're spending a lot of time in debates and you're constantly fighting and changing your mind. Start with the ideas there and establish impact is confidence or whatever prioritization model you like, but involve evidence in it. I think the confidence meter is a good tool to use irrespective. If you're building too much and you're not learning enough, start adopting the steps layer which we haven't seen yet and if your team is very disengaged. You have one of these teams where the developers are very into Agile, very into quality, very into launching things, start working on the tasks there.

**Lenny** (00:50:10):
Awesome. Okay, let's keep going.

**Itamar Gilad** (00:50:13):
All right, so steps. Steps are about kind of helping us learn and build at the same time as we said and one of the patterns I see is that organizations don't know that they can actually learn at a much lower cost. They believe they need to build this elaborate MVP which is not minimal in any way and then launch it and then they will discover it and basically it's what we used to call beta 20 years ago but just with a different name. What I'm trying to do here in the steps layer is to help companies realize there's a gamut of ways to validate your ideas or more specifically to validate the assumptions in your idea and I created a little model for this, it's called after assessment fact finding, tests, experiments and release results. But again, it's just putting together things that much smarter people invented. So in assessment you have very easy things, things that don't require a lot of work. You check if it aligns with the goals, this idea that you have in your hand.

**Itamar Gilad** (00:51:14):
You do maybe some business modeling, you do ICE analysis, you do Assumption Mapping which is great tool by, David J. Blend, or you talk to your stakeholders one-on-one just to see if there are any risks, etc. These are usually not expensive things and they can teach you an awful lot about the impact and the ease of your idea. The next step is to dig data and usually that goes hand in hand with this. So you can find data in your data analysis through surveys, through competitive analysis, through user interviews and through field research, observing your users. Obviously these last two are pretty expensive, so it's often good not to wait until you have the idea and then start doing your research. It's best to keep doing your research ongoing and then you have some sort of data to lie on and to compare your idea against. But until now we didn't build anything, now you're ready to start testing, building versions of the product and putting them in front of users and measuring the results. But initially you don't build anything, you fake it.

**Itamar Gilad** (00:52:18):
You do a fake door test, you do a smoke test, Wizard of Oz test, a concierge test, usability test. We used a lot of those in the tabbed inbox by the way, one of the first early versions was actually we showed the tabbed inbox working to people. But it wasn't really Gmail, it was just a facade of HTML and behind the scenes and according to the permissions that the users gave us. Some of us moved just the subject and the sender into the right place. So initially the interviewer distracted them and then showed them their inbox and in it the top 50 messages were sorted to the right place, more or less if we got it right and people were like, "Wow, this is actually very cool." And that gave us a lot of evidence.

**Lenny** (00:53:02):
That's an awesome story. So that was in the user research, it wasn't rolled out to people? It was a manual individual?

**Itamar Gilad** (00:53:08):
There wasn't a single line of code written, this was just cooked up by the researchers and our designers. But it gave us some evidence to go and say, we should try and build this thing.

**Lenny** (00:53:19):
Love that.

**Itamar Gilad** (00:53:21):
So initially you fake it, mid-level tests are about building a rough version of it, it's not complete, it's not polished, it's not scalable, but it's good enough to give to users to start using. So those are early adopter programs, alphas, longitudinal user studies and fish food. Fish food is testing on your own team.

**Lenny** (00:53:40):
Fish food? I haven't heard that term before. So it's dog fooding, but more local to your team.

**Itamar Gilad** (00:53:46):
I think it's a Googly thing, but some people told me that they use fish food as well in their company the name. So I'm using it, I don't know if there's a better name for it.

**Lenny** (00:53:54):
I wonder why it's called fish food, because it's like little? It's like little gentle little clicks?

**Itamar Gilad** (00:53:58):
It could be. Yeah, I don't know.

**Lenny** (00:54:00):
Wow. Okay, super cool. I'm learning a lot here.

**Itamar Gilad** (00:54:03):
So the next stage is to actually build a kind of more complete version of this and then you can dog food it, then you can give this to your users internally. When I joined Microsoft many years ago, the first thing I noticed was that Outlook was very buggy and I asked people what's going on? And they told me we are all dog fooding the next version of Outlook that hasn't come out yet and that's a very common practice in Silicon Valley. You can do previews, you can do betas, you can do labs, so those are tests. Now, there's a special class of tests which are experiments because they have a control element. So AB tests, multivariate tests, those are all experiments. I'm using the word experiment the way data scientists use it, although people tend to call experiments to everything that you see here and finally, even the release you can do stage release, you can do percent launches, you can do hold backs. All of these things help you further validate your assumptions. Sometimes you need to roll back and change things, but it's another opportunity to learn.

**Itamar Gilad** (00:55:06):
So the key point is you don't have to start at the right-hand side, which is expensive. You can start early on and that leads to poking a lot of ideas very quickly. You realize they're not as good as you thought, and then you can invest more effort into the good ideas. If they generate positive evidence, you can go further and further until that point where you feel you're ready for delivery.

**Lenny** (00:55:29):
Okay. So we've talked about goals, we've talked about ideas, we're talking about steps here. Is there anything else along steps? And then next I know comes tasks.

**Itamar Gilad** (00:55:37):
No, this is it for steps. There's a lot more with this, we will not go into all of it.

**Lenny** (00:55:42):
Okay, that sounds good. Let's talk about tasks and what you mean there.

**Itamar Gilad** (00:55:46):
All right, awesome. So in many organizations there's these two worlds. There's the planning world where basically you have the managers, the stakeholders, some of the PMs really sit and think about what we need to launch and that's where we create the strategies and the roadmaps and the projects. But guess who is not invited to the party? The people who are actually doing the work. They live in Agile world, they're very focused on moving tickets to the done state, on completing burning story points, pushing stuff into production and there's a big gap between these two worlds. They don't understand each other, they don't see eye to eye, there's a lot of mistrust being built sometimes against the plans or the managers feels that the teams are just not being very effective. We've seen all of this and the solution, the stop gap is to put a PM in the middle. The PM is supposed to make all of this work, deliver on the roadmap like a project manager, feed the Agile machine with perfectly prioritized product backlogs and stories and it just doesn't work honestly.

**Itamar Gilad** (00:56:50):
And the PMs I meet are very tired and they have to spend so much time in planifications and roadmap discussions and they're very busy, they don't have time to do research or to test ideas. So I suggest changing this and bringing the developers a little bit out of their Agile cage if you like and no disrespect to Agile, it's a great thing but let's let them do more than just develop. Let's let them discover as well and one of the tools I suggest and again this is a process is what I call the GIST board. So it's basically the top three layers of GIST. The goals are on the right, these are just the key results usually per team I suggest not more than four. So you create a GIST board per team, then the ideas we're working on right now sometimes with our ICE scores and then the next few steps that we might want to pursue in order to validate these ideas and this is a very dynamic thing.

**Itamar Gilad** (00:57:48):
It changes all the time, the team leads need to update it and the team needs to meet around it at least once every other week to think to talk about what's going on. Are we still following the right ideas? How are we doing on the goals? What are the next steps? What's blocking us from completing the most important steps? And this is a discussion that is not happening today, because most of the discussion happens at the roadmap level and then there's a lot of discussion at the task level. But this middle layer of what actually are we trying to achieve and how well are we doing on it doesn't exist. If you do have this, you create a lot more context in the minds of your team and then they need to ask you fewer questions. You need to tell them less what to do. They know what's success and they are able to actually do a lot more on their own.

**Lenny** (00:58:37):
Is the way to think about the GIST board as the way you should be road roadmapping or is this more of a strategy framework to think about why you should be prioritizing broadly?

**Itamar Gilad** (00:58:48):
The way I say this is at the beginning of the quarter, the team defines its goals. The leads of the team define the goals, but they review it with the team, they review it with the managers, of course with the stakeholders. Everyone's in agreement, these are the maximum four key results and the one or two objectives you guys need to work on, teams cannot deliver on more than that. You copy these key results into the GIST board, then you start looking at your idea bank or you start generating ideas and say, how can we achieve these key results?

**Lenny** (00:59:18):
And to clarify the thing you copy is the key result as the goal?

**Itamar Gilad** (00:59:22):
Yes, exactly. You can write the objectives alongside that to remind people what are we trying to achieve, but the key results are the thing we show here. Then you pick some ideas, the ones that look most promising and as unintuitive as it sounds or counterintuitive as this sounds I would recommend that you let the team pick these ideas. The manager of the stakeholders can propose the ideas, everyone can propose, but the team should use the ICE process to kind of... And especially the product manager is very important here to choose which ideas to test first. Then the team together needs to develop which steps should we run, how can we validate this? Some of the steps will be done by the PM, some by the data analyst, some by the user researcher. But some will involve the team, there'll be some coding, there'll be some running of experiments and so there's some ownership around the steps. A sub team owns each one of these steps and we will change the board very actively.

**Itamar Gilad** (01:00:24):
So if an idea turns out to be bad we will take it off the board and put another idea in this place or maybe we achieve the goal, we don't need to work on this anymore, we can focus something else. So it's a project management tool in a sense.

**Lenny** (01:00:36):
Awesome. So I'm looking at it and I think maybe the most important piece of this is that steps aren't just like a project, like launch a better onboarding or add the step to onboarding. It's you want to emphasize the steps that you're going to take to get to more and more confidence essentially, and more and more evidence guided thinking versus just, "Well, let's figure out how to launch this feature idea."

**Itamar Gilad** (01:01:03):
Exactly. It's not a engineering milestone or a design milestone, it's a learning milestone. So we build something and along the way we actually grow the scope of what we build. We are building the product in the process and we learn, so the two have to come hand in hand.

**Lenny** (01:01:20):
And for folks that aren't watching this on YouTube, just to walk through an example, we'll do it real quick. So one of your goals here is average onboarding time, you want your goal to be the average onboarding time less than two days, currently five and a half days. An idea there is an onboarding wizard, and then the steps are a usability test with mockups and then a usability test as a prototype and then an AB test?

**Itamar Gilad** (01:01:42):
Yeah, basically, and you can alter this as you go along. Sometimes you can run multiple steps in parallel it's not always sequential. But that's basically the process, yeah.

**Lenny** (01:01:53):
Awesome. So again, what you're trying to emphasize here as a team is just we're not just going to launch this onboarding wizard and we're not going to figure it out later. It's like let's be upfront about the steps we're going to take to build more and more confidence. This is something we should keep investing more and more in, which is really interesting.

**Itamar Gilad** (01:02:09):
Yeah, and another interesting thing that happens every time you run a step if it's successful you have evidence and you can go back to the managers and tell them and share and say, "With this idea we thought it was great, but we got this result. What do you think that means?" And sometimes that manager that propose it would say, "I think the test failed, let's rerun it." Or sometimes they will say, "Maybe it's not as strong as I thought. The discussion just becomes that much more nuanced and objective if you like.

**Lenny** (01:02:42):
Maybe just to close out this framework. How does this relate to a roadmap that they may have in a spreadsheet or in Jira or in Asana or something like that. Does this sit on top of that? Is this replacing a roadmap somewhere else?

**Itamar Gilad** (01:02:54):
I would say that release roadmaps where you are just saying by Q3 we want to launch this or by October we have to launch that, they're kind of competing with this. If you're doing that and people know that the goal is to launch that thing by October, forget about learning, forget about evidence guided, I recommend using outcome roadmaps saying by October we want to achieve this outcome. By Q4 we want to launch in another three countries, or we want to grow our usage in India by that much, by this time we need to tackle the problem of churn and how we achieve this. Sometimes we know we have a concrete idea that is high confidence that we already tested, we switch into delivery, then we can put it on the roadmap and say, "Yeah, we're going to build this thing and we'll aim for October." But otherwise you want to keep it open and the roadmaps can kind of suffocate this process if you decide upfront with low confidence that this particular idea must be launched.

**Lenny** (01:04:04):
Okay. So you're proposing people switch the roadmapping practice to this, which is very ambitious. I love it.

**Itamar Gilad** (01:04:10):
Well, this is not a roadmap. This is just a tool for the team to manage the project, but I have a proposal for outcome roadmaps inside the book.

**Lenny** (01:04:20):
Okay, awesome. Okay. So I was going to ask if people wanted to try this approach, the book is the best way to fully understand the framework and how implement it.

**Itamar Gilad** (01:04:30):
That's one way. I have articles, I have resources on my site, but I try to condense much of what we just discussed in a lot more nuance in the book. So if you are interested in that, I would give it a go.

**Lenny** (01:04:45):
Awesome. Maybe just on the topic of OKRs real quick. How do OKRs connect to all this? It sounds like broadly you kind of assume people will keep working on here's our metric or key results or objectives and then that plugs into this kind of GIST framework.

**Itamar Gilad** (01:05:01):
So the metrics trees, plus your mission, plus the individual missions of the teams give you most of what you need to populate your OKRs. There's of course a process of alignment, top down, bottom up, side to side, which I talk a little bit about as well. OKRs is a very rich topic, but those things are usually the core. There's usually some other OKRs that's about the health of the company, the health of the product, etc. Those are called supplementary OKRs, I talk about those as well. So yeah, I think OKRs are a helpful tool if you like them.

**Lenny** (01:05:37):
And just zooming out again. Basically you don't need to take all of these ideas and lump them all together and change the way you work as a business. You can start with picking some of these ideas and starting to become more and more evidence guided. It sounds like this GIST board isn't where you probably want to start, but maybe it's once you have more and more experience using some of these tools or you tell me. Do you sometimes go straight to this way of thinking about the roadmap and the plan?

**Itamar Gilad** (01:06:04):
So it might not be the full board because you're missing some of the pieces, maybe your goals are not as good or your idea prioritization isn't as good. But if your team is very, very delivery focused and sometimes it's also the opposite. The managers are telling them how to build and you want to break this kind of dynamic, you want to create a step backlog. So instead of a product backlog, let's create a backlog of steps which are just validation steps, betas and previews, etc, and that changes the dynamic pretty strongly.

**Lenny** (01:06:39):
So by the time this podcast comes out, the book will be out. What is the best place to find the book?

**Itamar Gilad** (01:06:44):
Hopefully on Amazon, you can search for it. You can go to my site, itamargilad.com and it'll be presented prominently there and there's also the book landings page where you'll find everything you need to know about the book, evidenceguided.com.

**Lenny** (01:06:59):
Well, with that we've reached our very exciting lightning round. Are you ready?

**Itamar Gilad** (01:07:03):
Yes, let's go.

**Lenny** (01:07:04):
What are two or three books you've recommended most to other people?

**Itamar Gilad** (01:07:07):
So I'm going to cheat, I'm going to recommend a series of books so two series. One is the-

**Lenny** (01:07:12):
Cheating is allowed.

**Itamar Gilad** (01:07:13):
All right, cool. One, and those are obvious one. One is the series published by SVPG, Silicon Valley Product Group. So INSPIRED, EMPOWERED, now I think TRANSFORMED has come out, I haven't read it yet but I'm sure it's amazing. So this is Marty Cagan and his colleagues, they write some tremendous books and every product manager should read them. The other series, a bit older, this is the Lean series, The Lean Startup, Lean Enterprise, Lean Analytics, there's gold in all these books, Lean UX, really, really important books and I think they're not as appreciated as they should. Running Lean, that's another example.

**Lenny** (01:07:54):
What is a favorite recent movie or TV show?

**Itamar Gilad** (01:07:57):
I'm not really a big TV or movie buff, I just put on whatever comes up. I'm discovering that YouTube is actually becoming one of my sources of information entertainment. I'm learning a lot of Spanish recently, so I discovered this channel called Dreaming Spanish which is if you're learning Spanish it's incredible. So that's my recommendation.

**Lenny** (01:08:19):
That's a unique choice, I love it. Favorite interview question you like to ask candidates.

**Itamar Gilad** (01:08:24):
I like to ask them to design something for a niche audience. So a navigation system for elderly people or some sort of laptop for people with vision impairment, etc. So those are good questions to see their customer empathy, their creativity, their ability to evaluate multiple ideas, their ability to find flaws in their own ideas. So there's a lot of room to dig in there and kind of see how this person is thinking as a product person.

**Lenny** (01:08:57):
What is a favorite product you recently discovered that you love?

**Itamar Gilad** (01:09:00):
It's a cliche, but it's AI. There's a company called ElevenLabs, that do voices and the best voices, synthetic voices you heard, but they can also replicate your own voice so you can create a voice signature. If you're American you can use their kind of default free version or cheap version to replicate your own voice and that could be pretty useful if you need to narrate an audiobook or do some online course. So I'm finding this service very interesting.

**Lenny** (01:09:36):
This is all part of my big retirement plan, find all of these components together that can replace me eventually. You got AI generating content, we'll have this voice thing. I love it, it's all happening.

**Itamar Gilad** (01:09:45):
There's an AI version of you, right? I can ask you questions now with-

**Lenny** (01:09:48):
Oh, there is lennybot.com.

**Itamar Gilad** (01:09:50):
Right.

**Lenny** (01:09:51):
It's all part of the plan. Okay. What is a favorite life motto that you repeat most to yourself that you share with others?

**Itamar Gilad** (01:09:59):
That's a big one. Albert Einstein I think said, "Strive not to be a success, but to be of value." And I think that's a great motto for people and for companies. It's something that kind of guides me and this whole concept of the value exchange, etc, is kind of loosely connected to that.

**Lenny** (01:10:19):
I love that, that's such a important point for people putting out content online. So many people are just like, I just want to be successful, get followers, here's all these things I'm tweeting and showing and the thing that actually works is deliver value, create valuable stuff that people really value and want. I find the signal for that is, do you find it interesting and valuable? If you're like, "Oh wow, that's really interesting." Oftentimes other people are going to find it interesting. So I love that, great choice, I'm going to look at that one up. Two more questions. What's the most valuable lesson you learned from your mom or your dad?

