---
title: "Lenny's Podcast — 2023 Q4 合集"
date: "2023-01-01"
source: "Lenny's Podcast"
url: "https://www.lennysnewsletter.com/"
---

<div v-pre>


# Lenny's Podcast - 2023 Q4 (24 episodes)

This file contains 24 articles/episodes.

---

## [1/24] What sets great teams apart | Lane Shackleton (CPO of Coda)

**Lane Shackleton** (00:00:00):
Moments that stretch you or moments that you feel uncomfortable in or you find yourself saying, "Oh shit. I shouldn't be here," or, "I'm under qualified to be here," those are the moments you should be seeking out. Those are the moments that stretch you and give you a new foundation. So oftentimes you'll hear a career question like, "Hey, do you feel like you're growing in your role?" And that's a very ambiguous, in my opinion, way to ask this question. A much sharper way is like, "Hey, how many, oh shit moments have you had in the last six months, year, two years, and what are they?" I think if you ask yourself that question and the answer is, "It's been a really long time since I've been stretched in some meaningful way or I've felt like I'm under qualified to be there," then it may be worth digging into.

**Lenny** (00:00:51):
**Lane Shackleton** (00:04:07):
So glad to be here. Thanks for having me.

**Lenny** (00:04:09):
It's absolutely my pleasure. I've always really admired the way that you write about product, the way you think about product, and it feels like Coda has one of the strongest and also the most thoughtful product teams out there. And so I am really excited to have you on here and learn from what you've learned over the years. My first question is completely unrelated. I have to ask. Your last name's Shackleton. Any relation to a certain very famous Antarctic explorer?

**Lane Shackleton** (00:04:36):
Yeah. It's probably distant at best. I wish it was close. I wish I could claim it was my father or grandfather. But I definitely grew up with those stories and reading a lot about him as a kid. In high school we read Endurance, which is a great book if you haven't read it. It's an amazing story. Very inspiring how he put people first and brought back all of his men from this journey to the South Pole. So have taken a lot of lessons from that, but that's as close as I can come to the greatness of Ernest Shackleton.

**Lenny** (00:05:09):
Okay. So there's a connection. When I think of Shackleton, I also think of the ad that he ran for recruiting people to join his journey. Low chance of survival, incredibly hard, chance for glory if you succeed, something like that.

**Lane Shackleton** (00:05:23):
It's a wonderful ad. I think I had a mug of that when I was a kid. Yeah.

**Lenny** (00:05:28):
Amazing. Okay. So on that same topic, I noticed maybe your first job was a mountain guide in Alaska. Was that inspired by this legacy? And also why did you decide not to pursue that and get into product management? Completely different life.

**Lane Shackleton** (00:05:42):
Yeah. Yeah. Very, very different. Very different time. Didn't have kids back then. I think I was convinced at the time I wanted a career outside. Just loved spending time in the mountains and climbing, things like that. To be honest, I wasn't the best guide. There were a lot of amazing guides out there that just had ... They were almost invincible in terms of their ability to climb for 20, 30 hours. But I learned a lot from the experience and maybe the quick story on why I stopped guiding. I was on what is a dream trip for mountain guides, which is we were flown to a remote portion of southeast Alaska. It's an hour long flight. Mountain called Mount Fairweather. Beautiful 15,000 foot peak. And as a part of climbing on glaciers one of the things that you do for context is you're roped to another person. And the reason that you do that is because if someone falls in a crevasse, you want to be able to stop them or pull them out.

**Lane Shackleton** (00:06:48):
So I was roped to a very nice client that I was guiding and he fell pretty close to the top on our way down. And luckily we were able to self-arrest and arrest that fall. But I spent probably the next six hours walking down that mountain thinking the same thing over and over again, which is I really don't want to die roped to someone that I barely know and don't trust or love. So that was the last season that I guided. But tons of great memories and learnings and I think it impacted my life in a pretty significant way.

**Lenny** (00:07:29):
Damn. Software much lower stakes. I guess just while we're on this topic, is there any parallels or big lesson you learned from that experience that you bring to product?

**Lane Shackleton** (00:07:37):
One is just preparation. I think when you go climbing or when you guide climbing, you spend months and months preparing for usually a few days of climbing. So there's that kind of preparation. There's also just a million checklists. So before you go on an expedition, you may check a checklist of all your equipment, stuff like that a dozen times or more. So you ensure redundancy across all your systems. So that was definitely a parallel. The other thing I think about a lot is just how to stay calm in challenging or scary scenarios. We had another instance where I had a client pull a big chunk of rock off and break their feet and I was the junior guide on that particular instance and the more senior guide looked at me, looked at the situation and was like, "Okay, we're getting this guy out of here right now." Put him on his back and we basically took turns carrying him out for a couple miles I'll just never forget instances like that where the clarity of stay calm, assess the situation, prioritize, take action. There's a mini version of that when you're building software, I think. So experiences like that, I think, even though I only did it for a handful of summers, were pretty profound.

**Lenny** (00:09:06):
Yeah. What a very different life that life path would've been.

**Lane Shackleton** (00:09:11):
Pre kids. Yeah.

**Lenny** (00:09:12):
Oh, man. So you mentioned your writing, you mentioned that this is something you want to write about. Shifting to the core topic of our chat, it's very clear that you spent a lot of time studying how great product managers operate and how great product teams operate. You've been doing a bunch of writing on the principles of great product management and also the rituals of great teams. And so I want to spend a bunch of time trying to extract as much as I can from your learning so that listeners can learn. Essentially what are principles of great product managers, what are rituals of great teams and generally how do the best teams operate? And my first question is just why is this something that you started doing? What pulled you into spending so much time and effort trying to understand how the best teams and people operate?

**Lane Shackleton** (00:09:53):
Yeah. Yeah. I've been asking myself that question a little bit lately. There's a few reasons. One reason is I just found myself giving a similar set of advice in one on ones. And so I think anytime you find as a leader yourself repeating the same lessons, it should be a good flag to say like, oh, I should probably scale this in some way. And as you know, as soon as you write something down, you have to clarify your own thinking and so it becomes very useful for that. And I don't think I quite expected how useful it would be in that sense. Writing something down and then putting it out there, you start to get feedback back of where you might've been right or where you might not be right. And so for me it's been a good learning experience there as well. I think the second reason is I've always been pretty frustrated with career ladders. Most companies have career ladders with 10 or 15 levels and as soon as they hit some scale levels, there's levels between levels and I feel like I looked at the one at Google and you needed a PhD to decipher it and interpret how to operate within it.

**Lane Shackleton** (00:11:11):
And so that's one piece of the construct. If you think more broadly though, they aren't consistent across companies, so now you're in a situation where you're in your version of the rat race. And so I found that I basically wanted to have a broader set of principles that transcended level. So things that could be true when you are an ICPM starting your career and things that can also be true when you're the head of product or running a product team or things like that. That's one. I won't rant further on that but I think that's one piece of it.

**Lane Shackleton** (00:11:49):
And then I think the last reason I'll mention is I was pretty inspired by a talk that is by this guy named Brett Victor, who's like a prototyper thinker. May have heard of his work. He has this talk called Inventing on Principle. And in the early days of Coda, one of our first designers, this guy Jeremy Britten, showed this talk to the company and my mind was blown. And I think it was one of those examples of someone developing a clear view of what principles they should operate with and then following that principle. And it was just a meta example of how important it is and how impactful it can be when you decide on a principle and then follow it. And so ever since then I've been thinking what are my principles as it pertains to building software and other things. So those are the three reasons that led me to start writing these things down.

**Lenny** (00:12:49):
Amazing. We're going to find that talk and link to it in the show notes. I want to ask about what principles you've come to, but I also want to understand how you actually ended up doing ladders and performance review stuff at Coda. Would it be better to talk about that later after we go through some of these things or is there something you want to share first of just how you think about it at Coda?

**Lane Shackleton** (00:13:06):
When we were doing career ladders, first of all, we put it off for quite a bit of time and that was based on the advice of a lot of other leaders that said as soon as you introduce this, then the incentives flip from being company focused to being individual focused. So I think we delayed it for a good bit of time. There came a time where we decided, "Hey look, we really do need to provide better guidance here about what it means to grow and what it means to be great." And so about the same time we were doing the levels thing I started writing down some of the principles that I've been publishing. One of the things that I think about a lot when talking about levels is just how to keep everyone oriented toward their team and their company. And I think that we've done a really good job of that over the years. So levels aren't by any means at the forefront of any company discussion. In fact, we don't use titles that much.

**Lenny** (00:14:11):
You said that it's not specific to role. Do you mean the same leveling attributes are the same from design and product and engineering?

**Lane Shackleton** (00:14:19):
We basically have five levels and we call them role stages and they go from apprentice to principal. So apprentice is ... Rope analogy here is learns about rope. Practitioner is can tie basic knots, shown complex knots. Given a problem, they can do it. Career is you can calculate rope strength. You know a lot about knots. Principal is basically invented nylon. So the bar is really, really high for principal in these levels and I think that that's appropriate. It should be aspirational that the bar is exceptionally high at the highest level of our role stages. I find it's a pretty good process to draw maybe a little bit of contrast with other companies. I think most other companies, especially large companies have 10 to 15 levels. I think we've made a really conscious choice to have only five. I think the other bit of contrast I would draw is basically role stages are not visible across the whole company. We're not showing levels of any individual PM or designer, and that's partially because we just don't want to put a big focus on it. And then probably the biggest difference is we have a centralized compensation committee and that's who decides compensation and so it's not the manager that drives your compensation. So those are some differences.

**Lenny** (00:15:52):
Super cool. I've never seen it done this way before. I think it's an awesome example of first principles thinking, which I see a lot come out from your product team. And then just to make sure I heard you right, these five stages are roughly the same across role, so designers have the same five and they're described similarly.

**Lane Shackleton** (00:16:08):
That's right. They're described similarly at a high level, but then the specifics if you get into it are a little bit different.

**Lenny** (00:16:15):
Okay. I'm going to ask about what the principles are, or a few of them that you can share. But one other very tactical question. At what size of product teams, say just PMs, did you start to develop this framework?

**Lane Shackleton** (00:16:26):
We were probably at 20-ish PMs and designers when we did that.

**Lenny** (00:16:31):
Awesome. Okay. So let me just ask, what are some of these principles you've narrowed it on as principles of great product managers?

**Lane Shackleton** (00:16:38):
Maybe it's helpful to start with a little higher level context on the unifying thesis. I think the unifying thesis is the core job of a product person in general is to turn ambiguity into clarity. And if you think about the job of a product leader or a product manager, everything is ambiguous all the time. It's like what's my role on this team? What problem are we solving? Who's the target customer? What prototype is going to solve this particular problem? So it's literally everything. And so if you're going to do the job well, you really need to get good at spotting ambiguity and turning it into clarity. And so the obvious question that follows from that is okay, great, that sounds like a great Hallmark card, but how do you actually do that? And so I think the principles that I've been writing down are very personal. They're my take on how to do this.

**Lane Shackleton** (00:17:41):
So the first one that I wrote about was systems not goals. And one of the ways that I started this post ... I'm a big fan of getting inspiration from outside of tech and so one of the stories that I tell is basically the story of Jerry Seinfeld. If you haven't seen the documentary Comedian, it's amazing, it's definitely worth watching. But the story goes, he's done Seinfeld the show and he's got all this material from the last 15 years and he comes in one day and he says, "Look, I'm going to throw away all my material and I'm going to start fresh." And this is unheard of in comedy for someone to just throw away all their old material and start fresh. And so the question is what does he do next? And the thing that he does is he sets a goal, which is basically to build up to an hour of material again.

**Lane Shackleton** (00:18:34):
But the goal isn't that important. What's important here is the system. So the system that he uses is he writes for an hour every morning, doesn't write for more if he doesn't want to, and then he goes and performs at night. And so when you rinse and repeat that system, do it hundreds of times, that's how he builds up from five minutes to 15 minutes to 30 minutes of material. And so I think that I take a lot of inspiration from that and I think product people can generally, which is instead of being obsessed with the goal, be obsessed with the system that gets you there. And so the phrase I sometimes use is goals with good intentions don't work. I really need to give a common example. A really common example is teams that are trying to learn about customers or do research. And one thing I've observed is a team may have a goal like an OKR of talking to 10 customers this quarter and they may or may not hit that OKR. And then if you watch closely, the next quarter, they may not have a goal of talking to customers anymore. And so their learning is going up and down.

**Lane Shackleton** (00:19:49):
And to draw a contrast, that's just really different than a team that has some default on system for talking to customers. Every few times a week they're talking to customers for whatever reason. And the impact of that is really hard to see until you understand that the latter team tends to have really good product instincts or really good customer instincts. It's because they've just had this default on mindset of talking to customers. And in the early days of Coda, we actually did something similar. We had a time allotted on Fridays and it was basically, it was on the calendar a customer or a potential customer was coming in and so you knew that it was going to happen and you had to have something to show. And so sometimes we'd be scrambling the three hours before to have a prototype ready for a customer. Sometimes we would've had something that we've been baking for a while. But the point is that it was default on. And so the way that we developed good customer instincts was not the goal, it was really just the system behind it. So that's one that I'm passionate about and I think it also translates into a lot of the rituals that we talk a lot about.

**Lenny** (00:21:06):
There's so many directions I can go with this. I really like this one. It reminds me of something I did at Airbnb where we had a lunch with a host every Friday with the team and we had a community person find someone in San Francisco that's a host. And there's no agenda, it's just let's have lunch and meet the team. Curious what you're wondering.

**Lane Shackleton** (00:21:22):
Exactly.

**Lenny** (00:21:22):
And Airbnb hosts are always so nice and has such a pleasant experience. Also makes me think about this book, The Score Takes Care of Itself.

**Lane Shackleton** (00:21:30):
Yep.

**Lenny** (00:21:31):
Have you read that?

**Lane Shackleton** (00:21:31):
Yeah.

**Lenny** (00:21:31):
Where it's just do the fundamentals and you'll win?

**Lane Shackleton** (00:21:34):
Totally.

**Lenny** (00:21:34):
The other thing it reminds me of is I have this quote hanging in my office here. I Believe it's from the Rick Rubin book. And the quote is, "The object isn't to make art, it's to be in that wonderful state which makes art inevitable."

**Lane Shackleton** (00:21:48):
I love it.

**Lenny** (00:21:49):
I feel like you just changed art-

**Lane Shackleton** (00:21:51):
Yeah. Rick Rubin's amazing.

**Lenny** (00:21:52):
Oh my god, it's so good. Just every section is this quotable thing I want ... I need to hold onto this thing.

**Lane Shackleton** (00:21:58):
Yeah. He's got a great thing on listening. I really admire what he says about listening and I think that a lot of PMs could take that lesson, which is-

**Lenny** (00:22:10):
Yeah. What is that lesson?

**Lane Shackleton** (00:22:11):
The way he talks about it is essentially you want to listen and absorb every fragment of what that person is saying, including their body language and everything else, and try to turn off the side which is crafting your response or figuring out what you're going to say next or what the problem with their argument is or whatever. It's quite hard to do. Because your default mode is always the next step of the conversation. But I think if you can really challenge yourself, like he says, to pause and really try to internalize holistically what that person's saying, it's pretty powerful.

**Lenny** (00:22:55):
I was actually just reading that chapter and the next chapter is about this idea of the beginner's mind. I don't know if you remember that. I feel like people get sniped by Rick Rubin stuff. But anyway, I'm going to go down this thread. He talks about how AlphaZero or AlphaGo, the first AI thing that beat humans at Go and how there was this move it made, move 37 in the game that was just like ... The person the AI was playing walked out of the room. He's like, "I don't even know what just happened. This is out of anything I've ever imagined." And it won. And the lesson there it was trained not on what we've learned, but it trained itself and figured things out from first principles and then came up with this thing we've never even comprehended. And so it's a really good example of the power of coming from a beginner's mind and not being influenced by what's already been done.

**Lane Shackleton** (00:23:41):
Yeah. We have a walkthrough ritual that we do.

**Lenny** (00:23:45):
Tell me more.

**Lane Shackleton** (00:23:46):
The prompt is essentially put yourself in the shoes of someone who knows nothing about this topic whatsoever and have beginner's mind and then walk through with five or 10 people watching you and let's fix all the problems that we see.

**Lenny** (00:24:05):
Okay. I want to talk about rituals. We're getting ahead of ourselves a little bit. Is there any other principles that you can share either just on a high level or in depth that you've come across? And I know people can go to your Substack and read this. And by the way, what's your Substack URL for people that want to check it out?

**Lane Shackleton** (00:24:21):
Just lane.substack.com.

**Lenny** (00:24:24):
Sweet. We'll definitely link into it. Yeah. Any other principles?

**Lane Shackleton** (00:24:28):
I think the other one is cathedrals, not bricks, and then the other one is proactive, not reactive. Cathedrals, not bricks I think is a classic one. I think I had a moment of realization and talking to Shishir in a one-on-one when I was at YouTube bemoaning the fact that my team wasn't performing to the potential that I thought they had. And he had a very pointed and unexpected question, which is like, "Do they know their cathedral? Do they have a cathedral?" And I'm sitting there like, "Man, what are you talking about? We're talking about performing as a team and you're asking me about cathedrals." And then he explained the cathedral story, which I can talk about. In that-

**Lenny** (00:25:11):
What's the cathedral story?

**Lane Shackleton** (00:25:11):
It was quite clarifying.

**Lenny** (00:25:13):
Yeah. Do share.

**Lane Shackleton** (00:25:14):
Yeah. The cathedral story is basically you walk up to three people, they're laying bricks. You ask the first person, "What are you doing?" They say, "Well, I take the bricks from over here and I put them on that sack over there." You ask the second person, "What are you doing?" They say, "Well, I take this little cement and I put it on top of the brick that that person lays." You ask the third person, "What are you doing?" And they say, "Well, we're building a cathedral." And the core insight here is that you want your teams to feel like they're building a cathedral and not laying bricks. And I think it's really, really easy to do when PMs are really busy on a day-to-day to just be one task after the other, really execution oriented and maybe not take the time to help the team take a broader frame, open the aperture a little bit and have a view of what the cathedral is. And I think we've learned many times that one unexpected bit of this is that everybody needs to see a different facet of the cathedral.

**Lane Shackleton** (00:26:22):
So very often ... And I've made this mistake before plenty of times. Very often people will do a great writeup on vision or strategy or whatever it is and the result is people can't quite see their version of what this broader arc is or this broader cathedral is. And so one of the things that we have tried to do when we go through big planning cycles is show all the different sides of this. So instead of just having a writeup, we may have a writeup, we may couple that with a metric, we may couple that with directional mocks and what the billboard might look like or how our homepage may change. And really what we're trying to do is take the mystery out of the set of broader constraints or where we're headed. I think great product teams and great PM leaders tend to always orient their teams towards a broader cathedral as opposed to laying bricks.

**Lenny** (00:27:26):
Such a beautiful metaphor. Reminds me of this other quote I just looked up while you're chatting. "If you want to build a ship, don't drum up the men to gather wood, divide the work and give orders. Instead teach them to yearn for the vast and endless sea."

**Lane Shackleton** (00:27:39):
Classic. Classic. It's Antoine.

**Lenny** (00:27:42):
That is right. Antoine de St. Exupery. Okay. Something I was curious about as you were chatting also is for folks that want to develop their own principles and define how they want to think about products, is there anything you found to be useful in helping emerge these into principles that you can come to? Is it just sitting around thinking? Is there anything else you've done that has helped you define these things?

**Lane Shackleton** (00:28:06):
Probably two things. One is reading really broadly. So I think not just reading PM style literature. Like I said, I tend to get a lot of inspiration from outside of tech. I think that's one thing. I think the other thing is insofar as you get the opportunity to mentor other people, think about what you're saying to these people. Think about, okay, this person came to me with this challenge. What was my response? Why was that my response? Am I giving that response a lot of times? Okay, maybe this is a more deeply held belief. So I think noticing those instances was helpful for me.

**Lenny** (00:28:46):
Are there any books or topics or areas that you found most inspirational when you talk about reading and studying other non-product tech?

**Lane Shackleton** (00:28:53):
I mean definitely sports. I would say sports is really interesting to me. Team sports. I've always been a huge fan of everything team sports. Storytelling. Go look at some of the best storytellers in the world and they're actually out there on a stage telling stories. There's a book called Storyworthy that I really like.

**Lenny** (00:29:15):
I was just going to mention that. That book is so good. Somebody mentioned this on the podcast and I read it. It's the most useful practical book for how to tell stories.

**Lane Shackleton** (00:29:23):
It's so good. The insight is amazing. Just in case your listeners are interested, the insight is basically the nugget of a great story is five seconds of transformation. So if you just orient everything else around that moment of transformation, then you end up usually telling a reasonably good story. I had a conversation with the author right after I read that book because I was just totally enamored with it. And then we ended up bringing him into Coda and he gave a great talk. So yeah, big plug for Matthew Dicks.

**Lenny** (00:29:58):
The other thing that stuck with me also from that same ... We're just going on all kinds of tangents. From that same insight is, and I watch movies completely differently now, where basically the characters you meet at the beginning of the story, they're going to be completely opposite at the end of the story because of this transformation that takes place. So I'm watching movies with my wife now, I'm like, "Okay, she's very shy right now. She's going to be very extroverted by the end of this movie." Or, "They love each other. Oh, they're going to have a lot of problems." That's so interesting. Oh, that's such a good idea. Okay, I'm going to get this guy on hopefully. And he's a Moth champion basically.

**Lane Shackleton** (00:30:30):
Yeah. I would say as maybe a principal version of this, the way that you learn or the way that everyone including me learns new things is you go seek out the best at that given craft. So in this case, you go to the Moth StorySLAM you see some really good stories. If you ever watch these on YouTube. And then you just unpack what they're doing and how they're doing it. And then obviously I think the other way to learn quickly is to throw yourself in the deep end. So insofar as you can put yourself in situations that are uncomfortable or force you to do things like tell a story or force you to come up with a clear strategy, you should always opt into those, especially early in your career.

**Lenny** (00:31:18):
The first thing you said, that's basically the whole premise of this podcast. Find the best at all these things and learn from them, extract and share.

**Lane Shackleton** (00:31:24):
And the world is much better for it. This podcast is an amazing resource.

**Lenny** (00:31:29):
Thanks man.

**Lane Shackleton** (00:31:29):
You've done something very special.

**Lenny** (00:31:31):
I appreciate it. This podcast episode is already very special. The point you just made reminds me of something that I heard you talk about, which is this oh shit moment. I don't know if it's related to what you shared of just giving people a sense of whether they're making progress in their career. Can you talk about that?

**Lane Shackleton** (00:31:49):
Sure. Yeah. I think I picked this up originally from Seth Godin, the author, and it just totally stuck with me. The basic thesis is that moments that stretch you or moments that you feel uncomfortable in or you find yourself saying, "Oh shit, I shouldn't be here," or, "I'm under qualified to be here," those are the moments you should be seeking out. Those are the moments that stretch you and give you a new foundation. And so I have found that they turn out to be a pretty good way to calibrate whether someone is growing in their career. So oftentimes you'll hear a career question like, "Hey, do you feel like you're growing in your role?" And that's a very ambiguous in my opinion way to ask this question. And a much sharper way is like, "Hey, how many, oh shit moments have you had in the last six months, year, two years, and what are they?" I think if you ask yourself that question and the answer is, "It's been a really long time since I've been stretched in some meaningful way or I've felt like I'm under qualified to be there," then it may be worth digging into.

**Lenny** (00:33:04):
That is so good. Making me think about this podcast where I never wanted to do podcasts. I'm like I'm not a podcast person. I just want to sit there and type out newsletters. How cool is that? And I'm like, no, I got to do it because it's hard. And I'm glad I did it. It also reminds me of this quote that I love that I always think back to. "The cave you fear contains the treasure you seek."

**Lane Shackleton** (00:33:26):
Nice. That reminds me of ... Have you read the book The Obstacle is the Way?

**Lenny** (00:33:31):
No. Say More.

**Lane Shackleton** (00:33:33):
It's a great book by Ryan Holiday. And the core thesis is ... It's a bit about stoicism. But the core idea is essentially instead of running away from obstacles, you should be running toward them and that's where you experience either the most growth or the most profound moments of your life. He gives a lot of examples in that book of people throughout history who made that choice. And I think he's also given that talk to hundreds of sports teams. It's a good book. Worth reading.

**Lenny** (00:34:08):
It's so hard. It's so hard to do hard things, man. So we've been talking about principles of great product managers. You also spent a lot of time looking at the rituals of great product teams. And I know you're working on this handbook that I'm excited to learn more about. Can you just talk about ... I guess one, where this idea came from of studying rituals of great teams and also just how do you actually go about learning about these rituals? I know you have this really interesting process.

**Lane Shackleton** (00:34:31):
Yeah. In general, I'm a big believer in good design and good product starts with noticing. Tony Fadell has a great talk on this. So I think a bunch of us that are really obsessed with rituals, we just honestly try to be great at noticing. So see something happening with a customer, ask a few questions, get introduced to their team, hear about something interesting from a non-customer, ask for an intro, end up just probing and asking a lot of questions. And then in many cases nowadays with Coda, we're building new rituals alongside people. So someone has a creative idea about how to implement something and we're like partners or collaborators with them on that, which is honestly incredibly fun to just see people's creativity expressed in a tool and then by extension the social construct that they exist in. So that's a little bit about how we got started in that whole process. And then of course Shishir is writing a book called Rituals of Great Teams so we've been cataloging those. We've been hosting a bunch of rituals dinners where we basically get people together for a dinner and we usually have three or four presenters at those dinners. It's just a great chance to learn and think about how the engine runs in a lot of these companies.

**Lenny** (00:36:03):
What are some rituals that you've learned from these dinners and these and this research you've done that have really stuck with you?

**Lane Shackleton** (00:36:10):
**Lane Shackleton** (00:36:27):
We've all probably been in the situation where someone gives you feedback and you either under interpret it or over interpret it. And as an organization, I think the core principle here is like you want to be calibrated on how much to pay attention to a bit of feedback. And so he outlines four flash tags. He presented this in one of our dinners. And I absolutely love the phrasing of these as someone who's given a lot of feedback on product stuff in their career. So it ranges from ... I think it's FYI, suggestion, recommendation, plea. So FYI is basically like I had a thought, take it or leave it kind of thing. Suggestion is ... And he uses this hill dying metaphor. So is this a hill I'm going to die on? And FYI is there's no hill in sight. Suggestion is there's a hill. I'm not going to die on it but this is what I would do if I were you. You can take it or leave it. Recommendation is I'm climbing the hill. I'm not going to die here, but I've thought about this a lot, so don't ignore this.

**Lane Shackleton** (00:37:41):
And then the fourth one, plea, is hopefully rarely used in the organization. It's like, I don't like dying on hills. That's not what we do here. But this is a pretty good candidate for it. You should really trust me. And so we have ended up using that. I was actually just at an offsite and someone gave a lightning talk to our team on how valuable this has been just to calibrate, hey, we got 100 pieces of feedback and there's one plea. Okay, let's spend our time on that. Or there's a whole bunch of FYIs. I think we're fine. Let's keep going. No worries.

**Lenny** (00:38:20):
That's amazing. It's interesting none of them are just do it this way. I imagine that's very intentional.

**Lane Shackleton** (00:38:25):
Yeah. Honestly it's a sign of ... In Dharmesh's case, I don't know him super well, but it's a sign of a really experienced leader to know that scale. But every time I look at the scale and I'm weighing where I am between suggestion or recommendation, I have to giggle to myself.

**Lenny** (00:38:45):
And how do you actually use it? In the feedback you put a hashtag plea kind of thing?

**Lane Shackleton** (00:38:51):
The way gets used in code docs and the way I think other companies have made it a ritual is you'll have a feedback table and you'll write your feedback and then there'll just be a little select list and you can select between those four. And usually what people do is they include the description so you can as you're choosing it, think do I really feel that strongly about this? And honestly, it's good hygiene. Otherwise, every bit of feedback is taken the same. Which just fundamentally the impact of that is it slows everything down because now you're looking at a list of 100 pieces of feedback and you're going like, "Oh man, we got to address all this feedback." Whereas as soon as you distinguish between what's most important, it's much easier to sort through that.

**Lenny** (00:39:46):
What about if it's in person? Do you say this is a plea or this is a FYI?

**Lane Shackleton** (00:39:50):
Oh, I've definitely heard that in many meetings. Are you making a recommendation or are you making a plea?

**Lenny** (00:39:57):
Amazing.

**Lane Shackleton** (00:39:58):
And making the person think through that choice I think is just a very helpful shared language.

**Lenny** (00:40:04):
I imagine one of the other benefits of this is I think most leaders that rise up the ranks eventually realize anything they say in a meeting is going to be taken really seriously and the team's going to rush back and be like, "Oh, Lane told us to change this thing." I imagine it helps you just make it clear. No, you don't need to actually change this. It's just my thoughts.

**Lane Shackleton** (00:40:21):
Yeah. Exactly. Yeah.

**Lenny** (00:40:22):
**Lane Shackleton** (00:42:21):
I guess one that I get asked about a lot on our team is called Catalyst. And I guess maybe to set some context on this one, in most product teams, the review forum is just a really important part of the product development process. And the core insight for most review forums or product reviews or decision forums is that they generally suffer from two problems that are hard to spot unless you've sat through hundreds of them. The first is they have standing attendees, and the second is they're normally single-threaded, meaning they're normally one topic at a time. So maybe I'll talk about both of those because I think they're not exactly intuitive. So when you think about what happens with a standing set of attendees, you either have the situation where you have too many people in the meeting or you have not enough people in the meeting, and both of those can cause problems.

**Lane Shackleton** (00:43:25):
So if you've ever been in a meeting, I certainly have, where it's like, "Hey, do we have the salesperson who knows most about this or do we have the engineer who's actually implementing this here? Oh, great. They're not here? They're not a part of the standing set of attendees?" You either have to reschedule the meeting or worse, you just do the discussion without the person who's most knowledgeable, which seems crazy in retrospect. The second problem is single-threaded. So one topic at a time. So if you think about if a product development process is somewhat of a chaotic assembly line for a second, your review or your decision forum ends up being a big time bottleneck in many cases. And obviously you want to be in a situation where product people have a lot of autonomy and they can make most of the decisions themselves. And I'm a big believer in decentralized leadership and all of that, but there are things that cut across the company that need to get reviewed by a broader set of stakeholders.

**Lane Shackleton** (00:44:29):
And so what happens when those things are single threaded is either the meeting is really long, so it's a three-hour review meeting once a week, and by the end everyone is about to fall asleep, or it's really short and it's really hard to get on the calendar. You're like, "Oh, can we get on the calendar in two weeks?" And the downside of the not being able to get on the calendar is that now you've just slowed down the whole velocity of the company because the throughput of your review meeting is really slow. So we built Catalyst to really solve those two problems. And so the way it works is it's essentially three one hour blocks throughout the week, and the assumption is that the whole company is free. So you can get anyone in the company for those three hours. And each topic has essentially four roles. Driver, maker, braintrust, and interested. It's a very transparent system.

**Lane Shackleton** (00:45:28):
So a salesperson can say, "Oh, I'm interested in this product development review. I'm just going to mark myself as interested." And then the driver is the person who's actually going to drive the meeting, drive the decision, drive the outcome, things like that. And basically, this is all centralized in one doc. And what happens is the day before, that hold that's on calendar gets removed, and then you have specific topics that get added. So there may be three topics going all at the same time because they don't have overlapping attendees. And the impact of this, I think if you really watch it in progress is huge. You basically have many topics running all at the same time, so the throughput is much better and you have the right attendees every single time, and you have a clear set of drivers and roles in these meetings. So that means that we can review work much, much faster with the right people, and ideally that results in more value to our customers, more things getting shipped, just a higher velocity organization. So that's one that we get asked about a lot. And actually a couple of weeks ago, we spent a while remaking the template for that one.

**Lenny** (00:46:45):
I love that ritual. You actually wrote even in more depth in the post that we worked together on how Coda builds product, which we'll link to if folks want to try this out and you link to actual templates people can actually use it their companies. When someone's listening to this and they're like, "Oh, wow, this is extremely cool," how easy is it do you find for people to take a ritual from a company and implement it? How much is cultural and it's hard to transplant, or do you find people can take this Catalyst idea plug and play at a lot of companies?

**Lane Shackleton** (00:47:15):
Yeah. I think it depends a lot on what your role in the company is. Maybe to say the extremes for a second, if you're a brand new PM to an organization, you probably shouldn't go try to remake the whole product review cycle that the head of product is really passionate about and has crafted. But you can probably take a decision template or some interesting ritual that has facilitated a team in the past and use it with your team. Another one of my favorites there is a hundred dollar voting. We use that a lot in the context of planning, and I find that creative rituals like that are easy to pick up for teams because oftentimes it's like, okay ... And maybe I'll describe the ritual real quick.

**Lenny** (00:48:01):
Yeah. I was going to ask.

**Lane Shackleton** (00:48:02):
The ritual is essentially you can take any set of problems or solutions or themes or whatever you want to get people's input on, and you put those into a table and then people can basically vote with their dollars and usually you allocate $100. And so people will go through and say, "Oh, I want to allocate $10 to this and $20 to this and $50 to this because I think it's really important." And I have found that especially in planning processes, little rituals like this are great at getting the elephant in the room out. So it's like, "Oh wow, we have a huge spread on this one particular problem. You think it's a huge problem. I don't think it's a problem at all. Let's talk about it." Going back to the thesis of turning ambiguity into clarity, a lot of this is like we're trying to get the ambiguous stuff out there so that we can make it more clear.

**Lane Shackleton** (00:49:03):
And so I use that as an example because you can be a brand new PM, run a brainstorm, run a planning session like that, and you're probably going to get great feedback. People are probably going to go, "This is cool. I've never done this before." Now to go to the other side of the spectrum, we help a lot of companies that want to remake a whole process. They want to remake a review system like Catalyst or they want to remake their decision rituals. And so in that sense, we're usually talking to a head of product or director of product or VP of product and someone who tends to have a lot more agency over the way that the team works.

**Lenny** (00:49:48):
Coda is interesting in that it feels like you have pretty stable processes for planning and reviews. I find most companies just every six months rethink a lot of these things. I guess that's probably a sign that you found something that's really good and works and you don't have to redo it. How much are you radically changing the way you operate versus working in similar ways? How do you think about that percentage wise?

**Lane Shackleton** (00:50:11):
People are always coming up with new creative ways to make their teams run better, make decisions go smoother. And we're continuously adopting those, but there's definitely a backbone of the system. The backbone of the system is Catalyst and tag-ups and the concept called Bullpen. And then there'll be a lot of iteration on top of that. And even those systems went through a lot of iteration. I talked about how the calendar hold got removed and then individual topics got added. That took us launching automations and the ability to add things to calendar in order for that whole process to really work. So in the years prior to us launching that, we did it very manually. So I think there's still a lot of creativity that I see every day.

**Lane Shackleton** (00:51:06):
So I'll give one quick example. One of our PM leads on core product, this guy Nathan, he basically saw that a lot of decisions had a lot of different stakeholders because he's in the core product. And now he's leading the core product team so he's trying to figure out what guidance do I give to each of these PMs on who to involve in these decisions? Because every one of these with core product feels like they impact everybody. And so a very simple thing that he did probably in the last six months was he had a table of all the upcoming decisions and then at a tag-up ... Which I can explain if you want. But basically with a small set of stakeholders, he had all the upcoming decisions and then he let people hit a little reaction and say, "Oh, I don't need to be involved. Just notify me of the decision after." Or, "Hey, I have some opinions, but you can keep going." Or, "No, I really want to be heavily involved in this decision."

**Lane Shackleton** (00:52:10):
And it was such a pro move. It was such a, I've been through a million of these. I don't want to treat every one of them the same because if I do, it's going to slow down the velocity of this whole organization. And so instead, the majority of those, Shishir or I or Oliver, the head of engineering will say, "I may have some opinions, but keep going." That's often the default. And then there are plenty where we say, "Just notify us of the decision after." And in doing that, Nathan can now give better guidance to the PMs on his team and say, "Hey, you don't really need to involve as wide a group as you think, so just keep going and check in later." So I think those types of little iterations are usually based on a really good insight.

**Lenny** (00:53:02):
It sounds like a dream come true for a platform team to reduce how many people have to be involved in all your planning and decision making. And that process in which you call it tag-up, maybe just briefly explain it and then I want to talk about this handbook you're working on, which is going to I think, cover a lot of these things.

**Lane Shackleton** (00:53:17):
Tag-up is based on this insight that a lot of work and project work tends to get discussed in one-on-ones. And actually it's really an anti-pattern. It's a pattern you should try to avoid. So if you're talking to your manager about product work, what's not happening in that moment is your eng lead and your design lead, they're not hearing that. And so you end up with this big game of telephone where you'll have a conversation with your manager in a one-on-one, they'll go back and translate to their engineering and design lead, and of course the fidelity of the game of telephone, something is lost in all of those transmissions. And so the core idea is have a group one-on-one with the key stakeholders. And so we have this concept of braintrust that's modeled off after Pixar's braintrust.

**Lane Shackleton** (00:54:11):
And so we'll have a tag-up with a small set of people from a given team, or sometimes we have larger groups, and then they meet with their braintrust and it's once a week. It's the same mindset of a one-on-one. It's their time. So anything that they need to unblock a decision or to make progress, they should use that time for. And they often start by reviewing OKRs and metrics and things like that. But then we generally get into a table of topics. Anyone can add a topic. Those topics are up voted, so people will react and then the table will sort itself. And then we'll say, "Okay, this is clearly the topic on people's mind." And that's a version of what we call Dory, which I can talk about. But essentially the principle is you should discuss that project work with the whole group there. With the whole triad there. And oftentimes with the sales person there and with the marketer there and with everybody else. So I found that that is just a really good practice to try to move a lot of that work out of one-on-ones and into a small group setting.

**Lenny** (00:55:26):
Awesome. Okay. So you're working on a handbook that's collecting a lot of these rituals. Talk about that and then when can people maybe look for it?

**Lane Shackleton** (00:55:36):
One of the realizations I had the other day, probably a month or two ago when we started working on this thing, was I was talking to someone about Catalyst and a couple other concepts, and they were like, "I get it. I'm sold. I want to implement some of these things. Where do I look?" And so I found myself sending them a bunch of links to individual templates. So that cued us into the fact that we needed to have a better core handbook for teams that wanted to adopt some of these rituals and also learn from all the rituals that we have learned from and feel very fortunate to have partnered with so many customers on. And so what we did was started writing this handbook, and it's going to come out hopefully by the time this recording is done. And in it, we'll talk about everything from rituals like Catalyst to decision rituals to a lot of planning and strategy and roadmaps, that kind of stuff. And trying to pull out the most interesting patterns and also give people a pretty practical view of how to implement these things. I think that's what has been lacking sometimes.

**Lenny** (00:56:50):
Amazing. We'll definitely link to that. Hopefully it's live by the time goes out. We'll make it happen. I know also you said Shishir's working on a book that's related and basically rituals of great teams and Shishir was on the podcast and he talked about Dory, so we don't have to get into that. If people want to learn about Dory, they can watch that episode. It was one of the earliest episodes actually. One of the most popular.

**Lane Shackleton** (00:57:09):
Yeah. I remember that.

**Lenny** (00:57:11):
Okay. Cool. I have a bunch of random questions now. I'm just going to go in a few different directions. One is, you wrote this post that you call Learn by Making, Not Talking. Is that another principle by the way? Is that amongst your many principles?

**Lane Shackleton** (00:57:11):
Yes.

**Lenny** (00:57:24):
Okay. Awesome. So in that post, which we'll link to, you share this story of how you and the YouTube team came up with skippable ads, which I didn't realize it was such a controversial ... But in thinking about it, obviously letting people skip ads, I could see why people were not excited about that. Could you just tell that story? And basically it's like the story of how skippable ads on YouTube came about?

**Lane Shackleton** (00:57:46):
Yeah. So I moved over to YouTube shortly after the acquisition. It was an amazing tight-knit team. It definitely felt like the Wild West. We were getting sued by Viacom for a billion dollars when that was a lot of money. No advertiser wanted to talk to us. It was essentially viewed as a site of cat videos and dogs on skateboards and things like that. And then I guess the other context, the sales team was very nascent and all they wanted to sell was the homepage and for good reason. That was where you made your money as a salesperson. And so I had just been sponsored by Salar and Shishir to become a PM. It's a longer story that I'll leave out for now and we can go into. But on day one of being a PM, Shishir's like, "Great. You're the new guy. You get the project that nobody else wants and that's called skippable ads. And we've got this crazy idea that we can align the incentives of advertisers and viewers and creatives in this really clever way by putting a skip button on the ad and then charging people per views." And the latter part we hadn't quite cemented yet, but it was part of the core idea.

**Lane Shackleton** (00:59:04):
And so the thing I write about in this post is as a new PM, this feels like a really consequential decision. It's like we've got this new product idea. Nobody really wants it. Advertisers don't want it. The sales team doesn't want it. And it's a very unproven thesis. And so the thing I write about is these are the types of things that you can debate for months or years. And I was sitting in a one-on-one with this guy named Phil Farhi who's an amazing product leader and was my boss at the time. And we're trying to figure out what to do and how to handle all the different dynamics. And he just stops and he's like, "You know what? Just test the extremes. Start the experiment tomorrow. We'll figure it out." Essentially.

**Lane Shackleton** (00:59:49):
And I think his point was like, look, we can debate this forever. So I would rather us see the upper and lower bounds of how good this could be or how bad this is going to be immediately. And so we launched a set of experiments. This guy Jamie Kerns who's still there. Tiny little skip button on one experiment, giant skip button that covered the entire player on the other side of the experiment. And within a few weeks, I think we had developed some conviction based on some very directional data that we were onto something. And so the lesson that I took, this is many years ago and I've seen this proven out hundreds of times since, is stop talking about it and go make something. Go run an experiment. Go make a prototype, go write a doc, go make a mock. Just don't talk about it.

**Lane Shackleton** (01:00:49):
And I found that also as a leader, people really follow that concept. And I also found that it transcends level. I am not talking just to ICPMs. I'm talking to heads of product and CPOs and CEOs to some degree. You should always be out there trying to learn by expressing your ideas and putting them out there. And that's much more valuable in many cases than pontificating about it or having endless circular discussions on it.

**Lenny** (01:01:23):
It makes me think a little bit about Twitter where they spent years just thinking about the edit button or all these different changes. They're so scared, they did so much research and then now they're changing things left and right. Everything's fine. Everyone's still using it. It shows you that you don't have to be so delicate.

**Lane Shackleton** (01:01:39):
Yes. It's almost never as bad as you think it's going to be. So yeah, it's just a question of how much better it can be oftentimes.

**Lenny** (01:01:46):
You mentioned in your early career ... We talked about your Alaska guide phase. Something else I saw is that you were on the AdWords approval team. You basically were reviewing ads people submitted to run on AdWords and that's how you started in tech. So I guess first of all, is that true? And then second of all, how did you graduate from that phase and become this Chief Product Officer of one of the fastest growing, most interesting companies in the world?

**Lane Shackleton** (01:02:13):
That was a really memorable time. There's an amazing cohort of people that started in tech. I think there was 200 or 300 of us at that time and then eventually thousands that started in Sheryl Sandberg's organization. I guess maybe some quick context. Before running ads on google.com at that time, you had to have them manually approved by a human before that was handled by machine learning and outsourced to other countries. And so there was this process where basically an ad would show up on your screen, you would mark it family safe, non-family safe, porn. And then based on that, it would either run or it wouldn't. And actually, funny enough, some of my most successful friends were terrible at the approval event. They failed the rote task of approving ads. They just couldn't handle it and they went on to be really, really successful.

**Lane Shackleton** (01:03:08):
So after working on ad approvals, at that time, I moved to chat support. It was basically when AdWords was launching chat support. I remember very fondly having two chats, chatting with two advertisers at once. Moved on to phone support. That was eight hours a day of talking to AdWords customers. Really a total rollercoaster ride. It was basically one minute you would pick up the phone and it would be someone from a Fortune 100 company trying to spend millions of dollars on AdWords and then the next minute you would be on the phone with a psychic or a taxi driver that was warring with their compatriots over some really specific keyword. I think there were two lessons that I would draw from this. One is I had a mentor at the time and his advice when I was starting my career was basically you have to get customer facing from the very beginning because you're going to end up serving a customer your whole career. Even when you're the CEO of a company, you're going to be serving a customer. So you better get really good at being in any customer scenario and being able to handle it. And so I think that that turned out to be insanely good advice. And if I think about a piece of advice that I give out to people who are early in their career, I've definitely recycled that advice.

**Lane Shackleton** (01:04:29):
I think the other thing that I took away from that experience was it's just a great lesson in when people don't actually care about your product. So in AdWord's case, people did not care about AdWords. You were the expert on it and you're trying to tell them about ad groups and how this ad format works and blah, blah. And most of the time people are like, "Dude, I'm a small business owner. I'm trying to get people to come to my auto mechanic store." Or, "I'm trying to get people to come to my taxi service," or whatever it was. I don't care. Basically the product had to get out of the way and really just drive impact for the customer. It was like they just want more phone calls or they want more people in the store. So those are I think two pieces that I think about from those days still.

**Lane Shackleton** (01:05:21):
And then I worked in a variety of other roles. I worked in a role called product specialist, which is an awesome role back when there were 15 product specialists at Google. For me, that was an amazing time because I was getting to sit on seven or eight different core product teams. And in my observation, these days, most PMs don't get to sit on other people's core teams. And so I had these three or four years of just ... I call it a masterclass in PMing because I was getting to watch what was working for some PMs and what wasn't working for other PMs and just taking notes behind the scenes. So that was a really influential role. And then went on to various PM roles at Google and YouTube.

**Lenny** (01:06:09):
Coming back to noticing. It comes up again and again in our chat. This is so interesting because it feels like you basically came from the mail room of tech to the top of the product field. And so I think there's a lot of inspiration people can take from this journey. One quick question is how long was that journey from not being a PM, from I guess being at a tech company to getting your first PM role? Just to give people a sense.

**Lane Shackleton** (01:06:33):
Let's see. I probably worked for at least four, five years before being able to move to PM and I think that was a slightly harrowing journey because at the time, you had to have a computer science degree.

**Lenny** (01:06:46):
At Google. Right. Cool. So I think that's one takeaway too is give it time. It's not going to happen. There's a lot of people that are just like, "I need to become a PM immediately."

**Lane Shackleton** (01:06:55):
Totally.

**Lenny** (01:06:56):
I think that's a good example of it's not going to happen overnight. Coming back to your two lessons, I think they're really interesting and I'm curious if there's anything else that comes to mind of what you found was essential to you succeeding in this path? So the first lesson you shared as being customer facing. And in this case being in retail as customer facing, is your advice get in a tech company and work on something customers use or is even working at Starbucks or Abercrombie, does that count?

**Lane Shackleton** (01:07:24):
Yeah. I think maybe to relate it to what you just said, if I were to give advice to someone who really aspires to be a PM or trying to get into PM, I think in many cases if you're in a customer facing role, you are the expert on the customer and that is really, really valuable in tech organizations. And oftentimes it's undervalued. And so I think people who want to move into PM roles who are not currently in PM roles can often lever that experience and that knowledge of the customer in ways that are pretty profound for the organization and pretty insightful for the organization if they really are creative about it. And then I think the other thing is, regardless of where you are in the organization, you're always serving a customer. You can't just talk to one big enterprise customer and you can't just talk to the smallest customer. You have to have a diverse and continuous stream of customer interactions in order to have good intuitions about what to do next. And your engineers aren't going to really trust you unless you have good intuitions about where the customer's headed and what they want and stuff like that. And so the stakes I think are pretty high. The good news is it's easier than ever with all these tools to really get into the mindset of a customer.

**Lenny** (01:08:47):
My lesson touches on something a previous guest talked about, Paige Costello, where she was often the youngest person in the room and built a lot of respect and people really trusted her over time. And her lesson was know thy customer. If you know the most about what they need, and you can show, here's what I've heard again and again and again, people will just like, "Oh Lane, tell us more." And they bring you into conversation because providing value, you're not just there sharing opinions. Everyone's got opinions.

**Lane Shackleton** (01:09:15):
That's basically how both me and ... I had a friend named Bill Ferrell who transitioned into PM at the same time and that's essentially how we got the try at being a PM inside of Google was we knew the customer really, really well and we were often in conversations bridging the gap from here's what I think they're really saying, or here's what I think we should build based on what they said.

**Lenny** (01:09:41):
The other thing I wanted to mention, you talked about the product and how a lot of customers don't care about the product, they just care about just I need this thing done. It reminds me at Airbnb, we hired this guy, Chip Connolly, who was a hotelier. He created the Joie de Vivre hotel chain and just is steeped in hospitality. And he came to Airbnb and started doing this worldwide tour talking to hosts. And he's just like, "Guys, when you talk about product, you're telling hosts, 'Hey, the product's going to be updated. We're going to launch all these features.', they think their home is the product of Airbnb. They don't understand what you're talking about when you're talking about the online experience and the website. That's the last thing they think about. It's the experience of someone traveling on Airbnb and staying in their home." So I think it's a really good reminder of most people don't care about the product. They just have this problem and you just happen to be this website that'll help them solve it.

**Lane Shackleton** (01:10:30):
I think most people can be way more concise with their communication. Even internally, people don't care. You should assume that people don't care. Or if you're talking to customers, writing a blog post for customers, you should assume that they don't care. When you start with that assumption, you really force yourself to be a little bit sharper in your communication style.

**Lenny** (01:10:53):
And one final question before we get to our very exciting lightning round. I heard a story that at Coda there's this moment called Tim Ferriss Day that drove a lot of traffic. Can you share that story? Does that ring a bell?

**Lane Shackleton** (01:11:08):
Yeah. There's lots of memorable days at Coda. One of them was Tim Ferris Day. So I guess maybe for context, we had built this very nascent publisher motion where we were going out and helping people publish their rituals. And this is what you see in the Coda Gallery and a lot of what we talked about today. But we had this one person on that team, this guy Al Chen, Tim Ferriss fan, and also I think had been really tenacious with the people around Tim Ferriss and basically finally got an in to him and figured out a really neat way to implement one of his rituals and wrote a doc. And so none of us really knew this, but this was all happening. And anyway, we wake up one morning and traffic is just spiking through the roof, signups are spiking, no one knows what's going on.

**Lane Shackleton** (01:11:59):
I'm convinced this is all spam. I'm like, "Something's wrong with our data or something's going haywire." At the time, we were also in the China Basin office and the fire alarm went off. And so now we're outside on our laptops. We were in a war room trying to figure out what was happening and now we're outside trying to figure out what's going on. So anyway, make a long story short, data scientists investigate and we eventually figured out that we had been featured in Tim Ferriss' email newsletter and I think early on you hear this lesson or this adage of first time founder, build a great product, second time founder, build a great distribution. I think that was one of those early big cues to think about the importance of content distribution and the importance of these publishing flywheels. And it definitely made us double down. We're like, "Okay, if we can do this with Tim Ferriss, what's next?" And we definitely spent a few months trying to reach that high watermark that was set that day in traffic and sign-ups. So it was a fun memorable day and people for the subsequent one or two years would refer to it as Tim Ferriss Day.

**Lenny** (01:13:15):
So funny. I bet Tim Ferriss had no idea what he did.

**Lane Shackleton** (01:13:18):
No idea.

**Lenny** (01:13:19):
Hoping you have a Lenny's podcast day once this comes out. Everyone's going to be freaking out. What is going on here? Is there anything else you wanted to share before we get to our very exciting lightning round?

**Lane Shackleton** (01:13:30):
Maybe we're talking really briefly about two-way writeups.

**Lenny** (01:13:33):
Yeah, let's do it. I had that in my notes, but I skipped it, so I'm glad you mentioned it.

**Lane Shackleton** (01:13:37):
Cool. Yeah, I mean this is a concept that I wrote a bunch about and I often now get asked about, and I guess maybe the historical view of this, I got really obsessed with the history of how work gets discussed and decided upon and broke it down into three phases. And so the first phase was 1980s we had PowerPoint. It was this amazing tool. You could manipulate shapes on a screen and we were all using fancy clip art and it was really fun, but we've all had the experience of being in a really long PowerPoint presentation and someone's droning on in their slides and stuff like that. Second phase is in the early 2000s, two things converged. One was Google bought this company called Rightly that became Google Docs. So instead of having Word on your desktop and sending files around you now had online collaborative editing.

**Lane Shackleton** (01:14:35):
And the other thing was Jeff Bezos sent this very famous memo, which basically said no more PowerPoint at Amazon. And what that did was started in earnest their six pager ritual. You can read all about this in the book Working Backwards. It's a really good book. Colin Breyer's book. And so that started I think what I'll call the one-way writeup phase, which is you're writing down your ideas, you're expressing them clearly. It's in prose so you have to be really clear. That was a big step up I think from always presenting work and deciding on work via presentations. And then the thesis is that we're in the midst of a new phase, which is essentially two-way writeups and that's where it's more conversational and feedback and discussion is actually part of the content itself. So that's the broader historical arc. But if you think about it, PMs and product people are always at the brunt.

They feel this the most because they're the ones that are driving decisions and really the ones that are driving discussions oftentimes in companies. And so I think the problem with one-way writeups I felt very deeply at Google and YouTube. And just to name them, the first one is you would always be trying to figure out who's read your write-up. So I have many memories of sending a write-up out at 11:30 PM and then waiting patiently for the avatar of the SVP in my area to show up in there. And that was a sign that they had read it, which is just totally insane if you think about that behavior. The second one is you end up having a lot of the discussion in the comments itself. So this is a space that's really built for grammar and spell checking and things like that. And you're having these really meaningful discussions in this a hundred pixel right margin.

**Lane Shackleton** (01:16:30):
And part of that I think is there are all these questions that are being raised, and so you have really no idea what the most important question is. And so if you're facilitating those discussions in one way writeups, you're often going through the comments in the 20 minutes before that session trying to figure out which one of these do I want to address. And then the other behavior, and I don't know if you've ever seen this in a doc, but in one way writeups that you see a lot is there'll be just a mega comment thread on the title of the doc. And people are like, "I don't think we should do this," or you'll get into this 30 comment thread on the title because that's the best place to put your overall thoughts. And I saw this pattern all the time. So if you live that life, I think the world of two-way writeups and the way that I think a lot of our customers are doing it, and you can do this on other tools besides Coda too, I think is quite a bit better.