**Itamar Gilad** (01:10:53):
I think both of them in their own way, they had relatively modest jobs, teaching or doing other things, but they always strived again to be the best they can and to deliver the most value they can. So it's very connected somehow, maybe I'm seeing the world through this lens. But they kind of taught me to strive to be the best I can at what I do.

**Lenny** (01:11:19):
The final question, you're Israeli for folks that can't tell. What is your favorite Israeli food that people should definitely check out or I try to get whenever they can?

**Itamar Gilad** (01:11:29):
When I arrive in Israel I usually go for shawarma, which is like döner kebab if you know it, it's just better. So if you're in Israel, if you go visit Haifa, which is the city where I grew up definitely check out the shawarma.

**Lenny** (01:11:44):
Awesome. Itamar, I hope people got the gist of your book from our conversation. What's the best way to find it? What's the best way to learn about you and reach out if they want to ask any questions? And then also, how can listeners be useful to you?

**Itamar Gilad** (01:11:56):
To find it you can go to itamargilad.com or to evidenceguided.com, and you'll find a book and you'll find me. Best value to me, try it out, just take some of these ideas, bring them back to your office, talk with your colleagues, say what do you think we should do about this? Just give it a go and reach back to me, tell me I'm easy to find in my website. Tell me what happened I'm really interested.

**Lenny** (01:12:22):
Amazing. Itamar, thank you again so much for being here.

**Itamar Gilad** (01:12:25):
Thank you.

**Lenny** (01:12:26):
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.

---

## [19/20] How to drive word of mouth | Nilan Peiris (CPO of Wise)

**Nilan Peiris** (00:00:00):
Some people focus on conversion rate, like, "I'm going to make this really, really slick." And that's cool. You get a bit more growth. But to get to recommendation, you're going to blow your user socks off. You have to give them an experience they didn't know was previously possible. And when you are in that place of doing something that no one has ever done before, that's when you get it.

**Lenny** (00:00:23):
**Nilan Peiris** (00:03:32):
Thanks for having me, Lenny.

**Lenny** (00:03:33):
So you're chief product officer at Wise, which I don't know if you knew this, but I'm a very happy weekly active user of. To give folks a little bit of context on Wise, could you just explain, what does Wise do? And also share maybe a few stats to give people a sense of the scale that Wise has reached at this point.

**Nilan Peiris** (00:03:51):
We're looking to solve the problems associated with cross-border money movement, which is that moving money across border is pretty slow. It's actually really expensive, and it can be really hard to do. We solve it with three products, our money transfer product, which is what we started with, our account, which would be like, think of trying to solve the problems of international banking with our account for people, and for businesses. And then finally we've also got an enterprise product where we take the underlying infrastructure that's powered those products that we've built, and embed them in the banks, and products that people use every day, and then zooming into the numbers. So, we've got to come a little way on the journey. So today we're now moving about $12 billion a month, growing between 30 to 40% year on year. We take about 0.65% on average across all our routes as price, and we've been profitable for about more than four years now, with 20% EBITDA margins.

**Nilan Peiris** (00:05:05):
But probably the stat I'm most proud of, and the hardest thing to make happen out of all of that was we acquired 70% of the users that found out about Wise last month through word of mouth. So, contextually, we have 16 million customers, and we're acquiring about a million a quarter, about 10 million actives, and yes, so out of a million that joined Wise the first time, 700,000 found out about Wise from a friend.

**Lenny** (00:05:36):
There's a couple stats there that really stand out to me. One is you're gaining a million new users a quarter, which is insane. Just like a million new people joining Wise every quarter. That's an astounding number. The other number is what you just shared around word of mouth, that basically more than two thirds of people are discovering Wise and joining Wise through word of mouth. Mouth. I want to spend the bulk of our conversation on this topic of word of mouth. I think it's extremely rare how you've been able to increase word of mouth, and just how much of your growth comes through word of mouth.

**Lenny** (00:06:08):
You've essentially developed a system for how to drive word of mouth, and how to basically structure your team, your goals, your priorities and things like that in order to lean into this growth channel. And so, I just have a million questions around how you think about word of mouth, and the first is just, how do you measure word of mouth? How do you know that say, 70% of your growth is coming through word of mouth?

**Nilan Peiris** (00:06:28):
We ask customers, is the short answer. So, we have an attribution model, as you can imagine, and we've had one from the early days, and it overlays all the referrer data and cookie data you have on visits comes to the website. So you kind of know that. And then you obviously have the soundtrack stuff, and we sample, and ask customers a set of questions on this, and then overlay that onto the... What turns up in your web tracking as direct traffic to give us a sense of how big that word of mouth number is, and that's what gets us back to the 70% stat.

**Lenny** (00:07:05):
And very practically, how do you actually ask people? Is there a little pop-up on the website?

**Nilan Peiris** (00:07:09):
It's actually integrated into the flow. So when we built it originally, we thought it's quite cool, marketing and acquiring customers is part of the product, and we should actually stitch that into the experience seamlessly so that we're able to do this more effectively going forward.

**Lenny** (00:07:26):
That's actually, at Airbnb, exactly how the team did that, to understand what percentage of growth was word of mouth. It's just a little interstitial popup when you visit say, airbnb.com, "How'd you hear about us?" You think there's some fancy ways to understand the stuff, but it's just like, just ask people, they'll tell you how they heard about it.

**Nilan Peiris** (00:07:40):
Yeah.

**Lenny** (00:07:41):
Awesome. Okay, so just to kind of dig into the meat of it, what has been the biggest shift in helping you significantly grow word of mouth, and make it such a huge lever of growth for Wise?

**Nilan Peiris** (00:07:53):
Yeah, before I launch into this, let's just also take a step back, and why even focus on this? So in the early days, when I met the founders, Kristo and Tyler. It was quite funny, I got introed to them when they were just the founders, and without a team really, and with the beginnings of a product, and they said, "Nilan, you've got to meet these guys, they've got a great product, they just don't have any customers." And I sat there with them, and we kind of launched the first Google ads, and in the early days you try everything, hoping that something works. But taking a step back, think of money as the ultimate commodity. It's pretty hard to build an expensive business that moves your money somewhere, and it costs a lot, so there's less of it afterwards.

**Nilan Peiris** (00:08:48):
So building a brand led money transfer business, the brand's got to be pretty damn good, right? You're going to feel pretty special afterwards, in order to have less money afterwards. So what we're looking for always, but what channels out there are super scalable, and can reach our entire audience, but have an incredibly low distribution cost. So, that's one thing that led us to word of mouth and the other bit, when we get on to talk about marketing later, the other challenge with marketing which is unique is because we are lower price, but a superior product, we have less margin to spend on marketing than others in certain paid channels. So that's another reason why marketing is inherently hard. Our marketing team does amazing work at Wise, in order to work within those constraints.

**Nilan Peiris** (00:09:36):
But back to your question, which was like, what's the biggest thing we've done to shift word of mouth. When I joined Wise, and started wrangling with word of mouth, I spent a bunch of time with friends of mine in the US and around the world, Andrew Chen, some of the other growth gurus, this is going back 10, 12 years. It's like what mouths, who's done it? What's the system? What do you measure? There wasn't really anything out there. So we kind of had to figure our way out. So, first step was asking it, and the second step was kind of figure out how do you know what's driving it? And the best proxy we found for this was something that most people have heard of, that we actually used quite a lot is net promoter score.

**Nilan Peiris** (00:10:26):
So from the very early days we'd start asking customers, and you probably have seen this survey, "Would you recommend Wise to a friend?"

**Lenny** (00:10:34):
Never seen that ever in my life. Never been asked that question.

**Nilan Peiris** (00:10:39):
Exactly. There's [inaudible 00:10:41] you said. And then in the end you've got the scale, zero to 10, and the theory is nine to 10 there are promoters, and zero to seven are detractors. Zero to six, detractors, and seven to eight are kind of neutral on your product. The intriguing bet was when we overlaid this... So we have word of mouth, it's about 50 odd percent, and then we have a referral program. When we overlay the referral data over the NPS survey data, we saw something really interesting.

**Nilan Peiris** (00:11:13):
There's very low invite rates at one to six, and not just invite, conversion rates of users that joined for invites. But when we've got people from sixes to this seven and eight group, they doubled the number of people they told. Eight to nine, they doubled again, and nine to 10, they doubled again. So, this is pretty crazy when you see it for the first time. I'm going to get back to your question in a sec, but it's quite core buildup to it, because when you are a product manager, like you've been in your career, one of your jobs is to figure out what metric are you going to optimize for? What are you going to try to get the business to ground behind? And if you optimize for something like conversion, rate and you move conversion rate with 10%, you kind of get this one-off hit.

**Nilan Peiris** (00:12:00):
But if you move the NPS from 30% to 50%, you increase the viral coefficient of your customer base. So every customer that goes through tells X many more. When you model this through, the ROI on NPS increases is absolutely huge. So, it's got to say, "Okay, this is the thing to zoom in on, so how to move it?" So, then the second magic of NPS is you get the numbers, but you also get the comments underneath it. I remember in the first year we built the NPS survey, and we emailed out every week all the comments to the whole company, which was pretty small, and we kept doing that, I think up till about three or four years, everyone got the NPS comments.

**Nilan Peiris** (00:12:51):
And when you read the comments, and now obviously we've got all kinds of fancy models sitting on top of these things, customers kept telling us the same things, "Make it faster, make it cheaper, make it easier to use." Do you know at the beginning, when I said, "Price, speed, ease of use," we kind of figured this out by thinking hard about this question. How do we make this product so good that people will use, it but they'll recommend it?

**Nilan Peiris** (00:13:20):
And customers were pretty clear, the ones that were evangelical, is the word we use, are the ones that had a much... Had this cheaper experience, the ones that were talking about it had a fast experience. So it's about price, about speed, it's about ease of use. And when you generalize and take a step back, and look at consumer product companies, they have these product pillars they call it, and they usually have KPIs around them. The second insight we got, found, is when we entered markets, like when we entered the US for the first time, if we entered with a product that was priced at say 5.9%, and the alternative was six, customers would use us, but they wouldn't talk about us. We only got the advocacy when we were eight to 10 times cheaper. That's when people started talking about it.

**Lenny** (00:14:11):
Let me actually interrupt you here a bit, just to kind of set a little frame around this, because this is extremely interesting, and I think people may miss, I think, some of the really interesting insights here. What I'm hearing is essentially there's this clear sense that you had to grow through word of mouth because of the business model. You didn't make a lot of money per user, and you didn't have a lot of money to spend thus, to help grow. So essentially it's like. "How do we grow the word of mouth?" And then it's, "Okay, what do we need to convince people to share this product?" And used NPS, which I think a lot of people use, and also a lot of people probably know, "Let's make our product more awesome so that people talk about it." Those are kind of like, "Oh yeah, of course."

**Lenny** (00:14:49):
But I think what I'm hearing is that you did that's really unique, is one, you found this huge delta between these detractors, and even seven or... I guess it was six and below, and then seven or eight, and then nine, 10 kept kind of doubling. So one is just this focus on, how do we get someone from there to there? Two is this really big focus on the comments of the NPS survey, not just like, "Oh we have this percentage of detractors." And then also I love how you just create these pillars, essentially, of like, "We're going to work on these three things. These are the three levers to help grow word of mouth for this product." Does that sound about right?

**Nilan Peiris** (00:15:25):
That all makes sense. Obviously at the time, it is also way more chaotic.

**Lenny** (00:15:33):
Yeah.

**Nilan Peiris** (00:15:33):
So, at the beginning, everyone thinks it's 20 different things, and then over time, slowly, you understand that it's these things again and again. And a lot of building a successful businesses kind of building conviction that these are the things that matter. So, now I'd say price, speed, ease of use, it sounds... Like, but yeah, go back to seven, eight years. But we were arguing with each other around what, "Is it trust? Is it this? Is it this?" Trying to get clear on what are the things we missed there.

**Lenny** (00:16:00):
That would be useful actually to know. It sounds like, of course, it's going to be price and speed, but what are the things you kind of realize you don't need to focus on as much, based on these surveys?

**Nilan Peiris** (00:16:09):
Oh, wow, that's a really hard one. So, then the challenge, is as you know, everything is important.

**Lenny** (00:16:17):
Yeah.

**Nilan Peiris** (00:16:17):
Yeah? And that things that we use... We have a bucket called convenience. And inside the convenience bucket, there are many, many things hiding in there. And actually, you can measure this on contact rate, conversion rate, whatever, many different ways, and get many slightly different answers. So, I think I've learned there isn't... I haven't got a good answer on things we haven't-

**Lenny** (00:16:42):
Well, as you said, trust, which is interesting. Obviously trust matters, but maybe it sounds like-

**Nilan Peiris** (00:16:47):
Trust certainly matters. Yeah, trust's a good one. Let's talk about that one bit. I'll talk to you through the trust problem. So I ran into the trust problem hardest in marketing. So, just imagine, you just started out, you've got a money transfer company, it's good, your product's really good, it's really cheap. So, you put an ad out, and it says, "Move money with Wise, and really cheaply," is anyone going to click that? People did, right? Is anyone going to use it? Yeah, people did use it. And you did work all the usual trust elements. But the bit I found that really helped, the way I got my head around this, was what people trust is their friends. And this really was way stronger a trust signal than anything I could put on a landing page.

**Nilan Peiris** (00:17:40):
And even when people came in through marketing, they'd been told. So marketing can aid recall, and all kinds of things, because people are told by their friends. They'd have a use case later on, then Google, and like, "Ah, I remember, this guy used this." And we do definitely get users, especially today as we've got a larger brand, through marketing direct. But trust in isolation is a really hard problem to solve. You need to get under the skin of what it means. People don't think my money is safe. "I don't know if this company is reputable," to unpick each of these problems and figure out systemically how to solve them. And we've done this to some extent, but really there's a massive shortcut, which is if you deliver your customers a good experience, then figure out, how do you make it so good they'll recommend it? Then that kind of shortcut a lot of really hard trust problems.

**Lenny** (00:18:28):
What did you find most helped increase trust in that way? Is it just get more people using it and then they'll share with their friends, or is there something you did there to...

**Nilan Peiris** (00:18:36):
No, it was literally get more people using it, and they'll share with their friends. There's obviously a bunch of learnings we've had around what specific trust sentiments matter, especially geographically, but less powerful in the macro than get more people to use it.

**Nilan Peiris** (00:18:52):
So coming back to that, and I'd love to get your thoughts on this one. So, as you said, lots of people go up to NPS, and they kind of heard people talk about it, heard people talk about recommendations. So my learning on this is you've got to work really hard to get recommendation. So, to get a nine or a 10, so our NPS is 70%, so it's really, really high. So it's kind of higher than the iPhone, and Google search. So really, really high, so off the scale high.

**Nilan Peiris** (00:19:25):
And when we launch a market, or at the beginning it was much lower, so 20s and 30s. So instead it in context, like banks and financial services NPS is -30. So, most people don't recommend banks. So it's like, comes from a low base. But, what I've found is when you build a product, most founders, and most teams kind of stop when it works. As their next step, some people focus on conversion rate like, "I'm going to make this really, really slick," and that's cool, you get a bit more growth.

**Nilan Peiris** (00:20:02):
But to get to recommendation, you're going to blow your users' socks off, and the phrase we use is, you have to give them an experience they didn't know was previously possible. And when you are in that place of doing something that no one has ever done before, that's where you get it.

**Nilan Peiris** (00:20:24):
So the bar is all the way up there. And to put that in context, that means figuring out how to move money instantly. That means figuring out how to drop the price all the way from six all the way down to 0.35. And that's because there are systemic infrastructure issues in moving money around the world, which some people haven't solved before. And these problems are just really hard to solve. They take years to solve, but they have huge kind of returns when you do it.

**Lenny** (00:20:52):
I love that just as a framework, is how do... We need to blow our users' socks off. And again, it just comes back to how you can get people to want to share this product, and drive word of mouth, blow their socks off.

**Lenny** (00:21:02):
I want to dig into how you actually just figured out what these attributes are. Obviously you talked about this NPS survey highlighting things. How did you decide it was instant money movement, and some of the other things? Is it just basically looking at these survey results, and picking the things that come up most often?

**Nilan Peiris** (00:21:20):
Yeah, it was talking to customers, and looking at the survey results, and then through that, in many different ways, price will come up, speed will come up, ease of use will come up, and they kind of aggregate up to that.

**Lenny** (00:21:31):
I think a lot of people listening are still going to be this like, "Okay, we're just going to make our product awesome, and it's going to grow." And in a sense, yeah, in another sense what you're sharing is essentially kind of a really simple framework for how to actually do that. To kind of go a little deeper there, when you see other people trying to drive word of mouth, trying to drive virality, is there anything you think people often do wrong? Is there other missteps you've taken in trying to drive word of mouth?

**Nilan Peiris** (00:21:59):
It's this thing around growth rate. So, especially product net growth, which is what we're talking about. So you can imagine, we're going to open a new market to Indonesia, and the fastest way to do it is to take... Someone else has figured out how to move to Indonesia. We take that infrastructure, and we'll plug it into Wise,

**Nilan Peiris** (00:22:18):
You know what? We can do this, we'll get some users. But it doesn't grow like a hockey stick. It doesn't grow like a hockey stick because we haven't fundamentally changed the problems in moving money internationally. So, got this mantra, you've got to build a 10x better product than what's there. And if it's 10x product better, basically it doesn't exist already. So if you're plugging in something else, that's kind of a misstep.

**Nilan Peiris** (00:22:45):
So it comes from a very logical place, how do I get users quickly? I can take a shortcut in doing this, but that, you kind of realize is wasted effort. So the step then becomes this much harder question of these types of questions. Like what is the theoretical minimum cost for moving money into a market? What is the theoretical maximum speed? Not just make it instant, make it cheap, but what actually is the lowest it could possibly be? And instead of incrementally going, doing a jump to make it a little better, a little better, a little better, you can never get there. How do we take two years, and end up there?

**Lenny** (00:23:24):
I love that. It's something that I talk about a lot. Something I learned at Airbnb is this idea of working backwards from the ideal, instead of working forwards from how do we iterate and make this better, and better, and better. It's like, okay, if we could start again, and we could create the ideal experience, what would that look like? And then work backwards from what would it take to get there?

**Nilan Peiris** (00:23:44):
And what's an example of that at Airbnb? What was an ideal that you guys went for and then built?

**Lenny** (00:23:49):
The ideal was, there's this whole process where the founders hired this storyboard artist from Pixar to draw out the ideal experience of a host and a guest. So, there's these storyboards sitting in the office. I think there's 12 kind of... They call them key frames of, it's just like the booking experience being really seamless, arriving in the home, and being really amazed. Going out and finding things to do.

**Lenny** (00:24:13):
So, this became essentially the vision of the company is let's make each of these frames, these key moments of a journey for hosting a guest as incredible as possible. That was one, and that became essentially the strategy for a few years is just make each of these frames awesome.

**Lenny** (00:24:29):
And then there was another project that they were working on around booking at Airbnb. I don't know if you remember this, if you used Airbnb much, but most of Airbnb back in the day was you request to book with a host, you're like, "Hey, can I stay in your home?"

**Nilan Peiris** (00:24:41):
Yeah.

**Lenny** (00:24:42):
And turned out 50% of the time the guest was ignored, or rejected, and the host was just like, "Nah, no thank you." Now, over 80% as far as I know of bookings are instant bookings, where you just book and it's done, just like every other place you book online. And so that was a huge transition that I worked on, and that came from, if we were to start Airbnb again today, or if someone were to disrupt Airbnb, what would it look like? And obviously it'd be you just book. You're not sitting around hoping someone is cool with you. So, that came from that idea of just like, what would be the ideal Airbnb experience?

**Nilan Peiris** (00:25:15):
That is incredibly inspiring. I'll try and share a couple of stories, analogies from Wise. I'll talk about two things. Let's talk about price first. So, it's a good question. So, Moneytrans has been around since the [inaudible 00:25:32]. How does a few people get together? And it's evolved towards moving trillions around the world, and generally retail consumers paying about six to 7% around the world to do it. How do a small team in Europe start out and figure out how to move it? We launched at 0.5%, and now we're down to about 0.35%. So what changed?

**Lenny** (00:25:57):
Yeah, I was going to ask, how did you do that? That sounds like everyone would want to do that.

**Nilan Peiris** (00:26:02):
Yeah, so let's try to unpick it a little bit. So, first question you'd ask is, "I know what you're doing, you're losing money on every transfer." It's like, "Especially what you're doing," but we've been profitable for five years. And one of the magical things here was we're actually profitable in every transaction. So it's probably about four or five years ago, I led this project to start to pull together our pricing.

**Nilan Peiris** (00:26:30):
So, every month you get bills, and they turn up in your P&L, but every single bill we got, we allocated the cost back to the customer, or the transaction that generated it. And then we add our margin on top, and that's our price. And when you look at this and you analyze it, you'll find obviously there are 20% of customers generating 80% of the costs. And what you do is you get those 20%, you give them a raise, because they should cover their costs, and you drop the price to everyone else. And then the team works really hard on reducing these costs down, and then you move into a different segment in the market as the price costs come down. Does that make sense, Lenny?

**Lenny** (00:27:13):
Yeah. Essentially charge the heavier users more to counteract less frequent users. And essentially that drives word of mouth.

**Nilan Peiris** (00:27:22):
Totally, but it's down to this level of, if an Australian customer calls up asking, "Where is my transfer?" That cost of that call gets allocated back to the AUD/GBP route. If a Brazilian business needs like 20 documents in order to be verified before we can give them an account, the cost of verifying check those customers goes back there, so that at a very atomic level starts happening. So yeah, as you said, the more expensive customers end up paying what they cost.

**Lenny** (00:27:51):
And it sounds like the more expensive markets.

**Nilan Peiris** (00:27:55):
Indeed, and the more expensive, systemically expensive markets. But let's get to that. So, what are the costs? So if you look at our P&L, there's just three costs at transaction level. You've got people costs, you've got the cost of risk, realized risk, and then you've got partner fees.

**Nilan Peiris** (00:28:16):
And so if you've got this mission of moving the world's money for almost nothing, or zero, as close to zero as you can, you've got to invest as much of your cashflow in engineering to try to engineer away these three problems. So just to take them through briefly a bit, and remember, we're trying to do this 10 times better than anyone else. So how do you really change the experience on each of them?

**Nilan Peiris** (00:28:40):
I'll cover a couple with you. So let's do the risk one first. There's two risks we have. We have have FX risk, you come to Wise you see your rate, and then you may send us the money a little later. If you're moving a million dollars, you can't usually move it instantly. It might take you two to three days to move it. The rate's locked, could move against us, we'd lose some money.

**Nilan Peiris** (00:29:01):
So that cost, if you look back, so we've halved that cost over the last few years, and you can imagine through understanding the bits of the product, they generate exposure, and limiting it, and a bunch of algorithms behind that. But the more inspiring stuff is the people costs, and the partner costs, go through each of these one at a time.

**Nilan Peiris** (00:29:25):
So the people costs are our customer service team, operations teams. But I like to think of that as the cost of poor quality. So you bring up customer support if the products are clear, you hire lots of people in the back office. If you haven't automated it. We get like 20% improvement year on year as we're doing that. But come back to your question, how do you step change that? How do you do a 10x better experience?

I'll share with you a story from Singapore. It's quite a fun one. Because we went to Singapore about six, seven years ago, and [inaudible 00:29:58], we asked for a license. We had 20,000 people on the wait list, or so, saying, "Wise, please come to Singapore." And we went there, we asked the regular, "Hey, can you give us a license?" They gave us the license, but they said, "You have to physically meet every single customer."

**Lenny** (00:30:13):
Great.

**Nilan Peiris** (00:30:14):
Face-to-face. And this happens, this is... Remember, they're banks that people use. So people go into banks usually, and you get face-to-face verified when you open a bank account. We're like, "You don't need to do this in Australia, in the UK, in other countries around the world." They're like, "In Singapore, for your license, you need to do this." So we actually sent a small team out to Singapore, and we opened an office through [inaudible 00:30:43], and customers... You went through this really slick flow, and then you got invited in to come see the team.

**Lenny** (00:30:49):
Amazing.

**Nilan Peiris** (00:30:50):
And customers hated it, and it was really expensive, obviously.

**Lenny** (00:30:56):
Yeah.

**Nilan Peiris** (00:30:57):
But the magic was we got the customers not to complain to us, but to complain to the government. And it took a year of lobbying, and a year of building, doing something unscalable effectively, before we got the world's first EKYC license in Singapore. So you could take a selfie, picture of your ID, and then you could get verified.

**Nilan Peiris** (00:31:21):
And that's what I call a 10x better experience than anyone else in the market, and that led to advocacy and word of mouth off the back of it. And that loop of getting your customers to help was also one of the learnings of word of mouth.

**Lenny** (00:31:35):
Was the product team involved? Were you involved in that on the ground stuff? Or was it like [inaudible 00:31:40]?

**Nilan Peiris** (00:31:39):
Yeah, yeah. Generally when we go [inaudible 00:31:43], we're running cross-functional teams, but this is a verification team. The team actually would verify the docs when you sent it to us. They went out to Singapore, verified them onsite, face-to-face.

**Nilan Peiris** (00:31:54):
So the fun bit here is why would customers help a company? And this is one of the other learnings on word of mouth. The way I think about this is that there are the rational reasons why people recommend, which we've covered. But there's these emotional ones as well. Softer ones people would call brand. I prefer to call it on the mission.

**Nilan Peiris** (00:32:19):
So we do our mission, which is to make the world's money move instantly at the touch of a button, for almost nothing. It was a very personal thing, it was like an internal company thing, to think our customers cared about it. And then we rebranded like eight, nine years ago, our first rebrand, and we wrote our mission and sent it to our customers.

**Nilan Peiris** (00:32:41):
We got more new customers from that email being forwarded around than any other kind of marketing. And I show this when I talk at conferences. This email broke all the rules of marketing. It didn't have a call to action, it didn't have a button to sign up, it didn't have anything in it, but people just forwarded it around saying, "You should check out Wise."

**Nilan Peiris** (00:32:59):
And it's not all the customer base, but there was a proportion of the customer base that this resonated in. And I think it's the authenticity within which they could see that we were genuinely trying to.... Trying to bring the prices down was a scheme to help us grow faster, which is kind of where it started out, was actually genuinely because founders, they were really upset about how much it cost to money.

**Nilan Peiris** (00:33:27):
They found good ways to solve that problem, and they're still really passionate about solving that problem. And they could see that authenticity flows through the whole company, because we got a... When you look at Wise, we're full of people on visas, and immigrants, and people that have worked, and live around the world, and struggled with this problem, and are passionate about solving it. And so they wanted to help us solve it. So the second part of this word of mouth engine is for us, we managed to get this mission thing to work.

**Nilan Peiris** (00:33:53):
So somehow we emotionally connect our cause, and then I see going, taking a step back, getting 10x better on price is through our customers helping us do it, which gets us even cheaper, which then brings more customers, that then creates this flywheel that's spins around.

**Lenny** (00:34:11):
What a flywheel you guys have built. This reminds me of a lot of different things. One is you talked about how there's the reality of the things people need, and then there's this soft, fuzzy stuff that's harder to quantify. I actually is the framework just like that on that product I talked about of instant booking.

**Lenny** (00:34:27):
I kind of built a roadmap around the reality of what people actually need in order to feel comfortable, guests booking instantly. And then I call it the perception, what are their fears about letting guests book instantly? And there's a lot of work to just convince them, you think you're going to get all these guests that are really scary or whatever, but in reality it never happens. It's really rare something bad happens, and if it does, we're going to cover it.

**Lenny** (00:34:50):
So, I think that's a really cool framework when you're trying to get people to adopt something, is think about what do they actually need? And then how do you convince them of the things that are just in their head? And it sounds like the win there was kind of this sharing your mission and your values as a business.

**Nilan Peiris** (00:35:05):
Yeah, it just sounds, again very tweedy, right? Tweedy, like sounds very corporate, sounds like it's never going to work, but I think it's also... I mean, Airbnb, the authenticity is there. People are passionate about making that experience work for both sides of the marketplace. It's kind of clear. So, I'm kind of taking a step back, personally very passionate about customer-led growth, and how that turns into shareholder value.

**Nilan Peiris** (00:35:32):
So, taking a step back, where every business I've ever worked in, it's always got these two lists, a list of things to do for your customers, and then it's got a list of things to do to make money. And you generally do everything you need to do to make money, and you do two things with the customer list, and you go, "Customer led business." And then, neat thing about wise, and I'm pretty sure you'll see the same thing on Airbnb is, we just had one list, which is this list of things that you need to do to make customers happy, and it's prioritized by impact on the really hard things. And if you do these really hard things, they have an incredible impact for customers, but hence on your growth, and on your shareholder value.

**Lenny** (00:36:11):
That is really interesting. Airbnb is not quite like that. It's actually become more like that with a lot of just like, "Let's build awesome products and not focus on experiments as much." So that's really interesting that prioritization basically at Wise came from, "What are people telling us?" I guess let me ask actually, how did you know what the impact would be on customers? How did you decide? Is it frequency of how often people request it? Is it, "We need to lower the cost, and so we're just going to prioritize the things that will lower prices most?"

**Nilan Peiris** (00:36:37):
Definitely on the journey at the beginning, you are into split testing, right? Let's try to take apart a split test on price. So, you've systemically dropped the cost. Imagine we drop the cost. The question is, do we drop the price? Do we pass that all on to customers? And do we keep some of it? And split testing on the price thing, if the split test is going to mean you end up with more revenue, it means you drop the price by 10%, and there happened to be that day, more than 10% more customers in the market who, they saw the price at one pound, but they see the price at 90p, at 10% lower, and they're like, "I wasn't going to shift at buy at one pound but I'm going to buy it 90p."

**Nilan Peiris** (00:37:23):
So this is pretty hard to do this. This word around conviction is one I use a lot, where you build this conviction that price is what matters. And through this incremental split test, you will take a long time to go there, but at some point you kind of go, "Actually I've got enough conviction." So there's one kind of strategic bet at the heart of Wise. That is if we have the lowest cost platform, and it's really fast, and really high quality, the world's volume will switch to us. And just marginally getting there step by step by step, and trying to track the incremental return is actually slower. And there's a point that comes that you go, "I feel really comfortable investing in price. I feel comfortable investing in speed, because I know it's going to pay back, and not necessarily this month, but eventually it will, and I need to make gains on all three levers in order to get there." Does that make sense?

**Lenny** (00:38:13):
Yeah, absolutely. So essentially, in that track of work, instead of everything that you did to reduce price, there wasn't an experiment to see, "What impact does this have on growth, or revenue?" Instead, it's just, "We know reducing price is going to help us grow, and so we're just going to track how much we're cutting price." And that's essentially the goals, I imagine, were just cut the price by some amount, find a way to make it this much cheaper every, say, quarter, or year.

**Nilan Peiris** (00:38:37):
Yeah, that's it. You got it. And that conviction is core. That extends to our product management approach on the UX. So this is a great line for use internally, I'm sure you've heard it, "You can't split test your way to love." So, this experiment led product management approach, where you throw a bunch of things on the wall, and then you kind of see what sticks, and generally we don't advocate this. Obviously there's a bit of it that happens, but generally don't advocate it. Mainly because engineering is expensive, and you can actually figure out what matters to customers through other means. Some of the techniques we've talked, and build it.

**Nilan Peiris** (00:39:21):
There's a story I like to share. I had a product manager join our refer a friend team, viral growth team, and invite team, and after a quarter, I said, "So what are you going to build?" And he's like, "I'm going to test everything. I'm going to test the landing page, I'm going to test the subject line, I'm going to test the program so I don't know yet till run through all the tests, then I'm going to come back and tell you what I'm going to build."

**Nilan Peiris** (00:39:47):
I said, "You're not going to do this. I'm going to give you three weeks and you're going to pick one thing to change, but you're going to go talk to people, and get quantitative insights, and build your own gut feel around what matters, and then launch it, and submit, test it, and see if it works." But this thing of building conviction on what matters, and I watch how teams slowly build this and you need the data there to make sure it doesn't become a hubris, right? That enables you to make much bigger changes than just experimenting away, and it forces you to get clear on what actually is the problem to solve here, and how do I solve it really, really well? Does that make sense, Lenny, Do you disagree? It's a bit provocative there. Some people are pretty strong in the expert led approach.

**Lenny** (00:40:30):
No, there's many ways to do it. There's no right way, and it's working. So I'm not going to argue.

**Nilan Peiris** (00:42:18):
Yeah, yeah, yeah, yeah. And is that something that you've seen yourself in practice elsewhere?

**Lenny** (00:42:23):
It's interesting how many parallels there are to Airbnb, because this is what Airbnb is doing now. There's been a shift recently, where instead of everything is very data experiment driven, it's very just like, "Let's build really great products that the founders are really excited about, and that the execs are hearing from people. Let's just build things that are awesome and launch them, and we believe things will grow." And Airbnb is doing great.

**Nilan Peiris** (00:42:47):
Yeah, the challenge of this is because it does become this risk thing of where it's like, okay, it's someone's opinion, so I think it's X, right? And everyone thinks they're kind of Steve Jobs type thing.

**Lenny** (00:43:00):
Yeah. That's right.

**Nilan Peiris** (00:43:01):
You have some way of using data to get this conviction, and show why this is what we should do, but try to learn how to build that faster CME, slight difference. So, it's less product managers or me saying, "Hey guys, I think it's X." It's generally data driven, and qualitative insights driven as well.

**Lenny** (00:43:23):
Personally, I would always index towards running experiments just to put this out there, but I think in this case, it makes sense, where you just know, "We need to do these three things, just make it cheaper, make it faster." You don't need to AB test every idea there. Probably the main downside of not testing everything is you may be hurting things along the way, and you may not know it.

**Nilan Peiris** (00:43:42):
I mean, yeah, so we definitely do... So you're right. But there's a very different thing to when you look at the... From a sample size perspective, you want to do a beta, and understand the negative impact. It's a holdout group that's smaller, than a test to get a significance. It's quite define the criteria to know whether something is breaking, is generally a different thing to say, is this a material result in a test? Yeah.

**Lenny** (00:44:09):
And along those lines, the other benefit of experimentation is you know the impact. And so, team members can understand, "Here's what I did this quarter, this year." How do you think about just like performance reviews, and people's impact, and that kind of thing?

**Nilan Peiris** (00:44:21):
Yeah, that's a good one. This one is definitely an ongoing debate. So, I generally ask teams what's their impact? So, every quarter, every team, what... [inaudible 00:44:29] or Kristo will ask, "What did you ship?" And I generally ask, "How many people used it? What was the impact on volume?" Et cetera. And we have analyst teams that can answer this either with pre-post analysis, all kinds of techniques, or all through split tests. We generally have this, the debate is where the analysis slows us down, and we wouldn't make a decision off the back of the analysis.

**Nilan Peiris** (00:44:54):
And then, this generally is what you said, where the team needs a validation, mainly for themselves, and maybe a little performance, but not too much. And so, there were ways in which you can maybe get some read on it that isn't quite as strong as a split test, which we'd use in these things. It's more just getting some... You can understand that people worried when you do split tests that slow down the release of something, but in order to get impact, if you know you're not going to roll it back, then okay, you should just roll it out, and try to reduce the need for that validation.