**Lane Shackleton** (01:17:26):
I guess the alternative to go down that list is you have a done reading button at the end of a writeup. So now you can say, oh, these are all the people that have read this. And I think even you see a pattern in some of our customers where if it's a particularly long writeup, you'll have three done reading buttons so you can see where everyone has gotten to. And then the second thing is making sure that you're actually addressing the most important question. So instead of pulling questions out of the comments and trying to figure out which one to address, just putting those in a table and then letting people upload those. And that's what we call Dory. And then I think probably the most valuable is sentiment or pulse, which is, well, how do you feel overall about this particular proposal?

**Lane Shackleton** (01:18:13):
And if you think about the contrast between a comment thread on the title and seeing a list of all the sentiment, how everybody feels about this proposal and really being inclusive to the entire audience is just wildly different. I think in my particular experience. I'll give you one example. I wrote this proposal, this is now a couple years ago. I thought it was going to sail through no problem. I thought it was going to get four out of five and five out of five smiley faces from everybody. That's sort of how the sentiment table works. And one of the lead designers basically said, "One smiley face. We shouldn't do this." And I was like, oh man. This particular person's not really vocal in meetings. And so I would not have heard that feedback. It was very unlikely I would've heard that feedback unless they had had a sentiment table, a place to add that. And so I think the punchline on all of this is I really authentically believe that this is where we're headed and hope that a lot of PMs and product teams adopt this in general.

**Lenny** (01:19:23):
I'm so glad that we touched on it and there's a template or an explanation of this that you wrote up that we'll link to. Yeah.

**Lane Shackleton** (01:19:31):
Great. Yeah.

**Lenny** (01:19:32):
Awesome. Is there anything else that you think that we should touch on that we haven't touched on?

**Lane Shackleton** (01:19:37):
Yeah. I think one thing that we've discussed before is just about strategy and planning and stuff like that. So it may be useful to touch on a couple of insights there. I think there's two insights in the strategy and planning thing. And this is again in the handbook that we're writing, but the first that I end up seeing a lot is just this idea that OKRs are not actually strategy. So I think the way that we plan and the way that our customers plan, the key point is it's critical to disconnect strategy discussions from OKR discussions. And it sounds really obvious, but it's I think a very common mistake. And I think a really simple question to ask yourself is do we have a separate strategy process or strategy ritual that is distinct from OKR setting and metric setting and goal setting? And I have found you can pick whatever strategy framework works for you, but I do think it's quite important to pull those two things apart.

**Lane Shackleton** (01:20:43):
The other rule that we live by on the planning side is what we call a 10% planning rule, which is essentially just ensure that you're not for a given time period planning for more than 10% of that execution period. And I think this is a really easy mistake to make. I mean, this is a hard fought rule because we've made that mistake before. But you end up getting bogged down in planning or saying, planning felt rushed and so we need to make it three weeks instead of one week or whatever. And the byproduct of that over the course of a lot of time is that you end up just planning way too much and oftentimes you really don't know what's ahead until you've launched or learned something. And so I think that's a pretty good rule to follow.

**Lenny** (01:21:32):
I love that rule. I found the same heuristic. 10%. If you're planning for a week, plan for half a day, planning for a month, maybe like three days. Yeah, I love it. With that, we've reached our very exciting lightning round. Are you ready?

**Lane Shackleton** (01:21:46):
I'm ready.

**Lenny** (01:21:47):
What are two or three books that you've recommended most to other people?

**Lane Shackleton** (01:21:51):
One that comes to mind is Turning the Flywheel. It's a little manuscript book. Jim Collins wrote it. It's really, I think a very succinct and very fast read about how flywheels work. We talked about Storyworthy. I recommend that book a lot. Good Strategy/Bad Strategy. Love that book. Very simple framework that I've reused a bunch. Maybe outside of tech, Waking Up is a book by Sam Harris on mindfulness that I really like. And then an old one that I really like is The Inner Game of Tennis by Timothy Galway, which is a kind of classic.

**Lenny** (01:22:27):
Amazing. On Good Strategy/Bad Strategy, I'm working on getting Richard Rumelt on the podcast. I'm in talks with his agent and they seem to be excited. So we'll hope that actually happens. And then you inspired me to try to get the Storyworthy guy on. So what a cast of characters we're going to get on here.

**Lenny** (01:22:43):
Next question. What is a favorite recent movie or TV show that you really enjoyed?

**Lane Shackleton** (01:22:48):
Yeah, it's a little bit hard with three kids and a job these days to watch a lot of TV. I would say I really enjoyed The Last Dance. I love any sports documentary. All those.

**Lenny** (01:22:59):
Have you seen Underrated, Steph Curry's new documentary?

**Lane Shackleton** (01:23:01):
No, I haven't. I got to watch that.

**Lenny** (01:23:03):
Ooh. It's really good.

**Lane Shackleton** (01:23:05):
I've been rewatching Arrested Development. That's also just a timeless classic.

**Lenny** (01:23:11):
Classic. I love that Michael Cera is in the Barbie movie, not to give any spoilers. That was a funny surprise.

**Lenny** (01:23:18):
Next question. What is a favorite interview question that you like to ask candidates?

**Lane Shackleton** (01:23:22):
There's two I really like. One is teach me something that I don't already know. I think it's just an awesome way of seeing if someone's going to lean in and really figure out what you don't know and then how passionate they are about pitching what they do know I think is really fun. And then Shishir and I have been asking a version of teleporter question and evolving it for many years now, so I like that question quite a bit.

**Lenny** (01:23:49):
Shishir shared that question in his episode and we make TikTok clips out of some of these conversations and that clip just went crazy. People love it. It's our most viewed clip, I think on TikTok. Or just like, what would your answer to that question, so we'll try to link to it in the show notes if you want to watch just that one interview question. I think you maybe gave it away, so maybe that's why you're evolving it.

**Lane Shackleton** (01:24:10):
Yeah. We-

**Lenny** (01:24:11):
Don't know if we screwed you.

**Lane Shackleton** (01:24:13):
I also recently wrote a post about my favorite ref check question, which I think I would love to learn other people's favorite ref check questions.

**Lenny** (01:24:20):
References check. Oh man. That's its own. Oh man, I'd love to do a podcast just on that. That is such an important skill. The first question you mentioned of asking people to teach you something, I heard the best version of that in a previous episode where Maya, the Head of Product for Spotify podcasts, asks what would your podcast be if you were to start a podcast?

**Lane Shackleton** (01:24:40):
I like that.

**Lenny** (01:24:42):
So feel free to steal it.

**Lane Shackleton** (01:24:45):
I sometimes do a version of making them explain it two different ways after, and making the candidate explain it two different ways and saying, "Okay, now you have to explain that to your grandparent." And then now you just told me about sewing or some hobby of yours. Now sell it in its most technical form to someone who knows everything about this particular topic. And so it's kind of fun to also see the range that people can operate.

**Lenny** (01:25:13):
Awesome. What is a favorite product that you've recently discovered that you really love? Either digital or physical, anything that comes to mind?

**Lane Shackleton** (01:25:21):
A few. I'm becoming a real sleep nerd, so those eye masks that cup around your eyes, I love. Obviously in the tech world, ChatGPT. I got really obsessed with tennis during the pandemic. There's a product called Swing Vision that's really good. It basically cuts up your match into different ... All of your forehands or all the longest rallies or all that and uses AI to do that. There's a corresponding meditation app to the book Waking Up that I really like. That one's a very good one.

**Lenny** (01:25:57):
We live not so far from each other, so we got to play some tennis and I could check out this very cool product.

**Lane Shackleton** (01:26:01):
Yeah, let's do it.

**Lenny** (01:26:03):
You're on. That'll be our sequel. Just our game. Next question. What is a favorite life motto that you either repeat to yourself often, like to share with people around you, share with your kids maybe?

**Lane Shackleton** (01:26:16):
I don't know if it's as motto as much as it's just a way of being. It's essentially the present moment is all that we have. Realizing that our attention is very often on the past or the future and in so many ways the present is where it should be always. And so I think that that is something I think about a lot. I think maybe more broadly, I had a mentor who roughly said a version of make things happen, and so I really try to apply that to anything that I do. If that's work or life or sports, I try to be the person who creates momentum and positive change and progress. And so I think that that's generally a good motto to live by.

**Lenny** (01:26:58):
Beautiful. What is the most valuable lesson that your mom or your dad taught?

**Lane Shackleton** (01:27:03):
My mom's a psychologist and a professional counselor so certainly active listening. Maybe the tech version of that or the modern version of that is steal manning someone's argument, being able to repeat back to someone what they said in a better form, more clear form. So yeah, she's an amazing woman. Taught me a lot about listening.

**Lenny** (01:27:28):
Final question. You were a guide in Alaska helping people climb. If someone were to pursue climbing, is there a tip or a lesson or something that you think people should know to get better at this or to know before they go down this route?

**Lane Shackleton** (01:27:43):
There's a saying, which is the safest climber is the one who knows when to come down essentially. And I think that there are many times that you have to put your ego in check and come off a mountain or come out of a climb because it's not quite as safe as you thought it was. So I think that's maybe one. I think the other is it's probably not a one-way door. So I think in many ways you can do climbing and you can do some of these outdoor pursuits on the side, or you can always come back from them. So it's maybe not as big of a choice as some people think it is.

**Lenny** (01:28:24):
Lane, I said at the top of this episode, Coda has one of the most thoughtful product teams out there, and I think it'll be clear to people after listening to this why that's the case and where it trickles down from. Thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out and ask you any other questions? And how can listeners be useful to you?

**Lane Shackleton** (01:28:42):
I'm on LinkedIn and Twitter and I have a Substack. We'll be releasing that handbook for product teams that I will probably post on Substack. And in terms of useful to me, yeah, give Coda a try. Give us feedback. I love hearing from product people all over. It's one of the bright spots in my day to hear all the creative rituals that come from this community. You've created just a legendary community of people and so they always give very thoughtful feedback so I'm very open to all of that. And yeah, thanks for having me.

**Lenny** (01:29:22):
Awesome. Lane, thank you again so much for being here.

**Lane Shackleton** (01:29:25):
Thanks.

**Lenny** (01:29:26):
Bye everyone.

**Lenny** (01:29:29):
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.

---

## [2/24] Brian Balfour: 10 lessons on career, growth, and life

**Lenny Rachitsky** (00:00:00):
Everyone's always complaining SEO's dead, it can't grow. Word of mouth is so hard. 

**Brian Balfour** (00:00:03):
All of the ingredients for new distribution platform are essentially happening. My prediction, the new distribution platform will be ChatGPT. There's a bunch of signals that they're about to launch that.

**Lenny Rachitsky** (00:00:14):
This is a huge opportunity for companies to get on it. 

**Brian Balfour** (00:00:16):
It ends up being a prisoner's dilemma. Don't trick yourself into thinking that you can't play the game. The cycles seem to be getting shorter and shorter, so you actually have a smaller amount of time. If you don't do it, your competitors are going to go to the new platform and your customer expectations change. There is no opting out of the game. 

**Lenny Rachitsky** (00:00:31):
This is the opportunity to disrupt an incumbent. 

**Brian Balfour** (00:00:33):
If you're a late-stage company, you place multiple bets. For startups, it's a totally different ballgame. You have to choose one and go all in. 

**Lenny Rachitsky** (00:00:40):
Think about companies like Zynga that grew on Facebook and then became massive companies.

**Brian Balfour** (00:00:43):
Building a great product is one of those things that's necessary, but not sufficient. And actually the separation is between those that build really great distribution.

**Lenny Rachitsky** (00:00:52):
What would be the backup if not ChatGPT? 

**Brian Balfour** (00:00:54):
My hypothesis of who's best-positioned would actually be...

**Lenny Rachitsky** (00:00:59):
Today, my guest is Brian Balfour. Brian is the founder and CEO of Reforge, a company that I've been a long-time fan and advocate of. Historically, Reforge has focused primarily on teaching courses on product and growth, but more recently they've transitioned to building their own products, including a product called Reforge Insights and a bunch more really cool stuff coming very soon. 

**Lenny Rachitsky** (00:01:18):
Prior to Reforge, Brian led growth at HubSpot, and over the course of his career, he has seen the rise and fall of every major distribution channel, including Facebook's ad platform, Google Ads and SEO, and the Apple App Store. Based on what he's seeing, he is predicting the emergence of a brand new and powerful distribution channel that will likely arise in the next six months, centered most likely around ChatGPT. It is really rare for a new growth channel to open up. It's been a long time since the last one appeared, and the people who recognize this and hop on it early are the ones that reap the most rewards. So this is a huge deal. 

**Brian Balfour** (00:04:09):
Yeah, thanks for having me. Excited for this one. 

**Lenny Rachitsky** (00:04:12):
I'm really excited to have you back. We're just going to dive right in. Essentially, you've uncovered a really important trend or insight about how products are going to grow differently in the future, how growth is changing, and this is something that I think a lot of people need to hear, so I asked you to come on to share what you're seeing. I also think this is just very timely. I think you said you're going to say in the next six months things might significantly change, so I'm really excited to do this. We're going to spend this whole conversation on this insight. To set us up, what is just the big idea? What's the high-level idea here? 

**Brian Balfour** (00:04:45):
Just like you, I've spent my whole career just really passionate about startups, figuring out how to build products that win, that emerge in new markets, and one of the things that I have learned over time or one of the things you hear a lot from a lot of folks is, to win, you have to really build a great product. A lot of advice boils down to that. And one of the things that I feel like I've banged my head against the wall in a lot of ways in my career is actually telling people that building a great product is one of those things that's necessary, but not sufficient, and actually the separation is between those that build really great distribution. 

**Brian Balfour** (00:05:26):
So this general partner, his name's Alex Rampell, he's at Andreessen Horowitz, actually wrote this blog post 10 years ago back in I think 2015. In the essence of the blog post, he basically says one thing, which is that startups is a game of trying to get distribution before the incumbent can copy. It's this kind of concept of escape philosophy. 

**Brian Balfour** (00:05:54):
On that note, which I think os a very good summary of what you're trying to do in a startup and distribution, is that we're right now living in this environment where that game of startups getting distribution faster than the incumbent has gotten way harder in a lot of ways, and in some small cases has gotten a little bit easier. But if we think about this, the way that it's gotten harder and some of the things that probably a lot of founders or folks working on the growth side that probably feel is that, one is that incumbents can copy faster these days. That window that you have to get that escape velocity has actually shrunk. It's decreased. 

**Brian Balfour** (00:06:34):
The second thing is that a lot of the organic distribution that we've had, especially over the past few years, has really shrunk as well. Everybody's talking about the decline of SEO and clicks declining, but you also see it in some other cases. A lot of these social platforms don't really let you send as much traffic to sites. LinkedIn just changed their algorithm, which has really dropped organic distribution. Obviously the Twitter-to-X, transition that happened, right? TikTok's almost always been like that.

**Brian Balfour** (00:07:06):
And then the third way that it's gotten harder is that AI's really good at writing software and code generation, and so everybody's feeling this infinite increase of competition, especially at the startup level. YC is pumping out six of the same thing every single cohort. That's what it literally feels like. 

**Brian Balfour** (00:07:23):
So it's gotten way harder. This game, this escape velocity game has gotten a lot harder. It's gotten easier in some very exceptional cases like the Cursor or something where AI has been like the spark. I know you wrote the blog post about the race car engine, and I think you said there's the spark plug in the engine. AI really created that, a new type of spark, a new type of interest of early adopters to fuel some new players in a short period of time. So it's amazing to see something like Cursor overtake market share of something like GitHub Copilot in nine months or less. That's how fast it happens. It's kind of crazy. 

**Brian Balfour** (00:08:01):
But the main thing that people need to understand is, okay, well, if that's the game I'm playing, how to get to escape velocity before the incumbent? What are all the ways to do that and to really figure that out? There's multiple ways that this can happen, but one of the major ways, one of the major, major ways that we always see is that this can happen when new distribution platforms emerge, because when new distribution platforms emerge, startups are usually the fastest to take advantage of them. It's slower for the incumbents to move. It gives startups this opportunity essentially to play this game. 

**Brian Balfour** (00:08:39):
Casey Winters wrote this blog post about two years ago, maybe 18 months ago, about the AI technology shift. His key point was the AI technology shift has been a technology shift that has not come with a distribution shift yet. If you look historically, we've had a bunch of technology shifts from the internet to the cloud to mobile to social, all of these different types of things. Some of them come with new distribution platforms, new ways to distribute products, and some of them don't, but the most powerful ones, the most impactful ones are the ones that do come with these new distribution platforms. His second key point was that these two things don't actually happen at once. Usually you get the technology shift, then you get the distribution shift a little bit later. 

**Brian Balfour** (00:09:25):
Now we're a couple years from that post. We are a couple years into AI technology shift, and one of the things that I am seeing is all of the conditions, all of the ingredients for a new distribution platform to emerge are essentially happening. So I think we're at an inflection point where we're going to see this emerge really fast. 

**Brian Balfour** (00:09:45):
The key thing for everybody to know is that as new distribution platforms emerge, they follow the same four-step cycle and it's a game that you're playing, that everybody's playing. Just like any game, you need to know the rules of the game. You need to know the steps of the game in order to have any sort of opportunity to win. That's the thing that I've lived through once again, both painfully and also in good ways, and is something that I'm keeping my eye on and something that I've been talking about. Before we go into that four-step cycle, I figured I'll pause there to see if you have any follow-up questions on that.

**Lenny Rachitsky** (00:10:24):
Okay. This is amazing. Essentially what you're saying is we follow these ways to grow, there's SEO, there's paid growth, there's sales. All these channels have been around for a long time. They're extremely saturated. Everyone's always complaining SEO's dead, it can't grow, the SEO, anymore. It can't grow. Word of mouth is so hard, there's so many amazing things now that's hard. Paid is so hard. It's just all this money just-

**Brian Balfour** (00:10:24):
Tax are rising.

**Lenny Rachitsky** (00:10:24):
Exactly.

**Brian Balfour** (00:10:49):
All these things. Yeah. 

**Lenny Rachitsky** (00:10:50):
So all these saturated channels, and what you're saying is there's an emerging new channel that has not yet been saturated, and this is a huge opportunity for companies to get on it. And you'll talk about timing because it's a little tricky to even know exactly when to go big on this.

**Brian Balfour** (00:11:05):
That's right. Yeah. 

**Lenny Rachitsky** (00:11:06):
But that's a huge deal. This has been a long time since there's a new way to grow that you can actually use as a lever for growth and not just hope for the best. Okay.

**Brian Balfour** (00:11:15):
Yeah. That's right. 

**Lenny Rachitsky** (00:11:15):
Before you get into the cycles, do you want to tease what the answer is, just to give people a little hint, or do you want to keep it secret?

**Brian Balfour** (00:11:23):
Well, to be clear, okay, so my prediction, we don't have a clear winner yet. My prediction of the new distribution platform will be ChatGPT, in some ways that people probably already think it's happening in some ways that it won't, but the thing that is less important or that is more important than whether I have predicted the exact winner correctly, the thing that's more important is to understand the cycle and evaluate how to determine where you want to place your bets and how to place those bets, which I know we'll talk about.

**Brian Balfour** (00:12:02):
I could be wrong about the ChatGPT prediction and what's going to happen there. I think there's going to be two parts of it. There's going to be what they do with a ChatGPT search experience, but I think the bigger thing will be whatever they do with launching a third-party platform on top of ChatGPT, there's a bunch of signals that they're about to launch that, I'm pretty sure it's going to be ChatGPT. 

**Brian Balfour** (00:12:25):
The thing I'm way more sure about is that some new distribution platform will emerge and it will follow the same four-step cycle. That's the key. Could be wrong on the first piece, I am very confident on the second piece.

**Lenny Rachitsky** (00:12:40):
Okay. Excellent foreshadowing. I completely agree, if it's anything, it would be ChatGPT at this point. Let's get into it. What are the cycles that platforms generally follow? 

**Brian Balfour** (00:12:49):
Yeah, and I'll give some examples of this, but let me explain the four steps of the cycle first and then we'll go through a bunch of examples of all those individual steps. The four steps are essentially, one is I call a Step Zero. It's the conditions of the market have been met. Step One is about a moat, Step Two is about a platform opening, and Step Three is about the platform closing for control and monetization. Let me briefly explain each one. 

**Brian Balfour** (00:13:20):
Step Zero is about the competitive market being met, the conditions being met, and there's a few part piece of this. One is that typically what happens is that there is consensus that there is going to be this new huge category. Think social, think mobile, like all those types of things. In this case, these AI like chat platforms, like a ChatGPT or a clock. There's consensus about that, but there's no clear winner yet. We typically have somewhere between five to seven major players really battling it out and they're all looking for what is the edge? What is the thing that is going to help me win? Because all of these dynamics, in all the history, they either end up in monopolies or duopolies, and so the stakes are really large and so the competition is fierce. 

**Brian Balfour** (00:14:13):
That's Step Zero. I think we could all agree that we are in that mode right now. We've got OpenAI battling with Claude, battling with Gemini, and Google with whatever Meta comes out with their new team, so on and so forth. There's huge amounts of capital, there's consensus, all the types. They are in a fierce composition. That's Step Zero.

**Brian Balfour** (00:14:36):
Step One is then these players, somebody essentially identifies whatever the moat is, the thing that is going to help build them defensibility and help them hit escape velocity and become that monopoly or duopoly in that single category. Once they figure out what that moat is, then they need to press the advantage. They need to figure out how to gather that moat as fast as humanly possible. It tends to be that you can't do that by yourself, so you need the help of an ecosystem in order to gather more of that moat. 

**Brian Balfour** (00:15:12):
That typically comes down to third-party content creators or app developers and other businesses. So they all establish a third-party platform that has some incentives built in, and usually the value exchange is, hey, you develop on top of my platform, you add more use cases, more engagement, all of these things to my platform, and in exchange, I'm going to give you something in return. Usually that thing that's in exchange is, I'm going to give you some new form of distribution for your application and for your business.

**Brian Balfour** (00:15:48):
But what essentially happens over time is that we go into Step Three, which is the closing period, which is at some point, all of these companies end up starting to lock down the platform. This tends to happen for reasons of monetization and growth. They either competitively don't want somebody to use their own platform to disrupt themselves. We saw that in the early Twitter days with things like Vine and Periscope, shutting those things down unceremoniously, or they need to find ways to monetize at a deeper and deeper level because all these companies, they have to grow. 

**Brian Balfour** (00:16:32):
Google's the classic example here of just more and more real estate has either been taken up by either ads or their own first-party applications. That's the key is they close it down by doing by one of a few things. They either shut it down entirely, two, they develop their own first-party applications to absorb the highest use cases, or three, they artificially depress the organic distribution that they gave you in the step prior to push you towards paid mechanisms in order to monetize. I think we should go through multiple examples here, but that's the core essence of the four steps. I'll pause there.

**Lenny Rachitsky** (00:17:12):
Awesome. So it's essentially figure out what's going to make, create defensibility long-term with your moat, bring everyone in, "Hey, everyone, welcome to Facebook," everyone joins Facebook and then, okay, and all the developers build on Facebook to bring in more people on Facebook and then they're like, "Okay, now you got to pay. There's a toll," but you love this so much and you're so hooked to all your friends that you're here, you may as well stick around. 

**Brian Balfour** (00:17:35):
That's right. That's right. 

**Lenny Rachitsky** (00:17:35):
Amazing. Okay, so yeah, a few examples would be great. 

**Brian Balfour** (00:17:38):
Yeah. You just hit on the first one. This is the first one that I always think about because this is where I learned about this cycle very early in my career. One of my first companies was during the Facebook platform boom, social gaming, all of those applications, and I lived the full cycle in a very short period. I lived the glory days and just the absolute horror days, and it was very painful, but this is exactly what happened. 

**Brian Balfour** (00:18:06):
Let's go through the four steps. Step Zero. Facebook was in a brutal battle with MySpace, Friendster and a few others. People forget this. People forget that there was actually a bunch of competitors at that time, and in fact those competitors were bigger than Facebook. They had more users back in 2007 when Facebook launched their third-party platform. But one of the key things is that Facebook was very early to the insight about the direct network effects in that there's going to create real lock-in that the more friends, the more of the global network that was on there, the more that it was just going to feed and hit this escape velocity.

At the time they launched their platform, I think they were maybe one-fourth, one-fifth the size of something like MySpace or even Friendster, Orkut, these are some of the names at that time, but they opened up their third-party platform. What was the value exchange? They went to third-party developers and they said, "Okay, we've created this canvas," they used to call it the canvas, and they were like, "You can put anything in the canvas that you want: an app, a game, whatever. You can monetize in any way you want. We just want this sidebar real estate on the ads. That's what we're really interested in." There was this mad gold rush on that Facebook. 

**Brian Balfour** (00:19:24):
Oh, sorry, the other part of that was, "Not only will you put it there, we're going to give you access to all of these notification channels and feed to get distribution for your application." That was the other piece of it. You had this mad rush of developers coming in and you had this huge social application, social gaming boom. People just grew incredibly virally very fast, but eventually, essentially what happened over time is they kept peeling back that value exchange. 

**Brian Balfour** (00:19:52):
They first were like, "Ah, actually those dollars that you're making inside that canvas area, well, we want a percentage of that." So they changed that. And then they figured out their ad systems and then they started peeling back. They started suppressing access to all of the organic channels that they had. Eventually, they went all the way towards absorbing the highest use case into their own first-party platform, things like first-party applications, things like events, photos, all those types of things, and basically shut down the platform for dead. 

**Brian Balfour** (00:20:30):
These companies that have basically built on top of this platform, the other thing is by the time they started closing all those things down, all those competitors that we talked about, they were so far ahead at that point because they had built off the back of all these developers coming, adding use cases, bringing more users onto the platform, identifying that moat. They were so far ahead, it didn't matter. It didn't matter what the other folks did at that point, and that's what really gives you confidence to start closing down. But there's so many other examples of this if we go through it. 

**Lenny Rachitsky** (00:21:02):
Just before you give other examples, just something I'll highlight here. One is the moat they identified in theory was the friend graph, I imagine?

**Brian Balfour** (00:21:02):
Yeah. 

**Lenny Rachitsky** (00:21:10):
Just once we have all your friends, you're not going to want to go anywhere. I imagine it's also important to note, this is a natural thing that would happen if you build the thing and it grows and you're like, "Oh, maybe we should change strategy." I imagine not everyone even knows this is what will happen and they organically evolve their strategy, or do you think everyone's just like, "This is now going to be our plan, Step 1, 2, 3, 4?"

**Brian Balfour** (00:21:32):
I think a different version of that question is I think some people could sit here and interpret this as all these folks are evil. That's not what I'm saying. That's actually not what I'm saying. I want to be very clear on that, because I think this cycle happens because of competitive and capitalistic dynamics and pressures. It's the same environment that enables creating amazing new companies here in the US. 

**Brian Balfour** (00:22:01):
And there's two sides of the coin. You go through this cycle because it's a competitive environment. You're trying to figure out how to beat competitors, and this is one of the strategies to beat competitors. But at some point you just have to continue growing. You have to grow those dollars. The market does not reward flat companies, if anybody's noticed. You have to keep growing, and so they have to keep finding ways to grow as well as prevent their own disruption. TThey can get so big and they can give access, so much access of distribution to new developers, they don't want to enable their own disruption as well as they need to keep growing. 

**Brian Balfour** (00:22:38):
My guess is anybody who is sitting in their shoes owning their platform is going to follow the exact same playbook and the exact same reasoning. Look, sometimes it happens also because it actually is the best thing for the user. Facebook's channels did get super spammy and all of those things, and that was part of the reason they'd play this, but let's be honest, it wasn't the only reason. A lot of it was for these other reasons. I don't think it's evil. You just need to know how to play the game. That's competition, that's business. They're playing you, so you need to play them. That might be a little sadistic or something, but that is business. You're in a game of competition.

**Lenny Rachitsky** (00:23:23):
Essentially, the incentives are pointing you in this direction. Capitalism, they say capitalism works, and so it'll pull everyone in this direction even if maybe they want to avoid it. Let's do a couple more examples.

**Brian Balfour** (00:23:33):
Yeah, we'll go through them quick. I think everybody's probably... Google's an interesting one because it played out over a much longer period of time. Facebook happened over the course of about in five-ish years, something like that. Google did it very slowly over years, but same thing, early massive competition against Yahoo, I don't know, AltaVista, Lycos, you name them all. That was even before my time. They were first to really identify these data moats and incentivizing essentially web developers, content folks to optimize for their search algorithms, create this great distribution mechanism. Everybody's building content and everything for them, but over time, slowly but surely they did two things. 

**Brian Balfour** (00:24:19):
One is more and more that real estate became ads that they were monetizing, so they're suppressing organic distribution in order to push people towards the ads, as well as absorbing a bunch of the highest value first-party use cases, things like travel as an example, or even restaurant search and all those types of things. The former Yelp CEO and founder has been out there saying a lot of things about these practices. So, same exact cycle.

**Brian Balfour** (00:24:48):
Mobile went through the exact same cycle. iOS created a new distribution mechanism. They had a ton of competition among different phones when they first started on. They found the defensibility was more about the apps, the data and all the developers, created the App Store, all of these types of things, but over time, we've seen more and more restrictions there on that front. 

**Brian Balfour** (00:25:09):
And then most recently, we've seen this happen in smaller places, too. LinkedIn, as an example, first went through this wave with company pages. They were like, "Ah, companies, come on, promote your company page. Bring in more users, all that type of stuff, and then get all these followers." And then of course you get almost no distribution now through your company page because they're pushing you towards ads. And then they recently just did this with personal profiles, too, which is they really boosted distribution for individuals to create content for that platform. They then introduced the thought leader ad format, a way to monetize those individual posts, and now you've seen them really pull back on that organic distribution. 

**Brian Balfour** (00:25:52):
So this happens in big forms and it happens even in smaller use cases as well, but once again, the steps of the cycle are exactly the same. The key part about this, too, is that the broad trend is that the cycles seem to be getting shorter and shorter and shorter and shorter, so you actually have a smaller amount of time to play the game.

**Lenny Rachitsky** (00:26:11):
Okay, and the big a-ha here is, yes, this will end maybe not great for you, but there's this magical period when they're open to customers and users where you can grow like crazy because they want everyone to come and they give you a distribution. What you're saying essentially is ChatGPT, potentially some other platform, maybe is about to enter this moat.

**Brian Balfour** (00:26:35):
Yeah. Well, before we get to ChatGPT, I think the natural reaction when you first realize this is, "Screw them, I'm not playing that game." That's what I feel like most people, how they react. Because the unfortunate truth is that a lot of companies don't predict that last stage and end up in a really hard position. So many companies got completely killed during the crash of the Facebook social platform. Apple's 30% tax basically destroyed a bunch of types of applications and business models because you feel like it just wasn't margin-effective. So many companies built on SEO loops that are in serious, serious trouble right now if that's their only channel. So all these things. 

**Brian Balfour** (00:27:33):
I think the natural reaction is, why would I play this game if I'm a startup or a company? You can even see this with ChatGPT, as an example. They just launched these deep research connectors. One of them was my former company, HubSpot. If you sat inside HubSpot and you were just thinking in isolation, you would be like, well, why would I want to make all of my data accessible through ChatGPT and have all of the usage you start to accrue there? That doesn't really make sense in isolation. But we don't operate in isolation. Once again, we operate in a competitive environment.

**Brian Balfour** (00:28:11):
What's going to happen is that if you don't do it, your competitors are going to certainly go to the new platform and your customer expectations change, and you have to rise to those customers' expectations. They're going to start expecting you to be in these new experiences and all these things. It ends up being a prisoner's dilemma, which is, there is no opting out of the game. You have to play the game. So it's better to be early than to be super late to this game, especially, especially if you are a startup. That's the key opportunity. 

**Brian Balfour** (00:28:51):
We will talk a little bit more about how to play the game more, but it's better to be early as well as, then the key, the harder part about it is anticipating that last stage of the cycle and figuring out how to sequence away from something before that last cycle comes. I think that's the key part, but let me pause there and then I'll talk a little bit about ChatGPT and some of my reasoning behind that.

**Lenny Rachitsky** (00:29:12):
Cool. So what you're saying is not only is there going to be this big opportunity to grow, if you don't take advantage of it, somebody in your space will. It's not only there's an opportunity, but this is something you need to do because you might miss the boat. 

**Lenny Rachitsky** (00:29:26):
I think about companies like Zynga that grew on Facebook and then became massive companies. If they didn't do that, they would've missed the boat, someone else would've eaten that lunch. I don't know, I'm thinking about the Technology Bros podcast on Twitter right now, TBPN, where they basically figured out on Twitter you can create this livestream and you see it all day in your Twitter feed just like, hey, they're broadcasting, and it's a really cool distribution channel.

**Lenny Rachitsky** (00:29:49):
I think there's a big call to arms here almost of just the opportunities emerging and you basically need to pay attention. You can't opt out.

**Brian Balfour** (00:29:58):
That's right. That's right. 

**Lenny Rachitsky** (00:29:58):
Awesome. 

**Brian Balfour** (00:29:58):
Exactly. 

**Lenny Rachitsky** (00:30:00):
Okay, so let's talk ChatGPT.

**Brian Balfour** (00:30:02):
Look, let's go through this cycle. Right now we're in that competitive environment. Like we said, all those players we talked about, ChatGPT, Claude, Gemini, all these folks, they are battling it out. We've seen this with the Talent Awards especially over the past month or so. There's no clear winner yet, but there's consensus around the category. 

**Brian Balfour** (00:30:25):
The second thing is then, okay, what's the moat? Has the moat been identified? And who seems to have identified it the first or as furthest along? My hypothesis, and I think there's a lot more consensus around this now than there might've even been three months ago, is that the moat is about context and memory. These models by themselves, if you compare them side by side, they generate the same result, and so the actual difference-maker is which one has more of your context, because it's the context plus the model that produces the best output, and then that starts to accrue to this loop around memory. The more you use it, the more it's able to store a memory around you, which feeds more personalized context, which produces better outputs. It ends up being another one of those flywheels, another one of those loops. 

**Brian Balfour** (00:31:16):
If you look at who's farthest on this, it definitely is ChatGPT. They were the first ones to memory. They've been investing a lot in these different types of data connectors, essentially context connectors, gathering all of this context, so you can really start to see it in the usage. 

**Brian Balfour** (00:31:37):
The second thing is, and one of the pushbacks I've gotten on my prediction has been, well, what about Google and Gemini? They have so much distribution through Chrome and all of this other stuff. Deedy Das, who's a VC at Menlo Ventures, actually published some good data on retention of all of these different ones. 

**Brian Balfour** (00:32:00):
I think the second reason I predict ChatGPT is if you look at history once again, it was never the person who had the biggest distribution at the moment of time. It was the one that had the best retention and engagement. Google had the best retention and engagement over the others. Facebook was smaller, but had way better retention and engagement over the others, so on and so forth. 

**Brian Balfour** (00:32:22):
The data that Deedy published clearly show that both the retention curves, which I know you and I have both written about at exhaustion, level off at significant portions higher than all the other platforms, as well as those retention curves have been shifting up dramatically over time, you can start to see the effects of memory. They have the very elusive smile curve, the ones that you just like. I've seen all of those dynamics very few times in my career, and they tend to be the folks like Slack and all of the big winners. It's just so elusive

**Lenny Rachitsky** (00:33:04):
The smile curve, just to people who don't know what that is, is essentially retention goes up over time, it goes down a little bit, and then you come back to it and you use it more.

**Brian Balfour** (00:33:12):
Yeah, that's right, and it's usually the result of some type of network of factor or something else, and it's an early indicator that that platform is on a trajectory to hit escape velocity. 

**Brian Balfour** (00:33:27):
The third piece is that, and they haven't really hidden these, but there's all sorts of signals that they're about to launch a third-party platform. They've been hiring for a bunch of roles. I've seen multiple postings on product manager engineering roles, all that kind of stuff for, quote, unquote, "agent platform" and all those pieces. It feels pretty inevitable that one of these players will need to launch a third-party platform in order to serve all the possible use cases on these tools. There's going to be some value exchange, which is like, hey, for your agent to be effective, you probably need access to the context and memory and distribution, so there'll be some value which is, "Integrate to us and we'll give you those three things which is going to drive more users and more usage," and we're going to go through the steps of the cycle. 

**Brian Balfour** (00:34:21):
You can already see this. They're starting to form preferred partnerships with some of the bigger players, which paves the way for smaller third-party players. It lends credibility to the platform. It's like, well, if HubSpot and XYZ are doing it, then I should probably do it, too. It's like that type of mentality. But that's why I think out of all of these platforms, ChatGPT has the best shot right now. 

**Brian Balfour** (00:34:47):
And then, a bunch of folks are always like, "Well, what about Claude? I really like Claude. I use Claude." Well, the problem with that is I think ChatGPT at this point has at least a 10x difference on MAU. If you're a developer and you're comparing those two platforms and you're looking at it and you're like, "Well, ChatPT has 10x the number of users and better retention engagement," it's like, what's the logical choice of which one you're going to prioritize your scarce resources on? 

**Brian Balfour** (00:35:20):
Those are just some of the reasons that my prediction is on ChatGPT. In the blog post that I wrote about this, I actually then played my own devil's advocate and said, "Okay, here are some reasons why it might not be ChatGPT," but I think we're in that part of the cycle. That's my prediction. I might be wrong in the prediction of ChatGPT, but I really think, I feel very confident we're going to see this cycle play out again.

**Lenny Rachitsky** (00:35:45):
Two follow-up questions here. One is, what would be the backup if it's not ChatGPT? It sounds like it might be Gemini or Google?

**Brian Balfour** (00:35:51):
My hypothesis of who's best-positioned but is not executing on it right now would actually be Apple-

**Lenny Rachitsky** (00:35:59):
Whoa.

**Brian Balfour** (00:35:59):
... because through the devices, they basically can see everything. They have the ultimate view into your context. They're sitting at that level But I don't know what they're doing. From an execution standpoint, maybe they're going to surprise us with something crazy magical, but we haven't seen any external signals around this. That's probably just based on what real estate and where people live in the stack would own. 

**Brian Balfour** (00:36:34):
And then, I think right behind that, I would probably put Google because of owning the context of things like email and the distribution points of search and Chrome and Android and those types of pieces. A lot of people point to them, but my experience with all of their products, going back to the retention engagement thing, is that if we could take a look inside their metrics, I think what we would see is a bunch of fly-by users in their mouse. They're sprinkling the Gemini bucket everywhere. I've literally clicked on it accidentally multiple times. My guess is a huge portion of their mouse is exactly that of what's happening right now. Look, they just acquired a very talented team from Windsurf and from-

**Lenny Rachitsky** (00:37:30):
And just the team. Just the team, part of the team.

**Brian Balfour** (00:37:31):
Yeah. We'll see. Things are changing dramatically on a week-to-week basis, so we'll see if they're able to press those advantages in a very clear way. But I think the window is very small for them if ChatGPT plays their cards right, because they clearly have the escape velocity right now. If they just keep pressing that advantage in the right way, I think it's going to be very hard for Google to counter in the amount of time that's left

**Lenny Rachitsky** (00:38:00):
On the Claude piece, I'll just throw this nugget out, I had Mike Krieger on the podcast, Head of Product, CPO, at Anthropic, and asked him just, "You're losing to ChatGPT. How do you approach the future of Claude?" He very specifically said, "Yes, they've caught lightning in a bottle. This is just going to win based on what I've seen at Instagram. So we are specifically focusing on what is Anthropic and Claude incredibly good at, which is developer tools, coding, backend stuff." So they're actually leaning more and more into that. If you've seen the revenue recently, they're making, I don't know, approaching 10 billion a year or some crazy amount of money. They're actually doing super well, just in a different use case.

**Brian Balfour** (00:38:40):
I'm glad you mentioned this because this brings up something that we skipped, which is, there are smaller platforms that have existed and will also emerge in this environment as well, and that's what you're alluding to. This tends to happen is things end up growing into more niches. Even if you look at social, like LinkedIn emerged as a subset of the social world, but even on these smaller platforms, these new distribution channels, they go through the same cycle. 

**Brian Balfour** (00:39:12):
I'll give something, really a very opposite example of the ones that I gave. Look at the platform Udemy. They are a platform for course creators. I don't know if most people know this, but when they started, their rev share to creators was something like 80% to creators. They started very high. That brought on all the course creators, got their whole marketplace going, so on and so forth. I believe it was about a year ago they announced that they're essentially pushing that rev share down to somewhere between 15 and 20%. 

**Lenny Rachitsky** (00:39:48):
Wow.

**Brian Balfour** (00:39:48):
They're somewhere at 25 and 30%. Another example of they close down organic distribution in order to monetize, all that kind of stuff. The same thing will happen in this AI world. Cursor, it's very clear Cursor's on the path to also probably create some type of agent platform for developers. That'll be a smaller ecosystem to play in for some products. It feels like everybody has the same strategy at this point is everybody wants to launch an agent platform. I imagine some of these other horizontal productivity tools will do the same thing, maybe like a Notion or an Airtable or a Monday.com or something like that. 

**Brian Balfour** (00:40:31):
There will be smaller platforms that will emerge, and they will follow the exact same cycle that I'm also discussing, but in terms of the biggest consumer one, that's where I think ChatGPT has probably the most escape velocity and others will focus on different areas. Just to be clear, I love Claude. I actually use both Claude and ChatGPT-

**Lenny Rachitsky** (00:40:58):
Same.

**Brian Balfour** (00:40:59):
... for different things. I have lots of love to go around for all these tools. My prediction has no bearing on which product I like the most right now.

**Lenny Rachitsky** (00:41:07):
Also love Claude. So the key point here you're making is that there's almost a number of distribution channels emerging. Many of them will be niche. I think of LinkedIn. LinkedIn for me has a very targeted audience, for folks that listen to this podcast. Even though it's not, I don't know, Google or Facebook or whatever, it's still incredibly valuable for this specific thing that I do.

**Brian Balfour** (00:41:30):
For sure.

**Lenny Rachitsky** (00:41:31):
I think this is even more interesting that there's going to be a number of distribution channels that emerge out of this whole AI wave. 

**Lenny Rachitsky** (00:41:37):
The other thing I'll note real quick, you mentioned this idea of everyone's building agents. I just had Brett Taylor on the podcast who's building Sierra, and he made me realize why everyone's building agents partly. One is because the outcome-based pricing that you can charge with agents is incredible because, one, you can actually attribute their impact on your business's ROI. You can actually see this is saving an agent $15 because it solved the case. And it's attributable and it's autonomous. It's just doing it on its own. With that, you can charge per outcome. You can say, "We'll charge you a dollar," every time it solves an issue. So the monetization opportunity is huge and the margins go up like crazy.

**Brian Balfour** (00:42:19):
Can I just ask a question about that?

**Lenny Rachitsky** (00:42:21):
Yeah. 

**Brian Balfour** (00:42:22):
Do you think that has longevity in the sense that... That makes sense in the current environment that we're sitting in right now because people are comparing these outcomes relative to what it costs them today with pure humans. But once again, competition comes in at some point, and so that feels like that creates a pretty ripe opportunity to undercut and come into... and then you have the disruption theory playing out as well. It obviously depends on the infrastructure costs and compute costs to run these things, but I just wonder how much of that is temporary versus something that'll be long-term.

**Lenny Rachitsky** (00:43:07):
So you're saying that dollar will come down to 50 cents, 25 cents, or you're saying someone's going to come with a whole new business model and disrupt that whole approach?

**Brian Balfour** (00:43:15):
More the first, yeah. It's just competition erodes that away, essentially, right?

**Lenny Rachitsky** (00:43:19):
Yeah, that's a good point. So margins will be higher for a while, and then they'll come down.

**Brian Balfour** (00:43:24):
Unless there's something else that creates a durable pricing power, right? 

**Lenny Rachitsky** (00:43:31):
Yeah. 

**Brian Balfour** (00:43:34):
That's probably the second piece of this. Yeah, that's probably the second piece of that hypothesis, I feel like. 

**Lenny Rachitsky** (00:43:38):
Yeah. I guess the opportunity there, the moat would be the data, similar to how Cursor is collecting more feedback on what people want in their code suggestions, maybe in theory CRF and has more and more data over time, and there's this network effect-

**Brian Balfour** (00:43:53):
Yeah. That's right. Let me revise that. I believe in that as long as it's paired with-

**Lenny Rachitsky** (00:43:59):
Some moat?

**Brian Balfour** (00:44:00):
... this second piece. Otherwise, it gets competed away.

**Lenny Rachitsky** (00:44:03):
Good tangent. Okay, one more question. What is your prediction on timeline for when the opportunity appears, and what do you predict, as of the day we're recording, what do you predict will be the next couple things that ChatGPT, and let's just focus on that, releases to start to open up this platform to get everyone in there?

**Brian Balfour** (00:44:26):
Well, look, I'll first give the disclaimer that I feel like any thoughts on timing in the AI market have been very hard to predict. It's always shorter. That's where we should buy us. It's always shorter than you think of when something's going to happen. That's what it's felt like from the seat that I've been sitting in. But my guess is this: we're going to see the next major steps of this play out over the next six months. 

**Brian Balfour** (00:44:57):
I think we just saw one of the pieces drop around this, which was, ChatGPT's recently launched Agent mode. It's kind of a general-purpose agent, and I think that starts to introduce all of the users to using agents and they're figuring out and placing it in the different tiers and business models, all of those pieces. But it's likely that no general-purpose agent is going to fulfill all of the infinite use cases successfully. There's two reasons for this.

**Brian Balfour** (00:45:30):
Users struggle with horizontal tools. They can do everything, and that's exactly why they struggle to adopt, and so they typically need more specific entry points. But also, the more specific use case you get, sometimes you need specific UI, specific data, other specific ingredients to properly fulfill that use case for a given audience. I think their Agent mode was a step in this direction. 

**Brian Balfour** (00:45:56):
What I would expect to see play out next is that they will either launch, they will announce the platform with preferred partners, or what they're going to announce first is basically a set of preferred partners, the guinea pigs, an initial 10 to 20 folks that are bringing agents to their platform. What that does is essentially, once again, it's a credibility card. You do special deals with some brand names to give the platform credibility, and it creates this desire from everybody else to come on to the platform.

**Brian Balfour** (00:46:37):
And then the step after that is starting to opening up the platform. This is where we'll really start to figure out what this game is going to look like because they basically have to define what the value exchange is. What are they giving you access to, and what are they incentivizing you with to come onto the platform? That's one version of it.

**Brian Balfour** (00:46:58):
The other version of it is just the replacement to search. You can also see them starting to make more moves here, which is deeper attribution in some of the results, those types of pieces. They're bringing in shopping. That's one of their recent announcements as well, native into the UI. Essentially they will form new monetization mechanisms around that stuff as well. That's actually going to be very important because, going back to the moat around memory and context is that they will want to incentivize as many people to their free tier as possible, but given the cost of AI, they have to cover it somehow, so they're going to need some monetization mechanisms. The more that they can cover that free usage with things that aren't subscriptions, I think that probably also feeds the moat.

**Brian Balfour** (00:47:51):
I think those are some of the next steps on two different vectors, more of a third-party developer platform and more of the content, whatever you want to call it, AEO, GEO. I don't know what acronym is we've all decided on yet. Let me know if we have. I think those will be the next steps that we'll see. 

**Brian Balfour** (00:48:13):
Now, that's what I think for ChatGPT. I think the thing that we should talk about is, essentially what I would advise folks, especially startups, is you're placing bets. At this part of the cycle, you're placing bets. The winner is 100% guaranteed, as I mentioned, and so you essentially at some point will need to make some decisions about where to place your bets.

**Brian Balfour** (00:48:37):
In the Facebook days, all those other social networks, they also came out with their own platforms. iOS had Android and some failed initiatives from Windows. I don't even remember what that platform was called. You can look back and whoever placed through... the iPhone was actually a very, and iOS is a good one, which is, if you had only aligned your bets to Android, you probably lost. If you somehow found a way to play on both ecosystems, you could be a winner. But if you only aligned to iOS, you could also be a winner. You had to have iOS as part of your betting strategy in order to win. 

**Brian Balfour** (00:49:21):
Everybody right now, you're probably at this cycle and you're trying to figure out, well, everybody will need to figure out where are they going to place their chips. How are they going to bet? Depending on how you bet really depends on what your current position is in the marketplace. If you're a late-stage startup, let's start with that, or a late-stage company, you can afford the luxury to place multiple bets and spread your chips and wait it out a little bit to see who the winner is, and then really throw your muscle behind that winner. You have that luxury a little bit. But the risk of that, the risk of that is that sometimes the incumbents wait too long to make that decision, and that's the key question they will need to answer. 

**Brian Balfour** (00:50:08):
The key question for startups is totally different. You don't have the luxury to spread your chips. You have to go all in. You have to choose one and go all in. You have scarce resources, scarce attention from the market. It's a totally different ballgame. Higher risk, higher reward, for sure. That's part of the betting strategy for startups. That's what you have to do is you have to figure out your betting strategy, and then we can talk a little bit about how you might evaluate and pick the right course for you. That's where we're all at right now is we just entered the casino, we just put some cash in for some chips, and now we've got to figure out what tables and where to place those chips.

**Lenny Rachitsky** (00:50:56):
I love this analogy. Just to be crystal clear about what listeners should do, what founders should do, what product teams should do, the advice here essentially is integrate with ChatGPT, maybe Gemini, maybe if Apple has something, actually integrate with what they launch. It could be a login thing, could be a search thing, could be a connect and suck up your memory in context. The advice here is you need to do this because this is potentially the way that most companies will start to grow and your competitors may overtake you.

**Brian Balfour** (00:51:30):
Yeah. If we had to really simplify it, it's essentially, play the game. Don't opt out of the game. Don't trick yourself into thinking that you can't play the game. That's number one. Number two, no matter who you bet on, just make it a focused bet. Because if you look back, all the failures are the ones that tried to play multiple games at once with scarce resources, and that just tends to never work if you're an early-stage startup. So those two things: play the game, put a focused bet.

**Lenny Rachitsky** (00:52:03):
**Brian Balfour** (00:53:31):
Yeah, 100%, and that's exactly what I think you see them doing. Look, to be very clear, I have not talked to anybody at HubSpot about this. I have not talked to Dharmesh about this, but Dharmesh I think has also published about this. The right thing to do is, essentially, even though you understand how the cycle plays out and you don't necessarily understand what your exit strategy is once you get out, it's better to be early, know that you need to figure out an exit strategy and figure out that exit strategy along the way versus waiting and then being super late and then know what the exit strategy is. 

**Brian Balfour** (00:54:15):
I think that's exactly what you see them doing. They're trying to be as early to this stuff as possible. I think it's a pretty smart play, even though we might not necessarily see what the exit strategy is out of this cycle for them.

**Lenny Rachitsky** (00:54:34):
Going back to that amazing quote that you shared at the beginning of the conversation by, I think it was Alex Rampell?

**Brian Balfour** (00:54:40):
Yeah.

**Lenny Rachitsky** (00:54:40):
Of that startups win by finding a distribution channel before the incumbent copies them. What you're saying here is this is the opportunity for startups to disrupt an incumbent. This is the opportunity for someone to disrupt Salesforce, I don't know, ServiceNow, all these guys that have been around for a long time.

**Brian Balfour** (00:54:59):
Yeah, it's going to be one of the major ones. Now look, you've already seen players that have been able to hit this escape velocity, the Cursors and stuff of the world. Once again, there's multiple ways to hit that escape velocity, but this is one of the major ways to do it is to basically hitch yourself to a new platform. Look, you did it yourself, actually. You hitched yourself to Substack super early. You took a focused bet.

**Lenny Rachitsky** (00:55:27):
I was going to say that. 

**Brian Balfour** (00:55:28):
Yeah, yeah. I don't know why that just hit me, but you took a focused bet and you've benefited from it in a disproportional way than those that came later. I think that's actually a great meta example here as I sit here and think about this.

**Lenny Rachitsky** (00:55:44):
Yeah, that's actually the way I thought about when I was moving to Substack. I feel like there's this wave rising and I want to ride this wave, even if maybe it's not the best place or they take a cut, all that stuff. But it worked out really well. 

**Brian Balfour** (00:55:55):
That's right. I think it worked out very well.

**Lenny Rachitsky** (00:55:58):
It worked out really well. To be honest, it felt like it was too late when I started six years ago.

**Brian Balfour** (00:55:58):
It felt too late?

**Lenny Rachitsky** (00:56:05):
Yes.

**Brian Balfour** (00:56:06):
Oh, say more about that. 

**Lenny Rachitsky** (00:56:07):
It always feels too late, I think, to people that join... Silicon Valley, or sorry, Marc Andreessen has this famous quote. He's like, "I came to Silicon Valley in the '80s. I thought it was over, I was too late. I missed all the opportunities." That's fair. There was just a lot of newsletters. They were doing really well. Millions of subscribers. I'm like...

**Brian Balfour** (00:56:24):
And what do you say to people now who want to join Substack?

**Lenny Rachitsky** (00:56:27):
"Learn from this example." A lot of times when people think that it's too late, it's definitely not too late, and it's always only just getting started. Especially if you're on Twitter all day listening to podcasts like this where we're surrounded with this bubble of everyone talking about something, when in reality, 1% of people know anything about what you're hearing about every day.

**Brian Balfour** (00:56:45):
Yeah. Yeah, that's so interesting.

**Lenny Rachitsky** (00:56:47):
Okay, so coming back to the advice, say someone is sitting there and talking to their manager like, "Brian just shared all this mind-blowing advice. We got to pick our battles, we got to pick our platform," what would your advice be for them to decide where to place their bets?

**Brian Balfour** (00:57:06):
I think this is a great question because, once again, put my personal prediction aside for a second, and I would encourage everybody to think about it from first principles from who their audience is, what their product is, what stage of company they're at, their current strengths and weaknesses, you got to take all this into account, but if I had to boil it down to a few criteria, the main things I would think about is, when you're looking at new distribution channels and new platforms to choose on, one, going back to what we said before is the better signal is retention and depth of engagement of the users on this platform than it is pure user level like MAU or some other number of signups, one of those vanity metrics. Look at that number one. 

**Brian Balfour** (00:57:51):
Number two is, there's some element of user quality and ability to monetize the users on this platform. I think the starkest example here would be iOS and Android. Even today it's something like Android has 70-some percent of devices, but only 30% of the market share by dollars, and it's the exact flip for iOS. It goes back to what we were talking about earlier, which was, if you bet on Android only, you probably lost, but if you bet on iOS only, even though smaller user base, you were still able to parlay that into a win later. 

**Brian Balfour** (00:58:31):
The third thing to look at is, as these platforms emerge, just analyze what the value exchange is. What are they giving you to incentivize you to develop on their platform? All these platforms, it's a bit of a game of whoever understands the rules and how to arbitrage the rules the best tend to be the ones with the edge and figure that out.

**Brian Balfour** (00:58:58):
And then finally, fourth on my criteria would be pure scale. Obviously, even if you have those other three, but there's a 200x difference in scale and momentum, obviously you probably have to choose the bigger platform. 