**Lenny** (00:45:31):
I think that there's an interesting correlation between products that grow through word of mouth, and less need to experiment with everything. Airbnb is also actually 70% of growth is word of mouth from the last stat that I heard. And then you think about all these social consumer apps, they mostly grow through people sharing with their friends, and a lot of them come from just the founder's intuition of what a great product's going to be. I think about Snapchat, and the recent mobile social apps. And so I think maybe there's something there about just as a founder, trusting your gut more often. But then it becomes difficult as you grow. You have to delegate, and then you have to trust people on your team making the right decisions. I guess, is there anything there that you've learned about just trusting individual product teams to make decisions that you can't for sure know are positive or negative without running experiments?

**Nilan Peiris** (00:46:23):
So, as I say, almost everything we do, we have some way of understanding the impact. So, that's always there. We definitely have things where the team does something where Kristo or I will say, "This is just crazy. There's no way they're going to use this." And then we have a culture where people are encouraged to do these things, if they believe in it.

**Lenny** (00:46:48):
Is there an example of that?

**Nilan Peiris** (00:46:49):
Yeah, a couple. So the one [inaudible 00:46:52] that my head of SEO always talks about is a currency converter. So, the Wise homepage is a pretty good currency converter. It's got a decent one on there. There's tons of traffic on currency converter. So, if you click Wise link, now it's a little bit hidden on send, it's there. It's pretty cool. Currency converter.

**Lenny** (00:47:10):
Oh I see it at the bottom there. Yeah, it's like [inaudible 00:47:13].

**Nilan Peiris** (00:47:14):
But if you Google currency converter, there's tons of traffic, and that converter on the Wise homepage obviously includes our price, and lets you sign up. And so, should we build a currency convertor? Should we try to capture this traffic? Is it more effective to try to push our own product there? And you can kind of understand why it was Kristo, actually not me, that was like, "This is a crazy idea." And the founder, and the SEO team went out and built it, and it's huge now, in terms of visits. I think we've got a currency convertor app out there. I think we've got [inaudible 00:47:51] out there, and yeah, people discover wise through that, as an example of off-topic traffic, but that's a good example of one of those things where yeah, the founder said, "No," or, "That's' a bad idea," and we kind of went ahead, and did it anyway.

**Lenny** (00:48:07):
Awesome. I'm just thinking about broadly all the things we've been talking about. There's a couple of things that were floating around in my head. One is, reminds me of Amazon, where Jeff Bezos realized there are things that are going to be always true with Amazon. People always want cheaper prices, they want faster shipping. And I think there's something else. And it feels like you guys found the same sort of thing. What are the three things people always want with a money transfer product? And let's just make those as incredible as possible, and in your eyes, make them 10 times better than what anyone else has out there.

**Nilan Peiris** (00:48:40):
Yeah, totally. The business one example is relevant, and use it a lot when we talk to investors in the market, [inaudible 00:48:49] public helps validate this low cost, cutting price story. What's interesting is what changed though. So we started with transfers, but we got to account, and then we got to enterprise. Just what changed was we realized with account, if you just have to move $10, you're not going to download an app and do it. If you do it once, you're just going to do it in your bank. And so, that was a little bit of the insight behind building the Wise account, and we kind of focused on, there's a real problem with international banking.

**Nilan Peiris** (00:49:22):
So, really good example is for businesses. So if you are a business, say, in... Say a business in Europe, you've got a customer in Australia, and you want to get paid, you send them an invoice in Euros, and someday, some money's going to turn up in your account, you're like, "I don't know." They paid you an AUD, it got changed by three banks on the way through. You don't know what it is. What you'd love to do is invoice them in AUD, and get AUD in your bank account. You might even have people who need to pay in AUD, so you have to call to keep it there. But to get an Australian bank account, I found out, you need to fly to Australia, you need to incorporate a business in Australia, you need to go to a bank with all those papers, and then they will give you an Australian bank account number.

**Lenny** (00:50:06):
Great.

**Nilan Peiris** (00:50:07):
So with Wise, you can get an Australian bank account number with three clicks. Anyone can, and any business can, and you get an Australian balance, and a US, and a UK, and a Swiss bank. And this is killer for businesses that receive money internationally. And then the next big jump we did, and for consumers, so there are plenty of people, if all your banking is in the US, you probably shouldn't use Wise, but if you're somebody who uses another currency a lot, then you probably should use us as your primary bank.

**Nilan Peiris** (00:50:37):
There's some people, for example, who live in one country and get paid in another currency, and this is... Wise is great as an account for managing that. And we found with that, we got about... As we launched the account in markets, it was about a 20 to 30% more volume, cross-border volume coming into Wise from that market. Just a good example of how, while it's not price, not speed, you could argue is kind of ease of use, but we had to evolve it in order to get to the next tranche of the market. Does that make sense, Lenny?

**Lenny** (00:51:07):
Absolutely. And it all just comes back from what would be the theoretical ideal situation for people transferring money, say from Australia. And what I'm hearing is just find all the little friction points that get in the way. In this case you're like, "Okay, we'll create you an Australian bank account, and you don't even worry about it."

**Nilan Peiris** (00:51:25):
Yeah, that's exactly it. And so now then you have all these other problems, because we've got about $12.5 billion in deposits now, which is like a time. And the next problem customers are at is, "I want a return." And we quite deliberately don't have a banking license. You have to figure out, how are we going to solve that? We now put customers money in government bonds, US bonds, and when you pay with your card, it dynamically sells those bonds. And that's how we give you an interest rate, in roundabout 5% right now, given where bond rates are.

**Lenny** (00:51:58):
Yeah, interest rates are quite high, for better or worse. Zooming out a little bit, for folks that are starting to... Their wheels are turning, they're like, "Okay, I want to think about word of mouth, driving word of mouth. I'm going to go look at my survey results. I'm going to figure out these pillars that are driving word of mouth. I'm going to think about how to make things 10 times better." Just broadly, for someone that's starting to approach this, what would you say to them? How should they approach this? Any major learnings at a higher level, of just how to drive word of mouth for a product?

**Nilan Peiris** (00:52:30):
I think it just comes back to talking to customers and this is the question we've kept coming back to. What would it take to make it 10x better? And then you get clear in your head what it would take, and then it's usually the thing that everyone's looked at before and thought, it's the thing that's impossible. One more example is on the partner side. So, rather than find a cheaper bank for a banking partner, you think, well, the cheapest banking partner is the central bank. And imagine you're a startup. How the hell do you get a bank account at the central bank?

**Nilan Peiris** (00:53:08):
But that kind of thinking, and we now have a bank account at the Bank of England, the National Bank of Singapore, Bank of Australia. And each of these was as hard as getting that face-to-face verification thing in Singapore. It took years of lobbying, and all kinds of stuff, in order to make it happen. But it's setting your goal all the way up there. That's what enables you to build a 10x better product. That's what gets you to the word of mouth. So, the first step is getting super clear on what's the problems that my customers are caring about, worrying about? And then once you're clear there, as you said, how can I solve that completely, and what's the best it could possibly be? And then the hard bit is figuring out how to move that.

**Lenny** (00:53:48):
A lot of these things you're talking about are just, they sound like they are either impossible, like no way we're going to achieve that, or really, really hard. And a lot of companies, and a lot of founders, teams are just like, "Okay, we're not ever going to create a bank here. We're not going to be able to create an Australian bank account for everyone." What is it about your culture, or approach to these problems that you think that's unique to Wise that's like, "No, we're going to spend three years figuring this out, because it's that important?"

**Nilan Peiris** (00:54:16):
I think it's two [inaudible 00:54:17]. So one is, definitely the founders have this philosophy that unless you're doing something hard and new, it's kind of a waste of time. So, I think that also kind of runs through the culture. So, it's quite a rude awakening when people join Wise, because they're like, "Okay, I'm going to come, and just play around with a few things." You're like, "No, actually, the culture of the product team is we're super incentivized to do the hard things, and that's what's rewarded."

**Nilan Peiris** (00:54:46):
And that's quite hard to create the air cover. You can imagine like then in the early days and months when growth was slow, and people turned on the money taps in marketing, and you're trying to keep focused and plugging your away up these hard things, it's quite hard also to get the management cover in order to let the teams keep doing this. And then it's also hard just to turn up to work and really keep... You can imagine being in Singapore, verifying customers face-to face, thinking, "This is going nowhere, this is going nowhere, this is going nowhere." And then suddenly it changes. So that's what progress very much feels like at Wise. And we try to recognize that, and create a culture that enables that.

**Lenny** (00:55:21):
It feels like there's also just a lot of patience for these things. There isn't like, "We need to hit this quarterly goal. Why aren't we creating banks in Singapore yet?"

**Nilan Peiris** (00:55:29):
Yeah, exactly.

**Lenny** (00:55:31):
Awesome. The other kind of metaphor that's rolling around my head is something Seth Godin talks about. I don't know if you've heard of this guy, he's a marketing guru, and he has this concept that you want to build something that's remarkable, because if something is remarkable, it'll spread. And if you think about the word remarkable, it's something worth remarking about, which essentially is word of mouth.

**Nilan Peiris** (00:55:49):
Yeah.

**Lenny** (00:55:49):
And so that's his kind of mission and his, I don't know, advice to people is build something remarkable, something people will want to remark about. And clearly, you all have been doing that. And that's actually a good segue to where I wanted to go, which is around how you structure your team, and how you incentivize the team, organize teams, to achieve all these sorts of things. So, maybe just broadly, is there something unique to how you think about work structure, incentives, goals, things like that, in order to achieve these really hard things?

**Nilan Peiris** (00:56:17):
There's two unique lenses on this. One is in the macro-structure and one is in the micro-structure. So at the macro level, if you look at actually international banks, they don't really exist. I'm not sure if you've moved around between countries, but say you open a bank account with Citibank in the US, and then you go to Citibank in the UK, your Citibank account doesn't exist in the UK. You have to go to Citibank in the UK, and open a Citibank account. And actually, turns out, with some of these banks, to move money between your bank accounts is an international transfer. It's crazy.

**Nilan Peiris** (00:56:53):
So, when you take a step back, and look at how the market looks, you have at one end, international banks which are local tech stacks. So there's a core banking system in the US, and one in the UK, and one in Europe, say for Citibank, or for HSBC, but they have deep local integrations, so they're directly integrated in the payment system. Citibank in the US has got relationships, say, with the Federal Reserve, et cetera.

**Nilan Peiris** (00:57:20):
Other end of the spectrum you've got something like PayPal. So it's a tech company, it's got a single global tech stack. It doesn't run a additional version of PayPal in Australia than to the US, but it doesn't have deep connections. It hasn't got five central bank accounts, it hasn't got any of that. And I'd like to think of in the middle, you've got Wise, where we have a single global tech stack, and we have deep local infrastructure.

**Nilan Peiris** (00:57:45):
Now, from a technological perspective, just take a step back and think through this. This is actually non-trivial to figure out how to design. So, let's take something like the onboarding flow. So, we have global product teams, one part of product teams called global product teams. So we have a single onboarding flow that will give you a Wise account, and it's the same code that runs, whether you are in Brazil, New York, or Australia.

The regulation in Australia and Brazil is really different, and it isn't black and white in any country. So, there's a bunch of... You get a bunch of things you just shouldn't do in terms of letting people get so [inaudible 00:58:31] people who shouldn't get access to accounts. And then you can need to check these people aren't using it, and different jurisdictions have completely different requirements. Example is Japan, you have to take a picture of that front of the ID, the back of the ID, and the side of your ID. It's the only country in the world that you have to do this.

**Lenny** (00:58:47):
Wow.

**Nilan Peiris** (00:58:48):
And imagine you're the product manager for onboarding, and someone tells you, "Design the onboarding flow to give somebody a bank..." Just imagine gathering all the requirements from every country in the world, because there's very little similarity. You can't just say, "I take the US," and copy it somewhere else. It's very, very, very different.

**Nilan Peiris** (00:59:05):
It'd take forever to try to get that, and then normalize that into the main model, and try to figure out how you're going to structure the data around this. So, it then becomes like, what is the organization structure that enables us to discover what the domain model, let's call it that, for the onboarding flow should look like. And you end up with a global product team that owns overall KPIs around conversion rate, et cetera. And you have local, regional teams that own the conversion rate, and the cost to do KYC for their market, and they contribute to the global product code base.

**Nilan Peiris** (00:59:44):
So we have weak product ownership, where anyone can make code change, and pull requests, and these guys owning the vision in the center. But the only way that vision can evolve is by getting the feedback from these guys in the market, as they're constantly pushing stuff forward. And through that process, artifacts start emerging, where other markets are like Japan, and so you start splitting off that, and creating subtypes for it, and slowly the model emerges from there.

**Nilan Peiris** (01:00:09):
And so with this structure, the thing to optimize for is a really hard one. That problem that every global business has, is how do you get this collaboration to work between the local and the global? But unlike every other business, most businesses solve this probably as you know, is you usually have the US, and then you have international. And international is usually a bump site, where everyone's arguing to get their thing prioritized, right?

**Lenny** (01:00:29):
That's right.

**Nilan Peiris** (01:00:30):
Whereas here, you're kind of letting the local teams commit directly to the code base, and then this global team's got this challenge of doing this, and we over time create sub-teams around parts of the regionalization of the structure, around different objects as they emerge. But that broadly speaking is the first problem, the global problem. And the other bit with us is this is quite unique to us, because most fintechs out there are usually in one market. Like you take Robin Hood, it was in the US, it came to the UK, they went back to the US. You take Monzo, only the UK, N26 only in Europe, Up in Australia, China, and the US. And that's because their home markets are so big, and one regulator is a ton of work to manage. And the second complexity we have is we have all of these markets we have to be in, because we're international by default. So a lot of our thinking is where do we take that, turn that into competitive advantage, and which customer base really needs that? Which is what zooms us into that positioning on the international account.

**Lenny** (01:01:32):
It just comes back to again, and again, again and again, doing the hard thing, knocking peoples' socks off, and it feels like that's the formula for Wise.

**Nilan Peiris** (01:01:41):
I think yeah, you more or less got it. So that's one bit on structure. So this global local thing, and the second one has been a bit more of a journey. So when we started early on, we ran in autonomous independent teams, all focused on KPIs, and these KPIs rolled up to make it cheaper, make it faster, make it easier to use. You can imagine like a KPI tree, and teams around bits of their KPIs, and every quarter they talk through how they move their KPI, et cetera, and this kind of worked. And the way we ran our planning is, every quarter every team would stand up and talk through its plan, get feedback from other teams, and then move on. This worked till we got to 30 teams, and then you go from doing this in the afternoon, to doing it in two days and it's just like whoa.

**Nilan Peiris** (01:02:27):
So, we started heading towards the Spotify model, where we group the teams in squads, and into tribes. Today, I think that autonomy is at the squad level. So the squads are around products. So, we'll have a Wise account squad, a business squad, a Wise platform, our enterprise product squad, you'll have a North Am squad that looks after the North American product, and Lat Am squad, et cetera. And then financial crime fighting, et cetera.

**Nilan Peiris** (01:02:57):
And inside those squads you've got the teams, and the squad... Imagine you're the director for the Wise account, but you don't have a vision for the account. You've got to say where it's going. You've got to keep your teams on track against it. The teams aren't off doing whatever they want. They kind of need to be on track, versus the overall vision, and you're accountable for the results of that squad. And squads are in tribes, the tribe provides overall leadership, and a slight, light touch strategy on the squads. And that's more or less our structure, and how we've evolved towards it.

**Lenny** (01:03:26):
Is there anything else along the word of mouth concept that you think would be useful for people to share? Either how you think about it, team structure, anything else?

**Nilan Peiris** (01:03:34):
There's one tiny bit I'll share, which was around marketing and referral. This was super interesting for me. So, we've been running it, like Airbnb, we've been running referral program for now 12 years, and after 12 years, you've kind of tested everything anyway. And like I said, by this point you have literally tested everything. So when somebody comes up with something that has a 300% increase, you're like, "Whoa, that's super interesting. What just happened?"

**Lenny** (01:04:03):
Wow, I'm excited for this.

**Nilan Peiris** (01:04:05):
And yeah, I'll share this one, because it's interesting. So we run many variants of refer a friend, where you'll get different kinds of benefit. We tried chocolate, we tried money, we've tried $200, $500, $10, you get some, I get some money, all kinds of things. More or less headed towards three for $100, generally it's a sweet spot. Anyway, it's a pretty creative PM there. And he was again talking to customers, and he spotted this thing, which is pretty cool, which is when you do a transfer with Wise, at the end you get this email, the email says, "Well done." Then it says, "Your money's there in the other person's account, and you saved $10 on this transfer." And he got this insight, which was pretty awesome, was he realized that people believed they saved money, but they didn't believe the number. And he then thought, what would it take to get them to believe the number?

**Lenny** (01:05:05):
That seems right.

**Nilan Peiris** (01:05:07):
And so the fun bit was the approach. So then him and a designer sat there and they sketched out an alternative email, and they went down to the coffee shop downstairs, and they showed it to people, and they said... Just asked them what they thought, and they kept iterating it until they got to a graph. And this graph is like this... When you go through a money transfer thing, it pops up in places, behind the compare button. And this graph shows with your bank, when you send, how much is in the rate hidden as... This is how much you're sending, this is how much they're taking in the rate in a fee, and this is how much you can see in the fee, because the fees are hidden in the rates with banks. And then this is with Wise.

**Nilan Peiris** (01:05:45):
And they iterate this graph to the point that people looked at like, "Oh my God, I'm never using my bank again. This number... This is crazy." And then they put this graph on the success page when you did a transfer. Saying, "You saved this." And put a share button in there, and invite your friends button, and that's what really drove it. And when you fast-forward to today, we've now got... So it's actually quite hard. So, we now have I think about 70 bank accounts around the world. So, I think the top three accounts, banks in the world, where we log onto every day, and then we log the price and the quote for a bunch of different routes into a file. You can imagine how hard is. I think I personally have about 17 of these still in my name, that I've opened up around the world to help the team get going. But that's kind of one of the biggest word of mouth growth, or referral insights. I've got to this comparison thing, made into our marketing, made into our homepage, just went everywhere up from that insight.

**Lenny** (01:06:46):
And you said that that like 3x'd the sharing rate?

**Nilan Peiris** (01:06:50):
Yeah, that 3x'd the sharing rate. So we always had the share button after you completed a transfer. But putting that there with this graph, and that kind of got me to this, I'm curious on your take on this, on this definition of product marketing, where customers use the product, and they think they got this value, but when they actually know the value they get. So we got this on speed as well, where we're doing instant transfers, and customers wouldn't know it was instant.

**Nilan Peiris** (01:07:21):
So when you get an instant transfer, there's like this wizzy animation at the end, and you kind of know the money's in the other person's account, ready to spend. And again, you see this big jump in referral rate when that happens, but people need to know it's happened. And closing this delta between what you've done, and what's perceived to be done is what I call product marketing within the product. And that in its own right is a discipline, I've learned.

**Lenny** (01:07:43):
That's an awesome insight. It comes back to this framework we talked about of reality and perception, in a flip way, instead of getting people to adopt something, it's to appreciate the work you've done to make it remarkable, to make them understand how remarkable it really is.

**Nilan Peiris** (01:07:56):
Yeah, that was it. And that's something I'm continuously learning about yeah, as we go, as well.

**Lenny** (01:08:01):
That is extremely interesting. Before we get to our very exciting lightning round, I know you also do a bunch of charity work, and I wanted to give you a chance to share what you're doing there.

**Nilan Peiris** (01:08:12):
Thanks, Lenny. So, less charity, essentially came out of angel investing, is probably the way to say it. So I invest in startups, generally fintechs, mission led founders, word of mouth type stuff, all the stuff we've been talking about, that I'm passionate about. It is less investing, more helping, and yeah, just getting through the angel route. And then over time, I realized the thing I'm most passionate about is market failures. So generally I find that the invisible hand means most human needs get fulfilled by the market, but there are a few things that don't, and there's a couple of exciting startups out there who work really hard in this space. A couple are Beam in the UK, working on homelessness, Affinity and Neobank in Ghana. And so, this type of thing is stuff I'm most passionate about. So, if any of your listeners out there know anyone doing anything of that kind, trying to solve these kinds of hard problems, definitely reach out, always keen to talk.

**Lenny** (01:09:14):
Awesome. And we'll link to those two you mentioned in the show notes just in case people want to check them out. With that, we've reached our very exciting lightning round. Are you ready?

**Nilan Peiris** (01:09:22):
Let's go for it.

**Lenny** (01:09:23):
Let's do it. What are two or three books that you've recommended most to other people?

**Nilan Peiris** (01:09:29):
Two, one's at the other ends of the spectrum. So one is... This sounds terribly pretentious Crime and Punishment, and the other one is Midnight's Children by Salman Rushdie. I read a lot, I'm very passionate about reading, fiction, mainly. I don't read... Nonfiction is too much like work. And so, I generally need to read before I go to bed to decompress my brain. It's generally escapist type stuff. But I'm curious what you think of this, but for me authors are people that create people with words.

**Nilan Peiris** (01:10:03):
Like you say artist is a good artists if it's... Makes a good likeness to somebody, but imagine that you create somebody with words, and that person feels real, so they have some insight into the human condition. And what's amazing is if you learn something about what it means to be human from reading that. So at that end of the scale, Dostoevsky, Crime and Punishment, where this guy kills somebody, and it just eats him up. It's a pretty amazing book. It's not as heavy as it sounds, but books like that are pretty awesome. So, I recommend that a lot.

**Nilan Peiris** (01:10:37):
And the other end of the scale is sometimes you read a book and there's a single sentence where each word has been just stitched together, and it's like, again, a work of art, and there, Rushdie is probably the pinnacle for me, of Midnight's Children, which is about partition in India, which is pretty... Through a metaphor, it's pretty amazing.

**Lenny** (01:10:57):
It's a beautiful answer. What is a favorite recent movie or TV show?

**Nilan Peiris** (01:11:02):
Oh gosh, I am not... I don't love [inaudible 01:11:05] got TV, but we had rented Barbie for the kids. That one, probably the last movie.

**Lenny** (01:11:12):
I just watched that too. So good.

**Nilan Peiris** (01:11:13):
Good.

**Lenny** (01:11:15):
You can actually stream it now. I don't know when this comes out, but it just-

**Nilan Peiris** (01:11:17):
Oh wow.

**Lenny** (01:11:18):
Yeah, you can watch it at home. But it's not cheap. I think it's like 20 bucks in the US.

**Nilan Peiris** (01:11:23):
Oh geez.

**Lenny** (01:11:24):
What is a favorite interview question you like to ask candidates when you're interviewing them?

**Nilan Peiris** (01:11:28):
Yeah, so I only ask two. I got down to asking just two questions over time. The first one's probably my favorite, which is, what is it that most frustrates you about... Instead of why you're leaving, what frustrates you the most about where you're working right now? And this is as people always tell you why they want to join Wise, or join whatever company you're coming to, and that's not that interesting. But what's interesting, trying to figure out, is what they're running away from. And usually there's something broken there, that's really wound them up. But what's more interesting is they've been unable to fix it. And so, in asking this question, and probing, you kind of get quite good at getting a sense of what is their limit, what's the thing they found, and what did they get stuck with? And you kind of think, "Okay, you're going to run into that here every day, every week? Or... You should be fine." And that's kind of why I ask that question.

**Lenny** (01:12:24):
I love that. What is a favorite product you've recently discovered that you really like?

**Nilan Peiris** (01:12:29):
I recently switched to Arc Browser.

**Lenny** (01:12:29):
That's what I use.

**Nilan Peiris** (01:12:35):
And yeah, the onboarding flow was mind-blowingly good.

**Lenny** (01:12:37):
That's exactly how I felt. I had to tweet about it. It's like, [inaudible 01:12:41].

**Nilan Peiris** (01:12:40):
Yeah, I sent it to my onboarding team, and everyone. And what I loved about it is, it's clearly like if you could try to use Arc with the same way you use Chrome, you just get really frustrated. But if you use it the way they want you to use, it'd be amazing. So, for figuring out how to get people to engage with, you need to use this fundamentally differently. They manage to almost get me to use it the right way. Still struggling a little bit with it, but that I thought was really clever.

**Lenny** (01:13:12):
Awesome choice. We had Josh, the CEO of the Browser Company of New York, it's called, on the podcast. And if you're interested in learning about Arc's story, definitely check out that episode. All right, next question. What is a favorite life motto that you like to repeat most to yourself, that you like to share? Anything come to mind?

**Nilan Peiris** (01:13:30):
The thing that defines success is the speed at which you pick yourself up.

**Lenny** (01:13:37):
I love that.

**Nilan Peiris** (01:13:37):
And that's the thing that I hold onto most, because you get knocked a lot, high growth company, and it's obviously quite... Obviously knocks you, when someone says no to an offer, when somebody leaves the company, when a product doesn't work as you think it should, when you get pushback from a partner. But yeah, if you lose four hours spinning around it, or you trying and figure out, "Okay, this happened, how do I move forward?" And just learning how to shorten that time has probably been one of the most important journeys for me.

**Lenny** (01:14:11):
That was an awesome answer. One final question, is there a fun cultural ritual at Wise that has stuck around for a while?

**Nilan Peiris** (01:14:20):
This one, my team would love to say. So, from the early days, we got everyone together from all around the world once a year. Oh, I actually did it twice a year. And the founders are from Estonia, and we have 5,000 people now, so we still have about 1,800 in Estonia. So it's cheaper to flavor on Estonia. So in the old days when it was winter, winter in Estonia is not fun, but summer in Estonia is amazing, and we still do this. And the funnest bit about this is, I have a side hustle, DJ, so I get to DJ there, and it's quite fun, and embarrassing for my kids because technically I've now DJ'd in other countries.

**Lenny** (01:15:03):
International DJ.

**Nilan Peiris** (01:15:05):
That's it. That's my side hustle.

**Lenny** (01:15:07):
Amazing.

**Nilan Peiris** (01:15:08):
That's how I introduced myself to my 17-year old's friends. So, yeah.

**Lenny** (01:15:12):
Do you have a DJ name? Is there... Can we check you out on Spotify?

**Nilan Peiris** (01:15:15):
No, no, you can't check me on Spotify or anything, but yeah, it's all private. [inaudible 01:15:19].

**Lenny** (01:15:19):
All right. Maybe Burning Man, you could see your performance next year.

**Nilan Peiris** (01:15:23):
Maybe.

**Lenny** (01:15:24):
Nilan, thank you so much for being here. We talked a lot about word of mouth. I feel like this episode is going to spread 100% through word of mouth. Can't wait for people to listen to it. Two final questions. Where can folks find you online if they want to reach out, and how can listeners be useful to you?

**Nilan Peiris** (01:15:37):
You can find me online on Twitter, nilanp, and always love to hear product feedback by email, by tweet, by LinkedIn. Generally by tweet is best, easiest for me to pick up, and my team to reach into directly. So, hit me up that way. And most useful for me, yeah, product feedback, and as I said, other people working on hard problems that need help, do reach out.

**Lenny** (01:16:03):
Amazing. Nilan, thank you so much for being here.

**Nilan Peiris** (01:16:06):
Thank you for your time. Take care, Lenny.

**Lenny** (01:16:08):
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 lennyspodcast.com. See you in the next episode.

---

## [20/20] Building Anchor, selling to Spotify, and lessons learned | Maya Prohovnik (Spotify’s Head of Podcast Product)

**Maya Prohovnik** (00:00:00):
We were obsessed with reducing friction, this was our constant battle. And so we hired a couple of college interns and we brought them in and we were like, people are going to push this magical one button in the Anchor app and they're going to say, I want to distribute my podcast, and your job is going to be to do all that same manual stuff manually, but to them it's going to feel magical and it happened automatically. I still don't know how many people know this. I think people think that we had some secret backdoor deal with Apple for distribution, but we just had college students making Apple podcast accounts and then submitting hundreds of thousands of podcasts through these accounts, and I think that was a really big part of why we got so much hosting market share so quickly because it was such an insane benefit over the other platforms which otherwise had been commoditized at that point.

**Lenny** (00:00:48):
Welcome to Lenny's Podcast, where I interview world-class product leaders and growth experts to learn from their hard win experiences building and growing today's most successful products. Today my guest is Maya Prohovnik. Maya is Spotify's head of product for podcasting where she oversees product design and engineering teams responsible for building the tools and experiences for podcasters and their listeners. Maya was also employee number one at Anchor, which Spotify acquired five years ago, which became the core of Spotify's podcasting hosting platform, which now powers over 75% of all new podcasts created in the world. In our conversation, we dig into why Maya is obsessed with dogfooding and why she encourages everyone on her team to create their own podcast. She's got four podcasts of her own, which are all very highly rated and people love. We dig into how she stays productive and organized in a very hectic senior leadership role, what she's done to allow for Anchor to continue to operate like a startup within a larger organization.

**Lenny** (00:01:44):
**Maya Prohovnik** (00:04:38):
Thank you so much for having me. You and I have been trying to get together for almost a year now.

**Lenny** (00:04:42):
Oh, man. But it all worked out and it's going to be very worth it.

**Maya Prohovnik** (00:04:45):
You had a kid. I took parental leave.

**Lenny** (00:04:47):
Oh, right. That is true. Man, overlapping kid journeys. I also have been just really looking forward to this chat partly because you're amazing and partly because it just feels very meta to have the head of product of Spotify podcasting on the podcast, and I imagine many people are listening to this on Spotify, so there's this, I don't know, turtles all the way down situation happening.

**Maya Prohovnik** (00:05:08):
I totally agree. I was thinking the same thing when I was preparing for it where it's like so much of what we have to talk about is so meta, and then we also have you and I know each other because you've been sending me feedback about the podcast experience on Spotify, so lots of circular stuff there.

**Lenny** (00:05:22):
Speaking of Spotify and podcasting, clearly you've done an incredible job building podcasting on Spotify. From what I've read, it's the number one podcasting platform now. Is there a stat you could share by just the percentage of the market share essentially of Spotify podcasting?

**Maya Prohovnik** (00:05:37):
I think we are now officially over a third of global market share of podcast listening, which is pretty insane.

**Lenny** (00:05:43):
That is insane.

**Maya Prohovnik** (00:05:44):
Yeah.

**Lenny** (00:05:44):
Also, I think on the hosting side, it's an even bigger number. Is there a stat you can share by just maybe new podcasts that are launched and how many are hosted on Spotify?

**Maya Prohovnik** (00:05:53):
Yeah, I think at this point it's more than 75% of all new shows on Spotify are hosted with Spotify for podcasters, which used to be Anchor. When we were acquired by Spotify, I think Anchor had already gotten to 40% of all new podcasts or something crazy. So, yeah.

**Lenny** (00:06:09):
Insane. Okay, so for these reasons, I want to spend the time that we have together unpacking how you operate as a product leader and essentially what you've learned about product org leadership growth and all those things. How's that sound?

**Maya Prohovnik** (00:06:22):
That sounds perfect. My favorite topics.

**Lenny** (00:06:24):
Okay, let's do it. So as the first question I asked a PM who actually works for you, Wilma Chu, what to ask you, and the first thing that came to mind for her was this idea of dogfooding and how important dogfooding is to your way of operating as a product leader. As an example, you have three of your own podcasts on Spotify and I checked them out and they're all very highly rated, so they're not just like bullshit podcasts, they're real people actually listen and enjoy them. So my question to you is just why is dogfooding so important to you? How do you actually operationalize it? And then also maybe just talk about these podcasts that you have.

**Maya Prohovnik** (00:06:58):
Sure. Well, I can talk about them forever, so be careful because I'll take up the whole hour with that. But I actually have four podcasts. There's two that I don't update as much anymore. So my first ever podcast was about Stephen King books. I'm a big Stephen King super fan. So, when I joined Anchor, and we weren't even fully podcasts yet, if you recall, we were something else audio, we were trying to avoid being podcasts for a while and then we decided to just be podcasts. But when I got into audio and trying to help audio creators, the first thing I did was make my own podcast because I was like, I know nothing about production or what it feels to even be a creator in that way.

**Maya Prohovnik** (00:07:35):
And so I started my Stephen King podcast because that is the number one thing that I just love to talk about every day, which is one of my tips for podcasters. If you're trying to figure out what to make a show about, it's what can you talk about for? So I did that one for a while actually. I spent a ton of time editing it. I spent a ton of time on SEO and marketing it, and it got to the point, I think at its peak I was getting 5,000 listeners in a episode, which now seems small for a podcast, I know.

**Lenny** (00:07:59):
No, that's very legit.

**Maya Prohovnik** (00:08:01):
Yeah, for a test podcast that I was just doing to learn how to do my job, I was so excited to get that audience and I fell off because, well, mostly I had a kid, I joined Spotify. My life's really busy and that level of production is so hard to do if it's not your full-time job, but I still get emails all the time from people who are like, please bring it back. I never found another great Stephen King because I really got deep into the books and the connection between the books. So that was one of them. The second one I did, still going today. So my husband and I have this Big Brother podcast, the show Big Brother, it's terrible.

**Maya Prohovnik** (00:08:33):
I would not recommend listening to my podcast unless you are a Big Brother super fan, and I actually started that one because I wanted to get the other end of the spectrum where something we were really focused on with Anchor at the time was first time creators really growing the pie of podcasters and specifically we had this theory that podcast creation of the future would be mobile first and we had this really high-powered mobile app, and so I was like, I'm going to make a podcast that's fully mobile, not highly edited, not worry about making something that sounds like a traditional podcast. And I really leaned into all the Anchor features. So it's fully recorded on my phone. I do almost no editing, but I think the thing that's kept us going, because it's been six or seven years now we've been doing the show, it's really the community, the people who call in.

**Maya Prohovnik** (00:09:15):
I have no idea who these people are. I have no idea how they found this terrible show, but they love it. They call in every week. And that I think is one of the many things I've learned from dogfooding, a podcast creation app is that community piece is so important. If you don't know if anyone's listening, if you don't know what they like about it, if you don't know if they're coming back, it's so hard to keep investing the time. And then I made a show, my least known podcast, because it only got like 25 listeners for episode, it's about my favorite book of all time called Children of Time. It's actually a trilogy. And the reason it got almost no listeners is because there were tons of spoilers in the podcast and the book is like 800 pages long. So we were like, do not listen if you haven't read the book.

**Maya Prohovnik** (00:09:53):
So, it was very niche, but I think it's a really good podcast if you've read Children of Time. And then my last one I just started doing a couple of years ago is about parenting. So I have a son who's two and a half now and we have been documenting our journey as parents all the way from, we went through IVF, so starting with sort of fertility, I have a really fun episode about childbirth if people are interested in that sort of thing. And then ever since then it's just been episodes about the transition to parenthood, which has not been particularly easy for us, and now my son's a toddler, so lots of fun things happening there. You're not there yet, but you will be and then you can listen to my toddler episodes.

**Lenny** (00:10:27):
Yeah. I got to listen to the next... A few months ahead to learn from what you've learned.

**Maya Prohovnik** (00:10:31):
Yes, I think that's a good tactic.

**Lenny** (00:10:33):
Before we talk about dogfooding, have you ever considered going full-time on this stuff? This is always an option for people and clearly you've done great. At least two podcasts are killing it.

**Maya Prohovnik** (00:10:44):
I have not. And I think it's so funny because with my parenting podcast too, and even my terrible Big Brother podcast, I get compliments all the time and people are like, "I love listening to this." And my husband also is a really funny and a really good podcaster, but I don't know why I don't think of myself as a creator. I think to me it still feels like this exercise where it's like I'm making my podcast, but I'm really doing it so that I can learn about our product and get in the mindset of a creator. So I think the problem is I'm just too much of a product person. It's a means to an end for me instead of the end itself. But that is an interesting question because I know most people who podcasts, their ultimate goal is obviously to be able to do it full-time and that is interesting that I haven't thought about it.