**Brian Balfour** (00:59:20):
But last but not least is as you go through these criteria, these are how you think through entering the game. Once you enter the game, then you immediately need to move to starting to think about how do you exit the game. Knowing once again that that last step is going to come at some point in the future, that there's going to be some closure for monetization, then that's where you have to start thinking through your strategy to exit. 

**Brian Balfour** (00:59:47):
That comes down to things like, okay, well how are you going to own an important part of the user experience or workflow? Or how are you going to accumulate specialized data in context that the major platforms don't have? Or how do you create different types of micro network effects? All of these types of things. So just once again, there is the entrance criteria, but once you figure that out and you feel like you're in the game, you immediately need to move towards, okay, what's my exit plan here, knowing this is all coming.

**Lenny Rachitsky** (01:00:22):
It's interesting that another way to think about this model you've described as building, the strategy of building on top of LLMs and becoming a GPT wrapper. Because essentially this tech allows you to, say, create a cursor that is incredible, and then you could argue, oh, you're just going to be this wrapper, and they're getting all the money here, everyone can copy you. What's your defensibility long-term? The answer is, what is the moat you will build over time sitting on top of this thing that will make you more and more valuable on term and not have to rely on this thing? It feels like you could use the same framework for building a GPT wrapper business, to use that euphemism.

**Brian Balfour** (01:01:02):
Yeah. 

**Lenny Rachitsky** (01:01:04):
Say someone is sitting there today. Is there anything they can do to start making a bet? Is it simply creating an MCP that allows LLMs to suck in your data? Is that the one thing you could do today? Is there anything else that's available today to start using these platforms, or is it just a little too early and they haven't released the good stuff yet? 

**Brian Balfour** (01:01:25):
It might be just a tad too early. We're right on that edge. Some of the questions I'm asking myself is, I'm going through all of these players and where our customers and target audience live, and I'm asking myself the question, okay, if this player launched some type of platform, how would we evaluate it? So on and so forth. 

**Brian Balfour** (01:01:51):
You can also try to cozy up to these folks. I would place a large portion of my net worth right now that if we could sit in the OpenAI offices at that front desk, that they are having meetings with potential preferred developers talking about this, we could probably sit there and log it. I do think some people are going to be in a place to develop preferred relationships and make a note. If you're in that spot, then you should definitely play that card. A lot of early-stage startups will be in that place.

**Brian Balfour** (01:02:30):
Other than that, I would say, once they launch these platforms, you can't do much else, so you really know what the value exchange is and what they're going to expose for you, but also just be prepared to turn your strategy on a dime and go all in. I think that's probably one of the hardest parts of this is that these things emerge and you have to capitalize extremely quickly. A lot of times, it's hard for leaders to do that because they don't want to create a feeling of whiplash into the unknown, and we've got all these projects in play. You know all the things. I think that's probably the last part of what we can be doing right now versus just staying on top of everything as it emerges.

**Lenny Rachitsky** (01:03:14):
As you were talking, this reminded me, I recently noticed that ChatGPT is driving me to my newsletter more traffic than Twitter, and I feel like that recently shifted. I didn't even know this was a thing until I just started looking through my referrals. I'm like, "ChatGPT? What the hell is going on there?" It's like a different version of what you're talking about, but essentially, in theory I could block ChatGPT from... I don't know. I don't even know if I can from... including all my stuff. 

**Brian Balfour** (01:03:39):
You can in Substack now, yeah. I just saw that setting in there.

**Lenny Rachitsky** (01:03:42):
Okay. Oh, interesting. That's the similar kind of decision is, is it better for me for it to be recommending my stuff and telling people, "Hey, go check this thing out," or is it better to block it off? I think, per your point, and this is the way I felt, take it all. It's good. In that, it's better that it's from Lenny's newsletter than something else. So someone else will come in and eat that market share.

**Brian Balfour** (01:04:06):
Yeah, that's right. If you don't do it, somebody else is. I think that's also what all the major media publishers are really contending with right now.

**Lenny Rachitsky** (01:04:18):
I guess I need a licensing deal with New York check. Anyway. Okay. I want to go on a totally different tangent. We weren't planning to talk about this. I know that I said this, we're going to be fully focused on this one topic, but there's something you mentioned to me before we start recording that I think will be really interesting to a lot of people. 

**Lenny Rachitsky** (01:04:34):
You guys at Reforge are now building actual SaaS products that people can buy. It's not just courses. I don't know if people know that, but let's make sure people understand this. There's actually products for product teams, so maybe just explain that briefly, but the thing that I think is really interesting here is you work with a lot of companies now selling them AI tools, and you have noticed a very big difference between the companies that are really good at adopting AI tools and seeing gains from them from those that don't. Talk about just what you see there, and because this is in theory going to be really helpful to companies that are struggling with adopting AI tools and seeing gains.

**Brian Balfour** (01:05:09):
Just to quickly explain that transition so it makes sense for people, which is, I started Reforge just with the interest that there was all these incredible leaders out there growing on the front lines of some of the fastest growing companies and they have all this amazing knowledge and I wanted to encode it in useful and practical ways for others. That took the form of courses and content and product, all that kind of stuff at the beginning. Along the way, everybody kept asking us to essentially build the tools to implement what we taught. Because with anything, you can learn as much as you want. You can listen to my podcast, your podcast, Lenny, whatever, as much as you want, but if you don't actually put it into action and implement it, then it's not really going to create value. 

**Brian Balfour** (01:05:56):
People kept asking us to really close that gap and we said no for the longest time. And then about a couple of years ago when AI really started to inflect, it really created this moment that, oh, wow, now there's this opportunity not just to encode this knowledge into content, but also into the products, the software, the tools that we use ourselves. So we started to take a really big bet on that and started to develop this new platform for AI-native product teams. 

**Brian Balfour** (01:06:22):
The first product we launched is called Reforge Insights, which acts like your AI product researcher, aggregates all the feedback from all the sources, uses AI to analyze it, helps you explore it, but also will start to identify what are the gaps, the things that you don't have in your feedback today and auto-generate the research to go gather all those new insights, so complete the full cycle. We're going to launch two other major products as part of this platform before the end of the year, but we'll save that for some future episode. 

**Brian Balfour** (01:06:53):
So that's been our journey. We've seen inside companies that are going through this transformation from two perspectives. One is obviously selling in that tools, but the other perspective is, for 10 years, companies have been coming to us to help them try some sort of transformation with our learning product.

**Brian Balfour** (01:07:15):
Most companies are not coming to us to just throw a bunch of courses in front of, they're trying to solve some big business problem, some transformation. Now that used to be things like, we've got to figure out this growth thing, or I'm going from sales-led to product-led, or I have more project managers and I need to transition to product managers, something like that. There's some business problem, they're going through some transformation and they saw us as part of that transformation and we got to partake in quite a few of those types of transformation.

**Brian Balfour** (01:07:50):
Now of course, the transformation that everybody's going through is, okay, how do I become more AI-native? How do I adopt this stuff? We've seen a pretty wide spectrum and from both perspectives of how companies are approaching this. I'm sure everybody's seen that AI, we've been calling them the AI manifesto memos from CEOs out there that proclaim, "We are now AI-native," in some grandiose way, but behind the scenes, there's actually some incredibly stark differences in the actual teeth of what backs up those memos and backs up those executive decrees that we should all be AI.

**Brian Balfour** (01:08:43):
Just to point out a few of them, which is, one is that I think the most impactful thing that you can do is form really hard constraints. There's other parts that's like, okay, you want to communicate this, you want to establish an owner of who's going to drive this, you want to build an incentives and rewards, and you see this all playing out in things like building it into your career ladders, or some people are starting to introduce this as questions into their performance reviews, all those types of pieces. But the thing that is actually moving the needle are the companies that are defining incredibly hard constraints. 

**Brian Balfour** (01:09:30):
One company that we worked with developed this constraint that they benchmarked against other companies of their revenue size and the team sizes for those stages, and they set a benchmark that we will be one-fifth, each of our functions will be one-fifth the size. What that did is it created a constraint that you couldn't hire above that level, and it forced people to essentially find ways to adopt AI and do things to replace that. So that was one. 

**Brian Balfour** (01:10:01):
You've seen these other ones, I can't remember from what company, that might've been Shopify or another, who was like, you are not allowed new headcount until you prove to us that you are not able to accomplish this with AI. That's another hard constraint. But you also see these other constraints on a smaller level, which is executives saying, "I will not do a product review or review a PRD unless it comes with three prototypes." Something like that. That's the hardest one. Those are the biggest constraints.

**Brian Balfour** (01:10:33):
I think the biggest change that I'm seeing is, and the things that separates out the top few percent making this change and everybody else is essentially making the hardest decisions, and that hardest decision is going to come down to exiting people. In every transformation, what we see is essentially three groups of folks. We call them the catalysts, the people leading the charge, the people who are experimenting, doing this on their own time, all that kind of stuff. 

**Brian Balfour** (01:11:07):
You then have what we call your converts. These are folks that will make the transformation, they will adapt, but they need structure, they need permission, they need a clear outline, they need a clear plan. I don't say this in a negative way, it's just that that's how some people operate. That's where things like all the things that we were talking about before, which was the decree, the permission, the clear budgets, the rewards, all of those types of things. 

**Brian Balfour** (01:11:37):
But then, inevitably you have a certain percentage that are anchors. They're dragging their feet, they're silently creating friction in the background and all those pieces. There's a big difference in how I think companies are treating and thinking about their strategy for those folks. One group is like, ah, we're going to work with them very passively. Others have set a hard deadline. They're either going to make the transformation by X date or we're going to exit folks. 

**Brian Balfour** (01:12:13):
A lot of people look at this as being really harsh. I think a lot of people would think that, especially individuals, but let me explain it from more of a CEO perspective. A lot of these companies are seeing this AI transformation, the ones that are taking it more seriously, as this isn't adopting new tools, this isn't a light change. This is a fundamental culture change of how we operate as a company. You can't have 20, 30%, whatever meaningful number of it is of your company trying to operate in a completely different way, in a completely different culture.

**Brian Balfour** (01:12:48):
Cultures thrive on density, and that's why there's sometimes the best ones feel like cults. As a result, from that perspective, it's like, hey, for us to be successful, for this to be the best thing for all employees, we all need to be operating around the same culture of principles and stuff. If that's not you anymore, then we're defining a plan to exit it.

**Brian Balfour** (01:13:16):
I would say that less than 10% of companies we see are taking this hard stance, but I would say they are probably the ones that are farthest along getting the most adoption and are seeing the most results of the ones that are taking those hard stances. There's a bunch of other stuff I could talk about, but that's the high level of what we've seen across a bunch of different companies.

**Lenny Rachitsky** (01:13:37):
That is incredibly interesting. I'm glad we went there. I have a newsletter post coming out soon, probably before this episode, that touches on a lot of advice along these lines. I am excited for you guys to keep seeing these insights into companies and sharing more of this because this is I think what a lot of people are looking for, just like things aren't quite clicking at our company. We keep hearing everyone just getting so much more productive. All these companies are running more efficiently and it's not working here. I think that's the kind of advice a lot of people are looking for, so thank you for sharing all that. 

**Lenny Rachitsky** (01:14:09):
Brian, is there anything else that you wanted to touch on? Anything else you wanted to leave listeners with before we get to our very exciting lightning round?

**Brian Balfour** (01:14:15):
Well, actually, just a couple more points on this topic we should go. There's probably two more things I would say about this. One is that, if you're a CEO listening to this, I would say that most CEOs or most executives are incredibly disconnected from the actual AI adoption taking place inside their companies. I think a lot of executives who have done these decrees and all that kind of stuff think it's happening naturally, but we talked to both groups. We talked to tons of end users and we talked to tons of executives. 

**Brian Balfour** (01:14:49):
The story we hear from the end users, the PMs, the eng, all that kind of stuff that we talk to using all this stuff, one of the main questions we ask them is, if we're talking to somebody who's picked up a prototyping tool, say, "Well, how many other people on the product and design team are using this?" Almost 90% of the time it's like, "Ah, it's me and this one other person," and everybody else hasn't taken it up. So there's a huge disconnect. 

**Brian Balfour** (01:15:17):
We heard one story, and I can't say the name, but it's a company we all know. It's a major tech company, a tech-forward company. CEO's been out there talking about being AI-native. We talked to one of their principal PMs. Person was early to the prototyping tools. This person shared a prototype with the designer, the eng manager. The designer and eng manager escalated it to the VPs. It caused this whole conversation. Month later, it was still stalling out. This PM happened to then attend a happy hour where the CEO was at and approached the CEO and told the CEO about the experiment that they were running with prototyping and stuff, and the CEO was like, "This is fantastic. Where is it at right now?" He was like, "Oh, well, X, Y, Z happened." The CEO had no idea. And then the CEO is like, "Okay, let me take care of it," and then the next day, it happened.

**Brian Balfour** (01:16:18):
So one is that you have to go to the ground floor on this stuff. Some of the best companies like Shopify and others are measuring actual adoption and usage. They've gone to the extreme on that front to get a bunch of signals and close to the ground. It just goes to show that this is... I don't think we want to talk about going founder mode, but the reality is it's not just about getting into the weeds of your product, but with something this sizable, you got to get into the weeds of the transformation to really understand what's going on and adopt it. That's point number one. 

**Brian Balfour** (01:16:58):
The second point I would say is Fareed, we do this podcast called Unsolicited Feedback, Fareed Mosavat had this great quote on it. He was like, "Look, your output is constrained by the slowest part of your system." That stuck in my head because it's absolutely true. If you think about AI adoption as a system, there's all parts of the system that could be slowing adoption. It might be that people don't feel permission or they don't have the budget or they don't have the knowledge, all these types of things. In a lot of these cases, it's things like IT, legal, procurement are the slowest part of the friction and are setting the pace of all of this output.

**Brian Balfour** (01:17:43):
You can also see this in just product teams. There's been all this talk about product managers are becoming the new bottleneck because engineers are speeding up. Well, that's because people are speeding up one part of the product system and not the other parts, which makes sense. They adopted all of this tooling for engineers because they're the biggest head count and the most expensive and all that type of stuff, but product is an output of design, PMs, and engineering. The system is there not to produce code, it's to ship product, and shipping product is the function of those three things. 

If you just accelerate one part of the system, you're just going to move to the bottleneck to another part and your actual product output, the output of the system doesn't accelerate, either. I think people have to really understand those two things: what is actually happening on the ground floor, and what is the slowest part? What is the thing that is causing the slowest part of the adoption? Just attack them ruthlessly if you're really serious about making this transition.

**Lenny Rachitsky** (01:18:47):
What a wild time we're living through. So much changes. 

**Brian Balfour** (01:18:48):
It is a wild time, yeah. 

**Lenny Rachitsky** (01:18:51):
All these ways that we're all so used to, okay, this is how we do it.

**Brian Balfour** (01:18:54):
Yeah. It's exciting and exhausting at the same time, man. That's how I think about it.

**Lenny Rachitsky** (01:19:00):
Such a simple way of describing the road.

**Brian Balfour** (01:19:02):
Yeah.

**Lenny Rachitsky** (01:19:03):
Oh, my God. Okay, Brian, is there anything else before we get through our very exciting lightning round?

**Brian Balfour** (01:19:08):
That's it. Let's do lightning round.

**Lenny Rachitsky** (01:19:09):
Here we go.

**Brian Balfour** (01:19:09):
Zap, zap, zap. 

**Lenny Rachitsky** (01:19:11):
Ding, ding, ding. All right, Brian, I've got five questions for you. Are you ready?

**Brian Balfour** (01:19:14):
Let's do it.

**Lenny Rachitsky** (01:19:14):
Okay. What are two or three books that you find yourself recommending most to other people?

**Brian Balfour** (01:19:20):
My God honest answer is that I have not had the time to finish an entire book since I had my second child. From a complete book standpoint, I have not been able to... Things that I actively read on a regular basis, just other content out there that I'll throw out there is, gosh, Jamin Ball from Altimeter Capital writes this great newsletter called Clouded Judgment, which is mixture of market thoughts as well as market stats. That's really useful to help me keep a pulse on the market. I was just reading through some stuff from NFX that's been pretty good lately on all of this. I know James Currier and I, we lived a lot of the same cycles through social and stuff, so I tend to identify with that. I don't know, those are two things that I love reading.

**Brian Balfour** (01:20:19):
Sorry, I'll give one more shout-out to a different podcast, which is from two guys at Spark Capital, Nabeel Hyatt, which I know from my early Boston days, and Fraser, sorry, I'm blanking on the last name right now, who was Head of Product at OpenAI, and they've got a great format where it's just those two riffing on some ideas and stuff. I highly suggest that one. I like that one a lot.

**Lenny Rachitsky** (01:20:45):
Here's my reading tip that has changed my reading habits. Bryan Johnson, the longevity guy, he has this advice for better sleep, which includes, before you go to sleep, read for 10 minutes in bed. 

**Brian Balfour** (01:20:58):
It does put you to sleep. I don't feel like I retain anything that I read that close to bed, though. Do you feel like you retain it?

**Lenny Rachitsky** (01:21:05):
I do, I do. I'm reading fiction. It's nonfiction. Sorry. You want to read something calm, not like I'm learning. I'm reading fiction and it's really nice. Knowing that this is going to help me sleep better makes me motivated. 

**Brian Balfour** (01:21:17):
There's an incentive. There's a reward there. 

**Lenny Rachitsky** (01:21:19):
The reward, yeah. 

**Brian Balfour** (01:21:20):
They're talking about rewards and creating behavior change, yeah. 

**Lenny Rachitsky** (01:21:23):
Exactly. The reason to do it is this whole thing is you want to get to low resting heart rate, and that helps lower your resting heart. 

**Brian Balfour** (01:21:29):
I've got some other sleep tips on that front if you want to go down that path, but we'll save that for you.

**Lenny Rachitsky** (01:21:34):
Please, for the third podcast. Okay, next question. Do you have a favorite recent movie or TV show that you really recently enjoyed?

**Brian Balfour** (01:21:40):
It's not new, but I just rewatched Silicon Valley that I hadn't watched in a number of times. It's painful because the first few seasons, I went through almost every one of those moments in my first startup, like hiring the gray-haired CEO, the funding falling through at the last second, all the crazy stuff, but going back and watching that, there's just some extra nuances and stuff that I feel like they wrote really well that I thought was really good. I've really been watching that. 

**Brian Balfour** (01:22:16):
The other thing that I've watched is just more of a just pure entertainment, calming thing, turn the brain off is Owen Wilson's new show on Apple TV, Stick, which is about him as a former professional golfer and all that. I won't ruin the show and stuff, but it's a very nice calming, little bit fun type of show. 

**Lenny Rachitsky** (01:22:40):
I've been seeing that on my Apple TV. Maybe I should check it out. Good tip. Do you have a favorite product you've recently discovered that you really love? It could be a gadget, it could be a app on your phone, it could be something in your computer. It could be nothing at all.

**Brian Balfour** (01:22:54):
You can't see it, but I just changed my whole setup. Now I have a UltraGear super-wide curved screen with a very nice standing desk from, I believe it's called Ergonofis. Er.

**Lenny Rachitsky** (01:23:13):
Ergonofis?

**Brian Balfour** (01:23:15):
Yes. I think it's Ergonofis, E-R-G-O-N-O-F-I-S. 

**Lenny Rachitsky** (01:23:21):
All right. 

**Brian Balfour** (01:23:21):
It's a very nice, sleek standing desk. Very stable, very quiet. Very much enjoy.

**Lenny Rachitsky** (01:23:29):
Excellent tip. And the curved monitor, very cool. Okay, two more questions. Do you have a life motto that you often come back to and find useful in work or in life, something you share with folks, something that you think about when times are hard or just generally?

**Brian Balfour** (01:23:42):
Look, it's a little cliche at this point, but it's somewhere around here, I used to have the quote printed out about the man in the arena. Especially in times like this where so many things are changing and there's so much competition, but so much opportunity for great, I really both respect and enjoy the game and spending time with folks that are in the arena figuring this stuff out, tinkering with things. That's what I keep coming back to, especially been at Reforge for 10 years, that's a good portion of my life, and we've gone through some great periods and some tough periods, so I tend to come back to that.

**Lenny Rachitsky** (01:24:30):
And that's what always separated Reforge from so much other content and advice is it's people in the arena sharing their wisdom, not just a bunch of influencers. It's sad that Chamath made that quote so cringey.

**Brian Balfour** (01:24:41):
I know, I know. That's why I said it's a little cliche cringe right now.

**Lenny Rachitsky** (01:24:47):
Screwed it up for everyone. 

**Brian Balfour** (01:24:49):
Yeah. 

**Lenny Rachitsky** (01:24:49):
Final question. Brian, you don't know this, but your parenting advice on Adam Fishman's podcast-

**Brian Balfour** (01:24:54):
Oh.

**Lenny Rachitsky** (01:24:55):
... really impacted my parenting philosophy, specifically this line you had about independence.

**Brian Balfour** (01:25:01):
Oh, yes. 

**Lenny Rachitsky** (01:25:02):
I'd love for you to just share that insight about how you think about raising kids,

**Brian Balfour** (01:25:08):
I wish I could remember where I grabbed this from so I could attribute it properly, but basically, the philosophy is, if you think about going from when they're born until they're essentially 18 and leave the home, your job as a parent is to essentially make them more and more independent. What that involves is continuously looking for opportunities for them to make even bigger and riskier decisions for themselves as they grow up and you're there as a support to those decisions, but letting them make those decisions on their own so that by the time they're 18, they are a fully independent person able to think through those decisions themselves. 

**Brian Balfour** (01:26:03):
Now, look, my sons are young. They're five and three, so it's not like I'm having them make life and death decisions or where we might buy our next house or stuff like that, but it's even small things at this age of... My oldest, five and a half, is really starting to learn and get curious about money and how you spend money and where new things come from and how you earn money. Rather than just buying things for him, he's got money from his grandparents and stuff saved up, and we can be like, "Okay, you can buy that thing, but you're going to spend this," and try to teach him the consequences and all that kind of stuff, and then when he breaks something...

**Brian Balfour** (01:26:50):
It's just small things like that, but thinking about the time from zero to 18 as this spectrum of independence and being a supporting role in what you're essentially doing is you're trying to move as many decisions, the percentage of decisions you make for them down to zero by the time that they're 18. That's something that I've kept in the back of my head since really seeing that. 

**Lenny Rachitsky** (01:27:19):
Thank you for sharing that. I know I didn't tell you that I was going to ask you about this, so that was a beautiful way of summarizing it. 

**Brian Balfour** (01:27:25):
Yeah, I couldn't remember that whole podcast. I had no idea what I said, but-

**Lenny Rachitsky** (01:27:25):
I would say you nailed it.

**Brian Balfour** (01:27:28):
... that's a good one, yeah. 

**Lenny Rachitsky** (01:27:31):
Brian, two final questions. Where can folks find you if they want to reach out and where can they find the products you guys offer? Whatever you want to plug. Also, how can listeners be useful to you?

**Brian Balfour** (01:27:41):
Check out reforge.com. Check out our new products like Reforge Insights. They're on the website. You can find me personally, my writing, including a bunch of the stuff that we talked about today now on Substack. Just recently moved. You can either go to my website, brianbalfour.com, where I have some info or just the blog.brianbalfour.com where all of my new writing is taking place. Those are the two major pieces. 

**Brian Balfour** (01:28:08):
Last but not least is that, as I mentioned, Fareed Mosavat, who I used to work with at Slack, we have this fun podcast. The two of us get on there and riff like we were having dinner every couple of weeks about different product and strategy types of things. It's a fun format for us, so if that's something you enjoy, it's called Unsolicited Feedback, where we give feedback and advice to nobody that ever asked for it.

**Lenny Rachitsky** (01:28:36):
That's amazing. Perfect title. Brian, thank you so much for being here.

**Brian Balfour** (01:28:41):
Yeah, thanks for having me again. This is great. 

**Lenny Rachitsky** (01:28:43):
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.

---

## [3/24] Inside Linear: Building with taste, craft, and focus | Karri Saarinen (co-founder, designer, CEO)

**Karri Saarinen** (00:00:00):
My belief is that, like any domain or industry, the more it matters, the more the design matters. What happens is whenever there's a new paradigm, I don't know, like the mobile or the web or something the first iterations of those products existing there, they don't have to be super well designed necessarily because they are the first.

**Karri Saarinen** (00:00:19):
Then, as you build the 100,000 different email clients, any email client now has to be pretty good to be even considered an email client. It's like the bar is so high. I think today it's almost a very basic thing now. Pretty much from the very beginning, you need pretty high level design for people to even pay attention or consider you seriously.

**Lenny** (00:00:46):
Today my guest is Karri Saarinen. Karri was the founding designer at Coinbase, principal designer at Airbnb, co-founder of two previous startups, and most recently is the co-founder and CEO of Linear, which I'm fairly confident is the fastest growing and most beloved issue tracking tool in the world and something that a growing number of product teams are using to build their own product.

**Lenny** (00:01:07):
Karri and his team are building their company and their product in a really unique way with a huge focus on craft and quality, no AB tests, no metrics-based goals, instead a focus on taste and opinions. Also, no durable cross-functional teams, instead teams assemble around a project and then disperse once it's done. Also, they have just one product manager as the head of product and that's it. In our conversation, Karri shares how he built a culture around quality and craft, how he makes trade-offs, and how he operationalizes quality and thoughtfulness where design can be a differentiator in competing against incumbents.

**Lenny** (00:01:42):
We talk about something called the linear method of building product, which is big on building opinionated software, working in consistent cycles amongst other principles. We also get into Linear's unique hiring approach, which involves a paid work trial where candidates work alongside the team for a number of days instead of just having an interview, also a glimpse into how Linear got their first 10 customers, found product market fit, and scaled their growth engine.

**Karri Saarinen** (00:04:29):
Thanks, Lenny. It's great to be here.

**Lenny** (00:04:31):
Maybe to start, set a little context, can you just explain what is Linear? What does Linear do? Then, share maybe a few stats of just the scale of Linear at this point.

**Karri Saarinen** (00:04:41):
Linear is the project and issue tracking system that software companies and technical teams love to use. We help software companies to build software. We started 2019. Today some of the top growth companies like Block, Vercel, Ramp, Retool, Mercury, and Softstack are building with Linear. We also additionally have lots of other companies, thousands of other companies using Linear. These companies can be a very early stage team like some companies just graduated from YC or a public company.

**Karri Saarinen** (00:05:17):
Just briefly, why we created Linear is that, like you said, I worked with you at Airbnb and before that I worked at Coinbase. Before that, I had my own startup. All of us founders, there's three of us, we had a similar path where we worked in multiple different companies in different stages. What we saw often is that the tools available for managing software projects weren't really cutting it. I think a lot of them felt very clunky or complex or just like they had this legacy way of thinking about software development. We just felt like we should do something about it. With Linear, we set out to build this most frictionless and streamlined system for modern software development. I'm also happy to share that we've been profitable the last two years. We also have this thing where we actually have this net negative lifetime burn rate, which means that we just have more cash in the bank today than we have raised. I think with a lot of startups usually the normal way is that you raise money and then you need to spend it to build it. I think since we were able to build a business pretty early on, we've been able to be in this position that actually we haven't spent any money on building the business.

**Lenny** (00:06:43):
That is insane. I didn't even know that. For all those reasons, a lot of founders and a lot of product leaders look up to the way Linear builds product and the way you think about product. To frame this conversation, there's three areas I want to dive into. One is just how you approach building product. Two is how you go about building the team and the business in general and then three is just how you grow Linear. To start, I want to talk about craft.

**Lenny** (00:07:11):
Clearly, one of the biggest reasons that people look up to Linear and use Linear is the quality of the user experience and the product. I know your team puts a lot of emphasis on craft and user experience. I imagine that also comes at the cost of some trade-offs like it takes probably longer to get stuff out the door. You're probably losing sales because people are waiting for a feature and you're not ready to launch it yet. You want to make it better. What have you learned about creating space for craft and building product that is really, really great?

**Karri Saarinen** (00:07:40):
I think it's interesting that those things you mentioned like hiring, building business, and building product and craft, I think that all of those are somewhat related to each other. What I can say about the product craft per se is it definitely starts with the people. On the hiring front, we always look for people that care about it. As a business, why we really care about it is that we see that cooperation only happens if people use the product and our product, which is supposed to help the cooperation, coordination.

**Karri Saarinen** (00:08:14):
If there's friction or the experience isn't that great or there's little paper cuts, I think it gets really annoying for people to use. We think for the business to be successful the quality and the craft is very important. There's definitely trade-offs sometimes. There can be for example timelines like we are about to launch something and then for example I or someone else goes to look at it and sees, "Oh, this doesn't feel right and we should fix it so I don't think we should launch this now."

**Karri Saarinen** (00:08:43):
Sometimes it does definitely push the timelines, but this might be days. It's not like we need to redo everything. The other way we think about it is we are actually very okay pushing things out to ourselves and for a small group of customers if they opt into that. Whenever we build a new feature one of the things is we don't want to spend tons of time upfront just designing it, then polishing it perfectly.

**Karri Saarinen** (00:09:13):
We actually believe that when you start building the thing you actually start realizing more how it should work and how it should be better. A lot of times with the teams we tell them, "Just put it there in, I don't know, the first week almost. After you have some designs in place or some design ideas, just put it into the app and ship it to production." It's only visible to us so we internally can test it out.

**Karri Saarinen** (00:09:40):
Then, I think the next stage is we look for a customer that could be interested in this feature or we just ask people to opt in to some better program. In those stages, the experience can be a little janky or it's not that polished, but we're okay with it because we are saying, "It's not finished. We just want to get your feedback early so we can make it better." Once we get to the full general release, then we pay more attention to the actual polish or the craft.

**Lenny** (00:10:11):
That is so interesting. I didn't know you do that. You actually go ahead and launch things really early to a select group of people that want the early stuff. Then, did you say that you find one customer to co-create and help evolve the feature and change it?

**Karri Saarinen** (00:10:26):
Usually it can be one or it's three or five or 10. Often, especially with the larger company facing features, we usually do try to find a large company because sometimes it's hard to imagine these things, how they should work. It's better if someone is willing to work with us to explain, "Okay, this is how we do something." For example, we work this way with Vercel in that there was some changes they wanted to see in the roadmap feature. We worked with them to improve it and then they could give us feedback along the way.

**Lenny** (00:11:02):
That is so interesting because I think people seeing Linear from the outside, it feels like you just take the time you need to build something awesome. Then, it launches and it's amazing and it's great, but it turns out that isn't exactly how you build. You actually do launch things really early and people don't necessarily see it until it's done, but there's this whole process behind the scenes.

**Karri Saarinen** (00:11:21):
I think sometimes people think that craft is about perfecting things and perfecting them in a very organized way or very early on. The downside with this perfection mindset is that it can be sometimes hard to put anything out because nothing is ever fully perfect. We try to balance this thinking with the fact that we should be always pushing things out very quickly, but then also fixing them, improving them very quickly.

**Karri Saarinen** (00:11:51):
It's almost like the opposite idea, but then we try to combine that and I think it's been working well. Generally, in the company there's not necessarily a lot of reviews or something that we always review everything that gets shipped this way because we do want people to feel that they can put something in the app and then we can try it out. It's more like let's just try it out, but then we do need to look at it again before we release it to everyone.

**Lenny** (00:12:25):
A lot of founders, a lot of product leaders, a lot of designers definitely want to create space for craft and making products really great, something they're really proud of, but in practice it's really hard. Very few teams and companies do this. Is there anything else you've learned about creating space for this sort of thing and prioritizing it for founders that are listening that are trying to instill more and more of this or do you have to be a designer CO like Karri and really it's hard to do otherwise?

**Karri Saarinen** (00:12:53):
I don't think actually. It's not purely coming from me. I think all of us founders like Jori and Tuomas additionally, their background is engineering, but I would say I think they spend even more time on the details than sometimes I do. I think very early on when it was the three of us I would be the one doing the broad strokes designs like this is how the UI works and this is how some of the things work. They were the ones that were like, "Oh, there should be animation here and there should be this kind of thing here."

**Karri Saarinen** (00:13:27):
I think it's like that DNA I think comes from all of us. I think with the craft it always starts with people need to care about it. If it's not valued in the company, then it's very hard for anyone to do because people don't feel like it's valued. I gave this advice to some founder. He was asking me about it and in their case their founders were coming from different companies. Maybe this one founder came from Airbnb and then the other ones came from Facebook and Amazon. For example, I think Facebook and Amazon have a very different culture on quality or craft or shipping. I think it's what I said to them. You need to align on it. It's like you cannot run a company with multiple different kinds of cultures. I think I made some points like why the quality is important for certain products and you should all believe in that and then instill that with everyone you hire. The other thing I would say that we like to do is we actually don't have much PMs in the company.

**Karri Saarinen** (00:14:32):
We only have one and we can talk about more about it. One of the things I think that happens is when you build a team and you start creating these very specific roles for everything I think that often the PM can be the ones figuring things out and making decisions and guiding the team, but they're not the ones building the feature. They're not there looking at it the whole day like where does this button go or how does it work? I think a lot of that, this craft for us happens when we give the project team this ownership and the project team is just engineering and design.

**Karri Saarinen** (00:15:11):
Then, when they start building that feature they start seeing these opportunities that this thing could be better. A good example of this is one of our engineers, Andreas. When we were building this right click menu in the app so you can click different things and under that you have sub-menus. Mac OS does this well where it's when you open that menu you hover on the menu and then you want to go to the sub-menu. You hover to the right. You don't have to go exactly horizontally to get into that menu.

**Karri Saarinen** (00:15:44):
You can actually go diagonally or you don't actually have to hit the menu exactly. There's this safe zone, but a lot of software just implements like, "Hey, let's do this menu. Let's make the sub-menu." It only works if you exactly hover over the menu. Then, what happens is the user often misses with few pixels what they were trying to do. What Andreas did, which we didn't tell him to do, is like, "Yeah, this kind of sucks and we should make this better."

**Karri Saarinen** (00:16:12):
He figured out a way to create those safe areas that are dynamic based on the sub-menu positioning and everything. It's much easier now. You can go diagonally to the actual thing you want to go to. I think these things happen when you give people more of the ownership of the project and also the space to do that and then you also have leadership or generally the company culture that values the quality or the craft.

**Lenny** (00:16:42):
I got to follow this thread. There's a couple of questions I want to ask. You have one product manager. Would you call him the head of product?

**Karri Saarinen** (00:16:48):
Yeah, Nan Yu, he is the head of product.

**Lenny** (00:16:52):
Awesome, what made you decide to hire him and even have any PMs?

**Karri Saarinen** (00:16:56):
We started to see that we have enough features and areas of the product and also the team speaker that it's hard to keep aligned on all of these things or even keep track of things. Initially, we actually hired Nan as a contractor to help us with this insights data tool. We have this data tool feature built in Linear so you can get data on what's happening in the workspace. For us founders, we realized none of us, we are not super experienced in data tools. We need someone to help out.

**Karri Saarinen** (00:17:34):
Luckily, Nan, we knew him and he actually worked at Mode, which is a data tool. We initially hired him like, "Can you help us figure out what exactly should this data tool and how should it work?" I think there's different ways of doing that. I think always the easiest way is let's just copy what some other company is doing, but we didn't want to do that. We wanted to figure out what is actually a useful way to use this data or get this data?

**Karri Saarinen** (00:18:01):
He helped us with that and then we saw this could be useful in other larger areas or overall with the whole product it's like we might have these kind of questions. What should we exactly be thinking around here and why and how would we define this direction and then help the teams to also align on it? To us, it's more like he figures out the direction of the product and steers some of the efforts and not like he's there in every meeting and making every decision or writing every spec or something like that.

**Lenny** (00:18:38):
Another question along this line, because there's a lot of PMs listening that are going to be like, "Oh, shit, these guys don't need PMs or PM is over, product management dead." Just another question along these lines, somebody needs to do the work that a PM does basically, right? There's all these things that is on the plate of a product manager when they're at a company and if they're not there, other people have to do those things. What I'm hearing is basically you give those responsibilities to the engineers, designer, and maybe other functions within the team. Is that right?

**Karri Saarinen** (00:19:06):
Yeah, I mean definitely I think what it means is, and there's definitely a trade-off. I think sometimes when companies specialize roles a lot it's because it's more efficient. If the engineer spends 100% of their time coding something, then it's like they're using their skillset to the max. Then, we just think that in order to build quality things or build things in a certain way it's actually better if people actually also spend some time thinking about things and not just executing.

**Karri Saarinen** (00:19:35):
Yes, for every project there's a project lead. That lead can be engineer or designer. It's not a formal role or it's not based on your whatever level or it's just like you need to be certain title that you can be that. It's more like an assignment that now you are responsible getting the project started and working together with the team, figuring it out, and then communicating changes or communicating how that progress happens.

**Karri Saarinen** (00:20:06):
Definitely it means that the engineers or designers also have to do these things and they do need to communicate and they do need to think about the scope or things. It's a different way of doing things. Also, not everyone wants to do that, which is fine, but we on the hiring front try to hire people that are interested in the broader scope than just the specific skillset that they have.

**Lenny** (00:20:36):
I think those last two points are really essential. One, people often don't want to do this work and they are happy to offload it to a potential product manager. The fact that say engineers have to do all these boring PM things like communicate timelines and keep PR specs aligned and make sure timelines are hit and all that stuff and run meetings, a lot of people don't want to do that.

**Lenny** (00:20:57):
A lot of times they do and I think in this case people seem to really want to be doing that. The other is I think you need a really high caliber team that's very product-minded and the hiring bar needs to be very, very high for say engineers and designers to want to do all these things and be good at them. I think those are two necessary ingredients for this to work out.

**Karri Saarinen** (00:21:16):
Sure.

**Lenny** (00:21:16):
For teams that want to try this approach, especially startups that are starting out and maybe not excited about hiring product managers, is there anything else that you think is essential or important to functioning well without any product managers? You're at around 50 people at this point?

**Karri Saarinen** (00:21:32):
We're around 50. Probably the only thing I would say is it's the hiring front that you really need to spend more time on it. Basically, you cannot really interview engineers only for the engineering skills. You also have to interview them for the product skills. Obviously, you cannot I think expect that people have some. If you do some PM interview for them, they're not going to have the same skillset or the same understanding of the concepts or something.

**Karri Saarinen** (00:21:59):
The way we have done it in the past is basically I might interview them about the product. I'm not a technical person per se. I will just ask them questions about how did they do something or how do they think about something? It's similar to other roles too. We just look for does this person have opinions about products and how they work? Can they form opinions and can they use their own judgment at times? Then, can they communicate or articulate those things as well?

**Lenny** (00:22:30):
Awesome, I was just thinking it's interesting that a tool that, I don't think it's designed specifically for product managers, but essentially for building products like the infrastructure for building product in a team is built by a company that has one PM and very few PMs.

**Karri Saarinen** (00:22:43):
I mean I think in some ways I would say that with Linear we're trying to help the whole company and I think engineers is probably the largest user group of the product. I think in some ways we want to make the PM's job easier in that they have to spend less time managing everything or the day-to-day because the engineers are actually using the product and they're updating the things. For the PMs, it would be much more easier to get what is the state of things and maybe trust that much more because people actually use the product.

**Karri Saarinen** (00:23:18):
In some ways, I think we are trying to make it easier for everyone, easier for the engineers. They can focus more on their work. Then, for PMs I think we're trying to make it so that they can also focus more on other things than just, I don't know, managing the tool that they use. I think that's not the most important job of a PM. I think they should be thinking more of the, I don't know, bigger picture or the other problems or figuring out the next features or something.

**Lenny** (00:23:47):
Just one more question along these lines, there's other companies like Stripe I think waited until 200 employees to hire I think their first product manager. Snapchat I think is famous for something around that. Do you have any sense of if you think this might change, when you think you might hire more product managers? Is there a plan here or is it just see how it goes as you grow?

**Karri Saarinen** (00:24:05):
I think we'll definitely hire more. It's I think like what I said before. I think we like to see the PM's smarts operating on a higher level. The whole company, I think the way we are trying to build it is we have less people, but people who are more high caliber and can think about larger scope than what their current role is.

**Karri Saarinen** (00:24:29):
I think we're just trying to build smaller units, but more effective units, which is I think where the PMs go. There would be also less of them and they're not there at every level. I think in the future as the company grows and the team grows and the product grows, we might have several PMs that are focusing on or looking at specific areas or specific types of things of the product or specific customers or something like that.

**Lenny** (00:24:57):
Awesome, that was a tangent because I could not go in that direction, but I want to come back to design again and craft.

**Lenny** (00:25:00):
... not go in that direction, but I want to come back to design again and craft. So it feels like Linear, one of the reasons you guys have been successful is design and experience is basically a huge differentiator from other products and there's always this question of can design be enough of a differentiator in specific markets? Is there always an opportunity to build a significantly better product experience and have a real shot at disrupting an incumbent? Do you have any sense of when design can be enough of a differentiator? And this is coming from a founder trend aside, should we go big on design and experience or should we invest in distribution or new technology or something along those lines? Any thoughts there?

**Karri Saarinen** (00:25:41):
My belief is that any domain or industry, the more it matters, the more the design matters. I think it's fairly easy to see in different, even in software or in other industries. It's like what happens is whenever there's a new paradigm, I don't know, it's the mobile or the web or something, the first iterations of those products existing there, they don't have to be super well-designed necessarily because they're the first. But then as you build the hundreds, thousand different email clients, any email client now has to be pretty good to be even considered an email client. The bar is so high.

**Karri Saarinen** (00:26:23):
I think today the startups, I don't know if you look at the webpage Google launched with or the webpage YouTube launched with or some of these older companies, they were very basic. If you launch that website today, no one would really pay attention. So I think the design is, it's almost like a very basic thing now, that from pretty much from the very beginning you need pretty high level design for people to even pay attention or consider you seriously.

**Karri Saarinen** (00:26:56):
And I think it's not necessarily fair because sometimes it's like maybe the product is really good but they didn't have a designer or they didn't have time to do it and then people just dismiss it because it doesn't seem like something that they interest them. So I think that's the first thing is I think it is, and it's going to be more and more important. But I would also say design is never going to be the reason why a company is successful. It's like the company still has to have some other things. The product still needs to be something, it needs to be better in some ways or it needs to be different in some ways.

**Karri Saarinen** (00:27:36):
And then a design is just enabling some of these things, enable and similar to technology, it's like if you have good technology, it's easier to do certain things and the product works better in some ways than you having a bad technology or bad infrastructure.

**Karri Saarinen** (00:27:53):
So similar to design, I think if you have a good design or even a good brand, people are drawn into it and then it makes some user acquisition or user retention or just even people perception of the product better. I think an example is packaging and products, is like Apple or a lot of companies spend a lot of time effort into the packaging because it's kind of already sets the expectations for the user who is receiving the product. It's like even before you use the product, you start thinking that this is a high quality product and I'm going to love it. And then when you actually have it, then you actually might feel that way, unless the product is really bad and then you wouldn't feel that way.

**Karri Saarinen** (00:28:40):
So I think similarly, with startups or SaaS, it's like your landing page or some of the other things. It's like they are already communicating something to the user and they're setting the expectations and then I think that that can be very useful thing, especially early on when no one really knows you or knows the product or cares about you. So I think especially, I feel like design can be very good leverage in the beginning.

**Lenny** (00:29:08):
I think that's such an interesting insight, especially that first thing you said around how the more often and the more crowded the spaces, the more opportunity there is for design to be a differentiator. Is that roughly how you think about it?

**Karri Saarinen** (00:29:21):
Yeah. So I mean just think about, I don't know, any product category, basically people have then a lot of choices and then they how do they make choices? Maybe there's a specific thing they want, but a lot of people don't necessarily know what is the specific feature I want from this software. So it's more like, well what is the best one? What is the highest quality one? And if you put things side by side and people see things, people are visual. So then the design can be one of those things, it stands out, it's like, "Well, that looks the best or that looks the most quality product to me, so I'm going to use that one." When people have a lot of choices, they probably will pick the one that looks most interesting.

**Karri Saarinen** (00:30:04):
Then I think there is, the second part is the brand, which is something that if you can build a brand, then I think it's even the product almost doesn't matter, it becomes this kind of default. I don't know again, like Apple or Nike, it's like yeah, there's all kinds of shoes you can buy, but there's a reason for someone to buy Nike shoes other than some random brand. Even if the random brand would be actually a better shoe, they still buy Nike because they, I don't know, like the brand. So then I think both the design of the product but also the design of the brand can be very strong things that pull people to your company or to the product.

**Lenny** (00:30:48):
Is there anything you've learned about just building a brand over the course of building Linear, something you find to be really important in actually building that perception that Linear is really great and amazing

**Karri Saarinen** (00:30:59):
To me, I think the brand should be always authentic and it should, I think even if people can't articulate it, if people start to feel like something is off, I think there can be companies or startups, they think about brands like, oh brand is the logo or the colors of the website or something. And then they do the same thing and some other company does and then they think, "Okay, now we have a brand." But you actually didn't think about what's your brand, what is the message or voice you want to talk about? And it doesn't also, the brand doesn't happen overnight.

**Karri Saarinen** (00:31:34):
So it's basically just you start in the beginning and when you start a company you don't have no brand and so you have to create it and you create it over time by the things you do, the things you say, how you say them and how do you approach things, how do you treat customers, how do you build the website or the product? All of these things starts to build this idea, what does this company mean to me in people's heads?

**Karri Saarinen** (00:32:02):
I know we both worked at Airbnb and I think Brian Chesky is, I think the brand was probably the most important thing for him. And I don't know how many hours or meetings or conversations there was about the brand and the brand was always, it's part of everything the company does. Because it's true. It's like, yeah, you could book things like places to stay in a lot of places on the web, but when people think about, "Oh, I want to stay in some cool place," they're going to think about Airbnb. It's like they're not going to think about those other places. So that's the power of the brand, people stop thinking about the other things or they start understanding, okay, this is the thing for this.

**Lenny** (00:32:43):
And it's part of the reason Airbnb's been able to build a direct destination where people aren't Googling, I want to stay in a home. They're like airbnb.com, which gives Airbnb such a massive advantage not having to run ads on Facebook and Google or SEO. It's just like people know Airbnb and they just go straight there. And there's very few sites where people go, "I'm going to go straight there and look for some," knowing that they can also compare hotels on all these other sites.

**Lenny** (00:33:08):
Coming back to design briefly, just very practically, how do you guys do design reviews? Just how do you actually go about reviewing what's going at, and then this may be too big a question, but just whatever you can share here, is just how do you know when it's done? How do you know when it's ready and approved? Karri sealed, checkbox, ready to go.

**Karri Saarinen** (00:33:26):
We've been exploring different ways of doing this. I think today, I still run the design team, so I do see some of the designs on a weekly basis and then, or one of the other co-founders or head of product, we are basically the sponsors for the projects. So then we are responsible reviewing the work. And so we might just have a meeting where we go through, okay, well let's go through the demo and people can explain what's going on and how they think about it and why. And then we might have feedback, okay, this seems strange or something, and then just after that I might just go into the product myself and try it out. And then what happens sometimes, it's in the initial stages, obviously we're not going to start fixing everything, it's just more like let's try to get the main concept there and figure out how it works.

**Karri Saarinen** (00:34:27):
But then before we are launching it, I might just go in and try it out and try the different states and click it around. And sometimes I find things, like we were building this threading to comments and then when it looked all good in the demos and stuff, and then I went to try it and try different lengths of messages and stuff and then I start to see, oh, sometimes the animations are kind of janky or it's just off. They don't go the right way, the screen doesn't scroll exactly right. So then I just captured those things and send it to the team. And so we had to pull back the release a little bit until those things were fixed. That one was, it's very, I think a simple concept and it's very known concept like, okay, this is how threading comments works. So that was mostly about, okay, what's the execution of this?

**Karri Saarinen** (00:35:22):
But then we have projects where we are not sure exactly how this should work and we can try it ourselves. We also have to see how companies use it. So something like we built this feature project updates and it's a common thing companies do. It's like you need to write an update on a project. Is it yellow, green, red? And companies have very different ways of doing this in different tools and we just thought, well, I think it would be really nice if it's inside Linear and the team, when they work on a project, they can write the update, Linear can also capture some of the stats, what actually happened. I think with that feature it's been working well, but then also now it'd be exploring. It's like after using it a while we think, oh actually, if there could be more robust way of following these updates. Maybe the leadership could just get these updates over email or maybe when you have a lot of updates you should have a search or a filtering system or something. So I think a lot of times we just think, okay, this is the scope of it for now and we are okay launching this and the execution is good. But we know that this is not the fully figured out version and we just need to see people trying it out and see the feedback.

**Lenny** (00:36:36):
So it sounds like on the decision of whether it goes out or not, it's kind of this intuitive feeling from your actual experience trying it out, feeling gut level, this is ready or this needs a little work?

**Karri Saarinen** (00:36:46):
Yeah, I would say a lot of things that we do is more like that but we don't do AP testing or we don't do specific, go follow certain metrics or something. Sometimes we do have telemetry or we can look at how people use certain things and we sometimes do that, but that's not usually the goal we have in mind, like, yeah, we should move this number this much. So it's more about based on the understanding of the problem we have and based on the [inaudible 00:37:16], what we think is right, is this the right solution and is this a good enough solution to be released to the customers?

**Lenny** (00:37:24):
One more question along this thread is how do you actually structure these reviews? It sounds like you go straight to a prototype. Is there a design review phase? Is it all kind of informal and people just review, here's what we need your feedback on?

**Karri Saarinen** (00:37:38):
So projects don't necessarily have specific states to them, but I would say roughly, usually we do start with design. So there's some explorations on the design, there's different ways that we could approach this or sometimes there's just one way because pretty clear. But then what I said before, is that we do try to get into the building phase as quickly as possible because then we can also see is this direction actually reasonable and is there some problems it causes or how does it just generally feel here? So I think that there isn't specific review stages. It's more like, yeah, let's check on this project every week or every two weeks and then before releasing, let's also make a review of it and really test it out, is it the quality we want?

**Lenny** (00:38:34):
Awesome. So that's a good segue to another area I wanted to spend some time, which is the Linear Method. You espouse this way of building product that you call the Linear Method, which you publish online and willing to in the show notes. And I just want to ask a few questions around this way of building product. One is, you are big on this idea of building opinionated software. Can you talk about just what does that mean and then maybe give an example or two of how you actually have done that at Linear?

**Karri Saarinen** (00:39:02):
So first with the Linear Method, why did we create it in the first place? Is we just believe that there is more of this modern ways of building software and thinking about it. And we wanted to share some of our thinking on it. And that's also, it relates to how we built Linear as well. So you might understand why we make some choices because this is the way we think about making these choices. So we are trying to share our thinking behind the product and also just like, here's the product and figure it out.

**Karri Saarinen** (00:39:33):
So the opinionated piece, I personally have this belief that productivity software should be, and especially company software should be opinionated. I think that what the productivity software is trying to do is make people productive. And I think what productive means is you actually do something that matters for the company, which is, I don't know, build some new feature or fix something or design something.

**Karri Saarinen** (00:40:02):
All of those things are eventually, they provide some kind of value for the customer. I think there is this ideas or notions in the world that flexible software is great. I'm like, I think it can be great sometimes. But what happens is people start spending a lot of time figuring things out. Like, how does this feature work? You can use it in 10 different ways and then every team or everyone figures out the different way of doing it.

**Karri Saarinen** (00:40:27):
So our thinking is we like to provide this good default or good opinions. Like, this is how the feature works and this is how the workflow works. So you, as a user or as a team don't have to think about it and you can focus on the work you do. And the other thing is, my design mantra is always design something for someone. It is very hard to design everything for everyone because you just end up with a very generalized solution. So then what we are trying to do with the opinionated solution is that that's the best solution or at the most optimized solution we think of.

**Karri Saarinen** (00:41:06):
And then when you use it, hopefully you agree and you can feel that it's most optimized. So being opinionated, I think the value it provides people is you don't have to think too much or spend more time on the tool than you do on your actual work.

**Lenny** (00:41:23):
And then another core element of the Linear Method is something you call cycles. I know Linear is all around this idea of creating cycles and working in cycles. Can you talk about what is a cycle and how it works at Linear?

**Karri Saarinen** (00:41:35):
So for example, the cycles, it's optional, not that the whole team has to use it or not that the whole company has to use it, but it's there as you can turn it on or off. But basically, I think why we created cycles is that I think any team that works on software or some other products, you always have almost infinite list of things to do and that list gets longer every day. And it can be sometimes very distracting for the individual or for the team to decide, there's a new thing coming in, should we work on that or should we work on this other thing we decided in the past? So the cycles is just a way to say that for the next week or the next two weeks or whatever timeframe, we are going to work on these things and these other things we think are the priority or the focus for this timeframe.

**Karri Saarinen** (00:42:27):
And then the team can try to focus on those things. Now if something happens, like I don't know, we really need to jump on this other thing. At least there was some kind of initial state that we decided before we want to do these things and then now something else happened and so now we have to go on this thing. So you have an answer when someone comes to you to ask, "Why didn't you do this other thing before?" Then you can say, "Well, we did decide to do that, but then something happened and we had to do this other thing."

**Karri Saarinen** (00:42:56):
So the cycles, it's very similar to sprints, but we like to call it cycles because we are not really sprinting anywhere. The cycles also run on automated schedule. So it's like you don't have to think about which day does it start? Or every time, set it up manually so it just runs automatically. And so it's just meant to help the team to focus on, let's just focus on this few things and forget about the infinite list of other things that are in the background.

**Lenny** (00:43:27):
You mentioned earlier that you don't set metrics goals and so let me dig into that a little bit. Is that true? You don't really have number goals for features for launches and things like that? And so let me start there and then I have a follow-up question.

**Karri Saarinen** (00:43:41):
So we might have a company level goal sometimes, for example, weekly active users, that's a metric we want to increase or something. But in terms of specific features, we don't have goals for those. And the reason is that I think a product like us or a system that is used by different kinds of companies, and it's like a system made of multiple different parts and it's not necessarily like you want to optimize any specific thing about it. Also, companies are a little bit different, so their usage of different features can differ because they just operate slightly differently or their team size is different or the setup of the team is different or the culture is different.

**Karri Saarinen** (00:44:27):
So I think for example, I don't know, some Instagram or some of these apps, it's like, yeah, we need to drive engagement and that's the main feature. That's the main metric for every feature. We don't actually have that. We just think that there should be features that help companies and sometimes we can look at the metrics before we start working on it, like let's see what this state of things are, but we don't necessarily want to set, oh, we need to increase this specific metric by X. It's more like we want to solve this problem. And ideally, the success what it looks like customers agree that the problem is solved or they enjoy the solution and it's not like that the metrics went up.

**Lenny** (00:45:08):
So just to summarize so far, you have no metrics, you have no experiments, you have essentially no PMs, just one product leader. You spend a lot of time on design and craft and making things awesome. I'm curious just what you think it takes to make a company work in that way? Because this is pretty different from how a lot of other founders think and a lot of other product teams work.

**Karri Saarinen** (00:45:32):
We like to talk about this internally, I like this mixture of magic and science and how we described, there's always some level of science that we do. And I think some companies are very scientific on their product management that they like to measure everything and they do a lot of tests and things, but we just decided we don't think that's necessary or that's good for us. So the science for us, means that we do talk to users a lot and any project we start with, we do some level of user research and as founders, different people on the team, we might have weekly calls with customers or users. We also encourage everyone in the team, go to the customer Slack, they answer people questions. We have shared Slack channels with customers. Anyone, I sometimes go answer the questions there. I also see when they complain about something. I think the first part is the whole team has to be really understanding the product and the customers and the problems people are facing and have that empathy and as well as the understanding what is the state of things today.

**Karri Saarinen** (00:46:47):
And then we talk about that. And then sometimes we might pull up stats and see, oh, wonder, is there some kind of patterns we see, okay, these kind of companies are using this thing more and what do we think about it? But usually we have some kind of question we want to answer. It's like, I wonder what is going on. And then we look at it versus let's pull some metrics and then decide that we should increase this metric. And then the magic part is what happens when you build this understanding, everyone in the company builds. It's not like everyone has the same understanding, but everyone builds more of that customer and product understanding. Then we have discussions like what should we be doing or what decision we want to make here? Then everyone is much more informed of actual reality of the customers or the product.

**Karri Saarinen** (00:47:40):
And then we think you can much more use your intuition or thinking to do those decisions so you don't have to use data or metrics to back those things up. So I think the main thing is the whole company has to be with the customers or talk to them and then understand where the product might work well or where it might fall short.

**Lenny** (00:48:05):
That's what I imagined you were going to say, and I love hearing that. For someone that wants to create a similar culture, is there tactically anything you find, just understand if your employees and engineers, designers have enough of that context and really understand the problem?

**Karri Saarinen** (00:48:20):
I think it's always, different people in a company will have different understandings. It's not like you can expect everyone will every day go to see everything and has this. But we do sometimes sessions with the team or we do record videos with the customers, we write notes and we share this with people. I feel like again, it's fairly apparent, if you know your customers or the product, it's a very different way you can talk about it versus if you don't have any idea. I think if you don't have any idea, you probably don't even know what to say.

**Karri Saarinen** (00:48:59):
So I think it's apparent if people have that then, it's not like every project's like we need everyone to have this understanding. Probably, usually enough if one or two people have that understanding or have different understanding of different things. So I think again, I feel like it's a culture thing. I think the other thing is you just have to kind of believe in it.

**Karri Saarinen** (00:49:26):
I think sometimes people use data a lot or too much because they're worrying or they're afraid that, will I make the wrong choice? And I'm using data to make the choice for me. But then you might still feel like this is not the right choice, but the data is telling me is the right choice and then turns out maybe it was the right choice or not. But it's more like, again, like a practice thing. I think the company and you need to be okay that sometimes we make mistakes and we made the wrong choice and then we just can fix it. But at least we made that choice and the data didn't make that choice for us.

**Lenny** (00:50:03):
What's interesting about-

**Karri Saarinen** (00:50:00):
The data didn't make that choice for us.

**Lenny** (00:50:03):
What's interesting about this is if you've heard the episode on RAMP and how Ramp builds product with Geoff Charles, there's such different ways of building product. Ramp is all about velocity, shipping all the time, metrics, measuring everything. And your approach is almost the opposite. And I think what's interesting there, as a takeaway, is just there's many ways to do it. You just have to do it almost fully and you have to have really specific people. It feels like the people want to work in a certain way. And a lot of it I think also is the founder has to be natural to the way the founder operates and thinks about building and building a company.

**Karri Saarinen** (00:50:39):
Yeah, and for sure. And then if you look at successful companies and Amazon is very different than Apple in how they operate. And I think both of them are successful, but not in the same way.

**Karri Saarinen** (00:50:50):
So I think it's, again, it's like... Yeah, it's a decision you make as a company or as a founder, what kind company you want to build. I do think there is some aspects of the domain that you're in. What does that domain and the problem space require from that company? And for us, I think it's... I think we are in the retention business. And the trust business that ideally we have a company starting use Linear very early on and then they stay with us forever. And I think the only way we can do that is we need to continuously deliver them good quality product and maintain that trust that we are... That we don't fail them more or somehow otherwise mistreat them.

**Karri Saarinen** (00:51:36):
And I think some businesses are much more transactional where it's like, yeah, we just need to make this e-commerce sale. And then once it's done, we don't care what happens.

**Karri Saarinen** (00:51:47):
So our case, it's more like we really need to build this relationship over time. And then that's why I think some of the choices we make are also more about respecting the customer versus we're just wanting to drive the revenue of the company.

**Lenny** (00:52:02):
Awesome. Such an important point.

**Karri Saarinen** (00:53:39):
Yeah. I don't think there's any complicated processes. And so I think one of the things, I was in YC in 2012 and one of the main things they say there is what you should be focusing on when you build a startup is talk to customers, build the product, exercise. And if you find yourself doing something else, then those three things, it's probably the wrong thing to do.

**Lenny** (00:54:02):
And the third one you said exercise or...

**Karri Saarinen** (00:54:03):
Yeah, yeah. And the exercise is that it's important for you to be healthy or not just burn yourself out. So I think it was a balance [inaudible 00:54:17] to that.

**Lenny** (00:54:17):
Love it.

**Karri Saarinen** (00:54:19):
So I'm doing those three things.

**Karri Saarinen** (00:54:23):
I think the thinking there is, I think we often as a company also talk about this, and very early on. And I use this the same way and I think the company can use it the same way. I think there's always things that you're supposed to do or it sounds like a good idea to do. And it could be like, yeah, come to this podcast. And I actually think before it wasn't like...

**Karri Saarinen** (00:54:47):
Or I always have this question, is this important to do now or is it important to maybe do later? So I think, for example, the question on this podcast is I didn't feel like it was important to do it earlier because we weren't at the stage or a scale or something that I think it'd be as interesting or something. So I think it was a better timing to do it later.

**Karri Saarinen** (00:55:09):
Similarly, when we built the product, initially we were just very focused on is this really important thing to do? There's always like, yeah, you could get SOC 2 security certificate. And we know that eventually we need to get it, but we don't need it today. So we just say no to that. And if customer asks for it, so we say we don't have it. And we'll have it one day but not now. And see, a lot of times people are like, "Okay, that's fine."

**Karri Saarinen** (00:55:38):
And then internally, we also talk about this, you knowing RPG games, you have the main quest lines and then you have the side quest lines. And we often talk about the companies avoid the side quests. There's always ideas people have and it's a good thing and it's like people have ideas, but then it might be like, "Yeah, let's make this T-shirt, so let's make this thing." And then we're like, "Well, does it help the customers? Does it help the product?" This sounds like a side quest to me, and basically means we shouldn't do it. This doesn't progress the main quest line, which is building this product and making it awesome for these customers.

**Karri Saarinen** (00:56:17):
So it's similar to me. It's like I operate this way personally too, that I think about "Is this important for the main quest line in building this company for me? Or is this something that I can ignore for now, or something that I can do later and it makes more sense then?"

**Lenny** (00:56:35):
That is such incredibly good advice. Basically ask yourself, "How important is this to do now? And is this the main quest or is this a side quest?" Amazing.

**Lenny** (00:56:47):
Okay, so let's talk about hiring. As with most areas, you're very, very, very deliberate about hiring. The bar is so insanely high at Linear, and you also hire very few people. So just a few questions along these lines, just one is when you're hiring people, what do you look for that you think maybe other people are not looking for enough? And where do you spend a lot of time?

**Karri Saarinen** (00:57:09):
I think one of the things all of us founders saw in this high-growth company is that sometimes the high growth, especially on the employee side, is not that great. It can create a lot of chaos or just messiness. Or just generally in my past and working in companies, it's almost never... It was always easier to work with a smaller team, very high quality people than with a very large team of more average people. It's almost like it's always faster and better output when you have a much more smaller team.

**Karri Saarinen** (00:57:43):
That was the thing with Linear too, is we just believe that you can actually build better with less people than you can with more people. So that's the basic belief we have. So then when it goes to hiring, we've been taking very slow steps on it that in almost the first year we didn't hire anyone. Then the second year we hired a couple people, and then the second year we hired a few more. We never more than doubled in a year. And that's been our guideline that we shouldn't more than double. And this might be something we change in the future that we actually might do less than that.

**Karri Saarinen** (00:58:20):
But when we look into hiring, it is a couple things. One is also that it obviously depends on the role, but basically I would say with every role, we often talk about there needs to be some taste or some this kind of understanding of how things are done or what's the... People have more a broader perspective than whatever their role is.

**Karri Saarinen** (00:58:46):
So we talked about the engineering before that they do need to do some of this BM type of stuff. And so what we look for in them is that if they have some of this skill set or product thinking, or they can articulate why some choices are better than some others, or in their past did they disagree with some of the company's choices or the team's choices, or... So we want to have this... Obviously they need to be good developers, but also do they have this a product sensibility, or do they have a judgment around that?

**Karri Saarinen** (00:59:22):
And this goes similar to, for example, a marketing hire is... We think about, yeah, we do need the marketing skill sets, but then we also want to see that this person also maybe is a good storyteller or they have this appreciation for writing or stories or they have a taste of what's interesting and what's not.

**Karri Saarinen** (00:59:46):
So I think, or when we hire operations person, we also like to see that they maybe have understanding on HR and maybe it's not their role, but they understand it. And what happens is when you have these people that are a little bit more than their title, it's like the company is, I think, much more easier to manage because it's like people can pick up things more easily or they can work together more easily because everyone has more like a shared areas or you rarely get to the point people say it's not my job. It's more like people understand, okay, yeah, I'm kind of in operations, but today I need to help on this HR thing, which is okay. And so that's what we look for people is they are more than their... They can take more scope than their skill set would assume, or what normally is expected from them.

**Lenny** (01:00:45):
So essentially you're looking for these Venn diagram overlappings across different functions and teammates.

**Karri Saarinen** (01:00:51):
Yeah. I think the other thing is, like I said before, is we want to build much... I think a company that has less employees, which means that it's... Like I said before, we don't want that many specialized roles or too specific areas of ownership or something. We just think that we could build this... We could have less people and those people can take on more scope and they can own more scope.

**Karri Saarinen** (01:01:19):
I think traditionally, I feel like in companies, how do you get more scope is that you advance in the levels of the company because there's a lot of different teams and different levels. And then to get any kind of scope, you need to rise into this higher levels. And what we try to do is you don't actually have to have that many levels, but people can just already, when they start, they can start owning more areas.

**Karri Saarinen** (01:01:45):
And I think that can be much more also interesting, not to everyone, but I think interesting to many people. And it's kind of like how I also always felt about us being a designer is I didn't feel like my job is purely just looking at the designs. I also thought I actually need to be helping this business or helping this other area as well. So I think it's just also natural to me.

**Lenny** (01:02:10):
Awesome. So one thing you didn't mention is you have a really unique way of interviewing, which is a paid work trial. Can you just talk about what that is? And also just while you're in that area, you talked about testing for product sensibility, so whatever you can share how you actually do that would be awesome.

**Karri Saarinen** (01:02:27):
Yeah. So we do with all of the employees, we've done a paid work trial and depends on the role, what it looks like, how long it is and depends on also sometimes on the person. But basically we do fairly standard interview loops where we test... We have some hiring manager interviews and then skill interviews or tests. And then the last step of the process is the work trial.

**Karri Saarinen** (01:02:53):
And basically, they basically come as a mini contractor to the company, and we give them a very usually fairly vague problem statements. If you're an engineer, it's like, hey, there's this feature that needs to be built. How would you build it? Then go build it. And so basically they need to first understand the problem. Then they need to scope it down to something that they can do in the timeframe that they have. And then they actually go... They get the access to a code base. They can actually go and go and build a version of it. And then at the end they can present the work they did.

And why we do this is that we just seeing that it's a very good way to see for both of us, both for the company and the candidates to see how we work together. And I think for the candidate, what they can see is, what kind of company are you joining, what is it like to work here, and what is [inaudible 01:03:53] ownership or how do I approach this?

**Karri Saarinen** (01:03:55):
I think a lot of engineers also like that they see the code base and they're like, oh wow, this is really clean and it's not some kind of spaghetti code type of thing situation. So I think it helps the candidates as well understand what are they signing off for, which I think can be very risky sometimes. Especially with startups, it's really hard to tell how the startup is operating just from the interviews. And in large companies, I think things are more standardized. So I think they're more similar and it's easier to make that choice. But with startups, it can be very different how companies operate.

**Lenny** (01:04:32):
Yeah. That is so unique and I rarely hear of a company being able to hire that way. I imagine one of the reasons you can get away with that where people don't have a full-time job for a while, while we're doing a paid trial is because Linear is such an enticing place to work. I imagine for a lot of companies they can't really do that. But I guess any thoughts on just maybe more companies can actually pull this off?

**Karri Saarinen** (01:04:51):
Yeah, I think it's always like if you don't ask, you don't know. I think in our case that's just been the standard and we try to work with the candidate. Let's figure out maybe we do it on the weekend or maybe we do it some other vacation holiday or something. So there can be ways we can schedule it so that it causes as little kind of problems to the candidate as possible.

**Karri Saarinen** (01:05:16):
And I think we only had only a few people probably have ever declined it. It's not like I think everyone else has been, at least after the fact, they've been happy that they did it because they felt like they had a much better sense of the company they're joining. And then also during that workshop, they can actually join our meetings, they get access to our Slack and Notion, and they also have one-on-one chats with some of the other people on the team.

**Karri Saarinen** (01:05:43):
So they already get to know people. So it's a good way for them to evaluate us as well. And then for us, it's obviously we can see... What is important for us to see is how does this person operate in this kind of environment and how do they approach problems? How do they think and are they able to make progress in a very short timeframe, which I always think it's very important for startups. In large companies, you have maybe all the time in the world to do stuff. But I think any kind of startup, even with us when we take our time doing things sometimes, it's still important. We can do things quickly if we have to.

**Lenny** (01:06:21):
Super cool. Just to close the thread on product sensibility, is there anything you could share of just how you actually help understand someone's strength and ability there?

**Karri Saarinen** (01:06:30):
Yeah. I wouldn't say we have some kind of very scientific or some special way figure it out for this. So I think a lot of it, it's like a discussion of... And I often think ask people that... Ask about their projects and I try to go deeper. It's like why was this decision made? Why do you think the decision was made? And I might ask, "Do you think it was the right decision or did you agree on it?" Or ask about what you think you would have done differently or something.

**Karri Saarinen** (01:07:04):
So I think it's more like I'm trying to... In this area and what their answers is. And people's answers can be very different levels. Some people might be, "Yeah, I didn't like it. Which yeah, it's not opinion, but it's not based on anything. It's just like you didn't like it. You should be able to expand on it saying well, I don't like it because in this case it would not work well for this kind of users or in this kind of context or for this kind of purposes.

**Karri Saarinen** (01:07:33):
So they have more of this reasoning or some kind of rational why they think this way and they can articulate that. So I think that's what we often testing for is can they do this and how well they can do it. Then there can be very wide ranges of how people do it. And when you see someone who really thinks about this stuff, it's very clear to see that they can just talk about it forever and they can go deeper and deeper. And then some people that maybe haven't had the experience or don't think this way, they're like, yeah, I don't really know. I just built it and then seemed fine.

**Lenny** (01:08:18):
Let's transition to the third area I wanted to spend some time on, which is growth. And basically I'd love to just understand how Linear grows and what you figured out around growth, especially in B2B SaaS.

**Lenny** (01:08:29):
So our first question here is just how long did it take from starting to work on Linear to launching, say, V1, something that a number of people can use?

**Karri Saarinen** (01:08:38):
So we started officially in 2019. Some, I think, months before that we were already exploring and prototyping the product. So I think we prototyped different kinds of designs a little bit.

And then we also, one of the things we really wanted to solve is we wanted to make the application really fast. And the way we figured out we do that is we have more of this local-based data structure where all the data lives in the client, and then it gets synced on the backends with this delta [inaudible 01:09:13].

**Karri Saarinen** (01:09:13):
And back then, we were just exploring different off-the-shelf solutions and systems, but there was nothing really there, so we ended up building our own. And so we spent some time prototyping that. And then once we officially, I think, started working on the company in April 2019, and then we announced the company roughly mid-April, and we had this little website up with the wait list. And then I think by May we could use it ourselves. And then we started inviting some friends to try it out.

**Karri Saarinen** (01:09:49):
But then I think in June, I think we started more inviting people from the wait list. And around June, July, I think we had about, I don't know, 100, 200 users on it and maybe about 10 companies or something. And then we were in this private beta stage for almost a year. And the way we did it was just like we had this wait list of people on the wait list. There was few survey questions, like what kind of tools you use today and then why do you want to use Linear and what's the company size?

**Karri Saarinen** (01:10:23):
And we invited people based on... We invited more smaller companies using the tools we currently supported. And then also I was trying to see who is more interested versus just, I don't know, I just want to try it out type of people. And then a year later, in June, we launched it publicly. And back then maybe we already had, I don't know, several hundred of companies using it. And then we also launched the pricing and I think almost all of them... Maybe one company didn't subscribe, but everyone else subscribed to that paid plan.

**Lenny** (01:11:01):
Okay. There's a number of really interesting things here. So one is you're in private beta for a year and then a year later, you launched. How long was that period between starting to incubate and starting to build to that private beta milestone?

**Karri Saarinen** (01:11:16):
Yeah, I think it's just a few months. I think just-

**Lenny** (01:11:19):
Just a few months of building the V1?

**Karri Saarinen** (01:11:21):
Yeah.

**Lenny** (01:11:22):
Wow, okay. I thought it was a lot longer. That is so interesting. Okay. What a team you've got over there.

**Lenny** (01:11:27):
Okay. And then this survey piece is really interesting. I've heard a little bit about this story. So essentially you launched it on Twitter. You had kind of a following. Your founders had a bit of a following, so I think that helped build up the initial wait list.

**Lenny** (01:11:39):
But what you did there wasn't just like, hey, go sign up for a wait list and you just add email addresses. It's a survey asking them what tools they use, whether it's GitHub or something else, and then also the size of the company and their interest. And that helped you basically prioritize who to go after and who to onboard. Is that right?

**Karri Saarinen** (01:11:56):
Yeah. And the reason we did it, because we know that we didn't support everything and what I said before and the focus is we want to also be focused on let's just build a version that can work for some people or some companies. We don't have to try to address everyone in the world in the first months of the business. And even before, after that. So it was very selective process. And I think we were fortunate that we were able to get people sign up on a wait list and I think after a month or so we had maybe 4,000 people on the wait list.

**Karri Saarinen** (01:12:34):
And then we had this internal... I think initially it was just a very manual process, but eventually we built this invite tool that we could just send invites. But in the beginning, I would go read the actual surveys in a spreadsheet, then I copied the email, and then I emailed them the invite link from my personal email. And then I would just email them after a few days or a week and it's like, "Hey, what do you think?"

**Karri Saarinen** (01:13:01):
And the reason we... And so we would invite only like... In the beginning, we maybe invited like 10 people a week. And eventually we increased those amounts. But the reason we did it that way was that we thought that if you just invite everyone at once or a lot of people at once, all of those people are going to probably hit the same problems in this kind of software that is very early stage. So I don't know. They hit the same bug or the same problem in the software. So then they will all send us feedback like, hey, there's this problem. And then we felt like it was a wasted effort.

**Karri Saarinen** (01:13:36):
So we would just do these cohorts. Let's invite these people and then they say, hey, this is a problem. This doesn't work, or something. Then we go fix that. Then after we fix that, we invite the next cohort of people. Then they say, well, there's this thing that is needed or this doesn't work, then we fix that.

**Karri Saarinen** (01:13:54):
So for that year, we did these cohorts and then always get the feedback from the cohort saying this is wrong or this doesn't work, and then we'll fix that. So eventually, I think it was much more... I think an effective way of doing the initial development than just inviting or letting everyone to use the product right at the beginning.

**Lenny** (01:14:16):
There's so many interesting lessons from this. I wanted to ask how you got your first 10 customers. And what I'm hearing essentially was from this wait list, you launched it on Twitter, people signed up, you picked people to let onboard, you worked with them over the course of a year to make it what they needed, and then eventually you started charging.

**Karri Saarinen** (01:14:33):
Yeah. I think the first 10 companies using it, I think maybe a little over half. Maybe there was three friends that have startups and they used it. And then I think the majority of them were just from this wait list. But they didn't pay us anything. We didn't have pricing in the beginning or during the private beta. At some point we started building the payments function, so we just added a page in the settings that you can optionally pay.

**Karri Saarinen** (01:15:00):
The page in the settings that you can optionally pay and then we just give you a slider that's, how much do you want to pay per seat? Then we just see if... I know some people paid $28 per seat and some people pay $1, but it doesn't matter, we just wanted to test the functionality and see what people think. After a year, when we launched, we already had... In the, I don't know, first week of launching, we had probably some hundreds of customers.

**Lenny** (01:15:34):
I have never heard of the approach to pricing as just an actual sliding scale where people can slide the scale themselves on how much they want to pay. Did that help you figure out what to charge, or is it mostly just an experiment?

**Karri Saarinen** (01:15:46):
I don't think it gave enough data to decide, but I think it was good to see that there was some people that went... I think that 20 was probably the maximum that people could pay, so I think there was some people that went to it and they felt like, "Actually, yeah, I really love the products. I'm happy to pay $20." I think at least it gave us some confidence that, if we charge for this and it's something under $20, there's going to be market for it.

**Lenny** (01:16:16):
I want to hear about the story of how you've started to feel product market fit, whatever that means to you. When did you start to feel like, "Wow, this is actually going to work and maybe this is going to be a real business"?

**Karri Saarinen** (01:16:31):
Yeah, I think we've always been, I don't know, some paranoid or... I guess maybe a paranoid is a good way about the product market fit. I think it's paranoid in a way, we are always wondering, "Do we really have it?" And, "With who do we have it?" I think it's true in our business, that... I think we started feeling it very early on, and when people first started using it and we could see, "Now the whole company is using it and they seem happier using it and the feedback is good and they might have some additional asks for us," but we started feeling like there was definitely a product market fit with certain customer and these were more smaller, early-stage companies maybe where the founder is still running the product and they care about the speed of the shipping or they have certain values in a way, so it was a good fit with them.

**Karri Saarinen** (01:17:27):
Then I think we always know that we want to address the whole market and also just these early-stage customers, but we knew that if a Fortune 500 company came to us then, or even today, we might not be... I don't think we can provide them the solution today that works for them, so I don't think the fit is there. For us, the way we think about is, "Do we have the fit in the specific segments?" And how strong that fit is. In the company's journey, the first year, we just focused on, "Can we get the fit..." In the first two years, we focused on, "Can we get the fit in the early stage startup segment?" Basically, the goal was, "We want to be the default for startups, the default tool that the startups pick, and I think we were able to accomplish that, but we just purely focused on that segment and getting the product market fit there.

**Karri Saarinen** (01:18:28):
At the same time, we started getting some larger companies and we saw, "Yeah, it's not really great for you right now, but let's work on it, making it better," so I think the last two years we've been focusing on that. It's like, "How do we make the software work better? How do we get the product market fit stronger in this larger company segments that are hundreds of people or 1000 people?"

**Lenny** (01:18:53):
I think this is such a good way and smart way of thinking about product market fit. A lot of people see product market fit as this binary, "I have it or I don't," and, "When am I going to really feel product market fit?" What you're describing is what I often hear, it's more of this spectrum of more and more confidence that there's product market fit and, even more specifically, it's product market fit with segments of the market. It's this map of the world and you're just slowly acquiring territory in the market with specific elements and then, over time, it grows and grows.

**Karri Saarinen** (01:19:23):
Yeah, I think a spectrum is a good way to think about it, too. I feel like there's this blog post written in the past where you know when you have product market fit and I think it probably... It's like that for some, I don't know, social consumer apps. If it's taking off or not, then you don't really have a lot of different segments, or you don't really think about it, you have millions of users and then you see it's taking off, so you have a product market fit. I think in more like a B2B world. I think there's always... You can have different sizes of customers, you can have different domains the customers are in, or there's different categories where you might be doing really well in one category and then not that well another.

**Karri Saarinen** (01:20:14):
I think maybe the countering to do things is that, actually, if you're doing really well in some category, just double down on that. This is something I talked to the Zoom founder, Eric, at some point in the company's lifecycle, and this is also what he said. When they were building Zoom in the early days, they would get this one type of customer. I don't know, maybe it's a university and then it worked really well for them. Then they're like, "How do we get more of the universities?" They would always focus on a certain customer rather than, "Let's just try to get everyone, so let's focus on everything," which is not possible. Again, it's about the focus. If you see that something is working really well, then it's almost like you should focus on doing that more until you hit some point. It's like, "Okay, now we do have that category captured or handled as much as we want," and we should expand to new area.

**Lenny** (01:21:12):
Essentially, look for pull and just follow that and pay attention to that.

**Karri Saarinen** (01:21:17):
Yeah. I think, for us, there can be sometimes... For example, now we have... Most of the AI companies are using us, so I think it's always... Before that, it was a crypto company, so I think there's... When we see these kinds of things happening, then we start to think like, "Could we do something differently or could we get more of these AI companies on board?"

**Lenny** (01:21:42):
Such a great lesson. Just a few more questions, you mentioned that you launched on Twitter and that led to a large wait list and a growing wait list. Is there anything you did before that to build this following? That sounds really amazing, "Cool, we just announced it on Twitter and we have this large wait list and then we grow and we get all these customers." Is there anything you did ahead of time in anticipation of this launch? Would you recommend people work on building some kind of following online before they work in a startup? Was it just like, "Hey, we happen to have this following," and it worked out? Anything along those lines you would recommend to founders these days?

**Karri Saarinen** (01:22:16):
Yeah. I think definitely if you have a following and, obviously, depends on what kind of following, but I think my background as a designer, I would say at Airbnb and Coinbase and other places, and I did some talks in conferences and write some blog posts. I was definitely out there and had some of that following, which was helpful, but it wasn't like I have hundreds of thousands of followers or millions, or something. I had maybe 10,000 or something, which is a significant number, but then I think the other thing is... I think with the announcement, one of the things we did, I think, well is I think sometimes startups do try to emulate successful, large companies too much and you do this fancy announcements where it's like, "Hey, now we are doing this fancy thing and it sounds very corporate or something."

**Karri Saarinen** (01:23:17):
With our announcement, we wrote it more direct or authentic to us like, "This is what we're going to do and this is why, and these are some of the things we're going to do." On a Twitter, we did the same thing. All of us founders, we wrote our own reasons why we're doing this, and I think it was just much more... I think people like us could resonate more with it, so we were writing to the right audience. I think that's probably the first thing when you're announcing your company, you think about, "Who is my first audience? Who would be the best early users for this product and where are they?" And then, "How do they think about things and what kind of language do they use?" For us, it came very naturally, because we are these people.

**Karri Saarinen** (01:24:09):
We are in building software and these companies, and other people have seen similar things we have seen, so I think the way we announced it resonated with a lot of people. Then I think we did have some friends... I said we got some angel round where we got some friends involved. The main reason we did it was that we just felt like, in the early days, it's good to have... You feel like a real company in a way, that you have someone to answer for in a way. Even though the investors normally run your company or they don't have that much power, it's more like, "I took someone's money so I now need to make it worth it," kind of. With the announcement, again, we could use some of those people to spread the message as well.

**Lenny** (01:24:57):
To close out our conversation, just a couple more broad questions. You have a pretty unique culture at Linear, and I know one fun thing that you do is you have this baking competition. Can you talk about that and what it is you do there?

**Karri Saarinen** (01:25:12):
Yeah. Since we are a fully remote and distributed company, so we have people in Europe and US, a lot of group gatherings are challenging. Remote group sessions are challenging, because the time zones are so different, so some of the basic things, like happy hours, don't really work that well. Also, Zoom happy hours is probably not that fun anyway. I think a lot of people in the company watch The Great British Baking Show, so we decided, "Maybe we do something like that," where basically, we would just pick a recipe. Firstly, it was baking, now we expanded to cooking recipes, too. We just pick a recipe that is somewhat reasonable to do in a few hours, in a couple of hours, and it doesn't require tons of equipment or skill, or something. Then we just tell people, "Go buy the ingredients, use the company card," everyone has a company card, "And then hop on Zoom on this day."

For me, since I'm in California, it's like 8:00 AM, so we started the baking or cooking then. We've made things like roll cake and lemon meringue pie, and we made some [Portuguese 01:26:35], which is Portuguese pastry. Then we just hop on the Zoom, everyone's doing their thing, following the recipe, and then sometimes people have questions like, "Hey," I don't know, "I'm stuck with this," or, "My dough looks weird, does your dough look like this?" People can help each other and then also chitchat about whatever random things at the same time. Then we do the thing and then everyone takes pictures and posts on the Slack channel, it's what they achieved. I think we have friendly competitions like who did it best, so people sometimes put a lot of effort into the decorations and visuals.

**Karri Saarinen** (01:27:17):
In a way, it's, again, a craft thing that we do. I think baking and cooking and these kinds of things are also a craft, so we liked it that way. Yeah, we've been basically doing it quarterly since the beginning of the company. Yeah, the latest thing, we were a little bit... I think didn't have that much time, because we decided to do an easier thing, which is a summer drink recipe, so I think people made matcha drinks and some coconut drinks or white iced tea, or something. Yeah, that was interesting to do.

**Lenny** (01:27:55):
Have you ever won one of these competitions yourself?

**Karri Saarinen** (01:27:59):
I don't know if we declare winners that much, but I do think I do... Since I'm a designer, I do have some advantages on the visual presentation, so I think that I generally do well on that. Obviously, with this remote competition, that's the only thing you can really look for. It's not necessarily about the taste or the texture, because you can't really taste it through the Zoom.

**Lenny** (01:28:27):
Maybe as a last question, just again broadly, you've gone from being an IC designer, manager of designers, to the CEO of very fast-growing company. What's something that you've learned about leadership over the journey of Linear that maybe you didn't expect?

**Karri Saarinen** (01:28:43):
For some reason, it was surprising to me, I think, that being a CEO or some of these leadership roles is that you end up doing so many different things. When I was a designer, even if I would be some high-level designer in some company, you're just mostly focusing on the design and that's your job, but then when you're a CEO, then every week or every day, there's some different thing going on. Sometimes there can be problems, but a lot of times, it's like, "Hey, we need to figure out how we're going to do this. How are we going to do this compensation?" Or, "How are we going to do this marketing plan?" Or, "How are we going to do this offsite thing?" What's definitely challenging for me is handling that different kinds of things that come to you and staying somewhat focused, still, on something.

**Karri Saarinen** (01:29:42):
I think I haven't necessarily fully figured it out, but I also figured it out, that hiring and delegation helps with this, that if you can find other leaders that can take on certain areas, that's helpful. That's the main thing, that it's a very wide range of things that you maybe didn't have experience before, but also, I think it's interesting for me to learn about these things. You learn about the financials and you learn about legal things, and then you start to feel like, "Actually, I know something about this thing," over time.

**Lenny** (01:30:18):
For the actual final question, before we get to very exciting lightning round, what's just the future of Linear? What's coming? What's happening in the future? Anything you can share?

**Karri Saarinen** (01:30:27):
Yeah, I think there's always things we're working on and improving. One, a newer thing we're working on is this feature called Asks. Basically, what it is is that... We see that, in a company, there can be a lot of different people that need to interact with the product team or different people that need to interact with this team, but they're not necessarily in Linear or part of this team. We'd be building this an Ask feature, which is an integration to Slack where you can very easily go to a Slack channel and then ask your question. You need something from this team, maybe it's the IT team, that you need a laptop, or maybe it's the infrastructure team and you need something from them, then the team that is handling the request, they can very easily send it to Linear, into this triage that we have, and then they can start doing stuff with it.

**Karri Saarinen** (01:31:26):
If they have questions or additional questions to the actual person who requested it, we can send those messages back to the person through Slack, so they don't actually have to go to Linear or they don't have to be a Linear user to use it. We think this is just a good way for the company, or the whole company, to be more potentially involved in the product operations without having to be a power user of Linear, because not every function really uses it or needs to use it.

**Lenny** (01:32:01):
Awesome. What a cool peek at something coming out soon, or maybe out by the time this comes out. With that, we've reached our very exciting lightning round. I've got a bunch of questions for you. Are you ready?

**Karri Saarinen** (01:32:13):
Yeah, I'm ready.

**Lenny** (01:32:14):
All right. What are two or three books that you've recommended most to other people?

**Karri Saarinen** (01:32:20):
Timeless Way of Building by Christopher Alexander. He wasn't really an architect, but he, I think, taught in Berkeley. He has these interesting thoughts about building things and he focuses on buildings and towns and these kinds of spaces, but I think there's a lot of things that are also interesting for building software. The other book that I like is the Zen and the Art of Motorcycle Maintenance, because it also talks about the quality of things and I think that's one of the main themes of the book. The thing is also that quality is so hard to define. If you actually start thinking about it, it's like, how do you define it? It's really hard to pin down, but it's like when you try something or see it, then you know if it's quality or not.

**Lenny** (01:33:13):
What are some recent movies or TV shows you've really enjoyed?

**Karri Saarinen** (01:33:17):
I think that the movie is probably John Wick 4. Obviously, there's no story in that movie, but I think it's very true to its nature, so I like that fact. Also, recently, I started watching the Silo on Apple TV, and I think I like it. It's like a good mystery and then, also, it reminds me of the Fallout games, so I like it that way, too.

**Lenny** (01:33:46):
I actually read the Silo books and I was really excited for the show to come out, but I mentioned this on a previous podcast, the show is so little to do with actual books. The core ideas are the same, but there's all these stories that they're just making up on the show, so I stopped watching, because that's not what I was hoping for, but-

**Karri Saarinen** (01:34:02):
Okay, interesting. Maybe I need to check the books later, once I watch the show.

**Lenny** (01:34:08):
Yeah. Definitely, read the books, but there's three of them and only the first one is actually good. The other ones are not actually very good and I should not have read them, because it just went off the rails a little bit. Anyway, next question. What is a favorite interview question that you'd like to ask candidates when you're interviewing them?

**Karri Saarinen** (01:34:22):
I think, usually, I like to ask, what is the candidate most proud of and why? On their professional life or otherwise, what they're most proud of and why. Then I think we can go deeper on that, but I think it gives you a little bit of indication, what the person values and how they think about things. Also, I think it's always nice that people can share something they think they did really well and we can spend time on it versus just asking something more like negative things.

**Lenny** (01:34:52):
What are some favorite products you've recently discovered that you really, really like?

**Karri Saarinen** (01:34:58):
I'm not sure if I discovered them recently, but recently in this home office, I've been installing some of these hue lights and I really like them, because throughout the day, I can have more harsh lighting, because I'm in meetings or something, and then in the evening, I can change the temperature. I make it much more red or orange, or something. I think it's nice that you can transition the space. It's like, "Okay, now I'm working and now I'm doing something else." You can use the lights to indicate that.

**Lenny** (01:35:31):
That is so cool. Do you automate the schedule or you manually change the color?

**Karri Saarinen** (01:35:35):
Yeah, I just manually change it. On my home app, I have scenes that... There's the night scene and then there's the day scene, or the morning scene, so I just click that button and then it changes the lights.

**Lenny** (01:35:50):
That is extremely cool, I'm going to try that myself. What is a favorite life motto that you like to repeat yourself or share with people? Something you come back to a lot.

**Karri Saarinen** (01:36:02):
Go slow to go fast. I think, for me, it's about that. Sometimes people have a tendency to rushing into things and especially, I think, in startups, but other places too, you have this like... I think urgency is important, but then sometimes you have too much urgency and you are rushing things, and what happens is that you rushed it and now you need to come back to fix it. I think sometimes I like to think that you should take some time to actually think about it and, "What are you going to do?" And then do it. In the end, it's going to be faster that way than going back and forth and fixing things.

**Lenny** (01:36:42):
What is the most valuable lesson that your mom or your dad taught you?

**Karri Saarinen** (01:36:45):
I think it's respecting people and things. I think the people respect is pretty obvious, but I think with the things you have, also, I think you should take good care of them when you use them. I don't know, clean them or put them away, and then they're ready for the next time. I think I like that, though. Rather than you treating things like they're trash or not that valuable, you should treat things that they are valuable.

**Lenny** (01:37:16):
Final question. You were born in Finland, I think you grew up in Finland. What is a Finnish food that people should definitely try to get as soon as they can?

**Karri Saarinen** (01:37:25):
One is this salmon soup, and it might sound weird, a fish soup, maybe it's not going to be that interesting. It's a creamy soup, it's on potatoes, carrots, and other things, and it's almost like a little bit of sweet flavor to it. You can make it yourself at home or you can... If you go to Finland, there's probably always a few restaurants that offer it.

**Lenny** (01:37:52):
Okay, amazing. Is that something we could get here or you have to go to Finland to get it?

**Karri Saarinen** (01:37:56):
I don't think I've ever seen it here in the US in any restaurant, but it's not very hard to make it yourself. You can probably Google a recipe. Basically, you just need some salmon, some basic spices and some cream and some fruit, vegetables.

**Lenny** (01:38:13):
All right. Next episode, we're going to do a cooking show with Karri. Karri, thank you so much for being here. You're building a very special company in a really unique way, and I think many founders and many product builders can learn a ton from watching you operate in the business that you're building. Again, thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out, maybe ask you some more questions, and how can listeners be useful to you?

**Karri Saarinen** (01:38:38):
Yeah. I'm on Twitter, my name, Karri Saarinen. We also have the Linear account, which I think is interesting. That's just @Linear. I hope everyone can check out Linear and see if it could work for them in their company, and figure out if there's a pilot. I think we are always happy to assist on those things, if you just want to try it out and try it with the team, we can help you to set it up and help you to understand how to use the product.

**Lenny** (01:39:09):
Awesome. It's just Linear, the app, right? Is that the URL?

**Karri Saarinen** (01:39:13):
Yes.

**Lenny** (01:39:14):
Awesome. Okay, easy-peasy. Amazing. Karri, again, thank you so much for being here. 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.

---

## [4/24] How to get press for your product | Jason Feifer (editor in chief of Entrepreneur magazine)

**Jason Feifer** (00:00:00):
The editor, the writer, I'll just say it as plainly as possible. They don't care about you. They don't care about you. They care about their reader or their listener or their viewer. That's who they care about. That's who they're serving, and if you can be of use to them in sharing the kinds of information that they are looking to serve their audience, then you can get what you want. But you can't treat them like a service provider because they're not. And so you have to approach them with an understanding of what they're trying to do for their audience and how you can fit into that because if you don't, they are not interested in you.

**Lenny** (00:00:47):
Today, my guest is Jason Feifer. Jason is editor in chief at Entrepreneur Magazine, previously an editor at Fast Company and a number of other magazines. He's also an author, podcast host, keynote speaker, and startup advisor. In our conversation, we get incredibly tactical about how to get press for your product. Jason shares how to pitch a journalist, how to find the right journalist to pitch, what publications to consider, why freelance writers are more likely to write about your story, why the mission of the publication is so important in how you pitch them, plus what channels to use to reach out to journalists, how to think about your goals and what success looks like from getting press, so much more.

**Jason Feifer** (00:04:13):
Lenny. Thanks for having me.

**Lenny** (00:04:14):
It's absolutely my pleasure. We've actually collaborated on a couple of things recently, and as we were chatting about some stuff, I was asking for advice on how to help a startup I'm working with get press, and you shared a bunch of killer advice, and so I asked if you could just come on this podcast and share similar advice for how to help startups get press and here we are.

**Jason Feifer** (00:04:36):
Yeah, I'm really happy that you asked me to do that. This is something people ask me about a lot. I've been in media for decades. I've worked at a lot of different magazines. Obviously, I run Entrepreneur Magazine now, but I was a Fast Company. I was at Men's Health, so I've seen a lot of different sides of media, and it is a very misunderstood tool, particularly for people in business, and so I love demystifying it.

**Lenny** (00:05:00):
Amazing. I'm excited to learn all this too, and so thanks for doing this.

**Jason Feifer** (00:05:04):
Yeah.

**Lenny** (00:05:04):
First question is just, as someone in press, how much volume is there coming at you from startup founders and PR people trying to get you to write about them and also just reporters that you work with?

**Jason Feifer** (00:05:15):
Yeah, it's tremendous. It's ridiculous. I would say that by the time we are done recording this podcast, I'll have, I don't know. I mean, it could be anywhere from 30 to 50 pitches in my inbox. It comes all day. Now, to be clear, most of that is garbage in the real garbagey sense, right.

**Jason Feifer** (00:05:36):
It's a lot of completely unrelevant press releases that were sent to me and a bazillion other people. But within, there are definitely some people who have spent the time to reach out very specifically to me, and everybody in media gets some kind of volume like that. To reach out to somebody in media is to be shouting over a lot of noise.

**Lenny** (00:06:01):
Wow. I imagine we'll get to this later, but I'm curious just what percentage of those are PR people and press release versus a founder or someone that is doing it themselves?

**Jason Feifer** (00:06:12):
The percentage of direct messages from founders that I'm getting is low. I would say probably 20, 25%. And then the 75% is PR in some capacity, either targeted PR where somebody's intentionally reaching out to me or mass blast press releases.

**Lenny** (00:06:30):
You know what's crazy is I've been getting a lot of these now. People think I'm some kind of journalist, and they're just like embargoed announcement product launch.

**Jason Feifer** (00:06:37):
It doesn't take much because you just end up on some list, and what's really interesting, and we'll talk about PR later, I know. But one of the great insights that you can get into the challenges of that industry is how completely automated a lot of it is where a lot of people in PR are not thinking specifically about how to tell the right story to the right potential media outlet. Instead, what they're doing is they're just playing a numbers game, and they're just blasting it out to everybody.

**Jason Feifer** (00:07:13):
And that means that you could end up... I write this newsletter, right. I have... Entrepreneur Magazine is the thing that people obviously would pitch, but then I have this newsletter where I don't interview anybody. There's no opportunity to be featured in my newsletter, and I still get pitches to the newsletter because somebody saw it and dropped it in some spreadsheet, and it just... now I get it. And I think that's a real disservice to entrepreneurs who are paying for people to do that, and I really hate that.

**Lenny** (00:07:41):
Yeah. Okay, so we're going to get into the meat of just how to actually do this well, but a couple more questions just to set a little context. One is in terms of impact. What kind of impact have you seen from getting press for a startup in terms of growth for their product specifically?

**Jason Feifer** (00:07:57):
So it's a really wide range. I have had entrepreneurs tell me that a single story in Entrepreneur Magazine, like the print magazine or just online, will drive more, whatever more app downloads, more sales that month than any of their paid marketing efforts.

**Jason Feifer** (00:08:16):
But then I have also heard entrepreneurs tell me that it didn't do anything for them or that it did one very specific thing for them, which is to say maybe some potential partner read it and reached out, and it started an interesting conversation. It's all over the gamut, and it's a really important thing for people to remember is that this is not something that I think that you should bank on as a strategy for growth. It's a great add-on. But if you think that press by itself is going to solve your problems, you're wrong because it might, but it's way too unpredictable.

**Lenny** (00:08:48):
Is there anything else along those lines of just when it's worth somebody investing time into getting press, either stage of startup, type of startup, any just general broad advice of you should not be spending time on trying to get press versus this is a really good opportunity for you.

**Jason Feifer** (00:09:02):
Think about press the same way that you think about raising money, which is to say you do it when you know what the money is for, and you should do it when you know what the press is for. A lot of people reach out to me at such an early stage that if we wrote about them, it wouldn't get them anything. They're not at a stage where they could use that press in any meaningful way, and so there's really no purpose in chasing it now. You should step back and think really as a starting point, "What do I need press for?" And if you have a good tactical answer to that, that could be because I need to drive awareness to a new product. That could be because I'm going out to raise money, and I need articles to show that the marketplace takes me seriously.

**Jason Feifer** (00:09:55):
These are good reasons, but I get a lot of emails. It's funny because people are... like entrepreneurs, in particular, they're just so vulnerable, and it's kind of a wonderful way sometimes. And sometimes people will just email me, and they'll just say, "You know, I've worked really hard, and I just feel like I deserve this." I respect that, and I relate to it in some ways with my own trying to get attention for my own work. But, "I deserve this" that's not a good tactical decision for your business that doesn't do anything for you. And so I would put that to the side and only think of press as you don't go out and raise money if you don't know what the money is for. You shouldn't go out and try to get press if you don't know what the press is for.

**Lenny** (00:10:38):
I'm curious to hear other examples when it's not, when it's a bad idea because, as like I said, an outside observer, I would always love to get more attention for my product and more people to be aware of it, more people to check it out. Is there an example or anything that comes to mind of there's no need for you to do that in this moment or for this product?

**Jason Feifer** (00:10:55):
Oftentimes, it's not even about the moment, but it's about the publication. So I'll give you an example. I spoke at an event once, and afterwards, this guy comes up to me, and he has a small hot dog food truck business in Washington, DC. So he said he's got a couple trucks, and he's doing good business selling hot dogs, and he wants coverage in Entrepreneur Magazine. He's like, "Oh, how can I get a feature?" And the problem with that instinct that he has is that he's really directing his energy in the wrong place because if he is selling hot dogs in Washington, DC, then I understand what press is for him. Press is to drive hotdog sales. That's what he wants to do. Entrepreneur is not going to do that for him. Full stop. Why? Because Entrepreneur reaches a national to international audience.

**Jason Feifer** (00:11:52):
So that means that 99.5% of the people who would read a story about this guy have no ability to go get his hotdogs, which means that that was wasted effort. So fine. Was it that hard to come up and talk to me at the conference? No. But scale that out. How many emails is he sending that are like that? How much energy is he putting into chasing things that ultimately don't have good direct value to him? What he needs to do is think, "Okay, my goal, get more people to buy hot dogs. Where am I? I'm in Washington, DC. How can I reach people who are interested in food in my market?" So stop chasing Entrepreneur and start chasing the local eater or the food section of the Washingtonian or something like that. That small shift can give you a lot more payoff for your effort.

**Lenny** (00:12:38):
This is a good segue to just let's just dive into how to actually go about getting press, and I know you-

**Jason Feifer** (00:12:38):
Yeah.

**Lenny** (00:12:42):
... kind of have this three-step structure for thinking about it. Maybe just start with what are the three steps, and then we'll dive into each one.

**Jason Feifer** (00:12:50):
Yeah, sure. So I mean, look, it is pretty simple, right. Step one is prep. You want to be thinking about how to tell your story. You want to be thinking about the kinds of stuff I just talked about. What is press for for you? Everything that you need to do to orient yourself towards what is this opportunity, and why am I chasing it, and how to make the most of it. Step two is figuring out who to pitch. Not all press is created equal. There are not reasons to just go chasing everybody arbitrarily. The hotdog example is a good one.

**Jason Feifer** (00:13:19):
So finding the writers and editors who you're actually going to reach out to, who are going to most receptive to you. And also making sure that because you did the prep, you can figure out how to tell your story in a way that they're going to be interested in. We'll talk about that. And then step three is the actual pitch. What does it mean to reach out to these people, to engage the writers and editors? How do you find them? What do you send them? What are you telling them? That's it.

I mean, right. But what you need to understand is that you're entering a world that probably doesn't operate the way in which you think it does, and I see that all the time as the recipient of pitches. People don't understand who they're reaching out to and how I and my colleagues think. We should maybe even start with that because a really important thing to understand just again, to go to [inaudible 00:14:07]-

**Lenny** (00:14:07):
[inaudible 00:14:07] do it. Yeah.

**Jason Feifer** (00:14:08):
... yeah, the metaphor of the investors, you don't reach out to an investor if you don't understand what that investor does, what they're interested in, or what kinds of companies they invest in. You can't do that with media, either. So I get pitches every single day along the lines of, "How do I get coverage in Entrepreneur Magazine? How do I get a feature in Entrepreneur Magazine?" And to me, it always feels like they're ordering a hamburger from me. Like, "How do I get a hamburger from Entrepreneur Hamburgers, right?" They're treating me like a service provider. That my job is to provide press.

And I get it because, of course, if you're an entrepreneur, and you're looking for press, then the... [inaudible 00:14:51] writers and editors out there seem to be in the business of writing about people, and therefore, there's some service that they seem to provide, and you're trying to figure out how to get it. But that's not how the media thinks of themselves, right. The editor, the writer, I'll just say it as plainly as possible, they don't care about you. They don't care about you. They care about their reader, or their listener, or their viewer.

**Jason Feifer** (00:15:18):
That's who they care about. That's who they're serving. And if you can be of use to them in sharing the kinds of information that they are looking to serve their audience, then you can get what you want, but you can't treat them like a service provider because they're not. And so you have to approach them with an understanding of what they're trying to do for their audience and how you can fit into that. Because if you don't, they are not interested in you.

**Lenny** (00:15:49):
I love that. And more... even specifically, what is it they're trying to do for their audience? I imagine it's just have something interesting that they want to read. Something they can learn. Something they're like, "Wow, I'm really excited to read this."

**Jason Feifer** (00:16:00):
Yeah. But it's going to be more specific based on the mission of each publication. So, for example, I've worked at two separate business titles. I was a senior editor at Fast Company for a number of years, and now I'm the editor-in-chief of Entrepreneur Magazine. The decision that is made about whether or not a story belongs in a publication, it was totally different based on these two publications. So I can't speak to Fast Company now because they've gone through a couple of leadership changes. I don't know what their mission is, but back when I worked there under Bob Safian, he was the editor-in-chief, that was really a magazine about where businesses going, and the stories that were in the magazine were all supposed to be in some way representative of the evolution of business.

**Jason Feifer** (00:16:50):
And so when people would pitch what we'd really be looking for are, are there insights into... in what this person is doing that other people could read and say, "Aha, that helps me understand where this industry is going or that industry, or it helps me think about how I can shape my own company to match current trends," that kind of stuff. Entrepreneur, totally different mission. The way that I think of Entrepreneur is that it's not even a magazine about business. It's a magazine about thinking. Or what I want to do is make sure that everybody who comes to the magazine walks away with great insights into how to think through the challenges in their business.

**Jason Feifer** (00:17:29):
And so what I'm looking for when somebody reaches out is did they make some interesting counterintuitive decision that solved a problem in their business, and I'll emphasize in. Because, oftentimes, when people hear me talk about solving problems in business, they think, "Aha, but I solve a problem in business, right. I saw that there weren't the best razors in the world, and I made the best razors." That's not what I'm talking about. What I'm talking about is... There's this woman whose name is Joelle Mertzel. She has a company called Kitchen Concepts Unlimited, and she makes a butter dish, and it's a really smart butter dish because it is built on a hinge, right. So this is designed to solve a very specific problem, which Lenny, I don't know if you knew this, I did not, that you don't need to refrigerate butter. Did you know that?

**Lenny** (00:18:18):
I knew that intellectually, but I still refrigerate it. I know people don't.

**Jason Feifer** (00:18:22):
Me too, even though I've had multiple conversations with this woman about this. You don't need to refrigerate butter, and if you leave it out, it cuts easier. It's more spreadable. Big problem, the butter dish. So most butter dishes you just lift up. And so if you have warm room temperature butter that's soft, and you lift the butter dish top up, you might bump into the butter, and it's going to make a big mess. So Joelle makes a butter dish on a hinge, right. Opens and closes exactly the same way every single time. No mess. Brilliant, solves a problem. She reaches out to me about this. This is not interesting to us, right. Maybe this is interesting for a cooking magazine, right. Maybe Bon Appétit is interested in this. Entrepreneur's not interested in this because that doesn't help other entrepreneurs to have thought through that problem.

But then she tells me something else. What she tells me is that she is, at the very beginning of this, trying to figure out how to answer some basic questions about her audience, like what colors do they want in this butter dish and what price point are they willing to pay? And she wants to do some market research. She goes to a market research company. She says, "How much would it cost to research consumers and answer these questions?" They say, $10,000. She doesn't have $10,000. And then, one day, she's sitting at the airport waiting to board a flight, and she looks around and she realizes that airports are full of people who have absolutely nothing better to do than answer questions about butter dishes, right. Nothing better to do, just sitting there. And you could start at gate one. By the time you get to gate eight, everyone in gate one is new. You could do it all over again, and you could have a 6:00 PM flight, and you could show up at 9:00 AM. Nobody's going to stop you. You can do this all day in the airport. And this is how she starts to do her own market research. She saves that $10,000, and she does it herself. I put that story in the magazine. It's tiny. It's this tiny random company and this random decision. But the reason I did it is because every time I repeat that story to entrepreneurs, they're all like, "Ugh, right, totally. There's always other ways to do things." They love the ingenuity of it. That's what I'm looking for. That's Entrepreneur's stories. So to go back to the point that you were making, it's not just about, "Well, it's a magazine called Entrepreneur. They must write about entrepreneurs, right. I'm an entrepreneur. I belong in Entrepreneur."

**Jason Feifer** (00:20:41):
People think that all the time. No. You have to step back and read what these publications are publishing and ask yourself, "What are they doing? What is the purpose here?" The editors and the writers, they're making decisions about what goes in this magazine, and they're making decisions about how the stories are constructed. Why are they doing that? Who are they trying to reach? When you start to see it through that lens, you start to see the pattern, and you get an understanding a real instruction manual for what it actually means to pitch these publications.

**Lenny** (00:21:13):
That is such an interesting insight. I had no idea that that was something you should be thinking about. Is there an easy way to understand the mission of the publication? Is there an about page they often add this to or is it, like you said, you just read a bunch of stuff and try to suss it out?

**Jason Feifer** (00:21:28):
Nobody publishes an about page in that way because the internal logic of the editorial team. But you can certainly make some starting assumptions based on who the publication is trying to reach. Everybody is trying to reach somebody. It gets more complicated the more general interest something becomes, right. What is the New York Times?

**Jason Feifer** (00:21:53):
What is the mission? That's a hard thing to answer. You sort of have to divide it up into sections, right. The mission of the National News Desk is different from the mission of the Business Desk, and even within there, the mission of the Sunday business section is different from the mission of the Monday to Saturday business section.