**Lenny** (00:11:31):
You have a good backup plan of things if anything goes off the rails.

**Maya Prohovnik** (00:11:34):
I guess so, yeah.

**Lenny** (00:11:35):
Awesome. Okay. Just coming back to this idea of dogfooding, where does that come from for you? What have you learned about just how to execute that?

**Maya Prohovnik** (00:11:40):
It's just always been my natural state. I've had a handful of different product jobs and I guess they've all been tangentially related to helping creators or creative people. And so I think for me it's like I don't know how you can build those tools if you don't understand that mindset. I'm not surprised that it came to Wilma's mind when you asked her what to ask me because I am constantly yelling at my product team who do not have podcasts and being like, I really don't think that you can build the right things. If they talk to users all the time, they see the data, but all of them, once they finally start doing their podcast, they're like, I get it. Something clicked and now I feel like I really understand what they need. And I guess building tools for creators is similar to building a B2B product where you really have to understand business, it's their livelihood.

**Maya Prohovnik** (00:12:25):
And so I think if you're just looking at a list of feature requests, you're not necessarily going to prioritize it in the same way as if you deeply feel those problems. And I think for me, I don't know if I mentioned this to you, but when I first got into tech, I started in customer support, that was how I got into product, and so I think I just am a very user focused product person. I think there's different schools of thought for product and for me it's always been about making people happy, making their experience better, solving real problems in their lives. And so for me, becoming one of the users, I think it's made it so much easier for me to advocate for that being a pretty big chunk of the roadmap.

**Maya Prohovnik** (00:13:04):
I think if you don't have that, especially coming from someone in leadership, it's so easy to just fall into that trap of like, well, we're working on the next big strategic thing, which is two years away, and then in the meantime your users are getting no value and then they're just going somewhere else. So I don't know. I think it's really important to me. It makes sense to me and also, I'm not sure how else I would do product. I've never really not done it that way. It

**Lenny** (00:13:25):
Reminds me of Airbnb Brian was a huge advocate on the host side of the product is like, you need to be a host, but many people couldn't because they didn't have a place that could be hosted. Is there anything you've learned about just how to make this a thing that actually works effectively, a way to operationalize this for people listening, they're like, "Oh, I should start encouraging my team to do?"

**Maya Prohovnik** (00:13:42):
I'm constantly reminding our team to do this. And then I think that also comes from the other people who are doing it. So we really elevate the people on our team who have their own podcasts, we help them tell their stories internally. Whenever we do an offsite or any team activity, we'll always incorporate podcast creation or some way of making sure everyone on the team is using the tools. I don't know, I think a lot of it just comes from, I'm so vocal about this stuff. The other night I was recording a podcast and I DMed one of the engineers on our team and told him about this tiny little iOS bug and he was like, why are you DMing me about this at nine o'clock at night? I think I was also supposed to be on vacation, I can't remember.

**Maya Prohovnik** (00:14:20):
But then he got the bug fix the next day. And so I do think making that something that's really top of mind for the team that we do need to fix problems, that these things matter, I don't know. I always listen to the podcast that my team makes, so it's like I know they're going to get at least one listener. And then I think also I try, I think because I understand a big part of building tools for podcasters is understanding all the barriers to entry. It's actually a really difficult thing trying to get someone to put their voice out there, share their story, it's a really emotional journey. And so I feel like I've tried to turn some of the things that I've learned about podcasting into, I've never written it down, maybe I should, but I have a playbook that I'll tell people when they're considering making their own podcast.

**Maya Prohovnik** (00:15:02):
So it's just things like don't try and record by yourself, find a friend. That's a much easier way to get into it or don't follow a script because then you're going to feel really awkward and uncomfortable and not feel good about it afterwards. Or don't just record a test thing for 30 seconds and publish it because you have to make yourself feel the pain that we're trying to understand in our users.

**Lenny** (00:15:24):
What's cool about that that could turn into just onboarding education, basically your experience of making a podcast informs how to help new podcasters become successful.

**Maya Prohovnik** (00:15:31):
Totally, yeah. And also this is less about dogfooding, but one of my favorite things is I'm always just trying to convince everyone I meet to start a podcast, that's just become my annoying thing. And so if I'm interviewing someone for a job or if I'm at a party and mingling with people, it's like somehow the conversation always turns to their passions and then I'm like, you should make a podcast about it. And then they're like, well, I can't. And then I work my way through all the reasons they say they can't do it, and then they go start a podcast. So I'm like one person at a time.

**Lenny** (00:16:00):
I see how you're growing the platform now.

**Maya Prohovnik** (00:16:02):
Yes, exactly.

**Lenny** (00:16:04):
Very unscalable, hands to hand combat at parties. I get it. Okay. One thing you mentioned about being maybe the only listen of your coworkers podcast reminds me there's this platform where you could find Spotify music that has never ever been played once and you could be their first play and just go through.

**Maya Prohovnik** (00:16:22):
That is so cool.

**Lenny** (00:16:24):
It's very touching, right?

**Maya Prohovnik** (00:16:25):
Yes. I haven't seen that and now I'm like, how can we productize that for podcasters? That's such a cool thing.

**Lenny** (00:16:31):
Anyway, another area that I've heard you're really strong at and came up with Wilma and a few other people I talked to is you find a really good balance between being very data-driven and also very gut driven, and this is something a lot of product leaders try to get better at. And so I'm curious just what have you learned about try to find that balance and also is there an example of something where you went against the data and went with your gut and it worked out.

**Maya Prohovnik** (00:16:58):
If you remember the old days of the internet, I feel like there was really this different way of thinking about product development where it was so much more about what felt good and what made you feel something as a user in that product. And so it's like we used to be a lot more playful I think with software. I think we used to put a lot more emphasis on things like delightful animations or fun little Easter eggs, and I am not sure when or where that got lost, but it feels like product management as a role has gotten formalized and become a little bit more scientific, I'm generalizing, but I think a lot of product managers can be so focused on using the right frameworks and making sure that they have the right roadmap and all of this stuff.

**Maya Prohovnik** (00:17:37):
And then it's like you find yourself in this cycle where you're just building things to build them and not really thinking about the connection to the end user. I think data is amazing and I'm like, we have such an incredible insights team at Spotify, both my insights team and then the broader one. I think we are so lucky and we have so much knowledge about our users and different cohorts and what people need and what they're missing, and so I think that's extremely valuable. I think where people get into trouble is when they think that they can rely solely on the data. And so what I spend a lot of time talking to my team about is how we can balance that. So thinking about, I guess a couple general things I would say are there are right and wrong times I think for both for your gut and for data. And then there are lots of different kinds of data and different ways to use that data.

**Maya Prohovnik** (00:18:21):
So I think when you're in the trap of just being like, well, this is the process we always have with insights and we're just going to run this every time we have a feature, I don't think you're going to have a great time. I think if you think of it as part of the creative process as a PM where you're like, I have a hypothesis, I have some data that is helping me understand that hypothesis in the first place or form it in the first place, then I'm going to do some user research and try a couple of things and see what works for people. Then I'm going to make sure that we have success metrics and that we know what we're looking for when we launch, then we're going to follow, et cetera. So I think there's different times and places for all the different types of data collection that you can do.

**Maya Prohovnik** (00:18:58):
The other thing I would say is something that I have had to learn as a leader, especially as part of a larger organization, when we were a startup Anchor was like 20 people when we got acquired by Spotify. And by the way, Spotify is my first big tech company, so I've always been at startups, so I've learned a lot about that. But when I was leading product at a startup, it's like we're a small team, we're really focused on moving quickly. There isn't a whole lot of stopping to ask what data is supporting this or it's just like we talked to some users and we're like, great, that's a problem. We're just going to go and fix it. And I think at Spotify there's obviously at places like Spotify, I mean, large organizations, there's obviously a lot more people that you need to coordinate.

**Maya Prohovnik** (00:19:38):
There's a lot of people you have to influence that aren't on your immediate team. And so I think something that I've had to learn is that being gut driven isn't the same as just saying to people, I told you or I believe this, so you have to do it. There really is an art I think to balancing that. And I think that what I try to do is always still as objectively as possible explain why my gut is feeling that way. So it's like you can refer back to your years of experience or other things that you've done that have been similar. You can talk about your experience as a user testing this stuff. You can bring in stories and anecdotes from users to help back it up. And so I have found that that works obviously a lot better.

**Maya Prohovnik** (00:20:18):
And I think that in the times that either I have done this or I've seen other leaders do it, where they're just like, well, we're just going to do it this way even if you guys don't agree or if the data says something different, those projects are always immediately doomed from the beginning. They're never going to work. You can't drag all these people through something that they don't believe in. So I think I would think of your gut actually as a type of data and I think it's a totally valid one and it's just I think you need to be clear that that's what you're working with, but then it should be taken as seriously as any other data point. So I try and think of it that way where it's like this should all ideally work together. And obviously the more data you have and the more types of data you have, the more convincing you're going to be and the more right you're going to be.

**Maya Prohovnik** (00:20:56):
So I think it all helps. There were so many of these in the early days of Anchor because I don't even know, I don't think we had a data scientist until we were part of Spotify, so I think it was just engineers running queries. But there were a couple times where we had to move Anchor from 1.0 to 2.0 and then from 2.0 to 3.0, we did these big, I don't like to call them pivots, but sort of evolutions let's say, of our product or our strategy terminology also very important when you're trying to convince people of things. So when I was thinking about those big transitions for us as a team, I think both times we had these big moments with our teams where we had to get everyone on board with making these big changes. So with Anchor 1.0, I don't know if you remember, but it was actually similar to what Clubhouse I think just rebranded to more voice messaging and short form and more about connections between people.

**Maya Prohovnik** (00:21:50):
And that was the first thing we ever launched and people loved it. People were very excited about it, the data was all good. We had extremely retained users. We anecdotally, we were hearing all this stuff from users all the time that they were staying up all night to use the app, people were meeting each other and falling in love and getting married on our platform, all of these really kind of magical things and we were seeing the user base was growing consistently. But I think we had this feeling, and when I say, I mean, mostly Mike and I at the time, Mike was our CEO, that it just wasn't ever going to be big enough. And so we had this really interesting moment where the users were all telling us, there's no problem. We love this product. They were using it every day, they were coming back. It was slowly growing and we were just like, this just isn't going to get us to where we need to be, our original goal had been we wanted to democratize audio.

**Maya Prohovnik** (00:22:42):
We wanted to make it something where anyone could easily tell their story, and we were like, if we keep digging ourselves into this niche that a small number of people really, really love, that's great, but that's not really the mission that we sent out set out to solve. And so the 1.0 to 2.0 transition was I think actually pretty painful because for all of those people who had been invested in 1.0, 2.0 didn't work for them. 2.0 was much more about content creation and making more of a radio station, and it was less about telling your personal story and close relationships and more about projecting and using different tools. Anyway, so we made that call I think pretty much just on gut and it was like, this is a business decision. This is where we think the next phase needs to be.

**Maya Prohovnik** (00:23:25):
When we built Anchor 2.0, it was a lot more like the tools that we wanted to use, even though it wasn't what the user base was asking for. So I think that's one example of sometimes it's that whole users don't always know what to ask for, they don't always know what problems they need you to solve for them. And so I think you really have to be able to hear what's behind it or really even if the data is looking okay, think about if it's heading to where you need it to go.

**Lenny** (00:23:51):
Before you move on, that's actually such an interesting story because it's so hard to have a product that's working that people love and decide to change it completely. Many founders are probably stuck in this where they're just like, hey, this is working and we're feeling some fit. Is there anything else you learned from that? Because that's a really interesting insight and it worked out in your case clearly.

**Maya Prohovnik** (00:24:15):
It absolutely worked out. I mean, I think it was a terrifying transition. Us at the time, it took us a few months to build a whole new app, it takes longer now, but the whole time we were building it, we were like, we weren't sure if it was a mistake and we would go back and forth and we would feel guilty when we were talking to our users about what they wanted us to be working on. But I think it was one of those things where as soon as we launched 2.0, our numbers started shooting up and we started seeing more kinds of people were using it and people were suddenly using it in the way that we had always imagined as a replacement for the old school, very difficult to make traditional podcasts.

**Maya Prohovnik** (00:24:50):
I don't know. I guess the lesson is you have to be able to tell the signal through the noise, and even if you've got lots of vocal users asking for something, we used to have this rule, the 80/20 rule, where it's like you can't just build for that 20, I don't think we made this up by the way. I think this is a common thing, but we'd always refer to it and say, we want to be building for the 80%, and even though the 20% are going to be more vocal, that's just going to get you deeper into that hole of that problem of you're not really building for everyone. And I think particularly when you're trying to build a creative platform, you're trying to democratize something and your target user is everyone on the planet. I think you really have to be willing to kill your darlings and let things go when they're not getting where you need them to be.

**Lenny** (00:25:35):
That's probably the most common cases. Something is working, but it's not working incredibly well. What do we do? And so that's really interesting. I feel like the first thing you said there is really important of just we had a much bigger mission and vision, and even though this is working, this is never going to get there. There's no path to building a massive business.

**Maya Prohovnik** (00:25:52):
I do think that's so important, and I give a lot of credit to Mike and our co-founders. I think they really knew what they wanted to do when they started the company and they were very firm on that and never varied that throughout the years throughout the acquisition. And so I do think not everyone's goal is to build a massive multi-billion dollar world changing business, that's okay if that's not your goal, but if that is your goal, you have to stick to it and it's really hard, but you have to keep pivoting to get to where you want to be.

**Lenny** (00:26:21):
Kill your darlings. I love that phrase, I use it all the time. I think you had a second example. I have a couple other questions of Anchor, but did you want to share another example?

**Maya Prohovnik** (00:26:28):
Sure, I can just quickly, my second example was, so we actually had to do it again. So we went from Anchor 1.0 to 2.0, we were like, that was totally the right call. And then Anchor 2.0, we were still in this phase where we would always joke about it because people would be like, "Oh, it's kind of like making a podcast." And we would be like, it's not a podcast because we're trying to be bigger than podcasts. Because we were at the time, 2015, there were still so few people podcasting, it was still so hard to do. And so we originally were really stuck on this idea that podcasting was going to be limiting and that we wanted to be the next thing. In the early days of Anchor, we had all this nautical terminology, so we would call them waves and I don't remember what else, but we had cute nautical terms for everything we were trying to resist podcast and podcaster and those things.

**Maya Prohovnik** (00:27:11):
And when we launched Anchor 2.0, we started getting all of this really great traction and the number one feature requests that we got from people is they were like, great, I love using these tools and then I want to export it as a podcast and publish it and get people listening that way. And we resisted it for probably, I don't know, six months or something and we were like, absolutely not, that's not what we're doing. And I think that one was such an interesting lesson because we had just learned that we did the right thing by not listening to our users. So for a while we dug in and we were like, that's not the direction we're going in, they don't know what they actually want. And then when we decided, I think we started with like, oh, we'll do a little test and let people export us podcasts and see what happens.

**Maya Prohovnik** (00:27:48):
And when we look back at our data, that's the moment when we saw the beginning of that hockey stick growth where it's like we had been growing, we had been doing well, and then you zoom out and you're like, okay, that was very clearly the thing we were missing. Yet again, we had to stop what we were doing, we rebuilt the entire app, we built it around RSS and podcasting and being able to export. And we actually did some really cool things to make it really easy for people to publish their podcast everywhere. So I think that was really the moment that it took off. And I think it's so interesting putting those two things together because it was the opposite thing the second time that we had to give up on a piece of what we had thought was so inherently true about our business.

**Maya Prohovnik** (00:28:28):
And so I don't know what lesson to tell people to take away from that other than I think you have to just stay, especially in a startup mentality, you have to stay willing to be flexible and take in new information and new data points as your product matures and as your user base changes, there's going to be new things that you learn that are going to change how you think about it. And I think again, the one thing that was unwavering for us was our mission and everything else was mutable for us where we were like, whatever we need to do to get there will work. And I do think looking back, it's astonishing how brave we were that we kept finding some product market fit and being like, nope, that's not enough. And then moving to the next thing. And I think that obviously worked out really well for us and meant that we were able to do what we set out to do and really democratize the medium and make things a lot easier for a lot more people.

**Lenny** (00:29:15):
I think another lesson there is just try stuff. Like you said, you tried this export thing, let's just see what happens. No, we don't think this is where we need to go, but let's just try it and maybe it'll work. And clearly that became the core of the product and platform.

**Maya Prohovnik** (00:29:27):
Totally. And also, you never know which of those tiny product changes are going to end up being this existential moment for your business. You really have to keep your eyes open and be ready for that to happen anytime, especially when you're still trying to figure out where your place is going to be.

**Lenny** (00:29:42):
You mentioned there was this feature that made it easy to distribute your podcast, and this touches on a question that actually asked Mike Mignano, the CEO of anchor what to ask you. And he's like, ask her about the story of how you made that actually possible to distribute the podcast to platforms, and it ended up being a very unscalable solution.

**Maya Prohovnik** (00:30:00):
One of our principles from the very early days of Anchor was build things that don't scale, where we were like, we're a ridiculously tiny team. We're trying to do this really big thing. We had raised very little money, and so we were always just trying to figure out how can we hack into whatever growth we're trying to make happen. So when it turned out that people wanted to distribute their podcasts everywhere, it's gotten a little bit easier. But at the time, I'm sure you remember what podcast distribution was like, where it's like there's all of these different podcast platforms you have to manually distribute to all of them. Apple Podcasts in particular can be really difficult for people who aren't tech-savvy because there's this whole, you have to prove that you own your RSS feed, you have to know what an RSS feed is.