**Lenny** (00:22:09):
[inaudible 00:22:09].

**Jason Feifer** (00:22:09):
So you have to start to really parse it out. And this is the reason why people hire PR is because if they're good at their jobs, they understand a lot of this already. But I really do think that if you spent time with the content and your starting point is, "I understand that this publication is trying to reach X. They're trying to reach these people," then you can start to see the patterns of what it is that they're doing. How are they telling stories? What do these five stories all have in common? They have something in common. There's something that they're all doing, and you can certainly read the tea leaves and try to figure it out.

**Lenny** (00:22:48):
Awesome. Okay. It feels like we've already gone into step one around prep. What else is involved in preparing to get press?

**Jason Feifer** (00:22:57):
If we're talking about prep, the very first thing that you need to do is what I had said earlier, which is just ask yourself, what do I need press for? And you need a good answer to that question. And once you have that, the next thing you should do is you should start to think about, "Well, what's interesting about my business? And oftentimes, it's not necessarily what you think, and you can be guided in a way by what's happening in step two, where you start to think about who you're trying to reach out to. Because, for example, the story that somebody might tell me at Entrepreneur is going to be different than the story that somebody might tell Cosmo.

**Jason Feifer** (00:23:42):
There's a reason for a company to end up in, both Entrepreneur and Cosmo, right. Maybe the product is for young women. And so, Cosmo might be interested in some kind of product feature or including the product in a roundup of some kind of products. Whereas Entrepreneur would do the entrepreneur-focused story. What did this founder do? How they do they write? You can take your... You could think about your story and kind of break it up into a whole bunch of different little pieces and then figure out which piece goes to what media. But oftentimes, people make the mistake of trying to do that in reverse, which is to say that they kind of decide what narrative they would like to have out in the world, and then they just go around to different publications trying to sell them on that. I get that all the time.

**Jason Feifer** (00:24:34):
A lot of my pitches that I'll receive in my inbox are somebody who hasn't really thought at all about what Entrepreneur publishes but instead just has something that they would like to get out into the world. I mean, a good kind of dumb example is, yesterday, somebody sent me an email about a company that had just hired a new president. I don't care about that. That's not useful to my audience at all. I'm sure that there is a trade publication, right. Let's say that there was a company in the restaurant industry. I'm sure that a trade publication that follows the blow by blow by blow of a restaurant industry might be interested in your new president. But I'm not because you hiring that new president isn't useful to my audience. Stories in Entrepreneur are not really about the person that I'm writing about.

**Jason Feifer** (00:25:23):
They're really about the audience. They're really me serving the audience through the stories of the people I'm writing about. That's not useful. I wish that they had spent a moment and thought about that, but they didn't. So once you start to think about who it is that you're trying to reach, you can step back and say, "Well, what part of my journey is going to be most relevant to them? And I would push you to be really, really creative about it. Because if you go back to the Butterie example, the butter dish, that little funny story about the airport, I mean, who else is writing about that? It's not central to her story as a brand. It's not central to her sales pitch. It was-

**Jason Feifer** (00:26:00):
... central to her story as a brand, it's not central to her sales pitch. It was just for us. We were probably the only publication in the world who cared about that, but I really cared about it.

**Lenny** (00:26:11):
Amazing. Okay, so just kind of summarizing what you shared, think about the goal. What are you trying to get out of press? Goals could be awareness of what we've done, something new, investor interest. What are some other common examples of goals that you see for trying to get press?

**Jason Feifer** (00:26:27):
Yeah, awareness of something new. But also doesn't have to be awareness of something new, it could just be continued growth, trying to reach into a new marketplace. That's fine. Anything that's tied to growth or reaching a new customer base-

**Lenny** (00:26:45):
Cool.

**Jason Feifer** (00:26:45):
... would make sense.

**Lenny** (00:26:45):
That makes sense.

**Jason Feifer** (00:26:47):
But it could also be that you're looking to position yourself in your own marketplace a little differently. I see, for example, a lot of people, a lot of big companies, keep knocking on my door because we don't just hear from startups, we hear from major companies as well who are pitching stories. I know why they want to be an entrepreneur. They want to be an entrepreneur because they're trying to position their brand as also being relevant to small business owners. It's helpful to have that kind of context because coverage an entrepreneur can help them go out to the marketplace and say, "Look, we're also reaching X, Y, Z people."

**Jason Feifer** (00:27:25):
So sometimes it's not even about a conversion, but rather it's about a positioning and that's a good reason to also maybe put forward your executives. Sometimes it's just about establishing your CEO or your founder as an authority in a particular area because you want them to be more trustworthy, you want them to be invited to more conferences. Because all of that stuff draws more attention to the company, all sorts of reasons to do this stuff. And then trying to get in front of investors, trying to get in front of partners. Look, there's a million reasons why being visible can be useful, but you need to make sure you understand what you're actually trying to do.

**Lenny** (00:28:07):
Okay, awesome. That was really helpful. So think about what goal you have in mind for getting press, pick a publication and understand their mission and what their goals are. And then think about some interesting stories that you could pitch them. Not just like we have a new president, but something that you think they'd be excited to share that connects with their mission.

**Jason Feifer** (00:28:25):
That's right.

**Lenny** (00:28:26):
Kind of on this topic, I know we want to talk about who to contact and how to figure out who to actually talk to. A couple of questions that come to mind. This is all a lot of work. Founders are really busy.

**Jason Feifer** (00:28:35):
Yeah, it's a lot.

**Lenny** (00:28:35):
So begs the question, PR agencies, do you have a perspective on would you recommend working with PR agency? Is there a time when it makes to and doesn't make sense to?

**Jason Feifer** (00:28:45):
Yeah, I mean it's a ton of work. Everything that I'm describing is a ton of work. And let me be clear, people succeed in getting press without doing any of the things that I'm describing because dumb luck happens in the world. You could very well just bang out an email to some random editor and they might like it. That is entirely possible. You could disregard everything that I've just said. What I'm really helping you do is try to optimize your approach. But yeah, hiring PR can cut out a lot of this. Now you're not doing this research yourself, you're not thinking through these challenges yourself. You're working with people who understand exactly how to identify the most interesting parts of your story and then turn them into good pitches. So why wouldn't everyone do that? The couple reasons. Number one, cost PR can be expensive, so you just have to factor that in. Number two, PR is and can be, I'll say can be, a very frustrating journey because a lot of PR people are very bad at their jobs. They're very bad.

**Jason Feifer** (00:29:52):
And this isn't just me bashing PR people. I have literally been hired to give keynotes at PR industry conferences. And I get on stage and I say most PR people are bad at their jobs and everybody nods. And they all know it. And of course, none of them think that they're one of the bad ones, but they all know it. PR is full of people who are bad at their jobs. Why are they bad at their jobs? They're bad at their jobs because they're lazy, because they're primarily relying upon email blasts, just sending things out, because they have a older idea of what it means to get the word out. For example, if you hire or talk to a PR agency and one of the things that they recommend doing that you should spend money on is a press release, like a traditional press release, run as fast as you can away from that. I don't know if you know this. Do you know this? The press release, there are some purposeful reasons to put out a press release, but the press release is really no longer the primary unit of press attraction.

**Lenny** (00:31:07):
Yeah, I get that sense.

**Jason Feifer** (00:31:08):
Yeah. But here's what's fascinating. So a PR agency I wouldn't recommend might do this. They'll tell you, "We're going to put together a press release about this new thing, so you have to pay a little extra money for the production of this press release and then also the distribution of this press release because what we're going to do is we're going to put it out on the wire," because there are a whole bunch of press release distribution wires. So they'll do that, you'll pay the money, it'll go out on the wire. And then they'll send you a report about all the places that this press release ended up on. It ended up on Yahoo Finance, it ended up on Market Watch. And it technically did. The press release is there, it was posted. And zero people are going to see it in the whole world because Yahoo Finance has a section where they just publish every damn press release that gets published by all these different distributors. Nobody saw that.

**Jason Feifer** (00:32:08):
So don't confuse posting press releases even on very big websites with actual success. What you want in an actual PR person is someone who traffics in one thing, and that is relationships. The most important thing that a PR person can have is active relationships with people in media. Why? If a PR person is guaranteeing you press, that's another reason to run out the door as fast as possible because the PR people cannot control this. Writers and editors, they do what they want. It's a completely subjective industry and very frustrating. I completely understand. That was totally subjective. So the best that a PR person can do is shape your story, understand who to pitch, and then get that writer or editor to look at it, to pay attention to it. There are some PR people in this world who I think very highly of. I think they're incredibly smart, incredibly good at what they do, and they only pitch me when they have something that they think I will genuinely be interested in. Instead of a lot of PR people who just send me some random thing every week or every day.

**Jason Feifer** (00:33:21):
I don't pay attention to those people. But, I don't know, just shout out, when John Beer from Jack Taylor PR sends me ... John, I met him in a PR capacity a decade ago and we've since become friends. When he emails me, I pay attention. I don't write about it all the time. I'm not going to write about something just because I like John, but I will pay attention. And paying attention honestly is half the battle because people in media are getting so much email. So you want someone who's going to understand you, understand your industry, understand and know the people who they should be reaching out to, and who really respect you as an entrepreneur and are going to give you the hard feedback. Because there are a lot of people who will go and hire PR and they'll say, "I want you to email this and this and this and this and this publication."

**Jason Feifer** (00:34:16):
And if the PR person just does that, all they're doing is annoying their contacts if they don't really feel like this was meaningful. You should like when a PR person pushes back on you and says, "You know what? I don't think that your story is right for that publication. Here's why." That's someone you should hire.

**Lenny** (00:34:34):
Is there any other PR people you want to call out as ones that you think are awesome?

**Jason Feifer** (00:34:38):
The challenge here is that I'm going to regret not including a whole bunch of people who don't pop to mind immediately, but-

**Lenny** (00:34:44):
We can include them in the show notes, whoever else.

**Jason Feifer** (00:34:45):
Yeah, sure. Okay, so let's see. Off the top of my head, so John of Jack Taylor, he does a lot of wellness stuff. So PR agencies tend to specialize, and so you want to make sure that you're going with people who really understand you and the media ecosystem that you are reaching out to. So I think John's really smart. Let's see. Hannah Lee at Hannah Lee Communications is great on hospitality stuff. So restaurants, hotels, booze, they're really smart. Jen Sesquila, sorry Jen, if I mispronounced your name. Max Borges Agency, really good on sort of consumer focused products. Greg Delman, he's based in San Francisco, he has a boutique shop called G3 Media and he does a lot of tech startups stuff, just really knows that world. Greg, I'll find writers through Greg because he just knows everybody. I just texted him recently and I was like, "I need somebody who can write about this very specific AI thing." He happened to be at TechCrunch Disrupt and he found some freelancer and connected us. That's great. So those are four. I will have more that'll give you for the show notes.

**Lenny** (00:35:55):
Amazing. Okay. This is really useful. If any come to mind as we're chatting, feel free to shout them out again. Similar question, when people are thinking about publications to go after, say you're a startup founder. Is there a list you could just share of just like, here's probably the top five, 10 that you should be thinking about? The obvious ones, you talked about entrepreneur, [inaudible 00:36:15] Company, TechCrunch obviously comes to mind. Is there others that are just like, "Here's a good list to start with?"

**Jason Feifer** (00:36:19):
Honestly, it really, so much depends upon what it is that you're looking to do. You could be a startup, founder and entrepreneur and Inc and Fast Company are for maybe some good reason not at the top of your list because you're a startup founder, but your goal right now is to reach consumers. And those publications don't reach consumers and they don't reach people who are in a buying mindset. They reach people who are in a creating mindset. So I would expect that if you have a startup and that startup is not B2B in some way, that it would be possibly very reasonable that business publications might not be your target right now. Maybe Men's Health is. Maybe, I don't know, anything could be. I think oftentimes people tend to think too close to them about where they belong. Lenny, here's a real kind of exchange that happens, which is if somebody will email me, I don't respond to every publicist.

**Jason Feifer** (00:37:23):
It's just literally not possible. I would not have enough time in the day. I do do my best to respond to every entrepreneur who reaches out because I feel like they deserve a response. And sometimes somebody will email me and they'll send me something and it's just not relevant. And I'll reply and I'll just say, "Hey, thanks. Congratulations on what you've built. But this isn't a fit for entrepreneur." And maybe once a month somebody responds really in a testy way, and they're like, "But don't you write about entrepreneurs? I'm a great entrepreneur success story." It's like, no, that's not what we do. Yes, entrepreneurs are featured in our stories, but no, we're not just a directory of entrepreneurs. Here's a good way of thinking about it. If you have a startup and you're trying to figure out what publications to be in, go look at where your competitors have been featured. That's a great place to start. What audiences are they reaching and how are they doing it? That should give you some direction about where you might want to go next.

**Lenny** (00:38:33):
Awesome advice. On TechCrunch, do you have a perspective on is it worth investing in getting featured in TechCrunch?

**Jason Feifer** (00:38:40):
I'll tell you a sort of personal press journey moment, and then I think that it will translate into the answer for TechCrunch.

**Lenny** (00:38:47):
Amazing.

**Jason Feifer** (00:38:48):
Okay. Something we haven't talked about so far yet is, and this is sort of almost skipping all the steps that we've laid out to what happens after you get the press. But the point of the press is sometimes to reach the people who are reading it. You get covered in Entrepreneur and entrepreneurs are going to read it and maybe something good will come of it. But sometimes the point of it is not to reach the people who are reading it at all. Possibly a very small number of people are going to read it, which by the way is a real, real possibility. Because although all of these publications that I have mentioned, Entrepreneur, Forbes, Fortune Inc, Fast Company, whatever, these are reaching millions of people, their websites get many, many, many millions of unique visitors each month. That does not mean that your story is going to be read by millions of people.

**Jason Feifer** (00:39:40):
In fact, the largest possibility here is that your story will reach five to 10,000 people, a small number of people because these publications are publishing tons of stuff. So you might get this story, it might look awesome, it might not reach that many people. That might also be okay. Because maybe the reason in your logic for why to get that kind of coverage is not to have reached that publication's audience at all anyway. Maybe what it really is is to tweet it and then put some money behind promoting that tweet because then you can target that you got coverage to the people who you want to notice you got coverage.

**Jason Feifer** (00:40:21):
And I see a lot of people do that. They'll take articles that we ran on Entrepreneur and they'll basically turn them into advertisements. And that's really smart because what they got out of Entrepreneur was the social cachet. It was the validation in the marketplace. And then they're going to do something with that themselves. That's really smart. You also see it sometimes the reason to get coverage, it's just so you can put it on your website. As seen in. As seen in is probably more valuable than anyone actually reading that story to begin with. They probably won't read the story. You might not even have to link it on the website. But you could just get to say as seen in. Because again, it gives you that validation.

**Jason Feifer** (00:40:56):
Me personally, I am building a small podcast company with my friend Nicole Lapin. Nicole Lapin is a bestselling business money expert. And we have a company, she's the founder and I'm an advisor. And it's called Money News Network. We have a podcast on it called Help Wanted that we co-host together. And we got coverage in Variety. And that was the result of pounding on a lot of doors and finally getting someone at Variety to take interest and they ran an article about us. Did we get anything from that story in Variety? The answer is no, like nothing. But you better believe that every email we send out to every potential advertiser, to every partner, includes the link. Variety has covered us. And I guarantee that when someone receives that email, it makes them pay more attention.

**Jason Feifer** (00:41:52):
And I have used it many times too when I reach out to people. It just gives you that validation. So sometimes what you're looking for is a prize to walk around with. And I would bet that the same is true for TechCrunch, which was your original question. Why get the funding announcement in TechCrunch? Probably not because anyone's going to care because they read it on TechCrunch, but now you can use that to your own means. And sometimes that's more valuable than the press itself.

**Lenny** (00:42:16):
That is an awesome insight. It also makes you realize you may not feel like it was a success after spending all this time getting in a story and entrepreneurs. Like, oh, nothing happened. But the benefits may come later, like weeks, months, years later when you start to share that.

**Jason Feifer** (00:42:30):
Exactly right. A lot of this is what you make of it.

**Lenny** (00:42:32):
Amazing. Okay. That was extremely interesting. Okay, let's talk about step two. So initially you prepped, we talked about how to think about who to go after and the mission and goals. Then you get to step two, which just figure out who to reach out to at a publication.

**Jason Feifer** (00:42:47):
Right. So a lot of people make the mistake of emailing me. If they want coverage in Entrepreneur, they email me. And I understand why they're emailing me. It's really for two reasons. One, I'm the most visible editorial person at Entrepreneur. And so it's easy to find me, it's easy to find my email address. And also they just assume, well, editor in chief, making all the decisions. But no. I mean, think about it. If you have a problem with a purchase that you made on Amazon, you don't email Bezos. He's too busy. And I am not comparing myself to Bezos. But I am the busiest editorial guy at Entrepreneur for whatever the hell that's worth. And I'm just not the guy to pitch because my job actually isn't really to select stories that go in the magazine. My job is to work with editors who develop their own ideas and then I get to say, "Oh, that's a good one," or, "Oh, let's refine that." I'm not sourcing as much. And so you really should start by looking at who's writing about your subject area.

**Jason Feifer** (00:43:57):
And you can do that by going to the website and surfing around. You can do that by Googling around. But you'll find the answer. Every publication is structured differently. Some people have specific beats. Some publications will be like, "This is the person on the transportation beat." And some publications don't. Entrepreneur doesn't really have a beat system necessarily. But if you look, you'll figure it out. "Oh, that editor is clearly interested in food. That writer is clearly interested in food. They seem to write all the food stories." And a good way, again, to do it is to start with the publication and then look at how they're covering your competitors. So a good example is I was once consulting with a guy who has a kind of fun peanut butter company. It's like imagine peanut butter meets Ben and Jerry's, so it's like peanut butter with lots of stuff and fun names. And so he's trying to figure out how to get press. And originally his thinking, the reason why he reached out to me was because he's like, "Well, I'm an entrepreneur. I run a business. I should be in Entrepreneur."

**Jason Feifer** (00:45:05):
I was like, "No, no, no, you shouldn't because none of our readers are going to buy your peanut butter. So who is your target audience? Who's buying your stuff?" And he says, "Millennial moms." I said, "Great. Okay, so Cosmo is a good place to reach them. So let's look at how Cosmo covers snacks." I don't know how they cover snacks. I don't read Cosmo, but let's find out. It's not hard. I went to cosmopolitan.com, searched for snacks. What I found immediately was a lot of stories that are all basically roundup-y and anchored to some time-sensitive things. So it's 10 snacks for Valentine's Day, it's our 10 favorite new fall snacks, whatever. It's all stuff like that. So now we know they are not going to run a thousand word feature on your peanut butter company. Instead, the best that you could hope to do is get into one of these seasonal-ish roundups.

**Jason Feifer** (00:45:59):
So now next step, who's writing these things? Let's look. Let's open some of the articles. The byline is right there. You can click on the byline. You can see what this person does. And in many cases, maybe they're the food editor, maybe they're the lifestyle editor, whatever. You'll see what they cover. And you'll have a good understanding of now how to frame the thing that you're looking for. Now, let me introduce one other possible option. They don't work for the publication at all. They're a freelancer. Publications use a lot of freelancers. Freelancers are basically independent contractors. They're writers who are working sometimes. Sometimes they have longer term deals with publications. Sometimes it's just one-off. My wife is a freelancer. My wife is a freelancer who writes a lot for the New York Times and Washington Post and Guardian. And the interesting thing about my wife versus me is that my wife, whose name is Jen Miller, just so I don't keep saying my wife.

**Jason Feifer** (00:46:58):
So Jen, on a day-to-day basis as a freelancer is hungrier for stories than me because Jen has to hustle for her food. Jen has to find stories and pitch those stories to editors at publications, and that's when she gets paid. So she actually is more incentivized to be looking for stories than I am because I am a salaried employee of Entrepreneur Magazine. And my email address is very easily found and people just send me stuff all the time. And I should add here also, note that a good journalist, a good writer is not actually sitting around thinking that their job is to wait for people to pitch them so that they can just write about the best pitches. Their job as they see it, is to go and find the most useful things for their audience. And they like to do a lot of that themselves. So they're not sitting around just waiting for your pitches. And in fact, your pitches have to overcome their instinct to go find things themselves.

**Jason Feifer** (00:48:02):
So Jen is constantly hustling. Jen is constantly talking to people. Jen is curious about the world and will spend a lot of time hunting things down. But if somebody reads a story that she wrote and says, "Ah, I think I have an idea of what this person is interested in," and then tracks her email address down and then emails her, Jen is getting a lot fewer pitches than me, the chances of her reading it are close to a hundred percent. And the chances of her taking it seriously if it's relevant to any of the publications that she writes for is much higher than me. So sometimes going to the staff person is not actually your best move. Finding the freelancer who's doing the work is sometimes the better move.

**Lenny** (00:48:43):
So many interesting tactical insights that you're sharing. I love it. With this freelancer tip, how do you know they're freelancers? Is there something in the byline?

**Jason Feifer** (00:48:51):
If you find them on the publication's website so let's say that you go to Cosmo and you click on a author's bio. If they're staff, it'll say staff. If they're not staff, it'll probably say something else. It might say writer, it might say contributor. It might say Jen Miller is a writer in Brooklyn, New York. But also you can just go one extra step and just Google their name because any smart freelancer has a portfolio website where they should be very easily found.

**Lenny** (00:49:22):
Awesome.

**Jason Feifer** (00:49:23):
So sometimes just take their name, plug it into Google, you'll very quickly figure out who they are.

**Lenny** (00:49:28):
Okay, so let me summarize things that you've taught us so far. One is think about publications that go to people that will buy your thing. So in your example, Cosmo is a good example of someone who would buy this peanut butter thing. Two is don't think of it broad thing. Think about the writer at the thing. So it's not like Cosmo would write about this. It's like, who specifically at Cosmo would write about this? And we find that as go to their site, search for, you talked about search for your competitors, but I think it's even broader, just things related to your area, right? [inaudible 00:50:01].

**Jason Feifer** (00:50:01):
Yeahs, that;s good point. Search for your category.

**Lenny** (00:50:04):
Even adjacent things probably are close enough. And then this tip about freelancers is really great, that they're hungrier and that they're more likely to respond to your pitch versus someone that's working there. And then also this point that they're like, their assumption is this is not a good pitch and they don't want your pitch. But freelancers have a higher chance of being interested and will pay attention.

**Jason Feifer** (00:50:25):
Yeah, freelancers got to eat.

**Lenny** (00:50:28):
Amazing. Is there anything else along this step of finding somebody at a publication that you want to share?

**Jason Feifer** (00:50:36):
Well, the next step is going to be how to actually reach out to them and pitch. So at this stage, I think that we've fairly well covered it. And I love your summary. And just to double click on part of that, the reason why you're doing a lot of this is not just for the crazy busy work of it. But it's because you have to understand that the media ... Just sort of go back to translating the media. The media, which is a phrase that is used in all sorts of different ways, is a pretty bad way of actually understanding the media because the "media" makes it feel like it's a unified entity. In politics, the media will be criticized as a sort of multiple publications colluding together in some way. But the way that we're talking about it is just as organizations that you're trying to reach out to.

**Jason Feifer** (00:51:25):
But really and truly, these are just publishing companies made up of individuals. And those individuals are all making fairly subjective decisions about what it is that they're going to write about. And there are layers of approval that they have to pass through. So nothing makes it into the print magazine, for example, without me saying yes. But I'm also trusting my editors to be passionate about the ideas that they're finding and convince me of yes. And so the thing that you are really looking to do is to find the way-

**Jason Feifer** (00:52:00):
The thing that you are really looking to do is to find the way in to a publication. Because nothing gets covered until a single individual at a publication takes interest in you enough that they go to somebody else and say, "I think that this would be a good story," and that other person says yes.

**Jason Feifer** (00:52:17):
So you have to find your way in. Because media is not a coordinated effort. It's a bunch of people showing up every day trying to figure out how to make the best thing for their audience.

**Lenny** (00:52:27):
Amazing. Okay, so that's a great segue to final piece, which is actually, get someone excited and write about you.

**Jason Feifer** (00:52:33):
So how do we do that?

**Lenny** (00:52:33):
How do we do that?

**Jason Feifer** (00:52:36):
This is where the rubber hits the road, okay? So things not to do, don't call them, if you track down their phone number. Which is a real thing that happens. People call my personal cell phone number.

**Lenny** (00:52:48):
Oh, wow.

**Jason Feifer** (00:52:48):
It doesn't happen often, but it happens. And I don't even know where they get it from. But I don't like it.

**Jason Feifer** (00:52:53):
And media people are torn on whether or not DMs by social are an okay way to reach out. I find them kind of annoying. Because, number one, the format doesn't lend itself very well, right? If you write anything wrong in a DM, it just looks like this endless thing that I got.

**Jason Feifer** (00:53:13):
But also, I don't know, my Instagram DMs, I just kind of don't think of as the place to be pitched. But other people don't care. So I don't know, you can roll the dice on that.

**Jason Feifer** (00:53:21):
Email is just the most traditional way. If you know somebody's going to be speaking at a conference, that's great, come up, you can talk to them. But the question of course is, what are you sending them? And here's what you're sending them.

**Jason Feifer** (00:53:34):
You're really sending them the product of the work that you have done in the previous two steps. Because you have now spent some time thinking about your story, and who you're pitching, and the publication, and how they're telling stories to their audience.

**Jason Feifer** (00:53:51):
And then the individual person who you're reaching out to, who you now have some sense of how they write about this. And you're taking all of that, and you're trying to distill it down into a presentation that they're going to find appealing.

**Jason Feifer** (00:54:02):
Which again, to go back to the thing about how press is not that dissimilar to going out and raising money, that's kind of what you're doing when you go and meet an investor too.

**Jason Feifer** (00:54:12):
If you have meetings with 10 investors, the way in which you talk about yourself and the company should not be exactly the same with those 10 investors, because they're all going to have somewhat different approaches and different thesis.

**Jason Feifer** (00:54:25):
And you're not trying to scam anybody, but you're just trying to be as customized as possible by building in your knowledge of what it is that they do, and what their firm does. And the same is true for media.

**Jason Feifer** (00:54:35):
So all of this is really going to take the form, in its most traditional sense, of a short email. A short email pitch. And what does that look like? I mean, look, there is literally no magic answer to that. I wish that there was, but there is not. There's no format. People always ask me, what should the subject line of the email be?

**Jason Feifer** (00:55:00):
That's is a good question. There's not one answer to that. The closest that I can give you to an answer is that, picture me. Picture me at my computer. I have a lot going on, and I'm glancing at my email, and 40 new emails are sitting there. And my instinct is to delete all of them as fast as possible, but I'm going to glance at each one.

**Jason Feifer** (00:55:23):
I'm not going to open each one, but I'm going to glance at it, which means that I see the subject line and I see the preview text, or just the first thing that somebody had written. What you want to do is write something that makes it pretty clear to me that this is targeted to me. That's step number one.

**Jason Feifer** (00:55:40):
Because most of those emails that I got in my inbox are not targeted to me. They're mass blasts, and I'm delete, delete, delete, delete, delete. So which is the one that actually is reaching me? And sometimes you can do that by referencing something that I wrote in the past. I see people do that a lot. Don't fake it. People fake it all the time. People email me and they tell me they're fans of my work, they've never read my work. It's very obvious, right? Don't do that. But if you've read something, or if you're familiar with something, if you're familiar with the publication in some way, any signals of that are good.

**Jason Feifer** (00:56:15):
Because again, what you're trying to do is just separate yourself from noise to, this is customized to you. Because If you think about it, this is really an efficiency question. What I'm trying to do is, I'm trying to spend my time on the things that have the highest percentage chance of being relevant to me. And I'm filtering out the things that seem not relevant to me, who are wasting my time.

**Jason Feifer** (00:56:41):
So if I see something where somebody's writing me and they have a sense of the publication and they have a sense of me, there's a higher percentage chance that the next things that they're going to tell me are going to be relevant to me. Maybe even turn into a story.

**Jason Feifer** (00:56:53):
Which is great. I like when that happens. Because it saves me time, frankly, right? It's one less story I have to find myself. So I'm happy for it, but it's got to be right. So you want to structure ... And then the email that you're writing is don't go on forever, like three paragraphs max.

**Jason Feifer** (00:57:09):
And you are telling the version, you're not writing an article, but you're telling me the thing that you are pretty sure I'm going to be interested in. It's the difference between, going back to the butter dish example, woman sending me a three paragraph email about the butter dish itself, and opening up, telling me a little bit about the butter dish, and then immediately moving into this very clever story about the product market testing survey.

**Jason Feifer** (00:57:43):
That's the difference. She told me the story that was going to be relevant to my audience. She got there quickly, and it felt like, to me, this is a interesting human being with an interesting entrepreneurial story to tell, and that's why I'm going to engage.

**Lenny** (00:57:57):
So that story actually came through a cold email?

**Jason Feifer** (00:58:00):
That was a cold email. Yep. Just showed up one day.

**Lenny** (00:58:02):
Amazing.

**Jason Feifer** (00:59:17):
Oh sure. Well here, let's see. We'll have to do this in real time here. But I keep in my inbox a folder called Bad PR Pitches and a folder called Good PR Pitches. We can go through both.

**Lenny** (00:59:28):
Let's do it.

**Jason Feifer** (00:59:29):
All right, I just pulled this up. This is, and I haven't read this in a long time. I'm kind of trying to read ahead as I'm talking just to see if this is appropriate to read. But I think so. I don't know, whatever. We're just going to read it and see what happens.

**Jason Feifer** (00:59:42):
All right, so the subject of this was, "Idea for entrepreneur and Problem Solvers, how the Border Closures grew my business." So this was sent to me in September of 2020.

**Lenny** (00:59:54):
And this is a good or a bad?

**Jason Feifer** (00:59:56):
This is good, this is good. This turned into an episode of a podcast that I do for Entrepreneur, and I might've also then converted it into an article I can't remember.

**Lenny** (01:00:06):
Awesome.

**Jason Feifer** (01:00:08):
And so here's what she did. So her name, I shout her out. So this is Meg O'Hara. And Meg O'Hara is a painter, a Canadian landscape painter. Which again, a small business.

**Jason Feifer** (01:00:21):
And she writes, "Hi Jason, I have an idea for a story I think would be valuable and relevant to you, Entrepreneur Magazine and the Problem Solvers Podcast." That's the show I do for Entrepreneur. And then she says, "Here's what's going on with my business. All entrepreneurs had to be flexible during Covid. This is a story about how one artist in Canada benefited from the border closure." This just sort of intrigues me. Oh, how?

**Jason Feifer** (01:00:42):
"When Covid hit in March, all ski resorts across North America shut down early. Skiers are a high earning demographic in Canada. They fall in the top 5% of income."

**Jason Feifer** (01:00:53):
Okay, well anyway. So she goes on. What she tells me, I remember this now, what she tells me is that her business used to be being hired by ski resorts to come and paint landscapes for their facilities. And when the border shut down and people weren't going to these resorts anymore, she had to come up with a completely different way of doing her business.

**Jason Feifer** (01:01:15):
And so she started to think, well, I can't work for these resorts anymore. They're not hiring me. But all these skiers who used to work at the resorts who have seen my work, or who used to ski at the resorts who were maybe familiar with my work, they're not skiing either. They probably are sitting around wishing that they were skiing. They'd love something to see of their favorite ski location, and they also have money sitting around because they're not spending it on the ski resorts.

**Jason Feifer** (01:01:39):
So then she lists off the problems and the solutions in bullet points. Which I love. Because she has listened to the show, the Problem Solvers Show, which is structured in exactly that way. Tell me the problem, tell me the solution that you came to. So she lists it off.

Here are the problems: the skiers can't come, people are spending more time at home.

The solution: I create artwork for their homes that depicts their favorite views from skiing as they were. She goes on and on and on.

**Jason Feifer** (01:02:03):
I read this and I just think, there is something here about what this person did to reinvent their business at a time in which one marketplace shut down, but it created a new one that I think people would like to hear. Because at that time everyone was thinking about how to reinvent themselves and their business.

**Jason Feifer** (01:02:21):
And even though I reach people who have very complex and large businesses, sometimes it's really a beautiful thing to hear a single individual who does the simplest thing in the world, which is put paint to canvas, talk about how she did it for herself. Because you can extract these wonderful little lessons about how to reinvent yourself that I think are going to be relevant to a very broad audience.

**Jason Feifer** (01:02:44):
So Meg sent me that email, I replied and I said, "I like it." And we did it. So that's a good example of someone who spent time understanding my work, down to the structure of how I'm communicating, and then sent me a pitch that very quickly and clearly seemed customized to me, and told me her story in a way that I could imagine telling my audience.

**Jason Feifer** (01:03:12):
At that point, it's a pretty easy yes,

**Lenny** (01:03:14):
That is an amazing example. I just took some notes on things that she did right based on things you've shared in the past.

**Lenny** (01:03:19):
Even just from the subject line or the first sentence, it was clear that she knew you. She knew you had this podcast, she knew the magazine, and she even expressed this specifically, you're going to be interested in this. She mentioned how this, she has a story. She starts immediately with a story. There's not the value prop of the company, here's what we do and here's why we're awesome. And then the lessons, the mission of Entrepreneur you talked about, is insights and lessons that people achieve, and she just went straight to here's what we've learned.

**Jason Feifer** (01:03:49):
That's right.

**Lenny** (01:03:50):
So I could see why that resonated.

**Jason Feifer** (01:03:51):
Yeah, it was great. And the next thing that made it a real success, by the way for her, was that once I got her on the phone, she was, and I find this, this is a make or break thing for me. Because I can talk to somebody and then kill the story, or not run the podcast. She was willing to be open about challenges.

**Jason Feifer** (01:04:17):
I mean, she had reached out because of challenges, but not everyone is. I will get a pitch from someone who is presenting like, oh, we had this challenge in the business. But then when I talk to them, they act as if there was no problem. Or the problem was really small and their ingenuity immediately made this a very successful business. And that's not interesting to me.

**Jason Feifer** (01:04:42):
Because success stories are not interesting. They're not interesting to anybody. It's not useful for you to just hear that someone else succeeded. What's useful is for you to hear how someone else faced challenges that you faced. And got through them so that you can see. Aha, that's an interesting strategy to use for me.

**Jason Feifer** (01:05:01):
I hate success stories. I love problem solving stories. And that's why when I talk to an entrepreneur, I expect them to be really open about that stuff. And if they're not, I basically lose interest.

**Lenny** (01:05:13):
The hero's journey. I'd love to hear another example. But before that, hearing this, obviously it takes a bunch of time to do this for a founder. I guess, two questions. Just, how many places should somebody probably try to reach out to give them a chance of being successful? And then do you have any thoughts on how much time they should put into something like this? I know it's a very broad question. But, any thoughts there?

**Jason Feifer** (01:05:35):
Yeah, it's a really broad question. So again, this is in some way why, in a large way, why a lot of people hire PR. Because PR can just move this along. They can reach a lot of people very fast, whereas you as an individual cannot.

**Jason Feifer** (01:05:51):
One way to think about it is, you're going to be on the hunt. You're going to try to make this work, and you're going to take a couple bets and hope that some of them pay off.

**Jason Feifer** (01:06:01):
Another way of thinking about it is, this is a passive activity. And I'll spend some time when I'm reading media, thinking about this, kind of developing an idea. Another thing that you can do, follow a bunch of writers and editors on social media.

**Jason Feifer** (01:06:20):
Meg, I can't remember the order of operations here, because I know that Meg follows me on Instagram now, because she's DMd me many times. And I respond to everybody. I can't remember if she followed me before, but she might've. And maybe she even DMd me a few times. Usually it's somebody's responding to an Instagram story or something.

**Jason Feifer** (01:06:38):
And I've seen a lot of people use this strategy with me, and I think that it's a really smart one. Which is basically, before you ever pitch, just get me to recognize your name. Just engage in social media in a very casual way, such that when you email me, I think, do I know who that person is? Meg O'Hara, I think I know who that person is. It just makes it more likely that I'll open the email.

**Jason Feifer** (01:07:08):
And I see a lot of people do that. They'll spend a long time engaging with me on social media before ever pitching me. I know what they're doing, I understand that it's probably calculated. I still like it. It's smart. Because it means that by the time that they've reached out, I think you have a pretty good sense of my work. Which means that what you're bringing to me is probably in pretty good faith. And for that, I like it. It's a good filter.

**Jason Feifer** (01:07:36):
So if you've been listening to this whole thing, and you're thinking, this is a tremendous amount of work, I have a new product launch, or I have a bunch of budget that I can spend on this, this individual kind of approach, it may not be for you. You might want to just spend a bunch of time instead interviewing different PR firms. And find the one that seems most aligned with and understands your story, and your vision, and knows people in your space shortcuts a lot of this.

**Jason Feifer** (01:08:06):
But even then, even then, I think that having heard this is really useful. Because at some point, if the PR person is successful, you are going to get on the phone with the writer or editor. And it's very useful to understand how they think. That they're not there to serve you. That this isn't a service that they're providing you.

**Jason Feifer** (01:08:27):
So you better understand what they're entering into this with, and what they have in mind. When they're asking you questions, they're asking questions, thinking, this is what my audience is going to be curious about. This is how I'm going to drive this person in this interview towards the kinds of insights that my audience are going to find gratifying.

**Jason Feifer** (01:08:44):
So the more that you understand who you're dealing with, the better.

**Lenny** (01:08:48):
And also just having done it yourself, you'll better understand what to ask your folks, how they're going to work, find opportunities to improve the way they're operating. On that question of quantity, say you're doing this, say you're spending the time. I'm going to really invest in understanding Jason and whoever else.

**Lenny** (01:09:05):
Is there a rule of thumb you'd recommend? Try to do this for three publications to get one, or is it five? I don't know. Is there anything there that you could recommend?

**Jason Feifer** (01:09:14):
So it's really dependent upon how easy you are to write about. I may just sort of note, if you are some kind of B2B service, especially in some kind of very niche or wonky space, it's going to be really hard for you to get [inaudible 01:09:40]. So hard that it might actually not even be worth trying. Because there are other things that you can do, or things that we haven't even talked about yet.

**Jason Feifer** (01:09:46):
You could say, you know what? Screw it. I'm not going to try to get coverage for my company. Why don't I just try to position myself as an expert? Right? It's a totally different kind of approach. Where instead, what you're maybe trying to do is just hook onto the news, try to get a quote or a perspective to a reporter who might be writing about something. I get these all the time.

**Jason Feifer** (01:10:07):
Something breaks, some news breaks, and people start reaching out to me. And they'll say, "This just happened in the news. And my client," or sometimes just the individual, "I have this insight into this, and here's what I would say if you want to interview me."

**Jason Feifer** (01:10:22):
It's not going to be a feature about you, You're not going to be the subject, there's no photo of you. You might get a quote. You might get a quote in a story. Which again, is all you need to be able to say as featured in on your website. So that's the reason why people do that.

**Jason Feifer** (01:10:33):
So sometimes it's about that. Sometimes it's about you could just be a writer. You might try to just pitch authoritative articles by you to different publications. Get yourself out in that way. Sometimes, again, you're not going to be able to be easily written about. And sometimes you are. Sometimes you made some insane technology that everyone's going to be talking about, and it's going to be super easy for you to get press.

**Jason Feifer** (01:10:56):
At which point your hit rate is going to be much higher. That's why going into this with really realistic expectations, and if you're going to work with PR, having PR who can set and hold you to those realistic expectations, can just save you a lot of heartache.

**Lenny** (01:11:12):
Along the same lines, there's always this idea of exclusivity and people want to write first about a thing. Say you talked about an awesome technology. Do you have advice on, do you just pitch the same thing to all of them and hope they all write about it? Do you pitch them different stories? Do you offer one an exclusive, any advice there?

**Jason Feifer** (01:11:29):
Everyone has a different approach to this. The number one rule here is just, don't do it in a way that the people in media feel like you're playing them. Because they won't have tolerance for it. I would rather walk away from something like this than do some funny dance with somebody.

**Jason Feifer** (01:11:48):
So my favorite version of this goes like this. Actually, there's a founder who recently, I met him years ago. So when he reached out, I recognized the name immediately. And he reached out and he's like, hey, we did this really interesting thing and we haven't told anybody about it yet. And I'd love to see if it's a fit for entrepreneurs.

**Jason Feifer** (01:12:10):
So I hop on the phone with him, and he tells me. And I'm not going to tell you what it's yet because we haven't run the story. But after 15, 20 minutes, I say, yeah, you know what? This is a really interesting story.

**Jason Feifer** (01:12:20):
And frankly, I know other media outlets are going to be interested in this too, particularly because a finance element to it. So I think the Wall Street Journal, and Bloomberg, and those kinds of places are going to be interested in this.

**Jason Feifer** (01:12:32):
He wants to go to Entrepreneur for whatever reasons he wants. I mean, I think probably two. Because number one, he wants to position himself towards that audience. And then number two, there's a trust factor. He knows me in a way that he doesn't know the editors over there. And so he feels like I'll probably treat the story more carefully.

**Jason Feifer** (01:12:49):
So we worked out a deal, which he proposed. And the deal is that we'll get the exclusive, and there's going to be a three-hour window after our story runs, and then they're going to start responding to everyone else. And then they're going to start talking to other people, or maybe they'll even line it up and reach out to some other media.

**Jason Feifer** (01:13:10):
And that's fine with me. I understand. And we're going to create a little embargo window. And we'll go first, and then they're going to talk to everybody else.

**Jason Feifer** (01:13:21):
Sometimes you can offer an exclusive to someone in that you are going to release the news to everybody, but only one media outlet is going to get the interview. Which works really well if you have a big personality.

**Jason Feifer** (01:13:35):
So for example, recently a company that Mark Cuban has invested in offered us that, right? They're like, we have this news. We're going to reach out, we're going to send the news everywhere, but we're going to give you the exclusive interview with Mark Cuban. He's going to do one interview and he'll do it with you. You can parse it out in any way. You just want everyone to feel like you're being upfront with them.

**Lenny** (01:13:57):
And that they're getting something special, as much as possible. That makes sense.

**Lenny** (01:14:02):
You touched on this relationship piece, and that's something I wanted to ask. It feels like in tech, a lot of reporters end up writing a negative story, because a lot of times that's what people want to read. Why is this destroying the world?

**Lenny** (01:14:14):
I actually had a fast company do a thing on me, and I talked to the reporter, and I had no idea. Was he going to just completely tear me apart, or is he going to be really friendly and positive over what I'm doing? And I have no idea, and it just comes out.

**Lenny** (01:14:24):
It's not like I look at it before it comes out. So do you have any just advice to give you a set, help if this is going to turn into something positive or negative? I know you have no idea

**Jason Feifer** (01:14:34):
What happened, by the way? Was it positive or negative?

**Lenny** (01:14:35):
Super-positive.

**Jason Feifer** (01:14:35):
Great.

**Lenny** (01:14:37):
I was very happy with it, yeah.

**Jason Feifer** (01:14:38):
Okay, good, good. I'm glad to hear that.

**Jason Feifer** (01:14:40):
So part of it is the publication itself, right? Entrepreneur, and I would say Fast Company, are just sort of not in the business of running negative stories. And the reason is, it doesn't serve our audience. My audience is coming to me to learn things for their business. Tearing somebody apart just doesn't help them in any way.

**Jason Feifer** (01:14:59):
So part of it is just what ecosystem are you dealing with? You can also look at the past work of the writer. And if you work with a PR person, it's funny because occasionally somebody has accidentally forwarded this to me, and I'll see the dossier that a PR agency will put together on me.

**Jason Feifer** (01:15:17):
But a PR agency, if they set you up with an interview with someone, they'll usually do some digging. And they'll find, what does this person usually write about? What kind of stories do they do? What are they generally interested in? So you can have a sense, right? What kind kind of thing are they doing?

**Jason Feifer** (01:15:33):
And past that, there's also a question of, well, what are you doing in the world, right? I mean, if there is something somewhat controversial about you, and especially if you're engaging with an outlet that is interested in that kind of stuff, there's a halfway-decent chance they're at least going to explore it with you, and ask you about it. And if you're weird and cagey with them, they're going to think that there's more to it, and they're going to start digging more.

**Jason Feifer** (01:16:03):
But the ultimate answer here is that every part of this, and this has come through, I'm sure, in our whole conversation, every part of this process is really out of your control. Does somebody pay attention to you? What do they write about you? When do they write about? All of it is outside of your control,

**Jason Feifer** (01:16:23):
Which again, is the reason why it's not smart to think about press as a primary strategy for driving growth. It's a good add-on, but these people are going to do what they're going to do. And the best you can do is read the tea leaves.

**Lenny** (01:16:37):
Yeah. It was a very weird ... I don't get press often, it's not like something I pursue. But it was just like, this is wild. I'm just going to talk to this guy, and then something will come out. I have no idea what it might be.

**Lenny** (01:16:46):
He might have things wrong, because I didn't get a chance to review, and might skew things. But it's a strange experience to go through. But it all worked out great.

**Jason Feifer** (01:16:55):
Yeah, it is. It's very strange.

**Jason Feifer** (01:16:58):
It is, it's strange. And I find that people often don't ... In business, people understand the structure of what's happening. They understand that we're a business magazine, we're going to write a story about a business. It's going to take a certain form.

**Jason Feifer** (01:17:14):
But I've done a lot of different writing, and I have had the experience many times over my career where I will spend a lot of time with people, and they will have really no understanding of what it is that I'm doing at all. They can't conceptualize it.

**Jason Feifer** (01:17:30):
And then the story will come out and then they'll always reach out to me and they'll be like, oh, now I finally understand what you were even trying to do. It's fascinating.

**Jason Feifer** (01:17:40):
It is a vulnerable experience, and you have to know that. And the more you try to control it, the more the reporter is going to be annoyed at you. And the more, in fact, the reporter might try to take a shot at you in the story as a result. Because they found you too controlling, because they felt like you...

**Jason Feifer** (01:18:01):
They found you too controlling because they felt like you had something to hide. This is not a comfortable thing. You have to go into this being vulnerable and you have to know that there's a chance that it could blow up in your face. That's the price that you're paying for reaching their audience.

**Lenny** (01:18:19):
Great advice. How about we do just one more example of an awesome email pitch that you got and then we get to our very exciting lightning round.

**Jason Feifer** (01:18:26):
I'll tell you about a pitch. I don't know that I have it in my inbox still, do I? No, it's not there, sadly. I'll just tell you about it.

**Lenny** (01:18:32):
Yeah.

**Jason Feifer** (01:18:33):
Ii leads to something that is another way of thinking about getting press, which I think is really important for people to remember. So far, Lenny, we've spent the majority of our time talking about press in the form of some kind of feature on you, writing about you or including you in some kind of prominent way in a story that's basically highlighting the thing that you wanted to get out there, your product or something about your business, something. Then we talked a little bit about another way of doing it, which is sort of putting you out as an expert in authority. There's another way of thinking about this, which is that you can either create or present context in which you just happen to be a part.

**Jason Feifer** (01:19:18):
Here's the story pitch that I got that leads into this. This is years and years and years ago. I had just started at Entrepreneur. I hear from a guy named Fred Ruckel. Fred Ruckel has got a cat toy and it's called the Ripple Rug. It's basically, imagine a rug and then another rug kind on top of it, but ill-suited. The rug is lumpy, there's a lot of lumps in and there are holes. This is for a cat to kind of crawl in and out these spaces and bat and do whatever cats do. I don't know. I don't know a cat. He wanted to tell me about the sales of this Ripple Rug and about how the sales are skyrocketing and all the things that he thought made it special. It's made out of recycled bottles and whatever the stuff, made in the USA, all cool stuff, but not relevant to me because we're not cat toy monthly and we're not reaching a whole bunch of cat owners, not that I know of.

**Jason Feifer** (01:20:16):
I replied and I said, what I usually say, "Congratulations on what you've built, but it's just not a fit for coverage." Now Fred stumbled his way into this, but he did really a very smart thing because what he responded with was he said, "Totally understand. If you're ever interested in learning about a gigantic scam that's happening on Amazon and eBay that we've been caught up in, let me know." I was like, "Oh, well, yeah, I guess I am interested in hearing about that." I said, "Tell me more." He sent me this long email. Fred loves long emails, and I got him on the phone and had him explain, and finally I understood it.

**Jason Feifer** (01:20:53):
This is, and maybe people are familiar with this, but this is sort of known as Amazon to eBay arbitrage. Basically the idea here is that Fred is selling his Ripple Rug on Amazon, or at least he was then, I don't know if he still is, but he's selling his Ripple Rug on Amazon. There are a lot of people who are copying the listing for his Ripple Rug and making their own postings for it on eBay. They sell it for a slightly higher price. Let's say that, and again, I'm making these up, but let's say the Fred is selling his Ripple Rug for $30 on Amazon, so somebody will sell it for $40 on eBay. Then somebody buys it on eBay, they find it, they buy it on eBay, they pay $40, that person gets $40, takes $30 of it, goes to Amazon, buys the Ripple Rug, and then just has it shipped to the buyer. It's arbitrage.

**Jason Feifer** (01:21:47):
You might think, "Well, why would Fred care about this? He still gets the sale." The reason he caress about this is because the Ripple Rug shows up at the customer's house and it shows up in a Amazon box, even though they bought it on eBay. They think, "Why did that happen?" Then the next thing they do is they go to Amazon and they discover that it's cheaper on Amazon and now they feel ripped off. Who do they feel like they got ripped off by? Fred, because they don't know about the arbitrage. They don't know that they exist.

**Jason Feifer** (01:22:21):
This person who has at this point opened the cat toy and probably had their cat roll around in it, now shoves the whole thing back in a box and returns it and Fred gets dinged and that's why he doesn't like this. He has tried and tried and tried to get Amazon and eBay to stop this, but he said, "Nobody seems to care and all these small businesses are losing tons of money on returns because of this." I had never heard of this. I thought it was fascinating. It's like a problem small business owners are dealing with. I was like, "Fred, do you know other people who are dealing with this?" He's like, "Yeah, I talk to them on the line all the time." He sends me off.

**Jason Feifer** (01:22:54):
I reported this whole thing out. I wrote this three 4,000 word story on this thing, and Fred was the main character because he was the way to understand this problem. I did all the reporting and I contacted the platforms and I contacted the people who make the arbitrage software. I did a whole report, but Fred got his press because sometimes, and here's the lesson, sometimes you are not the story, but you can be part of the story. Sometimes that means if Fred stumbled into it, but I get plenty of people who've reach out and maybe they have a real estate startup and there's something really interesting happening in the real estate space and they reach out and they tell me about this really interesting thing that's happening in the real estate space and the role that they happen to play in it. Now I think, "Oh, well that's interesting. Maybe there's a story about that."

**Jason Feifer** (01:23:46):
My wife, the freelancer, Jen Miller, she's done this many times where she once did this story about there was a bunch of startups that were all related to helping people prepare for death in some way or another. She's not going to write about one of them, but when somebody reached out and said, "Hey, here's a trend happening and we are one of them." Well, great, that's an interesting story. She wrote that and the company that reached out to her got kind of prominent billing because they were the ones who reached out. You know Barbara Corcoran from Shark Tank?

**Lenny** (01:24:14):
I think so. I think so.

**Jason Feifer** (01:24:15):
Yeah. She's been a regular Shark Tank since the very beginning.

**Lenny** (01:24:19):
Mm-hmm.

**Jason Feifer** (01:24:21):
She made her fortune by building a real estate company called Corcoran, realtors, buy and sell property. The way in which she built this company is fascinating. Barbara, before she was Barbara Corcoran of Corcoran Realty, Barbara Corcoran was random New York City realtor Barbara from New Jersey. She was trying to figure out a way to distinguish herself from the masses. She came up with an idea which was to take her own sales data, the only window she has into the Manhattan real estate market at that time is what she is what her clients are buying and selling, which she's facilitating. She has that data, is going up or down relative to last year. She puts all this data together in what she calls the Corcoran Report, and she starts sending the Corcoran Report out to the New York Times and the New York Post and whatever.

**Jason Feifer** (01:25:18):
Because nobody else at the time was putting together a report on the health of the Manhattan real estate market, everyone started reporting on the Corcoran Report as if it was an authoritative thing. It's produced by Barbara Corcoran, which immediately put her in the position of being an authority in this space. That was so smart, and I see it happen all the time.

**Jason Feifer** (01:25:37):
My inbox will also be filled with, for example, a company that specializes in remote work consulting. Especially remote work consulting, you can hire them, it's a B2B service. It's hard to get press for that, here's what they do. They pay a surveying firm to find all sorts of things. The top states for remote work, the top companies for remote work, the top whatever for remote work. They produce all these surveys and they send the surveys out. The surveys get covered because now they're creating a piece of news. They're creating some context in which they just happen to live in. Hard to write about them, this random company, but you write about the survey, that's interesting stuff. Oh, it turns out that Utah is the top, I don't know if that's true, is the top state for, that's something that people will write about. You're giving people things to write about. Then once they do that, you are a part of the story. I get those pitches all the time. I occasionally bite on them and Fred from Ripple Rug got himself a big feature as a result.

**Lenny** (01:26:38):
That's an amazing other strategy. I imagine if I was a founder, I'd be like, "Hmm, what trends can I think about that I can tap into?"

**Jason Feifer** (01:26:44):
Yeah. Sometimes you have it in your own data. If you have a lot of data, you might, Zapier. Zapier is a great example. I get a pitch from Zapier every single year about the fastest growing business apps of the year based on Zapier data because they see what people are using and they just compile that together into a top 10 list and people run it. It's very smart.

**Lenny** (01:27:09):
Amazing. We've gone through all three steps. Is there anything else that you wanted to touch on that we haven't touched on? Anything else that you think would be really valuable for founders or product leaders trying to get press that we haven't already shared?

**Jason Feifer** (01:27:23):
This has come up in different ways, but I'll just put a point on it as a maybe final way of thinking about this. Be human, be human. Press releases don't work because they're not human. I don't like interviewing people who are on talking points because that's not human. You're ultimately engaging in a human business. A subjective decision is being made about how to serve an audience of humans. There's no right or wrong. There's no way to know. Media is a sort of barely data-driven industry because every story is kind of different. It's like it's hard. It's hard to optimize the product because the product changes every minute. You're dealing with humans and the more that you can be human in every step of this process, when you pitch, write a human email, don't write a thing that looks like it came off of some marketing copy. Write a human email to another human and then when that person engages with you, be very human with them.

**Jason Feifer** (01:28:26):
I mean, Lenny, the reason why that fast company reporter liked you, I am very sure was because when they got on the phone with you, you were just like a normal nice guy. If you presented yourself differently because you just wanted to frame yourself in some way or you felt protective or something or whatever it was, the reporter would've thought, "This guy is a dick," and he would've written a totally different story.