**Maya Prohovnik** (00:30:44):
You have to sometimes deal with 301 redirects. There's just all this stuff that's deeply technical in a way that we were just like it doesn't need to be. And so one of the steps there was to submit your podcast to Apple Podcasts, you had to have an Apple ID, and there are a lot of people in the world who don't have iPhones, and so we're building for everybody. So we were like, how can we reduce that friction? We were obsessed with reducing friction, this was our constant battle. And so we had this idea, we hired a couple of college interns and we brought them in and we were like, people are going to push this magical one button in the Anchor app and they're going to say, I want to distribute my podcast, and your job is going to be to do all that same manual stuff manually, but to them it's going to feel magical and it happened automatically. I still don't know how many people know this.

**Maya Prohovnik** (00:31:27):
I think people think that we had some secret backdoor deal with Apple for distribution, but we just had college students making Apple podcast accounts and then submitting hundreds of thousands of podcasts through these accounts. And that resulted in lots of interesting technical and relationship situations. It was a really interesting thing, and eventually that didn't scale, eventually we stopped doing that, obviously, but I think that is such a cool example of the importance of how you're packaging what you're offering to people where if we had said you request distribution and we'll have one of our team members get back to you in three days and let you know when you're on Apple Podcasts, that doesn't feel very magical or it's really saving you any time. If all you see as a user is you're hitting a button and then 24 hours later you're somehow magically on Apple Podcasts, that was so much easier than manual distribution was at the time.

**Maya Prohovnik** (00:32:20):
And I think that was a really big part of why we got so much hosting market share so quickly because it was such an insane benefit over the other platforms which otherwise had been commoditized at that point. So, it's funny now to think back on that, but I think it's also related to we were so good at being willing to humor what seemed like stupid ideas and try them. And so that is something that I definitely recommend to product people is let yourself have the silly ideas we always talked about yes and when someone has an idea, how can you build on it and think about how it might work instead of saying, no, that can't work because, and so we had a number of those things where it was like nobody understood how we were doing things so differently, and it was just because we weren't afraid to do the silly unscalable thing for a while.

**Lenny** (00:33:08):
I love that story. Touches on two things, one is I was just doing an interview around how to drive word to mouth growth and make that a big driver of your growth. And the main message there is just make something remarkable and knock people's socks off that they're just like, oh wow, this is crazy, I'm going to share it with my friend. And that's such a good example of that where everyone's like, wow, that was easy, I'm going to tell all my other friends that are launching podcasts. The other is, I wonder just how much of tech is built off of college interns, the beginnings of companies or how important college interns are to technology and innovation. It feels like there's always an intern story.

**Maya Prohovnik** (00:33:42):
Yeah, I know. I think they must be. And for the record, we paid them very well, these were not unpaid interns, just to be clear. But no, I think it is amazing, and I think it was also such a cool opportunity. One of those interns actually is still a PM on my team today. She ended up converting a full-time after she graduated. And I remember I had a lot of cool college internships and it's such a cool way to get exposure to industries that you otherwise wouldn't get to. So I would definitely recommend that college kids start with, it's okay if your first job is like a repetitive, not very exciting thing. If you do a good job, it will lead to something very exciting maybe.

**Lenny** (00:34:15):
I love that. Imagine a place where you can find all your potential customers and get your message in front of them in a cost-efficient way. If you're a B2B business, that place exists, and it's called LinkedIn. LinkedIn ads allows you to build the right relationships, drive results, and reach your customers in a respectful environment. Two of my portfolio companies, Webflow and Census, are LinkedIn success stories. Census had a 10x increase in pipeline with a LinkedIn startup team for Webflow after ramping up on LinkedIn and Q4, they had the highest marketing source revenue quarter to date. With LinkedIn ads you'll have direct access to and can build relationships with decision makers including 950 million members, 180 million senior execs and over 10 million C-level executives. You'll be able to drive results with targeting and measurement tools built specifically for B2B. In tech, LinkedIn generated two to 5x higher return on ad spend than any other social media platforms.

**Lenny** (00:35:14):
Audiences on LinkedIn have two times the buying power of the average web audience, and you'll work with a partner who respects the B2B world you operate in make B2B marketing everything it can be and get $100 credit on your next campaign. Just go to linkedin.com/podlenny to claim your credit. That's linkedin.com/podlenny. Terms and conditions apply. So we've been talking about Anchor and I think what's really interesting about Anchor is it's one of the very rare success stories of an acquisition working out incredibly well. It was a small startup now powering two thirds of all new podcasts. It's pretty insane. So I want to spend a little time on just what worked in making that possible. So let me ask first around the integration piece, just how you integrated successfully, and then I want to talk about just operationalizing and making it continue running successfully.

**Maya Prohovnik** (00:36:03):
Totally.

**Lenny** (00:36:04):
Yeah. So on the first piece, just what did you do right to integrate Anchor into Spotify to make it effective and continue working?

**Maya Prohovnik** (00:36:10):
I think it's a combination of luck and hard work because Spotify is genuinely an amazing company. I mean, you've met now a bunch of people who I work with at Spotify, including my boss, Gustav. It's an incredible company. They're Swedish. So just their mindset about everything in the first place is amazing. But also, I have been so impressed that they are the type of company that can still move quickly and make really big strategic decisions and strategic shifts. It never feels like they're slowing down. And so I think our way of working worked with them. And then I think the other thing that we had to our benefit was they really saw the same vision that we had. So it was like they also wanted to change podcasting and make it more democratized and make it more two-way and bring it into the future.

**Maya Prohovnik** (00:36:53):
And it was so interesting because when we started talking to them, both of us had this chicken or egg marketplace problem where we had this critical mass of creators. They had a critical mass at that point of consumers, but if you don't have both on the same place, then you're still stuck with the limitations of RSS feeds. And so I think we were both coming at the acquisition with the same frustration just from two different angles. And so both of us really saw that benefit in joining up. And so I think one of the big ways we were lucky is that what I've seen happen in a lot of acquisitions is you have an idea of what you're getting acquired for and you get excited and really attached to that vision, and then when that vision doesn't end up fitting into the company strategy, there's nowhere else to go.

**Maya Prohovnik** (00:37:34):
And I think in a lot of ways Anchor did really well fit into Spotify's culture and their roadmap, but there were many things that changed around that initial vision. And I think we were really good at making sure that we stayed valuable to Spotify. That was one of our goals when we got acquired where we were like, we're tiny startup people, and we're like, we're not going to get lost in this big sea. When we came in, it was like we were very vocal about everything that we were doing, we did lots of internal marketing and made sure people were excited. We built a lot of really strong relationships. We made sure that every team at Spotify knew about us and what we were doing. We were constantly asking how we could help other teams. And when the strategy shifted, which it has dozens of times since we've gotten acquired almost five years ago, not like we just blindly followed, but we were always willing to get excited about whatever the next thing was and willing to be helpful and figure out how to make that work.

**Maya Prohovnik** (00:38:30):
And I think it actually goes back to the sticking to the mission in the first place where Spotify and we want podcasting to be able to be a huge business for the industry. We think it's been held back by a lot of things for a long time. And so we've had various hypotheses about how we can get there and we try things and if something doesn't work, we go onto the next thing. But that goal hasn't really changed.

**Lenny** (00:38:55):
That makes a lot of sense. And I love the idea of just staying excited about what is happening. I think a lot of founders join and they're like, "Oh, it's so annoying to work in this big company." "Oh man, we have this original plan, it's just not happening." And I think even if you're probably not, even if you're not excited, I think it's effective to communicate that you're excited and be on board and then shift things in what direction you think maybe needs to go instead.

**Maya Prohovnik** (00:39:19):
Totally, yeah.

**Lenny** (00:39:20):
Okay. And then in terms of operating within Spotify, from what I understand, your team is still very startupy and there's this really fast moving mentality. What have you learned and how do you do that? How do you make that happen within a larger company?

**Maya Prohovnik** (00:39:34):
We've definitely slowed down a little, I will say. I'm always joking about when we first got acquired, I remember we had to do this spreadsheet outlining our roadmap and estimate are things like small, extra large, whatever, and Spotify's definition of small with something like a quarter. And I was like, we've never built anything that took more than three months. And now it's like now we build lots of things to take more than three months. But the first thing that comes to mind, so when we were a startup, one of the first things we did when we were only a few people, we decided what our core values were going to be. And I think they maybe very trivially have changed over the years, but we essentially still have the same four core values that we decided on seven or eight years ago now. And when we got acquired, we had a conversation with our team where we said, we're going to of course embrace Spotify's culture and Spotify's core values, but we're not going to forget who we are as a team.

**Maya Prohovnik** (00:40:28):
And I think part of what really... And one of our core values by the way, is move fast. So that's something that's very deep within our DNA. But I think one of the things that helped with that is Daniel Eck, when we got acquired, came and talked to our team, which was so cool and so motivational. And one of the things he said to us was, we had a reputation at the time for moving very quickly, even compared to other startups. We were shipping a new feature every two weeks, it was insane. And Daniel said to us, not only do I want you to not move slower, that's part of why we're acquiring you so that you can move quickly. But he said, I also want you to help me teach the rest of Spotify how to move more quickly, and I found that so motivating.

**Maya Prohovnik** (00:41:04):
Because I think I definitely had that feeling going from startup to larger organization where I had this fear that it was just going to be bureaucracy and things moving so slowly. And I really loved that. That was one of his goals was that he was like, I want to make sure Spotify also grew really quickly and he was trying to figure out how to help them keep moving as quickly as they used to. And so I think that's something that I really took to heart and that I've continued to remind my team of even to this day where I think of that as part of my job here to help people think about how we can move quickly and what really matters. And I think at any large organization, there's obviously a lot more complexities, there's a lot more stakeholders.

**Maya Prohovnik** (00:41:42):
So to some extent it's necessary to slow down and be thoughtful. But I think the things that I always try to push people on is the unnecessary things that slow you down. So I think that's what we spend a lot of time on, both within our team and when we're collaborating with other teams at Spotify because we work with basically everyone at this point. So I think that was really cool that he gave us that mission when we joined.

**Lenny** (00:42:03):
On that note, is there anything that has been a real challenge or become really annoying? Just real talk about the flip side of that. Everyone's always like, "Oh, it's all working out great." Is there anything you could share that's just like, "Oh wow, that was really hard and we overcame it, or a real challenge that we didn't expect?"

**Maya Prohovnik** (00:42:19):
I think that the downside of Daniel's advice, so one of the things he said to us, he was literally say no to all the meetings. You're going to get invited to all these off sites and meetings and everyone's going to want to meet you guys and they're going to want you to come to all of these events and whatever. And he was like, just keep being Anchor. Just keep doing what you're doing for at least the next year. Don't worry about what Spotify's doing. And on the one hand, of course, we loved that as startup people we're like, cool, we're going to get to stay us within this larger organization. But the downside that we didn't really realize until a year later was that we weren't really able to build relationships. We had some culture problems where our team started to feel like because they weren't part of Spotify, they had some existential, they didn't feel attached to the work that we were doing.

**Maya Prohovnik** (00:43:03):
And so for a year we operated on our own. We moved really quickly, we were able to get a lot done, but then I think our next phase had to be really deeply incorporating into Spotify. And so we stopped calling our team Anchor internally, we started collaborating more with other teams. And I think that is the necessary trade-off is the more deeply you're embedded, the slower things are going to go. But I think that has been really amazing for making sure that our team actually felt like a part of the larger mission that Spotify was doing. And the one other thing I'll say that I found pretty striking. So, Spotify, as you know, did a lot of podcast acquisitions soon after the Anchor one. And so I got to know a lot of the other founders and early employees who have been acquired by Spotify and something that I've found with them and just with other acquired founders who I've talked to since, I don't know, I feel like people don't talk about this enough publicly.

**Maya Prohovnik** (00:43:59):
Maybe people are somewhere and I just haven't seen it. I think that people who get acquired, especially founders, actually go through a relatively deep depression and existential crisis after getting acquired. And I never would've thought, when you're talking to people about getting acquired, it sounds like such an obvious positive. Like you said, it's like this amazing positive exit and it was objectively so good for our team and for us and for our users, and I think for the industry. And I personally did not expect to go through that. Because I was like of course you want an exit, that's what you're working towards that whole time that you're a startup. And I've talked to a lot of these founders and I think it is a process I think that everyone has to go through because either you decide I'm going to stay here and I'm going to do this for a long time and I can make this work for me.

**Maya Prohovnik** (00:44:44):
Or you're like, I'm just a startup founder and this doesn't really work for me and I'm going to go do my next thing. And so I think to some extent some of the things we were talking about, I think do help shake out whether people actually want to make those investments and figure out how to make things work at a big company. But I think the other thing that I've found is just I think there isn't enough support for that transition. And I think that for me, I've definitely landed on the side of, I love working at Spotify. I now am so excited to be part of a large organization and building things at this scale, but I really would've loved to been able to talk to someone about it or understand that there were other people going through that kind of thing.

**Maya Prohovnik** (00:45:25):
So I don't know if you want an example of how it's not all rainbows and sunshine, I definitely think there were some dark times there and I've since learned everyone goes through that just because I think just by definition, all the reasons that you start a company, that means your personality is someone who wants to be having that direct impact and having your own ownership and being able to make things move quickly, and that is just so different once you join a large organization.

**Lenny** (00:45:54):
Yeah, and those are amazing examples. I think what's interesting with startup life is eventually if things work out well, you'll either end up working for a larger company, that's a likely scenario if things tip go great or you're running a public company, which is also extremely painful and stressful.

**Maya Prohovnik** (00:46:11):
Yes, exactly.

**Lenny** (00:46:12):
Yeah. So, the paths are hard no matter what you end up doing, as much as you love that startup time. I actually went through the same thing when we sold our company to Airbnb. I was just like, man, I had this life goal of starting a company and now I've done it and now what do I do? And it was just like, huh, okay, I guess I got to figure it out.

**Maya Prohovnik** (00:46:29):
Right? It's like, who am I? And I think the thing that I think for me, and it sounds similar to you, I think I didn't realize how much value I put in the actual day-to-day of survival that comes with being part of a startup. That becomes almost your reason for being is like, I got to make this work and I got to keep the team motivated. And you're just going, going, going, and then when everything is suddenly stable, you're like, wait, what is my job now?

**Lenny** (00:46:57):
I saw a tweet actually recently, I forget who tweeted this, that CEOs that exit and go on vacation end up being more stressed and less healthy than running a really high stress, high growth company.

**Maya Prohovnik** (00:47:08):
That is wild. I get it though.

**Lenny** (00:47:10):
Yeah. Although I will say when I joined Airbnb and was just the PM of our team working on one thing, it was like, this is really cool. I don't have to worry about everything all the time, there's a really nice relief to that. But yeah, there's a life existential question of just like, wow, we did the thing. What am I? What else? There's usually not a goal beyond that.

**Maya Prohovnik** (00:47:31):
Totally.

**Lenny** (00:47:32):
What was it for you? Was it that, was it the feeling of I had this thing that I was running and now I don't?

**Maya Prohovnik** (00:47:37):
I think it was a little bit the fear of being like a cog in a wheel, which is not actually how I feel now that I work at Spotify. And I think the other was like we were doing great, we already were killing it at podcast hosting. And also it was just so fun. I really valued that small company, everyone knows each other. We're doing really hard work, but we're also having so much fun. And I think it felt like I couldn't translate that to a large organization where I was like, okay, now I have to do things how they do. And then I think what actually ended up happening is I actually love how Spotify runs their company and I'm still able to run my team the way that works for me. And so I think it just goes back to knowing what you care about, being really solidly attached to your own core values and being able to take that with you.

**Lenny** (00:48:25):
I think we're both examples of people that were startup people and then realized it's not so bad working at a big company. I stayed at Airbnb for seven years. I was like, no, no way, I'm going to be here for more than a year and a half or a year or two. How long have you been at Spotify? At this point?

**Maya Prohovnik** (00:48:37):
I'm going on five years. Yeah.

**Lenny** (00:48:41):
No, I think this is just a example of it's you think you're not going to enjoy working at a larger company, but oftentimes it's actually pretty great for a lot of different reasons.

**Maya Prohovnik** (00:48:48):
Yes.

**Lenny** (00:48:49):
Shifting in a slightly different direction, just thinking about leadership and what you've learned to lead teams, lead large orgs, build products, is there any just, I don't know, frameworks or tools that you found to be effective?

**Maya Prohovnik** (00:49:05):
The big one for me is Radical Candor. And I know my team watching this is going to laugh at me because I talk about this every day. They're tired of hearing it, but have you read it?

**Lenny** (00:49:15):
I have. I love it.

**Maya Prohovnik** (00:49:17):
Yeah. It's my all time favorite book. And I think it really shifted for me, honestly how I relate to people in general. But I think especially with managing, giving feedback, being able to collaborate and push back in a direct way, direct and constructive way on peers and that sort of thing. So I make all of my managers on my team read it. We talk about it constantly in our team, and I think that the general concepts for anyone who's not familiar is you need to care personally and challenge directly. And if you're only doing one of those things, you're not giving feedback in an effective way. And the book just talks so much about the importance of feedback and how feedback is a gift, which I have now come to completely agree with. It's like anytime I've given someone effective feedback, it's always well received, even if it's tough to hear, people want to get better and they want to know how they can improve.

**Maya Prohovnik** (00:50:07):
And so I think anytime that you can give them specific feedback in a way that makes it clear that you care about them and want them to be able to reach their goals, I think it makes them stronger, it makes your relationship stronger. And I also think the one other big thing I took away from Radical Candor was when it comes to people not underperforming, it really reframed how I think about that because people are not generally inherently bad or lazy or ineffective, it's almost always because the role they're in is the wrong fit. And so being able to approach the conversation in that way means that you can come at it and in a caring way that lets them know you actually want them to be successful.

**Maya Prohovnik** (00:50:47):
And what I found is when you have the conversation in that way, they're much more receptive to it. And then you're able to either actually resolve the issues or you're able to help them figure out what the right fit is for them, which I think as a manager, it's so inspiring to me because that means that you get to keep mentoring them beyond. You're not just saying, this isn't working, I'm giving up on you, see you later. You're saying, I'm committed to helping you throughout your whole career and let's help you find the next step, even if that isn't on my team or at this company.