**Lenny** (01:28:53):
Mm-hmm.

**Jason Feifer** (01:28:54):
Be as human as you can and you will be dealing with a human who will receive that.

**Lenny** (01:28:59):
Amazing advice. With that, we've reached our very exciting lightning round.

**Jason Feifer** (01:29:04):
Yeah.

**Lenny** (01:29:05):
Are you ready?

**Jason Feifer** (01:29:06):
Let's do it.

**Lenny** (01:29:07):
Let's do it. What are two or three books that you've recommended most to other people?

**Jason Feifer** (01:29:12):
Andrew Chen's, The Cold Start Problem has come up over and over again for me because they're just really great lessons about network effects. I've been having a lot of conversations about anxiety and perfectionism with entrepreneurs lately, and a book by a psychotherapist named Katherine Morgan Schafler called The Perfectionist's Guide to Losing Control, is, I think, just a really great read.

**Lenny** (01:29:34):
Super cool. What is a favorite recent movie or TV show that you've really enjoyed?

**Jason Feifer** (01:29:38):
Movie? I don't get to see a lot of movies these days. I have two little kids, but I took my eight-year old to see the new Teenage Mutant Ninja Turtles, which was great and a really nice way of, I loved them as a kid, and so it was cool to see the modern version. Then my wife and I just finished Better Call Saul like years late, but it was just perfect.

**Lenny** (01:29:56):
I haven't watched that series yet. I loved Breaking Bad.

**Jason Feifer** (01:29:59):
Oh, it's worth it. You got to.

**Lenny** (01:30:01):
Okay. Another series I got to get started on.

**Jason Feifer** (01:30:03):
I know it's too much, too much television.

**Lenny** (01:30:05):
I usually ask this next question too, like product leaders and growth people, but I'm curious what the answer for you would be is. Do you have a favorite interview question you like to ask people you're interviewing? Usually it's about people you're hiring.

**Jason Feifer** (01:30:16):
Interviewing a job candidate?

**Lenny** (01:30:16):
Yeah, that's the ideal, but take it either way.

**Jason Feifer** (01:30:19):
I'll take it a little bit different because we've been talking about press. This is a really great strategy for interviewing people, and I'm going to tell it to you because I think that it's also good in any other context, and it might be a thing that somebody will do to you in an interview. My favorite strategy for interviewing people is to throw a theory at them, and I don't mean a theory of the world. I mean that maybe 10 minutes in after they have told me a couple different things and answer some different questions, I'll make a connection in my head and I'll say, "I want to run a theory by you. Do you think that the reason why you are really interested in this or you made that decision is actually because of this other thing that you told me a little bit about?"

**Jason Feifer** (01:30:59):
You're listening. It's really active listening, and you're combining things together into some theory. The reason why the theory works so well is because it forces people to think in real time in front of you. I like that because I often interview people who have been interviewed a million times before. I interview Jimmy Fallon and The Rock and whatever. They've been interviewed a million times before, so how do you get them to think in front of you? The answer is to ask them the thing that they haven't been asked. What I love about the theory is that it shows them that you're really listening and you're trying to understand them. "It's so interesting that you did that. I wonder if it's because of," X, Y, Z thing. That gets them to react in a really earnest honest way.

**Jason Feifer** (01:31:49):
I would say for what it's worth, as a job candidate tactic, it's not that bad either. My favorite job interview that I ever did as a candidate that I didn't even get the job was years and years ago, I interviewed for a job at New York Magazine. I interviewed with Adam Moss, who is not there anymore, but he was the legendary editor in chief. He made me, on the spot, drill down specifically into an idea. He was like, "What's your favorite section in Strategists," which is one of the sections of magazine. I was like, "I really like the real estate section." He's like, "All right, what would be a good neighborhood that we should feature in the real estate section?" I was like, "Oh, I don't know," I named a neighborhood. He's like, "What would be three good elements of that?" He just kept pushing me, drill down, drill down, drill down. There was no right or wrong answer. He just wanted to see how I thought. I found that to be incredibly powerful, and I do a version of that when I interview people.

**Lenny** (01:32:48):
Awesome. I love that. What is a favorite product you've recently discovered that you really like?

**Jason Feifer** (01:32:54):
I use BIGVU, I don't even know how to pronounce it, BIGVU, B-I-G-V-U, all the time. It's a teleprompter app. I spent like $150 buying an actual teleprompter because I make a lot of video and that teleprompter is, it's actually for people who are just listening to this, I'm pointing at another desk across my room where it's sitting there and I've never used it. The reason is because then I discovered BIGVU, which is just a app that runs a teleprompter very close to the camera, either in horizontal or vertical mode. I've tested it out in a million different ways, and it really works like you're reading it and it really looks like you're looking directly at the camera. I love it. It has saved me so much time.

**Lenny** (01:33:33):
That is cool. You basically put your phone on your screen next to the camera or wherever your camera is?

**Jason Feifer** (01:33:39):
No, no, no. This would be for if you're recording, if you're recording on the phone.

**Lenny** (01:33:44):
Got it. You're staring at the phone and it's telling you what to say. I get it.

**Jason Feifer** (01:33:44):
Yeah. Yeah.

**Lenny** (01:33:44):
That's awesome.

**Jason Feifer** (01:33:47):
You write a script and then you just import the script and then you choose the speed and you can fuss with it, how many words per minute, and then it'll run the text very close to where the camera lens is.

**Lenny** (01:34:01):
Amazing. All right.

**Jason Feifer** (01:34:02):
Yeah.

**Lenny** (01:34:02):
I'm going to check that out. What is a favorite life motto that you'd like to repeat yourself, share with friends, something that comes up a lot,

**Jason Feifer** (01:34:10):
Something that I've been repeating a lot to people is something that I heard, so I recommended Katherine's book, The Perfectionist Guide to Losing Control. I met Katherine because I, we've since become friends, but I interviewed her for the podcast when her book came out. We were talking about feeling overworked and being stretched too thin, and she gave me this question, which I think about almost daily, and I repeat to people all the time, and that is, "What's the point of building something if you can't maintain it?" I love that question because I, like probably everyone listening to this, pushes themselves really hard, and at some point you have to step back and think, "Am I building something where at some point there is sustainability for me here, or is this unsustainable and what's the point of building something if you can't maintain it?" It's a great reminder for why you're building something and how you have to build it.

**Lenny** (01:35:03):
I have a very similar quote that my sister's partner once said that has stuck with me forever, which is, "Life is maintenance. Basically everything that you buy or bring into your life, you have to maintain."

**Jason Feifer** (01:35:16):
Yeah.

**Lenny** (01:35:17):
We got a new air conditioner. Now, we have a guy that comes every year to check it. You got a generator, someone's got to check that thing all the time. We got a toy, now I got to think about where does it go and do we throw it away? Do we keep it? Everything that you bring into your life, you have to maintain basically for the rest.

**Jason Feifer** (01:35:17):
Yeah, it's really true.

**Lenny** (01:35:33):
Yeah, so it's really, I think specifically for work, it's like you start a new project, you're going to have to-

**Jason Feifer** (01:35:39):
You're going to have to maintain it.

**Lenny** (01:35:40):
... maintain it, like this podcast, right? It's like, do you want to start a podcast and do it forever?

**Jason Feifer** (01:35:45):
Yeah.

**Lenny** (01:35:46):
That's a part of it. Part starting something is you have to maintain it.

**Jason Feifer** (01:35:49):
Yeah.

**Lenny** (01:35:49):
Yeah.

**Jason Feifer** (01:35:50):
I know we're in the lightning round and we've defied the logic of lightning rounds, but I'll just add one other thing to that, which is that I interviewed Michelle Pfeiffer for the cover of the magazine, and one of the things that I thought was most fascinating was that she started this fragrance company, and it's called Henry Rose. She said the major difference between making movies and building a company that she found, was that when you make a movie, all the work happens in the beginning. You make the movie and then the movie is out, and then you are done. You don't have to work on the movie ever again. She was not really mentally prepared for a company being the exact opposite, that the launch of the company is actually the start of the work and there's an endlessness to it. She said that it took her a solid year to adapt to that reality, and then it became fun. I think it's the thing people forget.

**Lenny** (01:36:42):
Mm-hmm, Well, that story, it's cool that you got to interview Michelle Pfeiffer.

**Jason Feifer** (01:36:45):
Yeah, she's great.

**Lenny** (01:36:46):
Final question. I was reading your profile line and you said that the only reason you were able to achieve what you've achieved in life and got to where you're today is something that you called the opportunity set B.

**Jason Feifer** (01:36:57):
Oh, yeah.

**Lenny** (01:36:58):
Can you just explain what that is and why that is so important to you?

**Jason Feifer** (01:37:02):
Oh, yeah, sure. In front of you right now, you, Lenny, you everyone listening, watching, there are two sets of opportunities. Opportunity set A and opportunity set B, opportunity set A is everything that's asks of you. If you have a job, it's what your boss expects of you. If you have your own company, it's what everybody expects of you. Doing good at those things is really important. That's a measurement of success. That's opportunity set A, everything that's asked of you. Then there's opportunity set B and opportunity set B is what's available to you, even though nobody's asking you to do it. That could be, again, if you have a job, that could be taking on new responsibilities or joining a new team or something. Personally, it could be pursuing a hobby. It could be starting a podcast because you like listening to podcasts, anything.

**Jason Feifer** (01:38:01):
What I have found throughout my own career is that opportunity set B is always more important, infinitely more important. The thing is that if you only focus on opportunity set A, then you are only qualified to do the things that you're already doing. Opportunity set B is where growth happens and where you push yourself in different directions. I found a long time ago that it was just really helpful to think about these two things. Oftentimes, maybe we don't do opportunity set B because we don't know how it's going to pay off, or we don't know where we're going to find the time. I have always found, always, that engaging in these things of what is available to me, what's available to me right now around me, and nobody's asking me to do, leads to the next growth either because it turns into an actual opportunity or because it informs some future opportunity.

**Jason Feifer** (01:38:58):
I got to Entrepreneur Magazine, zero, zero people, when I became editor in chief, zero people said, "You should hit the speaking circuit. You should get really good at being interviewed on podcasts. You should write a book." Nobody said any of that. My job was to make a good magazine and direct the editorial of the brand, but all those things were available to me, and once I recognized that, I realized that I can pursue them and in doing so, also think differently about who I am. Am I a magazine editor? Not really anymore. That's one of the things that I do now. I think of myself as an entrepreneur, as a person who is now in the business of helping others. I'm an entrepreneur who helps entrepreneurs. That's what I think of myself as. I only got there because I was thinking, I am here and therefore I can get there. Nobody's ever going to ask me to do it. I have to do it myself. It's the thing that I always think about, and it's the thing that keeps me up at night. What am I doing now that is leading me to something else? I'm the only one who can figure it out.

**Lenny** (01:39:59):
Beautiful. It reminds me of a recent podcast guest's advice, which is the best way to track your progress in your career and in life too is just measuring how many, "Oh shit" moments you have because those are the moments where you're growing, you're doing something. I think maybe it's an example of an opportunity set B where it wasn't the default path that's like, "oh, I think I should do this, even though it's really hard."

**Jason Feifer** (01:40:20):
Yeah.

**Lenny** (01:40:22):
What a beautiful way to end it. Jason, not only do I want to start working on press, it feels like very achievable to get press now. That was really energizing, like, "Holy shit, I could do this. I could just find some people, pitch them. Here's how I do it."

**Jason Feifer** (01:40:33):
Yeah.

**Lenny** (01:40:34):
Not only that, I'm going to look for some opportunities set B routes for myself too. Thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out, maybe pitch you on their story? How can listeners be useful to you?

**Jason Feifer** (01:40:47):
Oh, so Lenny, thanks for all the work you do, which I just really love, and for creating the space for me to share all this insight. How can you find me? Well, I'll offer two things. An opportunity set B, like a good launching point for both of them, I wrote a book, it's called Build for Tomorrow. It is meant for anybody who's going through any kind of change in their lives or their work. There's an audiobook version that I read myself, but also hardcover and eBooks, just find it wherever you get books. Again, it's Build for Tomorrow. Opportunity set B, that whole thing, is actually a chapter in the book, so I go into a lot more detail there.

**Jason Feifer** (01:41:20):
Then if you want to get in touch and also get those kinds of things, I have a newsletter, which is called One Thing Better each week. One way to improve your work and build a career or company that you love. Again, the kind of opportunities set B, that's the kind of thing that I put out. It's very much about the personal and emotional side of work. You can find that by going to the web address onethingbetter, that's one, O-N-E, onethingbetter.email. Just plug that in. Onethingbetter.email. I said that's a good way to reach out to me because if you get the newsletter and you reply to it, it goes to my inbox. I guarantee I will write back to you.

**Lenny** (01:41:56):
Inside track. Jason, thank you again so much for being here.

**Jason Feifer** (01:42:01):
Oh, thanks Lenny. This was so fun.

**Lenny** (01:42:03):
Bye everyone.

**Lenny** (01:42:05):
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.

---

## [5/24] Building beautiful products with Stripe’s Head of Design | Katie Dill (Stripe, Airbnb, Lyft)

**Katie Dill** (00:00:00):
The use of the word beauty in books that have been digitized by Google has decreased, like pretty dramatically. And it's aligned with this idea of, "Well, functionality is king. Functionality is what matters." As if people think about functionality and beauty as like two opposite things. No, they're not two opposite things. Functionality is important. And actually beauty enhances functionality because it does make things easier to use, more approachable, more compelling to use.

**Katie Dill** (00:00:32):
And the other piece of it that is not talked about in business as often is just the importance of how people feel. Things that are more beautiful, increase trust. You see that we've put painstaking detail into this, and we care about the details of how something works, and that gives you assurance that we care about other details that you can't see too.

**Lenny** (00:00:55):
Today my guest is Katie Dill. Katie is Head of Design at Stripe, where she oversees product design, brand and marketing creative, web presence, user research, content strategy, and design ops. Katie was previously Head of Design at Lyft, and Head of Experience Design at Airbnb. She's built and led design teams at three different hypergrowth companies, seen the teams scale at least 10x, and two of which, Airbnb and Stripe, are some of the biggest and fastest growing companies in the world and also the best designed products.

**Katie Dill** (00:04:52):
Thanks for having me. Good to be here.

**Lenny** (00:04:54):
It's absolutely my pleasure. So as we were preparing for this podcast, you hinted at a story that you had from your time at Airbnb where the design team staged an intervention with you which I had no idea about. Because I was there during this time and I did not know this was happening. I am so curious to hear the story. Can you share what happened?

**Katie Dill** (00:05:15):
Ah, starting with the easy questions I see. All right.

**Lenny** (00:05:18):
Right into it.

**Katie Dill** (00:05:20):
Yeah. No, I'm happy to talk about it because, frankly, it was the biggest learning experience of my leadership career, or at least that happened in one moment. It happened in my early days at Airbnb. I was hired to take on the Design Organization, or the Experience Design Organization. That's basically the Product Design team, which was 10 people at the time. They had been reporting directly to one of the founders and they were going to start reporting to me.

**Katie Dill** (00:05:47):
During my interview process I learned a lot about what was working, and what wasn't working, and some of the trials and tribulations with the Design Organization and its collaboration with others. So it seemed like there was room for improvement in how Engineering, and Product Management, and Design all worked together. There was also really low engagement scores in the Design team.

So I kind of came in ready to go and excited to try to help make some change based on all the things that I had learned from various leaders and people across the company. I came in swinging, ready to go. And then about a month into my time there, I got a meeting on my calendar, Thursday 8:30 AM, it was an hour and a half with half of the Design team, so that was five people, and our HR partner.

**Lenny** (00:06:38):
Oh, no.

**Katie Dill** (00:06:38):
Usually not a good sign.

**Lenny** (00:06:38):
That's never a good sign.

**Katie Dill** (00:06:40):
Yeah. And I remember this so vividly. I remember walking into the office, and all the rooms in Airbnb's office are very unique spaces that look like Airbnb's. But of course this was the one room with all white walls and just a gray flat rectangle table. I walked into the room and there were five of them seated around the table. They had a pack of papers in front of them and they went on taking turns quietly reading from the papers all the things that they saw that I was doing wrong and all the things that they didn't like about me.

**Katie Dill** (00:07:22):
It was a really hard moment there. I went through all the usual kind of like stages of grief when one hears feedback, which is just like an immediate want to respond to be like, "Yeah." Like, "Well there was a good reason for that." And like, "That's not how it actually was." And, "This is why I did that." But luckily, thank goodness I had the sense to just listen and not respond in that way. I mean, clearly what they were telling me is that that was one of the things that was missing.

**Katie Dill** (00:07:49):
So I heard them out and took it all in. And regardless of each individual saying, what was very clear was that the missing piece, the theme that was across all of that, is that I hadn't earned their trust. So whether how right or how wrong what I was doing was, is the key piece is that I wasn't bringing the team along with me. They had no idea that they could trust in what I was trying to build, and what I was trying to shape, and that I cared about them, and that I had their best interests and shared goals at heart. And that was absolutely my fault.

**Katie Dill** (00:08:24):
In retrospect, as hard as that was, I'm very grateful and very amazed that they could come together and share that with me. It can be hard to bring feedback forward like that. So it was an extremely valuable learning experience. I took from that to then immediately shift how I was operating. And really a key part in building trust was to listen, to hear out what the individuals on the team were setting out to do, what they cared about, what motivated them.

**Katie Dill** (00:08:57):
So I started to make pretty fast change and still moving in the direction that was necessary for the org to make the really large impact in how we were operating, but bringing folks along with me. You can inflict change on people, but if you want to do it with them trust is the key element there. And then a couple months later, we had the best engagement scores in the company.

**Katie Dill** (00:09:20):
So it did objectively improve the situation, and since then taken that on into next steps in other companies that I've joined. And just think about instead of coming in swinging, come in listening, so that you can really set out to make change that actually has true, positive impact on the folks around you and that you bring along with you.

**Lenny** (00:09:42):
Wow, I was there during this. I did not know this was happening. Is this the time when all the designers were all always in one room together in Thayer? Is that that period?

**Katie Dill** (00:09:52):
Before I got there I think there was a little of like, "Design is just going to sit with Design and not necessarily work in close proximity with engineers and product managers, et cetera." And one of the things that I believe as a necessary part of building a high-functioning organization is that, one, building together is important. So having engineers, and product managers, and designers be together, have shared goals, and align on that and be able to just look over each other's shoulder and talk about things, is important. So sitting together is important.

**Katie Dill** (00:10:21):
However, that Thayer thing that you're talking about actually was like something that I was very devoted to, which is bringing Design together at key moments multiple times throughout the week to also build a community in Design. Like Joebot at Airbnb once said, "It's like, well, what T-shirt do you wear? What team are you on?" And I was like, "You have two T-shirts. You have the Design T-shirt and you have the Marketplace T-shirt, or whatever cross-disciplinary team that you work on. Because both are really important communities to build for slightly different reasons." So yeah, Thayer was a good spot for that.

**Lenny** (00:10:56):
Zooming out a little bit, I think the elephant in the room a lot of times with design is this idea that I'd say most PMs, most founders, intellectually understand the value of design, understand the value of high quality. But day-to-day it's often not actually prioritized versus new features, new product launches, partly because the ROI is just really unclear.

**Lenny** (00:11:16):
If we spend another month making this more awesome and making this even more amazing design-wise, experience-wise, what is that going to get us? Clearly, at Airbnb design was highly prioritized. At Stripe, from an outsider's perspective, it clearly is. I'm just curious what you've learned about how to make the case for the ROI of design and just how Stripe, and Airbnb, and Lyft have done that.

**Katie Dill** (00:11:39):
It's a great question, and I think this is like an age-old question that I don't know if will ever go away, and probably because the quality bar keeps evolving, keeps rising. But I think first to kind of level set before we dive into that I would say that there are levels of quality. There is the, does the thing work? Does it provide some sort of value proposition? It like executes on its job. That's baseline quality.

**Katie Dill** (00:12:06):
Next is that, does it do it exceedingly well? Is it error-free? Actually, maybe that's not even exceedingly well but just error-free and it actually works in a well-rounded way. Then beyond that, like level three, level four, level five, does it exceed expectations and it does something that you weren't even seeking for as a user? And I do think the levels of quality should be based on user expectations. I don't believe that there are disciplines that just don't care about quality.

**Katie Dill** (00:12:36):
I think it's more about that prioritization and kind of like what you talked about is just like, is it really worth getting something to that exceedingly well state or is it, what about just like another feature and being seduced by the chase of another feature versus actually taking your features to a level of being great? That is hard. And I get it when you look at your user base and they're all shouting from the rooftops for this additional feature.

**Katie Dill** (00:13:05):
Of course you're going to want to prioritize that over something they never asked for. Then the other thing would be you end up with like you've got three things that you could possibly do to make perhaps the next stage in your product development. Two of them you know you can measure and they're going to line up to business goals, and one of them you can't.

**Katie Dill** (00:13:21):
Of course that's going to be enchanting to want to go after the things that you can actually measure, you know that they're going to have that impact. But the companies that know that quality is non-negotiable, it is a long-term necessary aspect of what they build, don't play that numbers game. Or what they do is they recognize that it is absolutely functionality, but the quality of those features that is actually going to get to great usability, desirability in their product.

**Katie Dill** (00:13:53):
Actually, I think it's kind of like an analogy for going to the gym or working out. I don't know about you, but literally every time I think to do this, there's a fight in my head of like, "Ah, do I really need to work out today? Is this one day going to give me six-pack abs?" Like, "Of course not." So like, "Why go? Why not just skip it today?" But of course then at some point, hopefully, I realize that it's like, "Well, if I skip it today, what's to stop me from skipping it another day?"

**Katie Dill** (00:14:21):
And really in the belief of that these things, it really does add up to a better outcome in the end, and so a longer, healthier life. So hopefully I can get myself together and go to the gym. I do think some of the best companies on the planet think that way. I recognize that customers don't always ask for it. I mean, you might see it in support cases for example. Like clearly they don't know how to use this next step and that is probably a quality issue and that they might be asking for in more improved features.

**Katie Dill** (00:14:53):
But some of the levels of quality, the level two, and three, and four, you might not get direct asked for. But I guess I'll give you another analogy. If you don't have competition, that's fine. Right? If you think about the first car, I am sure that wheel was really hard to turn, and I'm sure that seat was not comfortable, and you could have any color you want as long as it's black. Right? But there was no competition. The competition was a horse, so no big deal. For cars today it's like the stitching, the choice of the leather, the sound of the door.

**Katie Dill** (00:15:28):
These distinguish a, hmm, okay car to a high-end special car with higher value. This is very much by understanding how the details matter and how execution of quality will take it to the next level. Lastly, I'll just say that I know there's this saying of it's growth versus quality, but quality is growth. And if you think about how you can make your product easier to use and more understandable, that will of course drive people to use it, and use more of it, and have a better experience with it that they'll want to talk about with others.

**Katie Dill** (00:16:08):
In fact, at Stripe our Growth team I would say is pretty much maniacally focused on building better experiences because we've seen it tied directly to our business metrics. We have things that we've improved on in our onboarding flow, for example, to make it easier to understand the products, understand how they work for your different use cases such that then we have seen activations increase because we've made these quality improvements that are just directly tied to growth.

**Katie Dill** (00:16:38):
One of the biggest examples that I've seen of business impact through quality is actually in the checkout experience. We've done research on the checkout experience in some of the top e-commerce sites. We found that 99% of the top e-commerce sites have errors in their checkout flow that actually hinder more impactful, more seamless, quicker checkout, and therefore higher conversion with their customers. These small things, really they're quality issues.

**Katie Dill** (00:17:14):
They're just that if you really understand what a consumer is trying to get out of the experience, then you can make it better. So we have been maniacally focused on that over many years, trying to make the checkout experience so much better for businesses and their consumers. So by improving the quality of the checkout experience through details small and large, we have seen a 10.5% increase in business' revenue from an older form of checkout to a newer form of checkout. And those little details matter to have such a material impact on one's revenue.

**Lenny** (00:17:51):
You mentioned this before we started recording, but you guys power the checkout flow for some very big sites. Can you mention a few of these because they'll give people a sense of like holy moly.

**Katie Dill** (00:18:00):
Yeah. Stripe is used by millions of businesses globally, small and large, from early stage startups, to SMBs, larger organizations and enterprises like Amazon and Hertz, Shopify, Spotify, X, which I believe you use. The work that we do, it ranges.

**Katie Dill** (00:18:20):
We have checkout flows, so when someone's paying online, or in person, or we also provide a suite of financial automation tools so that you can run your subscriptions business, and recognize your revenue, and receive tax, and essentially manage the complexity of the financial space through powerful tools that hope to make your job easier so you don't have to sweat the details of how these things work.

**Lenny** (00:18:46):
I just want to follow this thread a little bit. You talked about these opportunities to improve the checkout flow through a design lens. You could also think of it from like as a product manager I'd be like, "Oh wow. Let's just find all the things that people get stuck on and fix them." How is it that you see that from the quality design perspective versus like, "Oh, let's just move this metric and here's all the things that are stopping people." What would you say is the designer's lens on that, if there's anything there?

**Katie Dill** (00:19:13):
Honestly, a pet peeve of mine is this way of talking about things as there's business goals and there's design goals. Because I think maybe the first conversation one should have is that, "What are we trying to build towards?" And I would think that folks that want to create really impactful products, they want to create quality products, and that they want to create things that actually serve their customers in a positive and beneficial way because they know that will build a stronger business in the long run.

**Katie Dill** (00:19:47):
So yes, there may be slight prioritization details different through the process where a designer might be thinking more about the emotional experience and how somebody feels, because that's oftentimes how they're wired, and that is an important lens to bring on it. Whereas somebody else might just be like, "Well, just make the button bigger and they'll click it more often, and that's the outcome that we seek."

**Katie Dill** (00:20:10):
So this is, again, why I was talking about how important it is to have multidisciplinary teams that work closely together because sometimes we are the checks and balances in the conversation. But I do think if we can align on what are we trying to build? Are we trying to build something great, then we can recognize the fact that it isn't just that utility is an incredible important part of that, but so is usability and so is desirability because these things together make something truly great.

**Katie Dill** (00:20:38):
So beauty is an important part of that because it does make things more useful, it does make things more accessible, and that with these things kind of coming together you can build towards something better. I think that beauty on its own or just craft on its own without utility, I mean that's like, I don't know, that's like Blu-ray or PATH. Right? That does not lead to a high-quality product. So it is the combination of these things, and so it's like stepping towards that.

**Katie Dill** (00:21:10):
But if you really want your product, those features, to be utilized for all that they're worth and to actually gain such esteem, and respect, and reuse, taking it to that next level and thinking about, "How do I make this actually an enjoyable use and that it really feels like it's meant for me and it maps my mental model," that craft and that quality of the execution of those details is going to be paramount.

**Lenny** (00:21:40):
You mentioned this word beauty, and I wanted to follow on this a little bit of just ... This is a big question, but just what is great design? What is beauty? Is there like a objective definition where if a designer is like, "This is great design," is there just like, "Yes, that is true." Or is it just an opinion? How do you think about what is great design? What is beauty, Katie Dill?

**Katie Dill** (00:21:59):
I love that we're talking about this because I feel like there's probably some people listening that are squirming in their seats. Of like, "Beauty? We're talking about business here." Which is great. Actually, there's a fun fact. Stefan Sagmeister and Jessica Walsh have a book called Beauty. I would highly recommend it. Very, very worth the read. But one of the first things they talk about in the book is that from the 1800s to the 2000s the use of the word beauty in books that have been digitized by Google has decreased pretty dramatically.

**Katie Dill** (00:22:34):
It's aligned with this idea of like, "Well, functionality is king. Functionality is what matters," as if people think about functionality and beauty as like two opposite things. But what the whole book talks about is that like, "No, they're not two opposite things." Functionality is important, and actually beauty enhances functionality because it does make things easier to use, more approachable, more compelling to use. And there is actually some objectivity to whether or not beauty enhances things.

**Katie Dill** (00:23:05):
But if you ask a wide audience what color do they like more or what version of things do they like more, they tend to say the same thing because there is this shared understanding. The other piece of it that yes I can imagine is not talked about in business as often is just the importance of how people feel. A good example of how something looks, and how something is structured, and how that can translate to that, also from the book Beauty, they mentioned that they studied the tweets that came from people that were traveling through Penn Station versus Grand Central.

**Katie Dill** (00:23:43):
If you've been to those places I'm sure where I'm going with this, which is just like the people tweeting from Penn Station, it was just like more negative than the people that were tweeting from Grand Central Station that tended to be much more positive and optimistic. So the things that you create have this impact. And if you're thinking about like, "I want people to enjoy using my-

**Katie Dill** (00:24:00):
... have this impact. If you're thinking about, "I want people to enjoy using my product, I want them to feel at home in our product." Of course, beauty is a part of it, and this matters deeply to us, and I know, as a financial infrastructure company in the B2B space, some may assume that that doesn't matter as much, but it's actually a key priority for us. Because, number one, things that are more beautiful, increase trust. You see that we've put painstaking detail into this and we care about the details of how something works, and that gives you assurance that we care about other details that you can't see too.

**Katie Dill** (00:24:37):
Then, secondly, it is easier to use, as I've mentioned, it gives better user outcomes. What we're trying to do is we're trying to equip businesses to make the right decisions to be more successful at what they do. By bringing a interface or our invoices, or whatever it might be, to be more beautiful, and more easy to use, and more trustworthy, that will lead them to better outcomes. Thirdly, I strongly believe beauty begets beauty. When our business users or the consumers see the beauty and the care and the creativity that we put into things we deliver, then that again reassures them of just the care that we put into them. Actually, a perfect example of this, have you seen the show The Bear?

**Lenny** (00:25:23):
I have, yes. Great example. Yeah.

**Katie Dill** (00:25:25):
All right. Okay. All right. No spoilers, but all I have to say is peeling mushrooms. Do you know what I mean?

**Lenny** (00:25:30):
Yeah.

**Katie Dill** (00:25:30):
Yeah. Such a good example. Such a good example.

**Lenny** (00:25:33):
Someone just mentioned that same episode on a recent podcast episode.

**Katie Dill** (00:25:36):
Okay. All right. Well, it's that good. It's that good. I wish I could remember which episode that was, but it was seven? I forget. But anyway.

**Lenny** (00:25:44):
Yeah, that's exactly right. That's exactly right.

**Katie Dill** (00:25:45):
Oh, nice. Okay. All right. Well, and then lastly, quality is a matter of pride, beauty is a matter of pride. If we put that care into our work, more people will want to work with us, because they want to see their time spent and the care for their craft recognized and utilized and see that that can be put together into something really impactful. We really put that on the pedestal, because we know how much it matters to our users and then how much it matters to the people that work with us. Beauty is an important part of it all.

**Lenny** (00:26:20):
Amazing. Speaking of beauty, when I think of Stripe and beautiful, I think of your website, and some of the specific landing pages you have, which are just incredibly nice. I'm just curious how you decide it's time to redesign your website and how much time and thought you put into a new website. Because that feels like a common question founders have, "Should we redo our website?" And it feels like you guys really think deeply about that. So, I guess is there anything there that you can share?

**Katie Dill** (00:26:45):
Yeah, there's definitely a couple of things we could talk about in terms of operationalizing quality. Because the gravitational pull is to mediocrity. It is very easy to fall into a path of a baseline, where what is required to go to that next level where something feels truly great is certainly a lot of effort, and it's a concerted effort. I will definitely say we are a work in progress and we have not nailed all the things and it is an ongoing pursuit of excellence.

**Katie Dill** (00:27:21):
The way that we build the website is that we certainly do put a lot of care into what we're putting out into the world, and we view it as a articulation of how we care about our users in all that we provide for them. So, we take that very seriously. We try to meld art and science. So, it's the creativity of the work, but it's also just the technical power of the way that we show it.

**Katie Dill** (00:27:49):
How we've actually operationalized the way we do that is that we have design and engineering and our product partners and product marketing work really, really closely on this. Actually, it's one of the few teams where all of these things report, well, not all of them, but most of those functions report into one place. So, engineering and design actually all report up into the design organization when they work on the website. Together, quite literally, as we were talking about earlier, if we were physically together, they would be sitting side by side and they're batting ideas back and forth, because the engineer on the team has a great idea for how we could go about executing on it. And the designer on the team has another idea how to push that a little further. So, that rapid cycle of iteration is really, really powerful, especially when we're trying to move quickly, but at an extremely high standard.

**Lenny** (00:28:44):
That's super interesting. Is there anything else that you've found to be really helpful in just operationalizing great design, craft, beauty, any processes, systems, frameworks?

**Katie Dill** (00:28:54):
Yeah, I would love to tell you about something that we've actually rolled out pretty recently that I'm extremely excited about the positive impact on.

**Lenny** (00:29:02):
Awesome.

**Katie Dill** (00:29:02):
But before I get into that, one of the things that has been driving a little bit of this process and the way that I've been thinking about how we can build better things at Stripe is actually I've been just talking to people, talking to different design leaders, product leaders, engineer leaders at different organizations and trying to understand how they go about it. There are a couple of themes that are clearly coming through.

**Katie Dill** (00:29:28):
Number one is that quality is definitely a group effort. You're sunk if you think that you can just hire some incredibly talented person and they'll do it, that'll be fine. The rest of us will do what we're doing and they'll do it, or that it's just one organization that's going to look out for quality or QA is going to solve it all for you. It really does need to be an organizational and a group effort. If you think about the way that you run the internal functions is going to show up in the outside and how clear you all are and how you're talking about it and the standards that you set inside and you're constantly reminding people of in the way that you communicate inside will then eventually show up outside. So, of course, keeping your talent bar high and then thinking about how those things really need to be cared for, that shared care across the organization is number one.

**Katie Dill** (00:30:20):
Number two is that there needs to be some amount of vision and alignment. So, if you hire all the best people in the world and you just set them out to go and do their thing, what are the chances that they're all going to end up with something that actually aligns pretty well? Even if they all have incredible taste and they're very good at what they do, there is subjectivity to every decision in some part. So, that they might end up with some things that are really great but don't fit together as a really nice whole.

**Katie Dill** (00:30:49):
The perfect example would be building a house. You have the person that works on the roof and the person that works on the deck and the person that does the siding, et cetera, et cetera, et cetera. A house is arguably far less complex than most of the technical products that we all know. Yet, there is painstaking effort put into having the plans and having a drawing of what the final thing is going to look like. There's a GC, there's an architect. And these people are helping to make sure that all those pieces fit together, and we should have that same care when we're trying to build products together.

**Katie Dill** (00:31:19):
I think a big pair on that is then the next piece, which is editing. And you might call that your GC or your architect or somebody that sees how all these things fit together, and then has an ability to help narrow and reduce and remove the things that don't fit. At Airbnb, Brian Chesky is the editor of all the things that come together. At the Economist, there's a chief editor. But other organizations, they might decentralize that approach, which is certainly possible, but challenging, because you do need somebody to help see these things come together.

**Katie Dill** (00:31:53):
That pairs with the next piece, which is about courage, the ability to actually say, "No, this isn't good enough." To have the resolve to just be like, "Almost, but no." Which is one of the hardest decisions I think leaders can make and certainly I've had to ever make in my career, too, is just a team puts all this care and effort into something and then you're going to say, "Actually, unfortunately we're just not there yet. Let's try again." That is, I think, incredibly important part of getting there and building the fitness of what you do.

**Katie Dill** (00:32:28):
Then, lastly, the thing that I've learned that will lead me to the example that you were asking about is that, in order to build quality, you really do need to understand it also from the user perspective, which gets me into my fixation with journeys, because that is how a user sees it. The user very, very, very rarely just deals with any aspect of what you build in isolation. There has to be a moment where they learn about it. There has to be a moment where they get to know it, and then there's a moment where they actually decide to use it, and then something just changed and now they need to use that product in some other way. You have to understand it from that point of view to really understand whether or not the quality is there. I think that's a critical piece of building teams that have empathy for their users.

**Katie Dill** (00:33:16):
So, we have been operationalizing that. All the things that I just mentioned, but one of the key pieces is to bring that approach to understanding the quality of the product. So, our goal was to set out to try to solve the fact that products can be shipped and they could be at their highest game when you ship them, they go through all the processes internally to be a high quality thing, and then it gets out into the world and then, over time, the quality regresses. Some of the reasons for that is that other things are being shipped. It's kind of like, again, back to an analogy of a house, imagine you have one room where you redo the molding and you paint the little aspects and you've put new plates on the lights, now all of a sudden that room is great, but it makes everything else look worse and the whole composite is worse.

**Katie Dill** (00:34:10):
That is something that can happen to products is actually they get worse over time. Then you organize a company oftentimes and parts to be able to focus on their key business areas. That's a very good thing because they get focused and they know what they're building towards and they get expertise and they're laser focused on that. So, ideally, they move faster. But what also happens is that they get so focused on that they forget about that piece of the journey, and how it all fits together, and not recognizing that part of their product experience is intimately tied to another.

**Katie Dill** (00:34:44):
So, what we did was we set out to, number one, increase the kind of awareness and accountability of leaders to own their journeys. What we have established are we started with 15 of our most important user journeys. 15 is somewhat of an arbitrary number. It's a number that we can kind of keep track of, but also has pretty good breadth, but is certainly not comprehensive of all the most important things. But 15 of our critical user journeys, the things that we know matter so deeply to our users, and we must get right at the highest level of quality possible.

**Katie Dill** (00:35:20):
Those 15 things then each have engineering, product and design leaders that are responsible for the quality of those products. They review these journeys, what we call walk the store, where they review them as if they're walking the floor of their store on a regular cadence, and they friction log what they experience, which I know David Singleton talked about on your podcast. They will write what they have seen, what's working, what's not working. They're viewing this from, they're trying to put themselves in the shoes of their user. This of course doesn't replace user research, but it substitutes it and it adds to that.

**Katie Dill** (00:35:58):
So, they go through the experience and noting what's working and what's not working. And very critically, it's a journey, so a lot of times it starts from internet search, it starts on Google trying to understand something, goes to the website, they end up on Docs, they end up in the dashboard, and they're seeing it as a user might. With that, they're able to find the entailments of the experience that may or may not be working. They jot that down, they file bugs, they reach out to the teams that may own the different parts of this experience, and then they score it. Then on, again, a regular cadence, we come together in almost like a calibration, where we meet and we talk about the score of their work.

**Katie Dill** (00:36:40):
It relates to performance reviews. Performance reviews, managers are assessing an individual's performance, which is hard. There's some subjectivity to it, just like understanding quality can be. But what we do as managers is we calibrate. We come together and we talk about, "Okay, how well is our interpretation of our ladders document? And how well does that performance align? And are we doing it consistently across the rest of the organization?" So, we do something very similar. We calibrate these scores because what we're really trying to do is not just the 15 essential journeys and the owners of those, we want to actually uplevel and bring more shared understanding of our quality bar across the company. These moments of calibration start that. Then having leaders do this creates this, number one, it cascades this idea of the importance of owning your journey and then also has upstream impact.

**Katie Dill** (00:37:43):
Because when people see the state of products in the wild as a user would, they learn a lot about what are some of the bigger opportunities that we can make to make the product better? What are some of the things that maybe we want to change in our process to make sure that we have even better things coming into the wild? One of the best parts of this is, since then we've learned that folks have seen that like, "Oh my goodness, our SEO for this particular product or the way we're articulating it doesn't align to actually how we want people to understand it later on in the journey. So if we improve this over here, we're going to improve outcomes later on." They're seeing that and they're now able to make that happen even faster to make some of the changes there.

**Katie Dill** (00:38:27):
Then my real favorite part is that we're hearing from folks that maybe at first didn't see this as necessary, that maybe in different functions that are just like, "Oh, I was so very focused on executing the technical ability of what I do on this thing, but I hadn't seen it from this lens before." Now there're actually converts of like, "Yes, this is a really important part of it." That goes back to the point of it's a group effort. You don't want just one function looking out for the quality of the product. So, having engineers and product managers and people of different disciplines walking the store, seeing the experience, feeling it firsthand, I think will lead to better care in all of the details that will aligned to better craft in the end.

**Lenny** (00:39:12):
Oh man, what an awesome process. I have a million questions I want to ask to better understand how you operationalize this. I'll try to ask just a few. But one thing that stood out about this process is I think people kind of don't trust their own judgment when they're looking at their own product. They kind of, especially product managers, almost have to feel like they have to rely on user research or data to know a thing versus like, "I just see this and it feels bad to me." I think I've learned over time more and more that you should really trust that, because you're spending your energy trying to use this thing, you're not that different from a potential user. So, I love that this actually relies on your personal judgment trying to use a thing, which I think people undervalue.

**Katie Dill** (00:39:53):
Yeah.

**Lenny** (00:39:54):
A couple of just very tactical questions, how often roughly does this happen? Is it once a quarter?

**Katie Dill** (00:40:00):
To your first point, 100%, they're all just forms of input. I'm definitely not saying do this instead of user research, do this instead of data. It's like these things in additional sense. I do think what's so powerful about doing it firsthand is that, although I am the biggest supporter of user research, even hearing somebody talk about an experience, while that is really, really powerful, feeling the pain firsthand is just this next level of visceral understanding of like, "Oh, this could be better." Your users, they might not always say what's missing or what's wrong, or maybe they don't know that certain aspects of it could be better. Yeah, having your point of view on that in addition to the user research and what you've heard from them directly is really, really important.

**Katie Dill** (00:40:49):
But you asked about how often. We have, as I've mentioned, we are constantly looking at our processes and trying to figure out how we can make them better and better as an organization, as we've grown, things need to adjust. We today are doing it quarterly. The quarterly aspect of walking the stores by no means meant to be like that's the only time people do it. But that is the time where we're looking for update your scorecard and share the information in a dashboard where everybody can see. That is feeling right now to be the right cadence because that's enough time that there can be material differences made. You can see the scores evolve over time. But also frequently enough that you're not missing that perhaps there's been a setback since. But, of course, my real hope is that they're happening weekly, just perhaps in different parts of the organization.

**Lenny** (00:41:46):
I want to ask a couple more questions so that folks can try this at home. I was just thinking this podcast is the opposite of don't try this at home. It's like, "Here, try this at home?"

**Katie Dill** (00:41:54):
Try it at home.

**Lenny** (00:41:55):
Yeah. So, I want to try to give people a few more answers to questions when they're probably going to try to do this themselves. Who's in these meetings? Do you join these walkthroughs? Does David join? What do you suggest there?

**Katie Dill** (00:42:07):
Yeah. For what we're doing for each team is they do them themselves together. At bare minimum, it should be the engineer, product manager and designer doing it together. The reason why we like to see it happen together is, again, as we've talked about before, is that people bring a different perspective to something. Let's say somebody in the room might be like, "Oh my goodness, the load time didn't feel really good there." And like, "Oh, whoa, the way we're stating this is not consistent per page. And that's not on our design system."

**Katie Dill** (00:42:41):
So, it is really powerful to have folks come together and do it. In fact, David Singleton, who you mentioned, he and I do these things very regularly, too. This is outside the essential journeys program, but he and I walk the store and we'll just pick random flows and go through it together. I can't code, but he can. So, he'll do the code part and I'll be sitting there being, "What? Do they really do that? How can we make that better for them?"

**Katie Dill** (00:43:08):
I really love the multidisciplinary approach, but then when we do the calibration after the team has done these walkthroughs and they've gotten their own perspective and they fill out the scorecard based on our rubric for quality, we will come together in what we call PQR, product quality review. And they will take us through what they have experienced, and then they'll talk about, "So, this is why we've scored this, a yellow or a yellow green." Then we might have a conversation about that.

**Katie Dill** (00:43:39):
It's like, "Well, actually, that felt a little worse than you've described it. Actually, I think that we probably need to put more urgency on solving that." Or in some cases it's like, "Actually, that was pretty great. If you think about what we're trying to help somebody achieve at this moment that actually is really hitting the mark."

**Katie Dill** (00:43:59):
We will debate that there. In those meetings you'll have, yes, myself, David Singleton, Will Gaybrick, who leads product and business, and then various leaders from the organization that might be relevant to that area. We are trying to give people insight to what's happening across. Again, it's a multidisciplinary room. I'm trying to keep it not too large, because obviously it can be hard to have discussion, but it is very valuable to make sure, again, that we have the perspective of product marketing and the perspective of engineering, the expected product in the room as we discuss what our quality bar is.

**Lenny** (00:44:36):
Awesome. Okay. That makes a lot of sense. In terms of scoring, are you scoring individual steps of these journeys or is it yellow for segments? What are you scoring?

**Katie Dill** (00:44:44):
The way the rubric works is so that, and we have a template for the friction log. So, people fill out a friction log and it'll be screenshots and then what they experienced. Then there is a tool to tag for each moment. It's like, "Oh, that was a nice touch." Or, "Ooh, that is not great. We should consider a fix." Or different levels of severity of like, "Oh my gosh, P0 bug, we need to fix this right now." So, they'll tag for different moments in the journey.

**Katie Dill** (00:45:11):
Then there is a summary score at the end, which is based on a rubric that we have that talks about the importance of quality from the point of view of usability, utility, desirability, and actually going to that next level of surprisingly great. Then we'll ask them to score on a whole what they felt of these things. Then that adds up to a summary score. Which we have also talked about the different ways of scoring. Is it a number-based system? Is it a letter-based system? Like A-minus and B?

**Lenny** (00:45:42):
[inaudible 00:45:42].

**Katie Dill** (00:45:42):
Yeah. So far we have landed on a color system because, honestly, I think people can get a little tied around the axle on how you're measuring it, and to your point, especially in subjective things, and it's just like, "Oh, it's like, well, is it really a six or is it a seven?" We didn't want people to get a little too worried about how does... It's not meant to be an objective quantitative score. It is qualitative, it is judgment. We hire people for judgment, so we want them to bring that to the conversation. That's how we chose the score, because we felt that would actually lead to quicker but straightforward opinions and decisions.

**Lenny** (00:46:25):
At a lot of companies, you have these reviews and the founders share all this like, "Oh, this is broken, this is busted." And as a product team, you're like, "Goddammit, we have these goals we got to hit. We have this roadmap. And now we're going to get a hundred things that the founder's like, 'Got to fix this.'" I'm curious just how you tell teams to take this stuff and prioritize it amongst all the other things they're going to do. Is it just up to them, is they're like, "Need to fix this"? Anything you can share there, but just how to actually operationalize taking this feedback and doing something with it?

**Katie Dill** (00:46:54):
Yes. Yeah. I've seen some organizations talk about when they're doing planning, you do your OKRs quarterly or half year or year, whatever, recommendations of like, 10% of your time should be spent on fixing things, and 20% on growing things, and the rest on keeping the lights on, whatever it might be. Yes, I've seen different companies build a recommendation based on certain percentages of how they think teams should be spending their time.

**Katie Dill** (00:47:28):
We at Stripe think that, first and foremost, is that we have to make sure that folks are, number one, hired with the fact that they have great judgment and care for what they build, and they take pride in it. That's number one. Then, you can give a lot of trust to people based on that commitment to building great things that they will use that in their decision-making. Then, of course, it needs to be very clearly advocated for at the highest levels of the...

**Katie Dill** (00:48:01):
... Advocated for at the highest levels of the company. And with that, I think that fuels people's thinking as they're building their plans, but there is iteration in the plans and we do have multidisciplinary people making the plans together. So it's like, "Oh, okay, are we advancing these features? Are we going to be building growth? And is that improving the quality as well?" And so I think that's how we together get to it, but there's no formula that we ask people to.

**Lenny** (00:48:30):
So basically what I'm hearing is it's the cultural just people are hired with this expectation we are going to focus on quality and we'll prioritize things even though they may not move metrics because we know that this will generally improve and grow the business.

**Katie Dill** (00:48:43):
Part of it though is showing how it moves metrics, because I think that is a dangerous belief that is absolutely out there, as we talked about earlier, but that actual quality improvements do increase growth, they do improve the bottom line. For example, we saw that folks were reaching out to support because they didn't know the state of how one of their invoices was performing. And when we dig in, we realized it's, well, we had a button that looked nice, but it wasn't super clear, and so they didn't know how to access the thing that they were trying to do. And so by improving that, we decrease the need for them to have to reach out, which is clearly not their want to have to call somebody to find the answer to their problem. And so with that, we've made an improvement and we, of course, improve the bottom line because of that.

**Katie Dill** (00:49:38):
So I actually think that maybe one of the steps that somebody should consider in their organization is just you have those examples, every company does, where quality leads to better business outcomes and to talk about those and make them known, because I think it's actually a false belief that it's one or the other, it's like, "Are we going to work on quality and it doesn't move the metrics? And where we do." Some of them are longer term and so you have to look out for a while to see that change and the beliefs of your customers or how often they're sharing your product or how often they're succeeding in what they're trying to do, but some of them are short-term impacts and that is an important thing for people to be aware of because it will give them ideas of, oh, we could do this in our team too, we could have a higher quality product and actually move the business metrics.

**Lenny** (00:50:28):
Is there anything you do in how you evaluate performance of teams that helps prioritize this sort of thing? So generally it's just, cool, this team moved this metric by a ton, they're doing great. Is there anything that you bake into performance evaluations at Stripe, especially for product teams that help them understand and prioritize some of these things that may not obviously move metrics other than just broadly we believe great experiences are going to improve growth?

**Katie Dill** (00:50:54):
Well, I think one part is being clear on what impact means, because I do think that in some companies impact is just, okay, what business metric did I move and how much? And there are certainly really important impact projects that folks can have that maybe they're multi-quarter, multi-year, and so maybe you didn't move this incredibly important business metric in one quarter, but actually the work that you are doing is instrumental to the success of the business. So there's that. And then, like you said, there are perhaps quality efforts that are harder to measure or they're longer term, but they're still impactful. So I think number one is that when you're thinking about how to come up with the rubric for how you're going to judge performance, it's just really honing in on what does impact mean, and then a lot comes from that and being able to and celebrate and recognize great work happening even when it's not necessarily materially moving that number.

**Katie Dill** (00:51:59):
The other part of it is we have a ladder system. So it's a document that's not meant to lay out here's the checklist of all the things you need to do, but it's a guide for this is what is expected in your role and at this level, and in these documents we talk about the importance of things like quality in that what we pursue is building these things that are great. And another part of that is also the operating principles, which is the thing that we align on underneath all of these levels and ladders systems that we have. And our operating principles include meticulous craft. It is one of the things that is really important to us as an organization is just having that meticulous care for all that you do, whether it's you're designing the space that we work within or that you're creating the API or that you're building the interface or that you're talking to people on support calls, the meticulous craft is something that is actually expected of everybody.

**Lenny** (00:53:04):
**Katie Dill** (00:54:40):
One of the things that has stuck with me through all the trials and tribulations of leading, and as I've already laid out for you in the very beginning of this call, haven't always got it right, but one of the things that has been a clarifying force as I think about growing and leading teams, it's actually something I learned at Airbnb when we were there together, it's a formula sort of. So performance equals potential minus interference.

**Lenny** (00:55:10):
I love that.

**Katie Dill** (00:55:10):
And I really like this, it's pretty simple, but it's a good reminder that, as a leader, one of the things that you are of course driving towards is trying to get better performance so that your team feels more purpose and motivation and is excited about their work and that you're building greater things for your customers and you're having more business effect, and, of course, performance. But the key pieces of that, of course, is potential, so thinking about how you increase potential, which would be, of course, hiring really well, developing the talent and helping them grow and increase their own potential to do better and greater things. And then paired to that though of course is decreasing the interferences, which could be that lead weight on top of great talent, because you can hire the best people in the world, but like a muscle atrophying underneath a cast, if there are interferences that are holding them back from doing great work, they're going to burn out, they're not going to enjoy the work, they're not going to be as successful, and you will not get as strong of performance from it.

**Katie Dill** (00:56:14):
And so I really do think of this constantly as to how can I increase potential, how can I decrease interferences? And over time, especially as your company grows, you're going to have to keep doing that. The design work is never done in designing a team, because the more people you bring in, the more it puts your processes in a faulty state. I have intentionally run teams where you get to a point where it's like running hot, it's just like, "Okay, we've outgrown our processes." And that's okay because then you can learn as to, okay, this is how people are actually trying to work and this is how we actually can improve it. So making those changes as needed helps to make them more sought after and more informed in terms of as you improve the processes.

**Katie Dill** (00:57:05):
One of the things that I've been working on since I worked back at Airbnb was this idea of improving awareness of the things that are happening. What happens at a lot of companies, especially as they grow, is people lose touch with what's happening in different parts of the organization, and everybody's got a doc, their PRD, where they've written down what they've done and it's got tons of words that nobody really understands and keywords for the different projects, and that isn't the best way to lead to clarity. And I'm a strong believer that a picture tells a thousand words and a prototype saves a thousand meetings. What we do, and I've been doing it for the last decade or more, is having people within the design team share as a screenshot or a prototype of what they're working on in a shared deck.

**Katie Dill** (00:57:54):
And so they add this to a slide, in Google Slides decks every couple of weeks, and we get to see what's happening across the design team. And this is really important for all the designers because they could see, whether or not they're a team of 10 or 170 or whatever it might be, what is happening, and they can say, "Oh my gosh, you're working on that surface, so am I. And let's talk about it. Or Oh, that's an interesting pattern, maybe we could use this in more places." And we send it to the product managers and the engineer leaders and the leaders in the company because it is also a really great way for them to understand what's happening and what are we building together. Because going earlier, as I talked about, the importance of thinking about things as a journey, so what's happening in the marketing side, what's happening in this aspect of the product and seeing how all these pieces really fit together, that has been absolutely one of the things I will take wherever I go, whatever I do, because it has just been a very, very useful tool.

**Lenny** (00:58:51):
I remember that at Airbnb, and there's nothing more fun than just looking through a bunch of awesome designs and products that are in motion and in a deck form is so handy, just flip through what's going on around the company, I'm like, "Oh wow, look at this thing. That's amazing." And it's interesting that ends up in a deck, it feels like Figma would be really good for that too, but somehow decks are still really handy for simple things like that.

**Katie Dill** (00:59:11):
One of the key pieces is just keeping it really low maintenance. Yes, the design team would definitely prefer that it would be in Figma, but critically I want all functions to be able to look at it. And if not everybody is on Figma, if they were, that would be great too, but if they're not, it's just flipping through really easy, touch of a button, you can just send it off, it's behaviors that people are really used to and commenting. But maybe one day Figma.

**Lenny** (00:59:42):
And the way you do that is it's just like a scheduled call for all designers, add your stuff to this deck and then you email it out every two weeks I think you said?

**Katie Dill** (00:59:48):
Yeah, and we experiment with how often we ask folks to share and also the granularity of what they're doing. It is not meant to be a status check. We're not asking everyone, "Show us what you're doing." It's more of what are the projects that are happening? And we might ask, "Show us the medium and large projects," if there's such, it's too much going on and all of a sudden it's a 200-page deck and no one's going to flip through it. So we have experimented and evolved that depending on the team size, and I think right now we're at monthly sharing of it, and that seems to be working pretty well. It used to be biweekly, which I loved because I really love looking through, but if it's feels like it's a arduous task then it's not succeeding.

**Lenny** (01:00:31):
And especially knowing designers, they'd want to make sure it's the best version of what they've done, and it takes all this extra time to, okay, we got to make this beautiful mock to show [inaudible 01:00:39] working on.

**Katie Dill** (01:00:39):
And actually another part of it that is another benefit of opening up the curtain a little bit of certainly we have to take things seriously in terms of confidential work, it's work in progress, it's not ready to go live, we're not ready to critique all the details about this. We do need to make it very clear to folks that this is work in progress, but also that it is really beneficial to bring the work out because what isn't great is that you get to the end of the project and people have worked tirelessly on it for some long stretch of time and then find out that, oh my gosh, this is the same project that we're doing over here and this can be completely redundant, or these two things are on a path to collide.

**Katie Dill** (01:01:25):
So we want to know that sooner because it, absolutely, in the end of the day, will make the work better, save time. And so opening up that curtain and showing the work in progress, it can feel hard at first, but I think people have started to see the benefits in doing that and then usually that will lead to better outcomes in the long run in the culture too.

**Lenny** (01:01:46):
Going back to this formula you shared, which I love, performance equals potential minus interference, is there an example that comes to mind of helping with the interference where you found that, oh, wow, this is really slowing things down and you change something?

**Katie Dill** (01:01:59):
It actually goes back to org design that we talked about earlier and where people sit. So when I joined Lyft, as I mentioned to you earlier, I was like, oh, I had learned from the experience that I had at Airbnb and I came in needing to transform the organization, and was hopefully much better at it because I had learned so much. What actually was going on there is that the way that the team was organized before I got there was that actually physically the design team sat separately. They sat in a room that was just beautifully designed, separated from engineering and product and all the other functions by a locked door. And that was really interesting to see because of course there were a lot of benefits to it, which is that design had this very safe space for creative discovery and exploration and communication, there was work all over the walls, it was wall to wall whiteboards, and it was just absolutely a place where creativity could thrive.

**Lenny** (01:02:58):
It sounds exactly like the Airbnb situation, by the way.

**Katie Dill** (01:03:02):
The current Airbnb situation or the past?

**Lenny** (01:03:05):
The original, the [inaudible 01:03:05] times.

**Katie Dill** (01:03:07):
Yeah. And absolutely there are a lot of tie-ins to what I had seen. And the interesting part about how actually teams were working is that you would see that there was a lot of wasted work and there was a lot of misalignment in what we were trying to do because there was product managers and engineers that were sitting alongside each other making decisions and talking about the work and deciding things, and then designers were sitting over here in this other room and they were working on something, and then they'd meet up and it's like, "That's not aligned. No, that doesn't fit the goal. And you went that way, we were supposed to go over this way." And so interference in the sense that it was wasted work, it wasn't actually aligned to the goals, it was slower. And there were definitely benefits, there was real reasons for doing this, and I know there are companies including Apple that have separation of these things.

**Katie Dill** (01:03:58):
But I think if you're going into that way of working, there's probably a lot of other decisions you need to make too in terms of the way the teams work. And so what I was seeing there was just the composite of all these aspects coming together that was not leading to more efficient and less interference. And so what we did was to evolve the way we were working and bring better alignment to the different functions.

**Katie Dill** (01:04:22):
And, again, had done it with an approach about listening and came into that with a better understanding of getting to know the team and getting to know engineering and product and see what our goals were together so that when we were making changes we were making the changes together and we actually were aligned so that on the day that we opened the doors and brought design and product together and had spaces for folks to work together and they actually sat with each other, we still kept the creative space for this is where we'll do grits, this is where we'll do working sessions, this is where the folks that don't work in an embedded fashion we'll sit, but we had the best of both worlds in that way. And so with that alignment of the way that the teams were working together, there was much faster iteration cycles, better clarity on how the work was working, and we still kept and protected that room for creative space, literally the room in terms of figuratively speaking for allowing for creative exploration, but more aligned.

**Lenny** (01:05:23):
And just so I understand, essentially you reorged the teams and not just physically moved people, but you changed the way the product and design and eng team was even organized?

**Katie Dill** (01:05:35):
Yes, literally and figuratively we broke down the wall and brought the teams physically together so that they would work together, and then we had an org chart where it's like, okay, these designers are working on driver, these designers are working on rider, these designers are working on the safety team, and then they would sit with their respective engineers and product managers. And then as I talked about earlier, we would come together at key moments to make sure that we as a design function, we're still aligning on shared goals about the overall experience, but also making sure that we could work well with our partners.

**Lenny** (01:06:11):
So interesting that that was a recurring pattern at the places you went. I imagine Stripe was not like that, there was not all designers sitting in that locked room.

**Katie Dill** (01:06:18):
Not in a locked room. When I joined Stripe, it was a Zoom universe, so it's a little bit different, but even today we have a studio space where we have all the great tools of craft, and when you do go into the offices, we do have places where designers sit together, especially in the functions that aren't embedded. For example, we have brand and marketing creative, we have the website team, and we have folks that work across all of the things that we do. And so for sure there usually is some sort of creative space, which I actually think having a physical space for creative discovery and exploration and having that up on the wall, I love that so much. And I go into the office about halftime now, and I think over time we'll probably build that out more and more, because it is really powerful in addition to having teams sit by the disciplines that they work with every day.

**Lenny** (01:07:17):
It reminds me of a quote I have on my wall that I think I found in the Rick Rubin book, but it's by someone else, so I don't know exactly where I found it, but it's the object isn't to make art, it's to be in that wonderful state which makes art inevitable.

**Katie Dill** (01:07:32):
Ooh, that's good. I like that very much.

**Lenny** (01:07:34):
By Robert Henry. That's what I try to do in this little podcast studio that we got here.

**Katie Dill** (01:07:39):
That's awesome.

**Lenny** (01:07:41):
Is there anything else that you think would be useful to share either from scaling design teams or broadly?

**Katie Dill** (01:07:50):
I think one of the other tendencies I see of companies in different stages of their growth is a fear of bold ideas. What happens is that... It can happen at small sizes and then it can happen at large sizes actually, it's just that a fear of shaking things up too much or big ideas with lots of things changing at once are really hard to measure. And so actually if we just make an incremental approach, it's very measured and we know what the outcome is going to be, it feels safer, I can get it done in the quarter, and depending on how your performance is managed, that might be more attractive. And so that is a dangerous tendency, because I think if we go back to what quality means, and you think about it as, well, quality is really your users are the judge of that, and the way that they experience things oftentimes across products, across surface, across time, if you just think about these incremental approaches to the scope of whatever that is that you own, you are very likely not to make the whole thing better.

**Katie Dill** (01:08:57):
So I think we have to fight against that. And the way I look at it is, the way I talk about it is reach for the stars and land on the moon. And what I mean by that is that vision work is really important, and I think sometimes you can get a bad name because you can end up with some folks that are doing vision work that goes nowhere, and they make a beautiful deck and then it gets seated on a shelf and nobody ever builds it. That is not what I'm talking about here, that is not what I recommend, but actually vision work that absolutely does look at the entirety of the experience, a comprehensive approach, a journey approach, and thinks about how these various things may come together to be better, and sketch out the ideal version. And I think Brian Chesky talks about it, I think it was the 11-star experience I think he once said.

**Lenny** (01:09:45):
[inaudible 01:09:45] stuff. That's what we talked about a couple of times in this podcast.

**Katie Dill** (01:09:47):
Exactly. Looking at it as a journey. It's not the five-star approach, it's not the six-star approach, but the 11-star approach, but show what that ideal version is, because if you don't know what that is, what are the chances that you're going to increment yourself to the right outcome in the end? And as I talked about before, building the house, you want to see what that picture looks like and how all these pieces come together, and I strongly recommend you want to see what it looks like in an ideal form, because you can always work back from that.

**Katie Dill** (01:10:17):
And so it's like, "Okay, if this is what we want to get to, this is what our product is going to look like in two years, how do we get there?" And what very likely is it's a team effort and various parts of your organization are going to have to own various parts, and maybe we ship this piece first so that we can study it and learn and make sure that the data is good before we move to the next piece, I'm not suggesting you have to ship the whole thing at once, but that North Star lays out the process in a way that I think allows for big risk taking in a way that is measured and thoughtful and actually also feels like progress as you step towards that versus trying to get their day one and likely end up giving up.

**Lenny** (01:11:02):
I love that, reach for the stars, land on the moon. That could be a metaphor for so many things. Let me try to squeeze in one more tactical tip for people listening. If someone's hiring a designer, so someone that's not a designer, just a founder of product team, what should you look for that may be a red flag or something that you want to look for to feel good that they're going to be a good fit?

**Katie Dill** (01:11:23):
The key, I think, to keep in mind is it's easier to teach tools and process than it is taste and character, so I would certainly pay a lot of attention to that. Their hit rate for great judgment and great taste, and how they've honed that, even if they're not very experienced, just to see do they have that natural inclination for great things. The other piece of it is that certainly you want to find somebody with great talent, for sure, and high craft, but you...

**Katie Dill** (01:12:00):
Talent, for sure, and high craft, but you also want to find somebody that's humble. Folks that are really good at what they do aren't always, but humility is a really important part. I think it's a really important part for anybody on a team because if you're working on a team, you need to work together. And it is important that they have that respect and empathy and understanding and enthusiasm for the folks around them, but also the users. Humility means that they're going to pay more attention to what the users are saying and hopefully be curious about what's working and what's not, and strive to navigate these things to make it better. The last piece would just be hustle or chutzpah. I'm not sure exactly what's the right way to put it, but the design and the creative functions is the act of creation.

**Katie Dill** (01:12:53):
And it's scary. To take a blank piece of paper and propose something that you think is better, is scary. To have the courage to say, "This is not good enough and we should do it again," is scary. Having somebody that has that courage inside them to fight for great is pretty important. And that hustle to try to execute on that rapidly is, of course, essential as you're hiring at any stage company.

**Katie Dill** (01:13:23):
Lastly, I think you were asking in particular, especially with younger companies or with startups, I think one thing that can be hard, it's like do you hire a more junior doer or a more senior thinker/operator? It's like if you had all the money in the world, all of it. But I do think in your early stages you probably do need a doer, but it is important to also have that lens of how do you build an organization that's user-focused and the way that they operate and the way that they work together, and bringing a strategy that will help to be user-focused from the start. Maybe a great way of doing that is having a more senior leader, design advisor, and then a kind of executor or doer full-time on the team.

**Lenny** (01:14:10):
That's a really cool tip. On the craft and taste piece, a lot of times people don't have that themselves necessarily. Any tip for how to measure that? Is there a book you'd recommend or trick? Or is it just trust your judgment and does this feel great to you?

**Katie Dill** (01:14:28):
It's contingent on what is the thing, what is the user need? Something that is really great, we do a lot of tools that we strive to make them power tools for our users. And a lot of times that means dense information that is still easily accessible, but will definitely feel different than perhaps a consumer product that is meant to be extremely light and sparse and directive to one individual thing at a time. So it really depends on the context of the product sometimes. That's why it's hard to kind of quote an individual book. But yeah, I can think on it and we can put it in the show notes. There are definitely books that talk about the principles of great design and we can look at that.

**Lenny** (01:15:12):
Amazing. We'll link to extra books that come to mind after. One other question I wanted to ask is, what's a favorite project that y'all have worked on at Stripe?

**Katie Dill** (01:15:21):
Oh yeah, we got a good one that I'm so excited about. First off, I don't know if everybody knows this, but Stripe prints books. Stripe Press, we print books that are, we consider, ideas of progress. It's our intention of bringing great ideas out there. Most of them don't have anything to do with financial infrastructure. It might be any number of interesting problems and opportunities of things and ideas that people have talked about.

**Lenny** (01:15:50):
I have many of them in my background here. I'm a huge fan of Stripe Press.

**Katie Dill** (01:15:55):
Nice. And we take great care to deliver these ideas of progress and books that hopefully feel beautiful. We have a new book coming up that you can pre-order now, and it is Poor Charlie's Almanac. It's actually-

**Lenny** (01:15:55):
Already pre-ordered.

**Katie Dill** (01:15:55):
You did? I actually excited to hear that.

**Lenny** (01:15:55):
I'm really excited for it.

**Katie Dill** (01:16:12):
It's a fascinating book. It's 20 years old. It's actually Charlie Munger's words, but Peter Kaufman, a friend and a colleague of his, assembled all of these documents over the years of things that Charlie had written and said and put it into this kind of anthology. And so this book is really fascinating and it's not really a linear story so much. We have reprinted this book. We created a teaser site that I strongly recommend you all check out. It's really, really fun.

**Lenny** (01:16:41):
Oh, man, it's unreal. I remember when you launched that. I was like, "It just keeps going and gets crazier and wilder and amazing." I don't even know how that's possible on a website.

**Katie Dill** (01:16:49):
It's pretty awesome. Our website team is... We talked about the importance of design and engineering working super closely together. It's just like that. That art and science coming together into something that hopefully is fun and engaging and people want to pursue it. So the book will be coming out soon and we're working on an update to the site that we're really, really thrilled about, so you can read the book online in a special way. So yeah, very big fan of this.

**Lenny** (01:17:17):
What's the website for folks? Do you happen to have the URL? Otherwise, we'll link to it in the show notes for

**Katie Dill** (01:17:21):
The book. Yeah, yeah. It is press.stripe.com will be where you can see all the books that we have at Stripe Press. And I believe the first one in the line... And actually what you'll see in the website is that we originally had a typical buying model of the squares outlined. One of the things that we sought to do with the website is to consider what would be a great experience for understanding different books. And when you go into a bookstore and you see the spines of the books and you pick them up and you turn them around and you look at them. And so that's actually what you will... I should stop describing it. Just go and check it out and you'll see we sought to deliver this work in a way that would be aligned with what a reader would want to pursue.

**Lenny** (01:18:07):
I can't help but ask, but how did that even come together? Was it just like this passion project of like, "This book's coming out, I just want to invest a bunch of time resources into this?" Or how does that happen at Stripe?

**Katie Dill** (01:18:19):
Stripe's mission is to increase the GDP of the internet. We strive to build global economic prosperity because that's greater access across the globe. But there's more ways to do that than financial infrastructure. Financial infrastructure is absolutely a major part of that. It is like the lifeblood of businesses, and it enables them to accomplish more. But this notion of ideas of progress is another angle into that. While it might not be our core business, it is very much aligned with our mission. And so yes, it takes time, but we feel that it's important for what we're setting out to do. And it also relates to the pursuit of creativity and excellence. It is a part of our identity. It is a part of who we feel we are or we strive to be, and we're excited to share that with people. It's in some ways how they get to know us and they get to see the care that we put into any number of things.

**Lenny** (01:19:19):
Katie, is there anything else you want to share or touch on before we get to our very exciting lightning round?

**Katie Dill** (01:19:24):
We talked a little bit about the importance of different disciplines and the importance of quality being a group effort. I hope this doesn't insult my function, as I say, but at the core, design is simply intention. You're bringing intentionality to the decisions that you make in thinking about who is this thing for. If you're designing a doorknob, let's say, and it's like, "Does the doorknob speak to whether or not I'm going to push or pull or turn? Is it comfortable in the hand? Is it easy to manufacture? Is it easy to put on and remove?" These are some of the intentional decisions one could make, whether or not they're a designer, an engineer, the product person, any old function can put that intentionality.

**Katie Dill** (01:20:17):
If you think about who is impacted by this, who is using this? And that literally could be anything from designing a doorknob to designing your org structure to designing your strategy. Obviously, great design is also creative, and it also is demonstrated with great taste for what is beauty. Of course, that's where I would say that design expertise with people that have these creative skills and this great taste is an incredible important thing to bring into the organization. Day one, everybody can bring more care and intentionality, and I think that will result in better outcomes, internally and externally, in the long run.

**Katie Dill** (01:20:56):
I think your podcast is a great example of great craft and great quality. I was just saying this to my husband the other day, as I was talking about doing this. It's just like, your podcasts... There's more usable learning per minute than most. I don't know if that's a metric that you're measuring, but I love how you don't have your guests tell about their background. Because when someone tells about their background, that is interesting, but it's not really usable information. It's like, "I can take this information and run with it and then bring it to my own team and make my work better." You have clearly thought about that. Well, I don't know if that's why you made that decision.

**Lenny** (01:21:38):
Absolutely. That is exactly [inaudible 01:21:40]

**Katie Dill** (01:21:41):
Okay, great. I also love the way that you set these things up. You had said to me, in the thing that you set me, it's just like, "If it's not good, we're not going to ship it." And you set it in very nice ways, by the way. But at first I had this like, "Oh gosh, what if it's not good?" But I also had this moment of like, "Well, that's pretty great because if it's not good, he's not going to embarrass me to the rest of the world, hopefully." And I love that because that was that courage that I was talking about earlier, too, of that you're not going to let bad go out, because you know that each one of these little things will end up leading to a belief of the level of quality of what somebody can rely on getting when they listen to your podcast. Again, one workout isn't going to be a six-pack, but every one of those things will end up leading to better quality overall. I don't know, kudos to you. You're nailing it. So great.

**Lenny** (01:22:36):
Katie, what a nice way to end it. I really appreciate that. That's exactly how I think about it, actually. You cracked my whole strategy of just making it as concretely useful as possible. I was actually on David Perell's podcast recently and he had this really good way of describing this, which is exactly what I've tried to do, but I haven't put my words into it of make it as useful as possible per minute without removing the humanity. And I realized that's what I do, is I could cut all the stories of everyone's backgrounds, but that sucks. It's optimize for value and concrete, tactical advice, but also make it fun and human and interesting.

**Lenny** (01:23:15):
So thank you for the kind words. And with that, we've reached our very exciting lightning round. I've got a number of questions for you. Are you ready?

**Katie Dill** (01:23:24):
I'm ready.

**Lenny** (01:23:25):
Okay, let's do it. What are two or three books that you've recommended most to other people?

**Katie Dill** (01:23:30):
One, How to Win Friends and Influence People. It's an oldie but a goodie. I forget how many years old it is, but many, many decades. I think it was in the 1930s? The cover is funny. You might be embarrassed to read it on a bus, I don't know. But the learnings from it are timeless, and I've actually read it four times and I can always do for another because it is a great reminder of just how important the way you articulate things are. And not in a negative or gross kind of way, but people care first and foremost about themselves. That's the body that they're within, that is the context that they're within. Recognizing that can be really powerful as you think about leading teams, as you think about working with other people, as you think about being a good spouse, whatever it might be. I'm a big fan of that one.

**Katie Dill** (01:24:19):
The other one is a newer book, I think actually still a couple of years old. It's about the Wright Brothers by David McCullough, I think. I've been learning how to fly, and so I'm very obsessed with this, but I think it's a book that's relevant to everybody. Especially even entrepreneurs, because it just talks about the impossible challenge of nobody thought it could be done. Even the American Institute of Science didn't think it could be done. And these individuals that had the resolve and the commitment to make it happen. I think also the power of this beautiful partnership. Of course, they're brothers. That doesn't always mean you get along, but they're brothers and they did, and it's a beautiful story. Big, big, big fan of that.

**Katie Dill** (01:25:05):
And then third book, I would just say is... Actually, I brought it over because I knew you were going to ask me this question. I don't know if you could read that, but The Boy, the Mole, the Fox, and the Horse. This book was given to me by Jenny Yarden, which I think you may know. It's wonderful. It's a beautiful story. It makes you laugh, it teaches you a thing or two, and one of the best quotes in it is, "One of our greatest freedoms is how we react to things."

**Lenny** (01:25:32):
Very Buddhist.

**Katie Dill** (01:25:33):
Yes.

**Lenny** (01:25:35):
What is a recent favorite movie or TV show that you really enjoyed?

**Katie Dill** (01:25:39):
Oppenheimer was amazing. And TV show? Shrinking. And that one was really good, and it actually really surprised me how funny and positive it was, because the trailer for it does not give that impression. But it was really good.

**Lenny** (01:25:55):
I've not seen that. What is a favorite interview question that you like to ask candidates?

**Katie Dill** (01:26:01):
Tell me what work you are most proud of. And the reason I ask that is because it helps me understand their taste and their judgment, what motivates them, what work they view as good and as a good outcome. It also helps me understand a little bit about what they like to do and where their gravity pulls them.

**Lenny** (01:26:28):
Is there a favorite product you recently discovered, be it an app or physical thing? Anything?

**Katie Dill** (01:26:32):
Yeah. As a parent, you should definitely know the Toniebox.

**Lenny** (01:26:37):
Ooh, I don't don't know this. The Toniebox?

**Katie Dill** (01:26:40):
It's so good. The Toniebox. I should have brought it over, too. So it's like a squishy box, but it's a speaker. And your kids can control it. And the way they control it is these little figurines. This is also a brilliant product because you want to buy all these figurines. But the little figurines, it could be like Belle from Beauty and the Beast or Elsa from Frozen, and they place the figurine on top and that activates the stories that the thing reads to you or the songs that it plays for you. You can record your own voice so that you're telling stories to your child. And they control it all by themselves and they can drop it on the floor and it's all good. But the Toniebox, pretty awesome.

**Lenny** (01:27:20):
I just texted my wife to check this out so I don't forget. Amazing. Great. Very handy and timely. Do you have a favorite life motto that you'd like to share, come back to, find meaningful?

**Katie Dill** (01:27:31):
I don't say this out loud, but I've had it as a Post-It in my jewelry box and that I see regularly. Tomorrow is today. And what I mean by that is that so often I will in my head be like, "I'll do that tomorrow. I'll eat better tomorrow. I'll think about that vision tomorrow. I'll communicate better expectations tomorrow." And it's like those joke signs that "Free beer tomorrow." Because very easily, tomorrow just always moves on. And I needed to remind myself that it's actually, it is now today. Tomorrow is now today.

**Lenny** (01:28:14):
I love that one. I feel like I need to take all these mottoes, which are amazing. I love this question that I just invented. And just put them all on my wall here in this office.

**Katie Dill** (01:28:22):
Yes, that's a great idea. You should make a book. Book of Lenny Mottoes.

**Lenny** (01:28:26):
Oh, man. The Tribe of Mentors version of Lenny's podcast.

**Katie Dill** (01:28:29):
That's awesome.

**Lenny** (01:28:30):
Is there a lesson that your mom or dad taught you that has really stuck with you, especially as a newish parent?

**Katie Dill** (01:28:39):
I think about this a lot. I am a mom of twin girls, and I feel so lucky that my parents raised me to see that accomplishment is based on merit and hard work. They never made me feel like because I was small and that I was not as strong as somebody, whatever it might be, that I wasn't able. My dad had me chopping wood and mixing cement as a young kid, and that certainly led me in one part to be a designer, but also to be able to pursue leadership. Even though sometimes I'm comfortable willing to be in the room where I am vastly outnumbered by people that don't look like me or just not letting that hold me back.

And actually, I thought about that the other day because I was riding in a Lyft to the airport. This was also at 4:00 AM, so it was a really hard time to be in a Lyft to gone to the airport. The driver was telling me about his kids, and actually he had twins. It was one boy and one girl, and so we were talking about twins. He's like, "Yeah, yeah, yeah, my girl, she's my princess. My son doesn't understand why I don't let her take out the garbage and why her job is to sweep and that's his job." He's like, "I'm not going to let her take out the garbage." I was sitting in the back of the car wondering, "Should I tell him, you're screwing it up?"

**Katie Dill** (01:30:07):
Just because she's a female doesn't mean that she's not able to do the jobs, even the hard ones and even the bad ones taking off the trash. I really do think that I'm so fortunate that that was never the way that my parents were looking at it. Now, today, I feel like that is very much a part of a little bit of my chutzpah and willingness to step out there because I hadn't been held back from those hard jobs earlier.

**Lenny** (01:30:39):
Final question. You mentioned that you fly planes, and this is actually related to my last question. I guess one that I was going to ask if that's true, you mentioned it is true. Is there a lesson that you've taken from learning to fly and flying that you've brought into product, leadership, design? Anything come to mind?

**Katie Dill** (01:30:57):
First of all, learning to fly has been such an amazing experience because there haven't been many things in my adult life where you feel like yourself going from knowing nothing about something and being able to do something, and what an incredible journey that is. Whether it's learning a language or whatever, that is awesome and highly recommended. But one of the key things that has definitely sat with me from the experience of learning how to fly that I definitely thought about how to bring it into my work is that when I was getting to the stage of being able to do things myself... My instructor is sitting there next to me and usually is right there at the controls with me, so if something goes wrong when I'm flying, he's right there.

**Katie Dill** (01:31:46):
I remember one of the first times when I was learning how to land where he moved his seat back. A lot. And so he was now out of touch with the controls. He could jump there if he needed to, but he really pulled back. And it was such an incredible visceral experience. I was like, "He trusts me. Right now, he is showing his faith in me to take this and take this challenge on." And I think about that all the time. It's just like, "How can I show my team, people I work with, my support and trust in them to take that challenge on?" I can't always move my seat back, but what might be the way? And so that's been a pretty great example of something I want to pull forward.

**Lenny** (01:32:35):
That is an awesome metaphor. I feel like this whole episode is just full of beautiful metaphors. Also, just full of beauty. Katie, thank you so much for being here. Two final questions. Where can folks find online if they want to reach out and maybe ask some questions? And how can listeners be useful to you?

**Katie Dill** (01:32:50):
First off, please do find me online because, as I talked about, we are in the pursuit of trying to build excellent things and it's always a work in progress, and so I'm always interested to learn how others do it and see how we can improve our own methods. I am Lil_Dill on Twitter, and then I think that name was taken on Threads, so I'm Lil_Dilly, with a Y, on Threads, and then I'm on LinkedIn and find me there. We're hiring, so definitely reach out at our job board, too. Stripe.com/jobs. Definitely check us out. We definitely would love to hear from you.

**Lenny** (01:33:30):
Katie. Again, thank you so much for being here.

**Katie Dill** (01:33:33):
Thank you, Lenny.

**Lenny** (01:33:34):
Bye, everyone.

**Lenny** (01:33:37):
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.

---

## [6/24] Scaling Duolingo, embracing failure, and insight into Latin America’s tech scene | Gina Gotthilf (Latitud, Duolingo)

**Gina Gotthilf** (00:00:00):
Communication is constantly underrated.

**Gina Gotthilf** (00:00:02):
And communication isn't about being able to convey a message, it's about being able to convey a message in a way that the listener receives it, and understands it, and remembers it. And that's really hard to do.

**Gina Gotthilf** (00:00:13):
One of the things I've helped employ at Duolingo that I think is still there today, it's definitely not just me, it was an amazing team, is a unique voice. And what that means is not just another language learning app where we give you instructions and you follow directions.

**Gina Gotthilf** (00:00:25):
There is always a quirk, like it's unexpected. The way we talk to you is a little bit funny. It doesn't take ourselves too, seriously and it makes the person receiving this message feel something. Again, it's about how you make people feel. And you feel like either you giggle, or you're like, wait what? They just did what? And using that to your benefit.

**Lenny** (00:00:48):
Today my guest is Gina Gotthilf. Gina is most known for leading growth and marketing at Duolingo, helping take them from 3 million to over 200 million users, primarily through organic and non-paid growth channels, which we explore in depth.

**Lenny** (00:01:01):
She also worked on the Mike Bloomberg presidential campaign, where she oversaw a historic digital ad budget, and she shares learnings from that experience. She also led growth in community for Tumblr in Latin America.

**Lenny** (00:01:12):
Currently, she's the co-founder and COO of Latitude, which is a company dedicated to helping build the next generation of iconic tech startups in Latin America. In our wide-ranging conversation, Gina shares a ton of new insights and tactics on how Duolingo grew early on, how they grow today, and most interestingly, what they did to become one of the very rare successful consumer subscription businesses.

**Lenny** (00:01:35):
We also talk about how every life and career has an A-side and A B-side. Also, why PR and brand are way underappreciated by most startups. She shares a bunch of stories of failed experiments, and also some of her biggest wins. Also, why Latin America is so interesting right now as a hub for startups and for innovation. Also, there's a bit of philosophy sprinkled in, and a bunch of real talk.

**Gina Gotthilf** (00:04:39):
Lenny, I'm so excited to be here. It's been awesome to see how you've built this, and just how far it's gone. Thank you for inviting me.

**Lenny** (00:04:47):
Really appreciate that. I'm more excited to have you on the podcast. And I know you just came off hosting a massive event somewhere in Latin America, I think you had 5,000-something people. You had Ben Horowitz keynoting.

**Lenny** (00:04:59):
And I wanted to start with the talk you gave. I think you described it as people having this A-side and B-side to their life, kind of like a record as an A-side and B-side. So could you just share what it was this conference? And then two, kind of just briefly share this concept as much as you can

**Gina Gotthilf** (00:05:17):
For sure, and thanks for that Lenny.

**Gina Gotthilf** (00:05:18):
Look, I think for those of us here in the US, I became an American last year. I love the US. I've been here for 19 years. It's hard to imagine just how much is going on south of the border. There's actually 660 million people living across Latin America, and it's an economy of $6 trillion.

**Gina Gotthilf** (00:05:36):
And Brazil is a huge market, just in terms of sheer size, over 200 million people. And also in terms of where the ecosystem is. I am Brazilian, so I am Latin American, even though sometimes Brazilians are not sure if they are Latin American because we speak Portuguese.

**Gina Gotthilf** (00:05:52):
And so the future of the region really matters to me. And helping people get the opportunities that I've had, in terms of access to information and resources that could help them build scalable, very successful startups, can really change the economy across the board. I believe in that much more than I believe in government, and whether we're going to vote this guy or that guy next.

**Gina Gotthilf** (00:06:14):
And so that's sort of the impetus for the company. The conference was a conference put together by my company. I'm a co-founder. We're three, Brian, Yuri, and I. We put this conference together to bring together the top entrepreneurs, operators and investors across Latin America, but also people who are interested in investing in the region, of which there are more and more here in the US and abroad.

**Gina Gotthilf** (00:06:34):
More than 5,000 people came. We had over 70 speakers. It was across two days. We had amazing people like Ben Horowitz, who never gave a talk, or did a fireside specifically for and about Latin America and the opportunity. But we also had incredible founders who you, in terms of US operators, may not be as familiar with.

**Gina Gotthilf** (00:06:54):
But if you've ever heard of Rappi, it's a really important delivery company in Latin America. So the founder of Rappi flew down from Miami for that. And then we had VCs from a lot of the top names that you've heard here in the region as well. And then a lot of unicorns. We've had a lot of unicorns in the region.

**Gina Gotthilf** (00:07:09):
So they were all there. And the idea was to share learnings along the way, successes and failures, so that people can skip by not making the same mistakes as others. And I was asked to open both days. And then the first day, the opening talk that I ended up giving was this concept that I really like, which is the A-side and the B-side of a story. Which is that if you are old like me, and maybe you Lenny, I think we're similar age, you remember what a CD or what a mixtape was like. And we had the A and the B-side.

**Gina Gotthilf** (00:07:41):
We are very encouraged in our lives, especially professionally, to talk about our A-sides all the time. Because that's what impresses people, that's what opens doors, that's what allows us to keep growing and it's so important. It means that a lot of what you hear in podcasts and on stage ends up being the Instagramable version of someone, or a company, or a country's trajectory. It's just the highlights.

**Gina Gotthilf** (00:08:06):
And when I talk about my A-side, it's very impressive. I did things like we'll talk about, I met President Obama, I worked on the Mike Bloomberg presidential campaign. I helped Duolingo scale from three to 200 million users. I worked with Tumblr, helping them scale in Latin America. Andreessen Horowitz invested in my company, et cetera.

**Gina Gotthilf** (00:08:22):
But between all of those highlights, there were so many B-moments that get shoved under the rug because it's just easier for me and it's more impressive for others. But I really like to highlight those. Because I think that most of us have a lot of B-moments every day, every week, every month and every period of our lives. And it's easy to think that things aren't just not going to work out for us because we're in one of those B-moments, if we don't recognize them as moments.

**Gina Gotthilf** (00:08:47):
And the story I ended up telling was how, much I have these A and B-sides that I don't talk about my B-side so much. Latin America also has A and B-sides. Because it's really easy to focus on, it's dangerous, we're behind the governments are a mess. There's financial insecurity.

**Gina Gotthilf** (00:09:04):
But there's a lot of A side in there, and a lot of the A-side is the opportunity we have in terms of tech. Because in terms of percentage of GDP that tech occupies compared to other markets, it's very promising. We're at one third of India, one 10th of China, one 30th of the United States. Meaning that tech companies can grow a lot so that they occupy that space in terms of the GDP, which is believable. So that was the concept of the talk and the reason for this conference.

**Lenny** (00:09:34):
I love this concept. We're going to talk, as you expected about a lot of your A-side stuff. Is there any example of a B-side story of your life that would be interesting to share?

**Gina Gotthilf** (00:09:44):
Look, I think those are the most interesting, because they're funny or ridiculous. But I'll just say that I had a lot of B-sides and I still do. For example, I had no idea what I wanted to do. I actually, I thought I wanted to be an actress. I either wanted to be that person in SeaWorld who goes like this with a dolphin, this was before SeaWorld was canceled. Or I wanted to be an actress. But then my parents convinced me that I was probably not going to succeed because the odds weren't in my favor.

**Gina Gotthilf** (00:10:13):
I applied to schools. I didn't get into any Ivy League, I didn't get into any of the top schools I wanted to go to. When I got to college, I actually ended up dropping out because I got so depressed, incredibly depressed. Couldn't get out of bed, depressed.

**Gina Gotthilf** (00:10:26):
Ironically, I dropped out of Reed College, which is the same college that Steve Jobs dropped out of. So I was just destined for greatness. I knew it at that moment.

**Lenny** (00:10:35):
It all makes sense looking backwards, as he said.

**Gina Gotthilf** (00:10:37):
Totally. I was dropping out, being like, yes, this is exactly the path. No, I was miserable. I thought there was no path forward.

**Gina Gotthilf** (00:10:44):
And when I finally went back and graduated, the college counselor looked at my curriculum and said, "What have you even done with your life? There's nothing to show for." And it was shocking. Because I was always the overachiever who wanted to do the maximum curriculum, and ace all of my classes, and do whatever. I did three diplomas in high school, the international, the American, the Brazilian. My one learning there that has stuck with me, and I think can work for other people too, is that it's not just about doing things that actually matter, and learning. It's about being able to tell the story, and it's about understanding what other people perceive as valuable.

**Gina Gotthilf** (00:11:22):
I'm not talking about net value. But I'm talking about, if you want to grow in the world, it's understanding that psychology of how humans react to what you're showing them. So that was one lesson.

**Gina Gotthilf** (00:11:32):
But then I went on to, I applied to a hundred companies. I didn't hear back from most of them. I finally got an internship at kind of like a tier B-slash-C digital marketing agency in New York City, because I wanted to live in New York so badly. And they forgot to apply for my visa on time, so I lost my visa and had to go back to Brazil.

**Gina Gotthilf** (00:11:53):
And then I ended up leaving that organization to go work for another one. And I won't even go into the details of the shadiness of that company that I worked for, but then they ended up laying me off. So I lost my visa again, had to go back home. Found another opportunity, got fired that time. So there was just a lot of rockiness in my start that I don't think you would imagine when you see someone up on stage leading a conference for 5,000 people. That, I think, is important.

**Gina Gotthilf** (00:12:19):
And even when I started working for Tumblr, I was like, this is it. I made it. This is a really interesting company. This is going to work out. That was super rocky because it was an early stage startup. So for example, they couldn't figure out how to wire money to Brazil. So I was not paid for six months. And at one point me and my colleagues were trying to get money out of the teller to pay contractors, because we had no money to pay them. And we borrowed money from people. And finally they also laid me off because they decided to sell to Yahoo.

**Gina Gotthilf** (00:12:47):
And then I had to figure out, what am I going to do? No one's going to hire me. I've been fired and laid off so many times. This is all before I started an agency to help US-based tech companies and startups grow in Latin America, because I figured I was in this really great place to make that happen.

**Gina Gotthilf** (00:13:02):
And it eventually worked for, well-known companies such as Duolingo. At the time, they weren't well known. They were a tiny little startup. They didn't have an Android app. And that's how I started working with Duolingo. Because their head of marketing connected with someone they had worked with at Flickr and said, "I noticed Tumblr grew a lot in Brazil last year. Can you recommend a company or an agency to help?" And they said, this girl. And I was 26.

**Gina Gotthilf** (00:13:26):
And so that's how they connected me with Duolingo, and I started helping them grow in Brazil as a consultant. They were like, this is great. Can you help us grow in Chile, Argentina? And I was like, yes.

**Gina Gotthilf** (00:13:35):
They were like, how about Mexico? And I was like, yes. Did I know anything about these places, Lenny? Did I know people there? No, but you can figure it out.

**Gina Gotthilf** (00:13:44):
And then they ended up asking me to come on full-time, do that across the world. In Japan, China, Korea, Turkey, Spain, France, et cetera. And then to own growth, which ended up meaning communications, social media, government partnerships, anything to grow.

**Gina Gotthilf** (00:13:58):
And then eventually became an AB testing growth engine with engineers, and PMs, and designers of which I knew nothing about. And even after that, I left Duolingo five years later, didn't know what to do with my life. You'd think, oh wow, you have it figured out now. You left Duolingo, you have the world in front of you.

**Gina Gotthilf** (00:14:18):
And I'm like, maybe I can finally go work for nonprofits, which is what I actually wanted to do in the first place. Tried my hand at that, had a couple of experiences before going to work for the Mike Bloomberg campaign.

**Gina Gotthilf** (00:14:29):
Working for the Mike Bloomberg campaign is impressive, but you know what? Mike Bloomberg didn't win. He's not the president. So that was not a successful campaign, if you really look at it. And yeah, latitude seems like it's a really promising path. But there's A days and B days.

**Gina Gotthilf** (00:14:46):
So it's just a lot of that, and just staying resilient, and believing in yourself, and getting back on the horse when you fall on your face.

**Lenny** (00:14:53):
Amazing. That's such an important message. I think one of the threads from what you're describing, something that I think about a lot, is people kind of underestimate how long their career is. There's just so much time to do stuff, and for things to start to work.

**Lenny** (00:15:05):
This is going to sound really fancy, but I think Marcus Aurelius has this quote about how our life is actually very long, we just use it really badly. And we just waste a lot of our time.

**Gina Gotthilf** (00:15:14):
Wow. I think you're so right, Lenny and I love that. Because people are going around being like, life is short, life is short. But that's so true. We waste so much time. But also I think we don't recognize how much opportunity we have in front of us. And as a 26-year-old, I definitely thought my career was over. I was like, I blew it. And looking back, it's funny.

**Lenny** (00:15:33):
Yeah, I know exactly what you mean. I spent nine years at my first job, at a random company in San Diego in a startup. And I was like, what am I doing here so long? And it turned out that was really useful for the thing I did next. And then eventually, wow, things started to really take off.

**Lenny** (00:15:48):
So I think that's a really good lesson for people, just for a long time. This is my fourth career. I've switched careers many times. I was an engineer, then I was a founder, then I was a product manager. And now I'm whatever this is, whatever you call this thing.

**Gina Gotthilf** (00:16:01):
Okay, cool.

**Lenny** (00:16:03):
Yeah.

**Gina Gotthilf** (00:16:03):
I guess me too. I was an operator. I was a consultant. Well, I was an employee, I was a consultant. Then I was an operator, which is a fancy way to say employee at a startup. And then, now I'm a founder and a VC. And an angel, and whatever this is.

**Lenny** (00:16:20):
Awesome, awesome. So I think that's a really important takeaway. Just, there's a lot of time to do stuff. And don't stress if things aren't moving as fast as you want.

**Lenny** (00:16:28):
I want to try to bounce around between A side and B side in this conversation, that'd be a cool framework. And so we're going to definitely talk about Duolingo, and a little bit more about Latin America.

**Lenny** (00:16:36):
I wanted to touch on this Mike Bloomberg story. So what I understand from your experience there is, you deployed a historic amount of money into paid ads as a part of that campaign. I am just curious what you learned from running paid ads at that scale for a campaign or just broadly.

**Gina Gotthilf** (00:16:53):
So we deployed historic amounts of money in the campaign. It wasn't me, Gina, personally.

**Lenny** (00:17:02):
It wasn't just you spending that money, yeah.

**Gina Gotthilf** (00:17:03):
I think that's important to share. So my Bloomberg presidential campaign was spending roughly a million dollars a day. Which is crazy. And you can do a lot with a million dollars a day.

**Lenny** (00:17:11):
It's good to be Google.

**Gina Gotthilf** (00:17:12):
It's good to be Google. But yes, it's good to be Facebook. I'll share what I think is most useful here, and also what my experience ended up being.

**Gina Gotthilf** (00:17:22):
Which is, they brought together a lot of great talent from across the US, especially in terms of tech. This is an organization called Hawk Fish, that they started working with the Mike Bloomberg. Basically, he created it. I don't know, it was embedded in there.

**Gina Gotthilf** (00:17:37):
There were a lot of us who had large eagles, and had been sharks in our previous organizations, who had to figure out how to come together and work and in a very short amount of time. That was a very interesting experience, because it's hard to do that. It's not just important to be great and smart, but it's also important to understand how to most effectively deploy your resources and talent across an organization.

**Gina Gotthilf** (00:18:02):
And that sort of takes a little bit of time to happen. And for a presidential campaign, I find that very hard to do, from that one experience. That said, it also meant that when you're looking at the paid ads, and the fact that we were deploying this massive amount of money, there were a lot of cooks in the kitchen when it came to figuring out exactly what we were going to do with those ads.

**Gina Gotthilf** (00:18:23):
And how we were going to target them, and what are the campaigns we're going to run, and what's the copy, and what's the design? And after maybe a few days there, I realized that my best bet in terms of actually adding value was not to be another cook in the kitchen trying to figure that out, but to move into the next step of the journey, which nobody was paying attention to.

**Gina Gotthilf** (00:18:45):
Which is, once you click on an ad, you land somewhere. And then whatever happens there is super important. Because if people then take the action you want them to take on that landing page, or don't, is definitive. But everyone spends all of their effort and money on the ads. And I think that this is true of almost everything. We forget to think about the step-by-step in growth, and what that experience looks like. And even just the second or third screen in an experience are as, if not more, important than the first one. Because that's where your "leaky buckets" can happen.

**Gina Gotthilf** (00:19:17):
So if you're able to 2X the effectiveness of a landing page, you are able to actually, in a compounded way, increase the effectiveness of that first ad. So I spent a lot of time going rogue and figuring out how to make landing pages. Because the designers and the copywriters were all allocated to the actual ad.

**Gina Gotthilf** (00:19:36):
So I was just there being like, I'm going to do copywriting and design, and figure out how we can increase these conversion rates. And the cool thing about that level of dollar deployment is that you're able to reach statistical significance very quickly.

**Gina Gotthilf** (00:19:50):
Whereas in a company like Duolingo, where you already have a lot of users and you can reach statistical significance on an AB test within two weeks, at the Mike Bloomberg presidential campaign on a landing page, we could see that three times a day, so four times a day.

**Gina Gotthilf** (00:20:04):
So I would be able to do something and be like, oh wow, this has a 3% conversion rate. And then get approval for a new version and deploy it and then be like, okay, we're at 6% now. And then actually improve. There was one day where I brought one page from three to 12% conversion rate with statistical significance. So that's, I think, the biggest benefit of having those dollar amounts.

**Gina Gotthilf** (00:20:25):
I think the drawback, and that's the same for startups that have a lot of money to spend, is you start going a little wild in terms of like, oh, the world's our oyster. We can do whatever we want. And you lose sight a little bit about effectiveness, which is where growth is so magical.

**Lenny** (00:20:40):
What was that change on the landing page you did that increased conversion so much, do you remember?

**Gina Gotthilf** (00:20:44):
None of this is going to blow anyone's minds, I think, because it's very best practices. But it's easy to overlook when you're so focused on so many different steps of a process. The first one is making it mobile-optimized.

**Gina Gotthilf** (00:20:56):
People who are working, are working on their computers, on desktop computers, even today. We forget that most people are looking at pages on our phones. And that has been the case for a while, and I think it's just increasing. So you need to make sure that that experience of looking at something on your phone, whatever your phone is, is great.

**Gina Gotthilf** (00:21:11):
And what that means is from a landing page perspective, super simple. First, the core copy, the message and button need to be above the fold. Or, if you're not going to keep the button above the fold, which I still recommend, but if you're not going to do that for whatever reason, then you need to have a very clear indicator that there's something to scroll towards on your page.

**Gina Gotthilf** (00:21:35):
The second thing, applies to both desktop and mobile, is people skim. And copywriters don't like to believe that, much like journalists don't like to believe that people just read headlines. It's just how it is. People are busy and lazy, myself included.

**Gina Gotthilf** (00:21:47):
So you can write all of this beautiful messaging that you've thought through, but if people are not going to read it, it doesn't matter. So you have to approach a landing page with that perspective in as much as possible.

**Gina Gotthilf** (00:21:58):
And so for me, what makes something particularly skimmable is first restricting copy a lot. And even copy that seems short is probably not short enough. Second, so people normally like to have a title, some sort of subtitle, and then an image and a button. Those are kind of core pieces of some sort of landing page experience. Having the title and the button speak to each other is really cool. Because if people only read the title and the button, they got it.

**Gina Gotthilf** (00:22:24):
It can't be like, "Wouldn't you like the next President of the United States to blah blah blah?" And then a whole explanation of what. And then the button is like, I don't know, apply. Whatever, right? It's like, apply for what? Now I have to go read the thing and I didn't get it.

**Gina Gotthilf** (00:22:36):
So just keeping those two things super speaking to each other. And then of course, making sure that that landing page speaks to the ad experience. And that's something that I think people do pay some attention to.

**Gina Gotthilf** (00:22:47):
Finally, there's an element of emotion to it. Which I didn't get super deep in, but just very basic. My job was to create a landing page that made people ... So it was actually, funnily enough, before Covid hit the US. And then Covid hit the US. Half the people in the campaign got Covid on our sad goodbye Mike Bloomberg party. And I had already bounced, and I left New York. I was scared. I was like, the city's going to be a Petri dish.

**Gina Gotthilf** (00:23:13):
And I spent months trying to convince the whole United States, as much as I could, that Covid was going to hit the United States. And there were going to be a lot of deaths unless we had a different president. And so I, of course, convinced myself very effectively that we were in grave danger.

**Gina Gotthilf** (00:23:28):
And so to do that, we had images in the background of different sorts, Mike Bloomberg and whatever. But fear really inspires people, and that's just a truth about human psychology. Especially when it comes to a presidential campaign.

**Gina Gotthilf** (00:23:43):
So having dark colors like black, having Trump in sort of a black scenario, kind of looking down and looking a little menacing is more powerful than having Trump looking ridiculous, for example. In the context of, we need to take action, otherwise there will be deaths because of this.

**Gina Gotthilf** (00:24:02):
So it depends on the concept, but don't underplay the importance of understanding how people are going to feel when they see something, and whether that's going to lead them to take action. Keeping it super, super simple.

**Gina Gotthilf** (00:24:13):
Because also the other thing I see is a lot of images. It is like, no, the image can't distract from your core message. It has to be a background thing that aids in the digestion of that message.

**Lenny** (00:24:22):
I feel like all these startups are going to start adding Trump, menacing Trump to their landing pages because they worked for you guys.

**Gina Gotthilf** (00:24:31):
Well, they're going to alienate 50% of the American population.

**Lenny** (00:24:34):
True. There's a few other things I wanted to dig into. One is obviously Duolingo, so let's just spend some time here.

**Lenny** (00:24:40):
So it's really interesting. With my newsletter, I've written over 200 posts. The number one, most popular post of all time, did not expect this, was about the story of Duolingo. And the way that the team reignited growth after it started to plateau.

**Lenny** (00:24:55):
This was by Jorge Mazal.

**Gina Gotthilf** (00:24:55):
Mazal.

**Lenny** (00:24:56):
Mazal, okay, cool.

**Gina Gotthilf** (00:24:59):
Jorge Mazal, yes.

**Lenny** (00:25:00):
Okay, there's the right pronunciation. And so...

**Lenny** (00:25:01):
There's the right pronunciation. And so clearly, there's a lot of interest in the Duolingo story. And you were there before Jorge. You were there really early. I think you were there from 3 million users to 200 million. That's what I hear you describe it as.

**Gina Gotthilf** (00:25:16):
That's right. That's my claim to fame.

**Lenny** (00:25:18):
Great. That's a large growth trajectory. So one thing I wanted to ask broadly is it feels like B to C subscription apps never work. They never last. There's so few success stories of consumer subscription apps. There's Duolingo there, Calm maybe, but I don't know, it feels like it's slowing down, Headspace, Grammarly. And there's a few that are okay, but most die. I guess I'm mostly curious, what is it that you think Duolingo did right to make it basically and continue to thrive, even these days?

**Gina Gotthilf** (00:25:56):
Very few people really believed that we were going to make it, not surprisingly. Even though we had this amazing team, et cetera, now it looks almost obvious, it's like B to C language learning just seems so niche. And plus education, there's no money in education. It's been stuck for so long. And what I kept hearing, "You guys, did you hear about Rosetta Stone? This solution already exists." So I think that there are a couple of things that really made Duolingo's success, which are very hard to replicate.

**Gina Gotthilf** (00:26:25):
Number one, an obsession for the mission. That sounds cliche. I think a lot of founders and startup people like to talk about the mission, and I get it, and I think it's real. But I really mean it, because this obsession for solving a problem for hundreds of millions of people, and the problem wasn't just a vitamin. It was a problem in the sense that if you don't know English in today's world, your opportunities to get out of your socioeconomic zone are very diminished. More specifically, you can double or triple your income potential by learning English in a developing market like Latin America. And there are lots of those around the world. That belief that education should be free and that people should have access to that opportunity, not just in developing countries, but of course, also in the US really drove the organization in a way that drove how we built our marketing, how we spoke to our users, how we designed the experience, how we put barriers in front of taking decisions that would actually impact that mission. It helped our users rally around the business. It helped us hire the best people even if we were based in Pittsburgh and couldn't necessarily pay the Google dollars. So it's really hard to measure the importance of just really being obsessed about that mission. But I speak to a lot of education founders, ed tech founders, and I am very biased probably because of this experience. I will say that I had one of those, what's it called, the experiment where they looked at all of the shots that some plane got when it came back from war and then started fixing the plane. There's a name for this. And then they realized that-

**Lenny** (00:28:04):
I forget the name, but it's the pictures. The pictures are famous with the red dots.

**Gina Gotthilf** (00:28:06):
You shouldn't fix those spots because if they got back, they survived, they were missing the plane that fell. So I got to ride in a plane that survived. So I have, oh, it's called survivor bias, maybe?

**Lenny** (00:28:18):
That sounds right.

**Gina Gotthilf** (00:28:19):
I have survivor bias, but I really believe in this-

**Lenny** (00:28:19):
Survivorship bias.

**Gina Gotthilf** (00:28:22):
Survivorship bias. So if I speak to a founder and I can tell that they're building an ed tech because they believe that they will be able to make money from it, there's nothing wrong with making money, nothing. I want to make money. I think it's a capitalist world that we live in, and it's fine, but just that drive is what brings people to you, and it's what leads you to make long-term thinking decisions that really end up mattering. And it's what allowed us in many ways to grow organically versus with paid ads, which I think is crucial for an early stage tech startup. It's not the only thing, but I think it's one of them that's super important.

**Lenny** (00:28:59):
Just to follow that thread, that's something that I actually found. I wrote a post about this looking into of the ones that made it, what did they do consistently across them all? And one is just stay very lean and scrappy for a long time. Because to your point, it's so hard to build a big business, and you can't afford, like you said, the best people, you can't pay them as much as everyone else. So essentially it's just a long time of just being very lean and scrappy. That was the most consistent pattern across all these B to C subscription apps.

**Gina Gotthilf** (00:29:27):
Agree. And that's number two. When I was hired by Duolingo as a consultant and as an employee, my mandate was make Duolingo grow. Here is no budget. I had no budget. And people are shocked. They're like, "Oh, but when did you turn on the ads?" We're like, "We just didn't." Because I know this is between you and me, Lenny, I actually am quite bad at paid ads. It's just not a muscle that I ever developed.

**Lenny** (00:29:48):
We won't tell anyone.

**Gina Gotthilf** (00:29:49):
I'm only good at ... huh?

**Lenny** (00:29:51):
We won't tell anyone.

**Gina Gotthilf** (00:29:54):
Please keep this a secret. I think I could develop that muscle if one day I need it, but I'm particularly good at thinking about organic growth because I've had to, because that's what Tumblr and Duolingo required of me. And the logic behind it was, listen, with Duolingo, we started monetizing the platform very late, and it was a luxury because we had so much venture capital money to sustain us for a while. But we had some bets that we made in the early days that we thought were going to help really sustain the company, like translations that didn't end up panning out. And then the Duolingo English test that we started developing really early with Burr Settles, an amazing guy who basically was developing this test, we realized that was going to be super long-term. We didn't start really charging for subscriptions or having ads until, I don't know exactly, but something like year three.

**Gina Gotthilf** (00:30:47):
So we didn't have an LTV, which meant that having a CAC made no sense. So that's number one. You need that CAC-to-LTV ratio that everyone talks about. That's an important thing. But it's more than that. First, I think there's the CAC-to-LTV ratio thing. The second thing is that even if you have a low CAC, I was just talking to an entrepreneur this morning, he was like, "Oh, we were able to hit a 10-cent CAC." And I'm like, "Yeah, but that grows." As you start targeting more people, the low hanging fruit dry out, and you end up having to pay more money. And then once you have those users coming in because of those paid ads, you can't cut it off because you still need that growth, because you're trying to prove to your investors that you're growing, or you need those users in order to continue AB testing or whatever. Then you become completely dependent, and it's really hard to turn it off. So it's almost like an addiction, that as much as you're able to limit in the beginning, the better.

**Gina Gotthilf** (00:31:38):
And the third thing is that I really believe that ... I don't believe. I think we all know at this point that the most important thing for the growth of anything tech, maybe in general, is retention. Of course, you need acquisition, but retention is important. And I simplify it a little bit because retention, I don't think of it in terms of like, wow, I must retain this user. It's like, is this thing valuable or not? That's what retention is to me. Either it's actually providing real value or it's not. If it's providing real value, people stick around. It's as simple as that.