**Lenny** (00:51:16):
Awesome. Yeah, I love that book. And you talked about the two. There's this grid that-

**Maya Prohovnik** (00:51:21):
The quadrants?

**Lenny** (00:51:22):
Yeah, it talks about. And just to reinforce what you just said, the core is that when you want to give people direct feedback, but you want to make it clear you care deeply about them. And I love that she talks about if you do one of these wrong, here's what happens. If you challenge directly, but it doesn't feel like you care deeply, you're just an asshole and they're just like, yeah, God, you get really defensive. I should get her on this podcast. How cool would that be?

**Maya Prohovnik** (00:51:43):
Oh my God, that would be my, she's my... If I could meet one tech celebrity, it would be her.

**Lenny** (00:51:48):
Okay. I'm going to work on it. If you're listening and you're Kim Scott, let me know, I will try to get to her. Anything else in that bucket of frameworks or tools, things that you find really helpful leadership?

**Maya Prohovnik** (00:51:58):
The only other one, I'm not a huge framework person. I think this goes back to my gut thing, but the one other thing that I refer to often is I love the Eisenhower Matrix, which is also known as the four Ds. So it's do, defer, delegate, delete, you have also quadrants. Maybe my brain just works in quadrants. I don't know. But I totally subscribe to that and that's how I do everything, where I write everything down at the end of every day, I go through and I either do delegate, defer, delete, and it really helps you clear a lot of stuff out of your brain.

**Lenny** (00:52:27):
Interesting. So you don't even use it as a grid necessarily, it's more make a decision on all the things on your plate?

**Maya Prohovnik** (00:52:34):
Yeah, I do. I just tried using the grid view and it didn't work for me for some reason. So I just use a to-do list, and then I don't let myself finish working until I've gone through anything I didn't get through that day, and then I know what I have to do the next day.

**Lenny** (00:52:46):
So that touches on another area I wanted to touch on, which is productivity. I hear you're very good at being productive and making the use of your time. I guess one, where do you think that comes from? And then two, just any other tips, tactics, tools you find to be really effective in staying productive?

**Maya Prohovnik** (00:53:01):
Yeah, where does that come from? I think I am OCD. I think I'm an overachiever. I don't know, it's really important to me. I think when my team says that I'm very productive, the feedback I hear from them is they're impressed that they send me a doc and then I always read it. I think that's more about prioritizing my team and making sure that they're unblocked, which I take very seriously. I don't know other tips that I would give people. I write everything down because I think I'm one of those people I remember things best when they're written down and then I obsessively put things on my to-do list. Anything that anyone asks me to do goes on there, and then I have that method for organizing it later in the day.

**Lenny** (00:53:38):
Do you have an app for this or do you write it on paper?

**Maya Prohovnik** (00:53:40):
I use Todoist. I think you can use any, but it's the one that works best for me. I love using paper, but then if I don't have it with me, then I can't remember anything I have to do, so I've had to go digital.

**Lenny** (00:53:51):
Awesome. So it sounds like a big part of your process is just getting things out of your head and writing it down somewhere.

**Maya Prohovnik** (00:53:56):
Yes. I think that's huge. And I also think if you're in any sort of job, I think most PMs have this where it's so much of your job is actually deep thinking and problem solving. I just cannot get that done if I'm running through my to-do list in my head. So I think that was a big unlock for me when I realized that I just needed to, anytime I'm stressed, honestly, if I just sit and make a list of all the things I have to do, I'm like, oh, it's four things, I can get those done, it's okay.

**Lenny** (00:54:18):
Man, that tool of just making a list when you're stressed about, all the things you got to do, just making a list of it on paper, I find it so helpful.

**Maya Prohovnik** (00:54:27):
It works every time.

**Lenny** (00:54:28):
Have you read Getting Things Done by David Allen?

**Maya Prohovnik** (00:54:31):
It's on my list. I haven't read it.

**Lenny** (00:54:32):
Okay. That book totally transformed how I think about productivity, and you already doing a lot of what he recommends. It's like this very old book. And now he's just, I don't know, he's a public speaker dude that just goes around consulting. But this one, it has very simple approaches to being productive and it really changed the way I operate. And you're already doing a lot of it, so I don't know how much value you get out of it.

**Maya Prohovnik** (00:54:53):
I'll read it. I love this stuff.

**Lenny** (00:54:55):
A core concept is this idea of mind like water where you don't want to have anything in your head, you want to get it all out. And then there's these systems for how to process all the things you're getting out.

**Maya Prohovnik** (00:55:04):
Totally.

**Lenny** (00:55:05):
Maybe we'll get David Allen this. We got a whole list.

**Maya Prohovnik** (00:55:07):
I know we have a whole hit list.

**Lenny** (00:55:10):
Maybe it's just a final question. You're good at so many things, another thing you're really good at is public speaking. I was watching the last Spotify launch event and I was just like, holy moly, she's incredibly good at speaking and it's something I want to get better at and something I think a 100% of people want to get better at. So, I'm just curious, what have you learned about being an effective public speaker? Anything that you could recommend to people if they're trying to get better at this?

**Maya Prohovnik** (00:55:32):
Well, first of all, thank you for saying I'm awesome at so many things. This is my favorite podcast I've ever been on, you're just complimenting me the whole time, so I'll take it.

**Lenny** (00:55:39):
True.

**Maya Prohovnik** (00:55:41):
I think with public speaking, for me, the first thing that I had to do was decide that I didn't hate public speaking because I think it's human nature. It makes sense that we do not want to be in front of a crowd and we don't want to be performing. And it's just an unnatural thing that humans, I think make ourselves do. I remember actually when I was in high school, I had to give a presentation and I had so much anxiety I couldn't sleep the night before. And I remember I was getting ready for school that morning and I was like, I'm just not going to hate public speaking. I just can't get through my life feeling this way. And so I just got up there and I had fun with it, and it felt so much better to not feel worried about it.

**Maya Prohovnik** (00:56:18):
So I think ever since then I've been okay at it. And then I have gotten lots of opportunities to do big scary public speaking things for Spotify, and so I think I've had to get even better. I think my tips would be my biggest one is probably reframing. Everyone has this anxiety before they have to perform or they go on stage. Reframing that anxiety to understand that the thing your body is doing is surging you with adrenaline to help you. And so letting that feeling wash over you instead of fighting it, I think has been so effective for me because otherwise, it can feel like a panic attack. And so I think you have to be like, cool, my body's getting ready. We're excited, we're going to go do this on stage. That has been really helpful. I practice a million times anytime I have to do public speaking.

**Maya Prohovnik** (00:57:03):
So I think everybody has different memorization tactics, different ways of doing speaker notes that work for them. And so I think part of it is you have to do a bunch of public speaking to see what works for you. So some people work best with no notes. I almost read complete sentences a good, I can enunciate things while I'm reading, so that works best for me. Some people like bullets and then they go a little bit off the script. But I think once you figure out what method of speaker notes works for you, I rehearse probably at least 10 times all the way through once the speaker notes are final. And you can practice your exact delivery. You can practice where you're going to put jokes in. You can figure out what doesn't feel natural or where you're going to trip it up, and then you can change the words that you're using.

**Maya Prohovnik** (00:57:42):
And so I like to get to the point where I can remember ad-lib at least half of the notes that I have in there, and that way I know I'm going to feel confident coming off script. I make a lot of eye contact with the audience, which I think makes them think that I'm not reading speaker notes. So I think that's really important. If you can stand it, which I can't, record yourself or watch yourself in a mirror, it messes me up more. But I think for a lot of people, that can be really helpful to figure out where your issues are. I think the biggest thing for me honestly, is that the unfair advantage I have is if you really give a shit about what you're talking about, you are going to be such a better presenter because people are going to be able to tell that you care.

**Maya Prohovnik** (00:58:20):
And so I think even at a larger Spotify event where it's like I'm reading off a teleprompter and I'm reading, I'm marketing, but I'm helping write those words and then the way that I'm saying them matters because I'm talking to podcasters and I'm like, my mission in life is to make things better for you, not everyone gets that benefit, I guess. Sometimes you have to do public speaking about things that you're not very passionate about, but I certainly think that helps. And I think leaning into that, so when you can, telling personal stories, letting the audience get to know you, I like to work some humor into my presentations. I think that can really help as well.

**Lenny** (00:58:55):
That is awesome advice. I especially love letting the stress wash over you, because most of has this challenge. Your body's just doing all this shit that's just going to stress the shit out of you. And so the idea of just embracing it, just flowing with it.

**Maya Prohovnik** (00:59:10):
Yes, it's a superpower. It's like, that's so cool, that adrenaline works that way.

**Lenny** (00:59:14):
Yeah. Okay. I'm going to try that one.

**Maya Prohovnik** (00:59:16):
Also, if you're nervous, you can put your hands above your head that'll help the blood, I don't know, it helps it go into your head or something. I don't remember.

**Lenny** (00:59:23):
There's this whole power post thing that apparently has-

**Maya Prohovnik** (00:59:26):
Yes, exactly.

**Lenny** (00:59:26):
I think it's been disproven. People are like, no, there's no data that shows that. But the blood thing that's really interesting versus psychological benefits.

**Maya Prohovnik** (00:59:34):
I think there is a real physiological thing that happens.

**Lenny** (00:59:36):
That's cool. Okay. Amazing. Okay. Maybe as an actual last question, what's happening in the future of the Spotify podcasting platform? Anything you want to share about where things are going?

**Maya Prohovnik** (00:59:45):
A lot of the things that I talked about at Stream on for anyone who saw that this year, I think are still very much our strategy. So I think for us in general, Spotify is really focused on making sure that we can... We have a massive audience, we have more than 500 million monthly active listeners. We want to help podcast creators reach that global audience, and so it's really important to us. I always tell my team the biggest problem that I want to solve for podcasters is discovery and audience growth, and I really think we can be the ones to do it, so I'm really excited about that. So discovery, monetization. We're really focused on making sure that creators of all shapes and sizes can make a living off of their work.

**Maya Prohovnik** (01:00:24):
And then I think in general, we're working on so many cool things at Spotify to make podcasts a more interactive format, something that allows you to get to know your audience and connect with your fan base. We talked about a couple features this past year. I definitely can't say anything specific, but what I can say is there is lots of really cool stuff coming next year that I'm very excited about. And I would say for anyone who wants to learn more, definitely sign up for Spotify for podcasters. It works whether you're hosted with Spotify or not, and you can start to get a sense of some of those features that we're opening up to everybody, but there's lots more cool stuff to come.

**Lenny** (01:00:58):
Amazing, mysterious, and exciting. With that, we've reached our very exciting lightning round. Are you ready?

**Maya Prohovnik** (01:01:05):
Yes.

**Lenny** (01:01:06):
What are two or three books that you recommend most to other people?

**Maya Prohovnik** (01:01:09):
Children of Time, and I guess I would say It by Stephen King. I recommend a lot of Stephen King books, but that's my all time favorite.

**Lenny** (01:01:16):
Very on brand with your podcasts. Makes sense. What is a recent movie or TV show that you've really enjoyed?

**Maya Prohovnik** (01:01:23):
TV show, I'll just say, I guess Pokerface was the last one that really blew my mind. Movies, I mean, Barbie was so good, and then I'll just give you a lesser known one. I just watched this crazy movie from the '80s that was made the same year Home Alone was, this just got featured on a podcast, so I think everybody's talking about it now, but it's a horror movie about a kid who's home alone, and then he has to fight Santa Claus in a home invasion situation. It is so good, it has a bunch of different names, but if you look up either Game Over or it's like Code Père Noël or something, it's an old French horror movie, so good.

**Lenny** (01:01:59):
Interesting that the other Home Alone is the one that did well in this one.

**Maya Prohovnik** (01:02:02):
Well, there was apparently a whole legal thing over it.

**Lenny** (01:02:05):
Oh, wow. They didn't have Macaulay Culkin. That's their missing piece. What is a favorite interview question that you'd like to ask candidates when you're interviewing?

**Maya Prohovnik** (01:02:14):
I have one. It is, if you could make a podcast about anything, what would it be? And it is the best. Honestly, you should ask people that even if you don't work in work in podcasting, because it tells you so much about candidates, and one thing that I feel very strongly is that the most important thing is that you're hiring passionate people, not people who are passionate necessarily about the thing that you're doing, but about anything. If they can't think of anything, that's a red flag for me.

**Lenny** (01:02:33):
That's awesome. It's like a variation of the question of Teach me something or tell me about something that you've learned recently. Really interesting tweak on that question and very appropriate. What is a favorite product or something awesome you've discovered recently that you really like digital or physical?

**Maya Prohovnik** (01:02:49):
Okay. Very unsexy answer, but I love 1-800-CONTACTS.

**Lenny** (01:02:53):
Okay.

**Maya Prohovnik** (01:02:54):
I'm so impressed with their product team. If you need new contacts, even if you need a new prescription, you can do the whole thing online in five minutes, and it's so well-thought-out and so thoughtful. I love them. And then the one other one I'll give a shout-out to, since becoming a parent, Love Every, do you subscribe to them?

**Lenny** (01:03:09):
Absolutely. I don't know anyone that doesn't have them.

**Maya Prohovnik** (01:03:12):
I know. It's so good.

**Lenny** (01:03:12):
They've cracked it.

**Maya Prohovnik** (01:03:14):
Yes.

**Lenny** (01:03:15):
Yeah. We are missing some of the toys, and so we're trying to find where they went because he's ready for the rattle.

**Maya Prohovnik** (01:03:25):
Yes. Awesome.

**Lenny** (01:03:25):
Yeah. I love everybody's amazing and their ads are really great. Oh, man.

**Maya Prohovnik** (01:03:27):
Yes. They're so good.

**Lenny** (01:03:29):
What is a favorite life motto that you come back to often share with folks? Anything there?

**Maya Prohovnik** (01:03:36):
"Only a fool wishes time away." Even if you're having a bad day, even if you're doing something boring or you're stressed, you have to do public speaking, that's still your life and you should enjoy it.

**Lenny** (01:03:47):
I love that. There's this phrase of just like, I'm just killing time right now, and I always think about that, just like, oh, but you don't have that much time. Maybe you shouldn't try to kill yourself.

**Maya Prohovnik** (01:03:57):
Yeah.

**Lenny** (01:03:58):
Even though sometimes things are boring, it reminds me of another quote of just, "Most of the world's problems are caused by our inability to sit in a room for 10 minutes quietly."

**Maya Prohovnik** (01:04:07):
Yes. Also, if you're bored, have a baby because you'll never be bored again.

**Lenny** (01:04:11):
Yeah. Yep, indeed. Speaking of parenting, what is a valuable lesson that your mom or your dad taught you?

**Maya Prohovnik** (01:04:18):
My mom always told me that my generosity would be rewarded, so anytime that I was nice or thought of someone else before me, she always made sure that I got some little reward or got to go out for ice cream or something, I think that really worked on me.

**Lenny** (01:04:34):
I love that. Final question, I saw somewhere that you raised bait backyard chickens. Is that true?

**Maya Prohovnik** (01:04:40):
I'm so happy you asked about my chickens'.

**Lenny** (01:04:43):
I love that reaction. So maybe just why did you decide to do that and any tips for someone that may want to explore it?

**Maya Prohovnik** (01:04:48):
Oh my God. Well, we should have started with this because I can talk about this for an hour and a half, but I love my chickens. I have eight of them, we've got one rooster and seven hens. I think that all of us should be a little bit closer to nature, to the, I was going to say, the food that we're eating, I'm not going to eat my chickens, but they make eggs for me. But I just think there is something very lacking in our modern lives, that connection to nature. When I feel stressed at work and I go outside and I hang out with my chickens, I pet them, and I give them treats and we talk to each other. It's like nothing makes me happier and feel more grounded than hanging out with my chickens. So I think everyone should have chickens. I would say they're pretty low maintenance, so if you're thinking about it, I would recommend it. And if you get chickens, my favorite thing that I did for them, I got this monthly subscription box for chickens I think it's called Coop Crate.

**Lenny** (01:05:40):
Love Every for Chickens.

**Maya Prohovnik** (01:05:41):
Yes, it's Love Every for Chickens and every month they send me chicken treats, but also fun little things for crazy chicken people, so it's clothes or a sticker, something funny.I'm very into the whole chicken thing, so, yeah.

**Lenny** (01:05:55):
Oh my God. Maybe just a tactical question, how much space do you need in your yard for chickens?

**Maya Prohovnik** (01:06:00):
Not that much, so we let them free-range. We have a pretty big yard, but I think their actual, so there's their little coop, and then they've got a run that's fenced in. The run is maybe like, I don't know, five feet by eight feet or something, but you can go a lot smaller. If you go to Home Depot, they actually sell pre-made coops and runs. I think if you have a decent sized backyard, they'll be fine. I've known people with pretty small yards, and you just let your chickens out and they're happy and they'll find worms in a few yards.

**Lenny** (01:06:27):
Oh man. All right. A new project to look into.

**Maya Prohovnik** (01:06:29):
Please get chickens, do it.

**Lenny** (01:06:31):
Okay. Maya, we've talked about chickens, dogfooding, gut level decisions, Radical Candor, so many things. Thank you so much 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?

**Maya Prohovnik** (01:06:43):
I'm on threads, I guess, and I'm on LinkedIn. I'm Maya Fish on most social media, and then I'm on LinkedIn, and then, what was the second one? How can people be useful to me?

**Lenny** (01:06:53):
Exactly.

**Maya Prohovnik** (01:06:55):
Listen to your podcast on Spotify, and then send me your feedback. I would love to know either as a podcast creator or as a podcast listener. Always happy to hear what Spotify can be doing more of or better to help you out.

**Lenny** (01:07:06):
Amazing. Maya, thank you so much for being here.

**Maya Prohovnik** (01:07:08):
Thank you so much.

**Lenny** (01:07:09):
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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