**Gina Gotthilf** (00:32:11):
And if you don't force yourself to pay attention to retention and finding the users to whom this is the most useful really early on, you risk convincing yourself of metrics and glossing over some of this other important stuff, which means that even if you succeed at acquisition, you're just not going to succeed long-term because those users fall through. And you won't really understand why because you were building retention based on acquired users that weren't the ones who weren't necessarily going to ... And I don't mean to say that I don't believe in paid at all. I think paid has its value, I think especially when it comes to testing. Sometimes you don't have as many users as you need to run statistically significant tests. But with paid users you could, or you could just use paid ads to understand messaging and images and even value prop. On a landing page, that's super valuable. Or you find an amazing niche, and you know exactly who your target users are, and you figure out a way that makes sense. But then again, I would argue that if you found your perfect user and where they are, you should go figure out a way to get them organically, because if you can really provide them value, they would come and they would stay.

**Lenny** (00:33:16):
So far I've heard be really focused around a mission and be very clear about what you're trying to achieve. Two is just very low spend, essentially don't expect to grow this into venture scale business. Focus on a sustainable profitable business for as long as you can and constrain your spend basically. And then third is this focus on retention, which I think is a really important point. And this is true for any app you're building, but I think especially true for consumer business where people are just like, "Nah, this is cool. Okay, what's next? Okay, let's check out Snapchat."

**Gina Gotthilf** (00:33:47):
Totally. And I was going to have a different three, but I think it's related, so maybe we can add it as three B or four.

**Lenny** (00:33:54):
Three B. Let's do it.

**Gina Gotthilf** (00:33:56):
An obsession for the product. Again, sounds obvious but isn't. When we look back to products that existed before the internet, before the app store, you built this thing, you made it, and then you tried to convince people to buy it. That was it. So look, I made a chair, this is a beautiful chair. And then you spend all this money trying to get it out into the world, and people buy the chair. And you hire all these salespeople, and you hire an amazing marketing agency, and you try to sell the chair. It's no longer at all that because products are constantly in motion and evolving. And unless you're able to own that data and understand what it can tell you, you're never going to win.

**Gina Gotthilf** (00:34:33):
So I hear a lot of people come to me and say, "Gina, Gina, we built Duolingo for this." And I'm like, "Okay, cool." And then they show it to me, and it looks exactly like Duolingo. And I'm like, "Okay, cool." And then I'm like, "How did you get to this design?" They're like, "Oh yeah, we used Duolingo." So I'm like, "Great." But then as I started talking to them, I understand they don't have the engineers and PMs there looking at Mixpanel or whatever it is that they're using every day, understanding how every single change is leading to other changes that enables them to ask the questions and come up with the hypotheses that allow them to get to the next step. So it's almost like they just copy-pasted something.

**Gina Gotthilf** (00:35:09):
You know how I think of that? It's like those students who are able to copy the best student's answer on the math test, and then they get frustrated that they didn't get an A because the work wasn't there, but they copied the answer. But if you don't know how to do the work, you get another math question and you're not going to get it right. And so that I think still misses, and I would venture to say most early stage tech startups out there. It's certainly the case in Latin America, where people think they can outsource the code or outsource the growth, and they're not just looking like hawks at the quality of the data and statistical significance and running hypotheses and questioning them. And that rigor is a culture at Duolingo that was there from day one before me and continues to be there today.

**Lenny** (00:35:58):
Amazing. So I think if a listener is trying to build a subscription consumer app, I would suggest just rewind and listen to that again. I think there's so much gold there. And in my experience, I get a lot of decks because I do a bunch of angel investing. I just discount consumer subscription apps because they never work, except when they do once in a while. And so my advice is if you're building something in this space, just listen to exactly what you just said. There's a lot of important stuff, and actually internalize it. Stay really lean, stay really focused, obsessed with retention, obsessed with making sure the product is solving the problem you're going after.

**Gina Gotthilf** (00:36:33):
I'm so glad that you agree, Lenny. I really admire you. So it makes me very happy.

**Lenny** (00:36:37):
Well, we're both happy then. I wanted to switch to the B side, and I'm curious, what's a mess-up or a big mistake maybe that you made or your team made that was like, "Oh, wow, that was a big waste of time?"

**Gina Gotthilf** (00:36:50):
Look, a lot of things didn't work out. More than 50% of our AB tests didn't work out. We made bets that didn't make sense. I will say, though, that in the spirit of A and B sides, I, and think in general, we are really good at forgetting the B stuff. I talk so much about all the stuff that worked that it's hard to remember all of those moments that didn't actually work. And the thing that I tend to talk about, which is this mistake that we made as the growth team, is almost like one of those, when you get asked in an interview, "What's your biggest weakness?" And you're like, "I'm a perfectionist." It's one of those things that actually makes you sound good because it's the story about how my team really wanted to implement badges. We spent a lot of time playing all the games that were popular at the time, trying to understand how those gamification growth hacks that we could find in those apps would potentially overlay onto Duolingo and how we would do that.

**Gina Gotthilf** (00:37:48):
And badges was just pervasive in all of the top games. And so it seemed like a no-brainer. But since we ranked all of our experiments in terms of ROI and return being how many users we think we're going to get from this, DAUs and time investments, it never made sense to focus on this, because we thought that the time sink would be too high. So I actually ended up not letting the team run this experiment for six months so that we focus on lower hanging fruit. So that's a mistake on my end. Then we decided to run this experiment in the most lean way possible. We're like, "You know what? There's MVPs, there's minimum viable experiments. We don't have to run a whole badges thing. We can just do something more simple and actually see if that leads to growth in an interesting way, and then we'll know."

**Gina Gotthilf** (00:38:32):
And we ran this very simple experiment that was like, "You sign up and then you get a badge." And it was like this girl with a balloon, I don't know, she was happy or whatever. And of course, in retrospect, it led to no results, because no one is proud of signing up. It's not an exciting moment, and you don't even have badges to collect. You can't show it to other people. None of the things that make badges compelling were there, but we were like, "Well, we does it. It didn't work." And then we moved on. So we moved on for another, I don't know, eight months, and we didn't look back. And then when we did look back, first of all, at that point, we discovered that we hadn't been dogfooding, which also was embarrassing.

**Gina Gotthilf** (00:39:06):
Looking back, we hadn't been dogfooding in the growth team. We'd just come up with hypotheses. We were super careful about prioritizing them and making sure that we were doing the best possible write-ups and all these things. But the dogfooding piece just, I didn't come from a product background. I was a marketer, and I didn't really understand the term dogfooding. But when we had a conversation, we were like, "You know what? If we had just tested that, we would have all known that this was a super lame badge." And I was like, "Why are we not testing our experiments?" And so that became part of our practice.

**Gina Gotthilf** (00:39:38):
It's still relevant. I just had a conversation yesterday with engineers at Latitude. I haven't explained what we're building yet. Maybe we'll get there. But I was talking yesterday to engineers at Latitude, and they're awesome. In terms of product team, we have have the number eight employee at NewBank. You might have heard of NewBank, but it's this massive banking fin tech in Latin America, and we have people from other fin techs, and then we have this guy who's a lead PM at Twilio, and I was explaining to them why we should be dogfooding. And they were all like, "Oh yeah, we should dogfood." It's just easy to forget stuff like that.

**Gina Gotthilf** (00:40:10):
So that was a mistake that we could have probably gotten to the growth that we got to with badges much earlier on. And not only did we get to growth with badges, but it became this amazing treasure trove of opportunity. Because once you have badges and people want them, you can now ask people to do anything like go find friends, go buy things, whatever it is. And so we impacted almost all metrics across the company positively, including some we hadn't expected, but it's easy to talk about a mistake that ended up being a win. So that's why I compared it to the interview thing in the beginning. But we tried making Duolingo a social app really early on and failed. It was called Duels, DuoDuels. You could duel.

**Lenny** (00:40:55):
Very clever.

**Gina Gotthilf** (00:40:56):
I know. We were clever, but people didn't use it, and we didn't figure out why. We tried making a Duolingo for Schools platform. We couldn't get it to pick up. I went and launched Duolingo in China, and it got downloaded by a million people in the first day, and then the app got blocked because of the government, and then we couldn't figure out what to do. And then everyone rated the app one star because it didn't work, and so then we had a lot of trouble actually recovering from that. We launched Duolingo in India and didn't realize because we couldn't have unless we went there, which we finally did, that most people set their phone UI in India to English, because typing in Hindi is hard, and of course there's a lot of languages throughout India. And we were making it so that when you downloaded Duolingo, whatever UI your phone was set to, we offered not that language for you to learn. That was your base language.

**Gina Gotthilf** (00:41:48):
So we were telling people learn French, Spanish, German from English, and they were all trying to learn English, so they didn't find what they were looking for and they left. There were so many mistakes, and luckily I think we were able to bounce back from most of them in terms of how Duolingo is doing today.

**Lenny** (00:42:05):
Man, there's so much there. That was awesome. I like that you're like, "Oh, I don't remember any of my failures." And then like, "Oh, here's all these awesome stories." That was great. Just one thread there that comes up again and again in this podcast is the dogfooding piece, especially I think people don't trust their gut and personal instinct enough. I think a lot of times PMs are just like, "I need to do user research to understand what we should be doing." Versus just use the thing, see what feels wrong and keeps you from being excited and really trust that. I find that more and more. I don't know. When I read a thing and when I'm writing, I'm just like, "Oh, I don't like that. I should change that. I don't need to run this by three people." So I think that's a really good lesson there. Just don't underestimate the power of you just using it and relying on instincts and feelings you have when you're trying to use it.

**Gina Gotthilf** (00:42:50):
Totally. And that's so hard to do, especially when you're young. And I think I'll add that, especially when you're female as well, or maybe other minorities. It's just really hard to trust your instinct because you're constantly telling yourself, do I really know anything or am I just being lucky? But you have to, and I think that forcing yourself to pretend that you know answers and just finding out what this pretend person who would know all the answers would think is really helpful because it helps you develop your point of view, your voice, and to trust yourself, even when you're working on something that you don't fully understand.

**Gina Gotthilf** (00:43:22):
As in we're building a banking platform at Latitude, I was looking at it, and they were having trouble understanding why people were having problems with wires. And I told them all about how I'm an idiot when it comes to wires, and I make these mistakes A, B, C, because I don't match the line. It's like, whatever. There's all this information you're supposed to input, and sometimes the information you get is not in the same order. And they're like, "Wow." And I'm like, "This is just me as a user making dumb mistakes." But that is our forte. When you're able to understand that when you don't get something, probably other people don't get it too at scale.

**Lenny** (00:43:56):
Absolutely. It's like if you're thinking about asking a question in class, many people are thinking of that same question, and they will appreciate you asking it. The other thing that stood out there, so the Hindi mistake you made, I actually made the same mistake with my podcast recently. I was noticing that the second biggest market of listeners is in India. So I'm like, how do I lean into that and help people in India find this podcast even better? So I added subtitles in Hindi to a number of the episodes and tweeted it being, "Oh, look at me go, I'm going to make this so great for people in India." And everyone's like, "We don't need this. We prefer English. People in tech in India, we know English."

**Gina Gotthilf** (00:44:33):
That's true.

**Lenny** (00:44:33):
"This is even harder." They're like, "I can read a lot faster in English, so please don't do this." So that was a really good learning-

**Gina Gotthilf** (00:44:39):
There's so many languages in India.

**Lenny** (00:44:41):
That, too.

**Gina Gotthilf** (00:44:42):
Really, it's crazy how people don't speak the same languages across the whole country, but also it means that people in India are fluent in so many different languages.

**Lenny** (00:44:52):
We live, we learn. I want to go back to the A side and just a couple more questions about Duolingo. You said that most of the growth was organic and you basically had to grow it organically. Is there anything that you can share that worked really well? Because everybody wants to grow organically through word-of-mouth. Is there anything tactical you did that really helped Duolingo that other startups can do and try?

**Gina Gotthilf** (00:45:12):
Absolutely. So first of all, I would actually say that AB testing and product-led growth is organic growth, because you're not spending money on it. And so the first thing that you can do, no matter what stage your startup is, is make sure that you are not overlooking the importance of people in your product team who really know how to evaluate data and how to use that and learn. And if you're too early stage, you're not looking at 5% growth, you're looking at 20, 30% growth opportunities. But I think that's number one.

**Gina Gotthilf** (00:45:44):
Number two, actually, this is something I might have said is something that Duolingo did really well, but I think it goes hand-in-hand with mission. But throwing the mission thing aside, brand and PR. So the importance of building a lovable brand that really resonates with people and makes people feel something and want to stand behind an idea that's bigger than themselves is not easy to do, but possible and core to being able to increase word-of-mouth.

**Gina Gotthilf** (00:46:19):
So at the bottom of this is the mission, which is Duolingo, the mission was always originally to bring free language education to the world, then to build the best education to make it accessible to everyone. I don't know how they're wording it today, but that's something most people can get behind. It doesn't matter if you think Bloomberg or Trump should be president. Do you think everyone should have access to great education? Most people would say yes. And so that's much more powerful than, do you want to download an app and learn a new language?

**Gina Gotthilf** (00:46:48):
So if you're able to have that and things that you really believe in about what you're building that's changing lives or impacting the world, even if it is just helping business people do their jobs better in a way that's going to improve their lives and their ability to make a living, or it's going to improve a company's ability, whatever it is, the bigger idea behind it and focusing on creating something that people like, whichever your audience is. It might be a more serious audience and something like Duolingo, but for Duolingo it meant we have this owl, the colors, and then the way that the owl talks and the notifications and the emails that you get and the product experience.

**Gina Gotthilf** (00:47:26):
All of that ties back into how people feel about your brand, which makes it so that people are more likely to talk about it, which makes it so that you are much more likely to get a reporter to write a story about you, if you have something that's meaningful outside of like, "Hey, TechCrunch, did you know that my app grew by 20% last month?" They're like, "I don't care." But if you're able to tell a story about people whose lives are completely transformed or something like that, that's much more interesting and has played an important role in, honestly, my work at Tumblr, at Duolingo, not my Bloomberg presidential campaign, but definitely Latitude as well.

**Lenny** (00:48:02):
That's amazing. I was going to ask, what does that actually mean, and how do you build a lovable brand? And so what I've heard so far is there's this personality and voice that was really fun that you all lead into make it not just a generic translation app. It's like, oh, this is really fun and interesting. And then this other piece is these stories of transformation.

**Gina Gotthilf** (00:48:21):
Yeah, there's more, there's more. So I think a brand that stands for something, that truly stands for something, that's where the mission piece comes in.

**Lenny** (00:48:30):
How do you communicate that? How do you people even know that the brand stands for that?

**Gina Gotthilf** (00:48:34):
So that has to be an integral part of your communication. In the early days, we tested a lot of stuff on social media. We made, again, mistakes. At one point we were posting photos of our team on Facebook being like, "Check out the behind the scenes." Guess what? No one cares. But we had a calendar, this is very tactical, but a social media calendar where one post a week is about effectiveness, because we knew that proving that Duolingo was an effective way to learn a language and actually having data behind that moved the needle. So making sure that was part of our communication in terms of our social media calendar, in terms of the PR pitches that we were making, in terms of whatever we were able to communicate out into the world, and then make sure that one post a week was something about the mission and what we were actually trying to accomplish.

**Gina Gotthilf** (00:49:17):
But it also got embedded into a lot of things. For example, when we were testing screens to get people to convert into paid users on Duolingo, we found that including something like, "By paying for Duolingo, you're making language learning accessible to millions of people," that actually improved the metric. People cared enough to make the payment. So it really can be anywhere. In addition to that, I love copywriting, and I believe that communication is constantly underrated, and communication isn't about being able to convey a message. It's about being able to convey a message in a way that the listener receives it and understands it and remembers it. And that's really hard to do. And one of the things I've helped employ at Duolingo that I think is still there today, it's definitely not-

**Gina Gotthilf** (00:50:00):
I've helped employ at Duolingo, that I think is still there today, it's definitely not just me, we're an amazing team, but I've helped employ that I've used at Latitud in other places is a unique voice and what that means is exactly what you said, Lenny, not just another language learning app where we give you instructions and you follow directions. There is always a quirk. It's unexpected. The way we talk to you is a little bit funny. It doesn't take ourselves too seriously and it makes the person receiving this message feel something. It's about how you make people feel and you feel like either you giggle or you're like, "Wait, what? They just did what?" And using that to your benefit. We use that a lot at Latitud today as well in terms of especially our newsletter, just self-deprecating humor and that's what's helped us grow so quickly in Latin America in such a short amount of time. People identify with it, they see themselves as part of that. Again, much like the mission versus your company, and I'm a consumer.

**Lenny** (00:50:59):
**Gina Gotthilf** (00:52:09):
Look, I think for Duolingo we constantly looked at every copy we wrote and asked, "Could this have been written by other companies? Could this have been any other company or is it Duolingo? What makes this Duolingo?" And it was tough because the more people you hire who come from other backgrounds, they're not used to that style and they might even think it's unprofessional or whatever. You're like, "Nope, this is the Duolingo way." So, it helps figuring out, exactly what does that voice, what does it sound like? What are some words that it tends to use? Why yes, why not? What's too much, what's too little? In terms of specific examples, this is something that I didn't write myself, but I wrote a lot of notifications for Duolingo for the passive-aggressive messages that I'm sure people have received, which started and then became a meme and then Duolingo used as well, but the whole, "This doesn't seem to be working. We'll stop sending them for now," message, which you got after five days of inactivity. In addition to that message, around the same time we decided to send an email to people in New Year's because that's when people make a resolution to do things and we wanted them to make learning a language a resolution for the year. So, we created an email and it had Sad Duo because there was... I don't know if the screen is still there, I haven't used Duolingo in a while, but there was always a screen of Duo really sad when you fail something and that [inaudible 00:53:24]-

**Lenny** (00:53:23):
Duo the owl.

**Gina Gotthilf** (00:53:25):
Duo is the owl, sorry. The green owl will cry and we A/B tested the size of the puddle and the number of tears that came out of his eyes in terms of effectiveness. So, we used Sad Duo in one of those emails and then someone picked it up on Twitter and the passive-aggressive message and this Sad Duo, they started making their own versions, which was like, "Study now or Duo will eat a poisoned loaf of bread," or, "The next email will be a funeral e-vite," things like that.

**Gina Gotthilf** (00:53:58):
And so that's an example, I think, to me, which can now be seen very much throughout Duolingo's brand where we could have just said, "Oh no, this is a PR disaster. We need to go back to being this friendly, nice little fluffy thing that everyone loves." Instead being like, "No, we get that people think this is funny and we're just going to run with it," because using the Duo voice, it gives us the permission to do that because we're not square, we're not going to do that thing that you read in the textbook in school. We're kind of going to play along with it.

**Lenny** (00:54:29):
That's an incredible lesson. It reminds me of this famous Duolingo meme that I'm sure you've seen where someone shared these... They got these two notifications in a row, I just pulled it up here, where first they got this Duolingo push notification, "It looks like you forgot your Spanish lessons again, you know what happens now," and then the next push was from their security system, "Intruder alert, backdoor, proceed with caution," and I imagine Duolingo even leaned into that, I think when this started spreading.

**Gina Gotthilf** (00:54:54):
100%, and it wasn't an easy decision because of course a lot of people in the company were really concerned about the brand image and, what are people doing and how do we revert this, that kind of thing. So, it was a bet that we made where we're just going to, "No, we're going to lean into it because that's what having this unique voice means. It's about getting it. It's about being part of something bigger. It's about connecting with people outside of just teaching them a word a day," or whatever it is. And with Latitud, I think we do that all the time in our newsletter and it's a lot of self-deprecating humor for Latinos and using expressions that could be almost offensive, but they're not in terms of Latinos only, but also the tech world, making fun of being a tech founder and the things that we do that we think are okay and it's just a lot of that where I think I would call it irreverent.

**Gina Gotthilf** (00:55:45):
It's a tough line, it's a lot easier to be, I think, a copywriter in a place that doesn't want to do that because the lines are a lot clearer and you don't have to take as many risks, but it's so less fun, which I think makes it so less fun for the user because people are used to getting emails from their banks with corporate lingo that you don't understand, but if they get an email from their bank that's funny, ironic, but also very informative, that's a bank email I'm going to read.

**Lenny** (00:56:12):
I think that's a really good lesson. Part of this is just taking a risk. I think that's one of the big takeaways here is just take some risks. We had Lulu Cheng on the podcast who is a huge advocate of that. She is a PR comms person that's worked at Substack and Blizzard now, and that was her advice to people-

**Gina Gotthilf** (00:56:27):
Take risks?

**Lenny** (00:56:28):
Take risks, do things that are a little controversial because that'll get attention. I definitely want to talk about Latitud, just a couple more questions on Duolingo. One is, today feels like one of the most interesting things about Duolingo is their TikTok presence and it feels like they're doing so well, kind of leaning into exactly what you're talking about, just being really silly and different with the owl especially. I guess the question there is just, what is it that you think allows for that? Is it just this very special social media person they hired that was just incredibly good at this thing and being irreverent as you said, or is there something else that contributes and allows a company to win in social media the way that Duolingo has?

**Gina Gotthilf** (00:57:07):
Look, I haven't met the person who does a TikTok and they're fantastic. I definitely don't want to demerit their work. It's awesome, I don't think it's easy to do, especially on a consistent basis. So I think, yes, finding someone who gets humor, who gets the platform, who's able to produce content quickly, but also reacts to learnings, all of that is not easy to do. However, I do think that everything we just talked about is at the bottom of that because if Duolingo didn't have this unique voice and leaned into the humor and wanted to be irreverent as a brand and was so focused on connecting with people where they were and ready to take risks that might seem maybe unorthodox, especially in terms of education, then an opportunity to build a TikTok like that wouldn't exist. So it's both, and I think it goes back to the brand DNA, it goes back to the culture of the company and to the attention, as I said, to every single text that was published and whether or not it wasn't the right voice or not.

**Gina Gotthilf** (00:58:06):
It has to do with having those conversations with the executive team where you talk about who is Duo and what are they like and how do they talk and what do they sound like and is this a Duo thing to say, is this not a Duo thing to say? And committing to this idea that you're going to be remembered, that you're going to do things that sometimes are going to rub people the wrong way, and you're not just going to sit squarely in one place. I think that opens the possibility for a TikTok like the one that Duolingo has today to exist, but again, whoever's running the TikTok, you're amazing.

**Lenny** (00:58:42):
That's such a good lesson. A lot of people are looking at Duolingo, we need to find that person at our company. And what you're saying is it takes a lot more than that. That person is not going to have a good time if the culture of the company isn't set up to be that... To have that approach to try to just take risks and be irreverent, so that's a really good point. One final question around internationalization, you said that you helped drive internationalization of Duolingo, and I read somewhere that one of the learnings you had there was essentially treat everyone the same almost across countries, which I think people think is the counter. They should often like, "No, we should be super personalized for every country we're in." What did you learn there?

**Gina Gotthilf** (00:59:22):
I think this is very controversial because not only is it the case that when you're working in regulated industries, maybe in more B2B situations, looking at specific countries is important. Looking at specific countries and elements of these countries are important, especially when you're looking at, I don't know, laws and if you need legal differences and there's a lot of things that make countries different is what I'm trying to get. However, humans are very similar and we think we're very different. I don't think we're that different. I think that maybe we were brought up differently, and so for example, in Brazil we like to dance. In Mexico, we like to dance salsa, in some places it's okay to hug and other places it's not okay to hug. Yes, there are cultural differences and it's important to love everyone and to adapt, et cetera, but a lot of these differences when it comes to core human behavior are that final 5% of understanding people.

**Gina Gotthilf** (01:00:27):
And if as a startup, whether it be early stage, but as a startup you focus too much on those marginal differences between groups of people, you can run the risk of making big mistakes, which is making too many changes too soon and learning very little and adding crazy amounts of code complexity and overall organizational complexity to what you're building. And with Duolingo, because it was a consumer app, because we weren't dealing with a lot of regulatory issues, except for China where we had to watch out for certain words and phrases, in general, people want to learn a language and people learn a certain way and people use apps a certain way. So, there's a lot of commonality. We just found that by treating the world as one, and whenever we deployed an A/B test or tried something new in terms of marketing, we would just look at it as like, "Well, if this worked here, it will work there and we should just try it out everywhere," which meant every time I went and launched Duolingo new market, I got the same feedback.

**Gina Gotthilf** (01:01:27):
Whatever country it was, "Here, it's different. People are different. You don't understand and what you're doing is not going to work and here's why you need to change." And if we had actually listened to that, it would cause all kinds of problems. In our country, we think that green is a negative color, owls are poorly seen as an animal, or here people think that free things are actually of low value, they like things that are expensive. Oh, people here really like free things and I'm like, "Everyone likes free things." They're like, "Oh, in this country..." Whatever, so yes, I think that countries are different, but it's more important to realize that people like to think they're different and people like to think their countries are different and highlight those because it makes them feel special, unique. We're all special and unique in all of our amazing ways, but this is not necessarily it.

**Gina Gotthilf** (01:02:13):
And when you're trying to be super cautious of your resources, you have to ignore some of that because then you're able to roll out things once, which is important, but in addition to that, every new A/B test you want to run or every new hypothesis you have, if you now have a version of your app that's different in Mexico, in China, in India, whatever, you're going to have to run that test and whatever change you have in all of those versions, and then you just start having all of these different versions of the app everywhere and good luck managing that in terms of code, in terms of processes, in terms of personnel, in terms of costs, and most importantly in terms of time because now every single experiment or hypothesis is going to take you way longer to be able to deploy, and time is almost more important than money when you're a startup. So, it's important to keep things super simple, and this was something that we did that actually ended up paying off with few exceptions like India and China.

**Lenny** (01:03:12):
That is such cool advice. It reminds me of a quote that I think of that a friend of mine shared once, "Life is maintenance. Anything you add to your life is just something you're going to have to maintain from that point forward," and similar in products. Any time you add new code, you're going to maintain that code forever, and the more you can not add anything new and not make things really different, the easier everything gets. People forget that. It's like, "Oh, we're just going to spend a bunch of time to make it awesome in China or Brazil," and then, oh, they have to maintain that forever and every you feature has to...

**Gina Gotthilf** (01:03:42):
And it's an 80/20, so just focus on what will get you the 80 and not the 20. And then when you have the luxury of focusing on the 20, then you can.

**Lenny** (01:03:52):
So, speaking of different cultures and people being different but not that different, you pivoted your career basically to focus on Latin America. First of all, why did you decide to do that? That's a pretty unique path and what pulled you there?

**Gina Gotthilf** (01:04:09):
So Lenny, I don't see it as a pivot because as we were joking in the beginning, I've been an employee, I was an operator there at early stage startups and now I'm a founder and I'm a VC, so I'm still kind of in this little stack of roles that we have in our little tech ecosystem. And in my time working with Tumblr and my agency and Duolingo, I had the pleasure of speaking with entrepreneurs all over the world, in part because I started getting some media because of the work that I've been doing starting at Tumblr, so a lot of entrepreneurs reached out to me, but also because I became a mentor for an organization called Endeavor, which is global. So, I started working with entrepreneurs in Japan and Brazil on my free time, just mentoring. And I know that the opportunity for growth in terms of tech in Latin America is huge because first of all, the opportunity for growth in tech is huge all over the world, meaning there's just more and more to do.

**Gina Gotthilf** (01:05:09):
There's more pieces of our lives that can become more efficient or better or cheaper by making them digital in some way, shape or form because digital products scale. We are behind when it comes to that in terms of Latin America, and our economy is also not doing super great right now. There's a number of things that make it tougher to succeed in Latin America, but make the outcome of potential success much higher. And simply put, there's a lot of low hanging fruit because a lot of what has already been digitized and productized in the US and more developed markets just hasn't in Latin America. And every time I took these calls, I would think like, "Well, this is not very efficient for me to be doing this one-to-one call. I feel very good about myself, I feel great, and this entrepreneur learned a lot, but I wish I could do this more at scale."

**Gina Gotthilf** (01:05:56):
And also it doesn't seem like this is what's going to help this entrepreneur succeed. Maybe it's a little bit of advice, but it's like... And not only that, but I had a lot of experiences where I would mention something about growth that I had learned and that would blow the entrepreneur's mind. And I would think, "Why do I know this, but not this entrepreneur who honestly is smarter and more ambitious than me?" Oh, it's because I've had a career in Silicon Valley. It's because I've gotten to work with some of the best people in the world and I have access to this information just free flowing in my way all the time, and we take it for granted. So, how can we make this more accessible to Latin America's entrepreneurs, so that they can have access to that? What else is hard to get access to that could really get in the way?

**Gina Gotthilf** (01:06:34):
Oh, like access to capital. So, what's the VC in the angel ecosystem looking like and what can we do that can actually impact that at scale? And then there's other pieces of the ecosystem that are missing, like if you're going to start a company, you have to incorporate it. It sounds super boring, but Brazil is one of the countries that takes the longest time to incorporate a company in the world, but then if you're going to get investment, you probably can't get investment in your Brazil entity because investors are like, "I don't know anything about Brazil, and sounds like a lot of employers get sued by their employees and lose," which is totally true, "And there's all this liability. I feel much more comfortable investing in a Delaware company." So then entrepreneurs are like, "Oh man, now I have to create this entity in Delaware. I don't even know where that is and what's the C-core? What's this other thing?"

**Gina Gotthilf** (01:07:19):
So, there's just stuff that needs to happen for Latin Americans that we don't think about here, "Silicon Valley" talking about it as in the cloud in the US and developed markets, but also then you're able to raise money, how do you get money down to your country? That's not simple at all. How do you think about the FX transactions and not get screwed in the process and who's going to do it? And so anyway, there's a number of these things that make it super hard. And so, that's some of the problems that we wanted to solve.

**Gina Gotthilf** (01:07:47):
Why it matters to me? I'm Brazilian, I'm Latin American, and I know that I had all of the opportunities in the world. I went to an American school, I got to go to school in the US, I got to work with some of the best tech companies in the world, and 99.9% of people in Latin America will not have these opportunities. And so for me, if I don't use this privilege to somehow make a huge impact where I came from, that will last, then I kind of wasted my life. So, that's why this matters so much to me, and I met my co-founder, Brian Requarth at On Deck. If you've heard of On Deck before, I'm a big fan.

**Lenny** (01:08:24):
I'm wearing On Deck socks right now. Yeah, I am.

**Gina Gotthilf** (01:08:28):
I love their socks, and I just had a conversation with them yesterday. I am a big fan of what they built. I met Brian doing On Deck... I actually was thinking of starting a completely different company, but also focused on community. As we were talking about, people want to find connection, and I think that there's a lot of business opportunity there, but I met my co-founder and he was working with our third co-founder, Yuri, who was actually the guy... We joke he's the guy who builds things.

**Gina Gotthilf** (01:08:53):
He's the CTO, he actually knows how to build and started talking about what it is that we can do to make an impact in the speed at which tech startups succeed in Latin America because we think we can have a huge impact on the GDP of the whole region, developments, job opportunities, and so on and so forth. So to me, that's what motivates me. It's like figuring out how I can use my time as leverage to make the biggest impact possible in terms of socioeconomical mobility for people in the world and focusing on the part of the world that I came from made the most sense.

**Lenny** (01:09:26):
So you referenced this company, that you started Latitud. Maybe just describe briefly, just broadly, how do you pitch what Latitud does to folks that might find it useful?

**Gina Gotthilf** (01:09:35):
I will, and I still do a pretty bad job with pitching it, but the pitch is basically we're building the operating system for Latin American early stage tech startups, and what that means is that building a startup is hard anywhere, but it's extra hard in Latin America for some of the reasons that I outlined. Some of the things that we decided to solve for are one, it's super lonely to be a founder. And if you're able to meet great founders who are just a step ahead of you in anything, be it in product or growth or marketing or incorporation or finances, you can save yourself so much time from trying to read books and Google if they can just tell you what to do or connect you with the right person, that if we were able to connect these people meaningfully, we could make a huge impact.

**Gina Gotthilf** (01:10:16):
So, that's number one, it's lonely. And number two, you build a startup in Brazil and you're like, "Wow, this is working. I'm going to go to Silicon Valley." I've seen this happen a lot in the past decade, and Silicon Valley is a completely different place. The US, it's a different place, the competition's different. 3% of people in Brazil only, and that varies in Latin America, speak English. So, the likelihood of you being taken seriously is low. Your chances of success are low, but at the same time, Latin America has so much in common as a region, but we don't actually actually see that if we're Latin Americans. We just think we're countries, especially Brazilians don't think that they're part of the rest, and Mexicans don't think about Brazil. It's so far, look at it on the map. In the US you're like, oh Latin America."

**Gina Gotthilf** (01:10:58):
But if you're there, it's just not at all connected, but the opportunities of growth are huge and dependent on whether you meet the right people are able to open doors and understand that our problems are so similar that a solution for one part of this region could potentially be great for another part of the region. I'm not doing a great job of pitching, but in addition to it being lonely and it being difficult to find the right resources and really trustworthy knowledge, it's really hard to raise capital and it's really hard to do things like incorporate and bring your money down, et cetera. So, that's what we do. First, we have a fellowship program. We have 1,500 entrepreneurs who got in, we run four cohorts a year, about 600 applicants per, and so you get in and you get access to all of these resources we've put together.

**Gina Gotthilf** (01:11:44):
You get to find out what everyone thinks about other investors in the region because I think it's important to disseminate that information. You get access to introductions to investors through each other and advice and events. In addition, we have a fund, so we've invested in 100 startups and we're raising our second fund now. It's going to be around $25 million with a $30 million cap, so that's another thing. So we invest, you figure out your investment game, but you might become one of our investments as well. And in addition, we have products that make it a lot easier to navigate the super, in my opinion, boring and frustrating stuff behind starting a company that you don't want to think about it as an entrepreneur because you're trying to solve a problem and build a team and build a product.

**Gina Gotthilf** (01:12:25):
You're not trying to figure out what's the best incorporation method and how to open a bank account in the US and how to figure out the foreign exchange prices and bring the money down and how to manage that money or how to stay compliant in your country, and then in two other jurisdictions, if you have a Delaware and a Cayman. So, we do all of that for you and make it easy through a dashboard we built, a bank that we built, and so on and so forth. So, it's not an easy to describe business because it's kind of an ecosystem play. We're trying to elevate the tech ecosystem in Latin America, and it's a lot of moving parts.

**Lenny** (01:13:02):
You basically help them do everything, which is what I'm hearing, and it sounds like you'd be a fool not to take advantage of this. The customers essentially are founders in any Latin America country, is that right?

**Gina Gotthilf** (01:13:14):
Founders in Latin America, but we also have a lot of US-based founders who are building for Latin America because they understand that the opportunity there is huge.

**Lenny** (01:13:22):
Awesome, and then what is the arrangement? Do you take equity if they join the program? Is it free?

**Gina Gotthilf** (01:13:28):
We don't, joining the program is free. You just have to be able to get in. For a number of reasons, we just don't want to deter anyone who's amazing from being part of this community, and so that's why we made that decision. If we invest, we take equity. If you choose to use our products, that's a paid thing. So, you can choose what makes sense for you.

**Lenny** (01:13:47):
Something I wanted to ask about is what is it that Latin American founders and companies are uniquely good at? Is there kind of a thread across Latin American startups that are like, oh, they're so good at this area, pay attention here?

**Gina Gotthilf** (01:14:03):
In general terms, startup founders have to be really scrappy and resourceful and resilient. Latin Americans tend to be very scrappy, resourceful, and resilient because of just the realities in which we were brought up in. We have words for that that we don't have in English and Portuguese in Spanish, which is like dancing around things and figuring out things when you don't have other solutions. So, I think that's something that we see a lot. In terms of what we're really good at, I would say first of all, there's opportunity in every single vertical in Latin America because it's such a wide open field, so there's opportunity everywhere.

**Gina Gotthilf** (01:14:40):
It's not that we're particularly good at FinTech, for example, but if you look at the FinTech opportunity in Latin America right now, it's so hot and there's so much money and there's so much happening because of the huge problem of people not having access to bank accounts or access to credit, or just all of the bureaucracy that exists in trying to get those things or to make payments and so on and so forth. So, there's just huge opportunity there. I'm trying to think what else-

**Gina Gotthilf** (01:15:00):
So there's just huge opportunity there. Trying to think what else I would highlight. Ah, Lenny, you talked about B2C. I think again, because there's so much open field, there's so much opportunity when it comes to B2B, especially when you're talking about SMBs. There's a lot of small and medium businesses doing things on paper, so figure out what they are and how you can make them not on paper and deploy them effectively. So I think that's an advantage we have.

**Gina Gotthilf** (01:15:28):
Other than that, I wouldn't highlight anything in particular. I think that there's amazing people all over the world. It's just a matter of what are the opportunities that exist. And because there's so many opportunities that are Latin America specific or that are emerging market specific, which means that if they work in an emerging market in Latin America, they could work in other emerging markets. And you know what? Most of the world is not developed markets and understanding what it's like to not have access to amazing wifi and iPhones and all the things that we have access to, that can be a huge advantage because that's the reality that most of the population lives in. And that's a huge TAM.

**Lenny** (01:16:08):
That makes me think about WhatsApp. And one of the reasons they made it is they were just obsessed with making the app incredibly small and fast. And they started, I think with international markets and then that just ended up being an amazing app so fast and so easy to use.

**Gina Gotthilf** (01:16:22):
And still, and now there's things being built on top of WhatsApp. We just invested in a company called Leadsales, and they basically turn your WhatsApp into a CRM, which is amazing because so much business is being done on WhatsApp, and that's not the case here in the US. So you want to understand that you can build something for that. And there are other markets that are using WhatsApp for which that's also going to be useful. And the other thing is I think that emerging or developing markets tend to sometimes skip over things because we're so behind.

**Gina Gotthilf** (01:16:48):
So for example, there's examples of these in India and in some countries in Africa where, I don't know, the desktop was skipped, people just went straight to mobile. I think we can see these catapult opportunities because then when you start building something and you didn't even build for the previous version of whatever it is that was being used because in the US or more developed market, you had access to them, then you are in a way at an advantage. So I'm excited to see how that plays out in the next few years, and I'm particularly curious to see how that plays out when it comes to AI.

**Lenny** (01:17:21):
One last question around Latin America. It's going to be a broad question. What do you think people should be paying attention to, whether it's specific companies you want to call out, big companies that are doing great or just trends or patterns, what do you think people should be paying attention to? Anything you want to shout out?

**Gina Gotthilf** (01:17:39):
Lenny, the truth is I would love to call out all of our portfolio companies. I believe in all of them, and there are some of them that are growing incredibly impressively. One of them is Pomelo, which is a FinTech platform for FinTechs that is just grown incredibly. To me, it's more about paying attention to Latin America. I think for the US, that's already a lot. I don't think people know what's going on below the border, I have no idea what Brazil is like, but paying attention because it's not just a place that's behind and trying to catch up. It's a place where the opportunity to make a lot of money exists. It's a higher risk region because of all the political and economic instability. But given the scenario that we're in right now, which is that we're still behind in terms of all the solutions that we know will be built to give people access to health, to education, to financial services, et cetera.

**Gina Gotthilf** (01:18:36):
But we actually have a lot of money flowing into the region in terms of venture capital. We have the best talent we've ever had because now we've had, I forget how many, but a lot of IPOs that came from Latin America and unicorn companies, people who have worked at those companies or who have worked places like Duolingo are coming back to build now, know what they're doing. And so there's a number of things that have come together that make now a really exciting time to build a startup in Latin America and to scale it. So from an investment perspective, I just think that there's a lot of hot opportunities now in terms of knowing what's a good opportunity versus not. I think the same rules probably apply to those anywhere else, which is most importantly, the entrepreneur. Does this person know what they're talking about?

**Gina Gotthilf** (01:19:23):
Do they have an unfair advantage in terms of knowing what a problem that exists and knowing how to solve it in a way that others couldn't do? They have access to the best talent in the world, not just in the region that will actually join them and build the best thing possible. And yeah, what's the TAM? And not just what they put on the slide, but what you actually believe the TAM to be. So that's what I would say. I think everyone's looking at FinTech and Latin America right now. It's hot, it's profitable. Money is where the money is, but I'm super excited about what happens with health and education in particular because I think that that has the power to truly transform the region in a massive way.

**Gina Gotthilf** (01:20:05):
At Latitud, I think I mentioned in addition to FinTech, we tend to invest a lot in B2B SMB platforms that are helping businesses scale and work more effectively because there is a huge need for that and there's an opportunity to build. And I think that that can have an impact on the region. So I think that would be my advice. It's a little broad, but other than that, if not, I would just now sit here and tell you 15 companies that we love at Latitud and I won't.

**Lenny** (01:20:33):
Well, we can point people to your portfolio page on your website.

**Gina Gotthilf** (01:20:38):
I would love to highlight our portfolio companies. Maybe I'll just send you a list or something. I don't know.

**Lenny** (01:20:42):
Perfect. We will figure out a way to share that. With that, we've reached our very exciting lightning round. Gina, are you ready?

**Gina Gotthilf** (01:20:50):
I'm ready, Lenny.

**Lenny** (01:20:52):
What are two or three books that you've recommended most to other people?

**Gina Gotthilf** (01:20:57):
The one book I recommend because I truly, it really changed the way I think about things. It taught me a lot about a discipline I had never really thought much about, but also because I think it makes me sound smart and it's a really short book, so it's easy to get through is The Design Of Everyday Things. For me, that was the first time that I realized that design wasn't just this sort of cool thing that some people were into and they had to get and it made things beautiful. It was about understanding how everything is designed and how to think about design and usability.

**Gina Gotthilf** (01:21:28):
So for someone like me who didn't have any experience in product before, I think it could be transformative. And then the second book, it has nothing to do with what we do. I recommend Viktor Frankl's Man's Search For Meaning because at heart I'm a philosopher and I tend to think a lot about life, the meaning of life and what differentiates one life from the next and how to live a good one. And no matter what profession we choose that continues to be important. So those are my recommendations.

**Lenny** (01:22:01):
What is a favorite recent movie or TV show that you really enjoy?

**Gina Gotthilf** (01:22:04):
So first of all, I love Succession, but I don't think we have to go into that. One that was recommended to me by a friend who I very much admire was Mike Krieger, co-founder of Instagram is How to with John Wilson. It's a really weird TV show that I would've never found if it wasn't for him. But the premise is basically this guy, I think he's a filmmaker and he's awkward and it's cool that he's awkward. It's just his style and he decides to make a TV show about creating to help people who are really worried or scared of doing something and helping them prepare for that moment in their lives.

**Gina Gotthilf** (01:22:42):
So for example, someone is really scared of telling their friends that they lied about how many college degrees they had or whatever that they said they had a master's degree, but they didn't. And it's now been five years and it's not the debate club, but I forget what it is, but something that requires some sort of intellect and he doesn't want to confront the group. And so he recreates everything that could possibly happen that day in order to make this easier. Or another one about having kids. Someone's really scared about making the decision about whether or not they want to have kids. So it's kind of a documentary, but it's not. It's awkward. It's weird, but it's so good. And then I would say White Lotus, just like so good.

**Lenny** (01:23:25):
I do that song to my new child often because it's so funny.

**Gina Gotthilf** (01:23:29):
My husband and I do it at home.

**Lenny** (01:23:30):
Lot is a recurring,

**Gina Gotthilf** (01:23:31):
Yeah,

**Lenny** (01:23:32):
Yeah. I'm not going to do it, but it's a recurring favorite on this podcast. So we had a short drinking game where every time someone said, White Lotus, we drink. So I'm going to have some tea here real quick.

**Gina Gotthilf** (01:23:41):
Okay. I'm sorry to be predictable, but like I said-

**Lenny** (01:23:45):
No its great.

**Gina Gotthilf** (01:23:47):
We humans are a lot more similar than we'd like to think. What's amazing Lenny is just my realization more and more of how much this is true because I like to think of myself as unique much like everybody else. And then I started seeing that all of these really creative decisions I made are what all of the other millennial white girls did. It's just fascinating. Oh, I like whatever, mid-century modern furniture. Oh, you know what? Actually, I'll tell you what movie is my favorite one? Bo Burnham's Inside. I love-

**Lenny** (01:24:19):
Oh my God,

**Gina Gotthilf** (01:24:20):
I don't know if that's a movie, but I'm in love with Bo Burnham. My husband knows about this. I know all of the songs and what is it? White Girl's, Instagram? White Woman's Instagram. Such a good song. That's what I'm talking about.

**Lenny** (01:24:33):
Also, I've been re-listening to How is the best case scenario, Joe Biden,

**Gina Gotthilf** (01:24:40):
They're going to make me vote for Joe Biden. I was singing this to my parents. They didn't get it.

**Lenny** (01:24:45):
That's amazing. We'll link to that video, that movie. It's even after COVID, it's incredible. Anyway, I was actually going to say that first show you mentioned, I think it's called The Rehearsal, maybe there's a different title.

**Gina Gotthilf** (01:24:57):
Oh my gosh, you're right. So he has two shows and one of them is called How To and the other one is called The Rehearsal. And you're right, I am recommending the rehearsal. I have also seen How To, which are shorter episodes where he films in New York and he just goes like How to find a parking spot. And then it takes him on this down a rabbit hole of how cars are made or parking in the city. But it's also very good. But I prefer The Rehearsal.

**Lenny** (01:25:22):
And Nathan Fielder's the guy behind all this who's incredibly hilarious. He has a new show, actually I think it's on HBO with John Wilson or something that he's producing or it's this other guy. He's going around talking about stuff in New York and I think he's a producer.

**Gina Gotthilf** (01:25:37):
That's the one I'm talking about. That's How To with John Wilson.

**Lenny** (01:25:41):
Oh, there we go. So I think he's behind that. Okay, look at us. We're figuring things out.

**Gina Gotthilf** (01:25:45):
We are figuring things out. So I think he has maybe a new season.

**Lenny** (01:25:48):
Think season two. I haven't started that one yet. Anyway, here we go. We're going to keep going. What is a favorite interview question that you like to ask candidates that you're interviewing?

**Gina Gotthilf** (01:25:57):
Why do you want to work here is what I really like to ask because it tells me a lot. Of course, everyone wants a job. People could just be like, because I want a job and it seems like you guys pay well and whatever. I think this is a good next step in my career, but I want to know if this person knows what it is that we do, if they did a minimum level of research and if they connect with our mission because we're going to talk about mission a lot and I don't want them to gloss over it and to make decisions that are short-term thinking that go against our mission because of the reasons I mentioned with Duolingo. So I think that's one, it's not very unique, but I think gives you a lot of information. And then I would say, what are you world-class at and how do you know that you're at that?

**Gina Gotthilf** (01:26:41):
And the second part is almost more important. What are you world class at? It's okay if someone says, look, I'm working on becoming world class at whatever, and this is why I think I'm great at it or whatever. But the second part is important because it tells me if people actually care about metrics, and I don't care what the metrics are, but just how do you know this to be true? It has to be more than like, "Oh, because my boss loves me," or "Because my mom told me," "because I gave a talk," or whatnot or whatever I want to hear, "I'm proud of having accomplished this." And maybe if you have some numbers to show, that's also really important.

**Lenny** (01:27:17):
What is a favorite product that you recently discovered that you really like?

**Gina Gotthilf** (01:27:21):
I have not been trying any products, I would say. So nothing to recommend. I would say though that I am very curious to try these gut health tests that are out there now or microbiome ones. I'm really interested in how little we know about our body and how tech can actually help democratize this information. And going on a tiny rant. I'm also feeling very resentful of doctors right now because we've always lived in a world in which doctors are sort of like these authorities and we must just believe whatever it is that they tell us, and we rely on them for information that is crucial to our survival.

**Gina Gotthilf** (01:27:58):
But we're now in a world where we can Google things and that's even more scary because you have to know how to filter that information really well and you don't find explanations to things. But doctors don't like you Googling because they say it's scary, but also because they don't like being questioned. I think we're finally coming to a place where a lot of these devices that can give you great information about your body so that you understand your nutrition and very core things about ourselves that we don't today are becoming accessible to a lot of people just to the population. It's still expensive but we're getting there, and I think that will be magical. So I will call out the company Levels by my friend Sam Corcos because I think that what they're doing is awesome.

**Lenny** (01:28:40):
Next question. What is a favorite life motto that you like to think about? Come back to share with other people.

**Gina Gotthilf** (01:28:47):
One is "This too shall pass." And I will tell you this one right now is particularly meaningful to me right now because I'm going through a really tough moment because I have long COVID and lost my taste and smell, and it might be long-term. So, but I think it applies to the A/B thing that I was talking about when everything in life is moments except for a couple of diagnoses. And so, "This too shall pass," is something I say to myself a lot. The second one is also not particularly motivational, but I really believe in it, which is, "Fake it till you make it." That's something I've held onto for a long time. And even today, I don't mean lie. I don't mean pretend to be something that you're not, but it's almost like a way to overcome imposter syndrome and by opening rooms for yourself to be who you want to become so that you enable opportunities to become that.

**Gina Gotthilf** (01:29:39):
And I'm not saying lying, but early in my career, I did fake it until I make it from the point of view of not saying no to things. When companies were saying to me being like, "Hey, can you help us grow without a budget like Tumblr," right? I was 25, 26. I was like, "Yeah, and then go figure it out." And when Duolingo turned to me and said, "Hey, can you be head of growth?" And I didn't know what growth was and I had to Google and find Andrew Chen's blog, I read it and I found out and I just said, "Yes," and then kept going with that. So fake it till you make it as kind of that for me.

**Gina Gotthilf** (01:30:07):
But even today I have a lot of imposter syndrome, which I actually think is not imposter syndrome, is just acknowledging that I don't know a lot. My team says I have too much self-deprecating humor that actually puts the company down. It puts me down. So fake it till you make it to me means knowing how to stand in front of your team or a reporter or Lenny in a podcast and almost like being that person that you would like to be or being your best self. You could call it whatever you want, but I think it can really help you get out of the little hole that you would put yourself into and limit opportunities for yourself.

**Lenny** (01:30:44):
Amazing. This question elicits so many interesting insights and stories. I appreciate you sharing all that. Final question. You majored in philosophy, if I'm not mistaken. I'm curious, do you have a favorite philosopher or someone that most influenced the way you think about the world?

**Gina Gotthilf** (01:31:04):
I use a lot of philosophy in my day-to-day, but it's not because I have deep knowledge, it's because I have light knowledge that I draw on that helps people think I'm smart and relates to ideas. I often talk about Theseus's ship, to me that allegory is one of the most interesting ones because it's about identity and building and whether if the allegory is like the ship-

**Lenny** (01:31:04):
No, please share.

**Gina Gotthilf** (01:31:27):
So Theseus is on this journey. I think he leaves Crete and he's going somewhere else and he's on a boat. And then over the course of the trip so many things happen. They've hit so many waves and they have storms that they have to replace planks, and re-sow the sail and by the time they arrive at the next port, nothing on the ship is the same as it was before. They'd replace every single plank. They'd replace all the masts, they've replaced all the sails. And so the question is, is this the same boat that left the dock? And to me, that's a really interesting concept around transformation and what it means to have an identity that exists over time, even when so much of us or so much of a company or so much of a country changes, and what is that core identity?

**Gina Gotthilf** (01:32:14):
And to me that shapes I think a lot of ideas because it's a cool allegory and it resonates a lot. But yeah, so I would say at this point I embarrassingly have very cursory knowledge of philosophy. I could probably remember a lot of it if I went back to it, but I don't use it in my day-to-day, and I would love to take time off at some point and go study, but I'm also embarrassed to admit that I'm not a person who just finishes work is completely depleted and then wants to bury my face in a philosophy book. I would like to acquire all of this philosophy knowledge, but I want to watch White Lotus. Or if I'm going to force myself to work out, I'll listen to an audio book that makes me feel good about myself, and it's a fiction one.

**Lenny** (01:33:01):
I think this is actually a great example of exactly what you're talking about, where we change and we are not necessarily the same person we were. That makes sense that you're not obsessed with philosophy having finished that a while ago and now working on something totally different.

**Gina Gotthilf** (01:33:16):
Yeah, I think I still am because I consider myself to be very existential. I'm an atheist, so I like to find meaning. It's not like it doesn't exist so much for me, and I think about the big questions and I am interested in philosophy. I'm just not interested enough to make time and effort for it in my life right now.

**Lenny** (01:33:34):
As a hidden gem. At the end of this episode, I'll share, I'm also an atheist and I actually ran a website called atheistspot.com. It was like a Reddit for atheist news. I went to conferences.

**Gina Gotthilf** (01:33:45):
What does it do? We didn't see God again today, still no God to be found.

**Lenny** (01:33:53):
Yep. The funniest thing is we had Google AdWords on there and the ads were based on the stories around different religions, and it says all like christianmingle.com, the atheistspot.com. Anyway, Gina, we covered so much ground. What an amazing episode. I learned a ton from you. I'm so excited for people to hear this. Two final questions. Where can folks find you online if they want to reach out and how can listeners be useful to you?

**Gina Gotthilf** (01:34:18):
Yes. Okay. Thanks, Lenny. So people can find me online if you want to see just ridiculous posts. That's where my Instagram is, and my Instagram is impressive because I'm Gina on Instagram. Yes, I am just Gina.

**Lenny** (01:34:30):
Wow.

**Gina Gotthilf** (01:34:31):
So that's super impressive. You won't even find it when you look for me because you'll see all these other Gina's, but it's just at Gina. That's me. I do share some professional things as well there too, but I think it's my more entertaining channel. You can find me on LinkedIn. I'm a little more serious on LinkedIn. I have a photo with Obama, which will certainly impress you, so find me. Gina Gotthilf on LinkedIn.

**Lenny** (01:34:51):
So many stories we haven't covered.

**Gina Gotthilf** (01:34:52):
I know I'm Gina G on Twitter, and that's probably, you know what? I did a Harry Stebbings podcast and then that got me 600 followers on TikTok, but I've never posted, but maybe at some point. I feel self-conscious, but I think I could be a good TikToker because I think I'm amusing.

**Lenny** (01:35:08):
Well, you're not going to get followers by saying there's nothing good there. I think if you want people, they'll follow you. You should tell them it's going to be great there.

**Gina Gotthilf** (01:35:15):
Come see my amazing contact content on TikTok. I will definitely start posting it soon, and you can influence what kind of content will be there because I'm listening to my followers right now, and then how you can be useful. Look, if you know of an amazing founder in Latin America, if you are an amazing founder in Latin America, or if you are in touch with VCs who are interested in this, then definitely tell them about Latitud. You go to latitud.com. Do not misspell Latitud. It doesn't have an E at the end. That's because latitude in Spanish is latitud. However, it's also because we couldn't buy latitude.com with an E, but now that's what it is and it's grown a ton, so get in touch, join the fellowship, join our community. We're particularly useful by the way to us people who are interested in getting plugged into Latin America, because if you get in, you just meet all the top people in one fell swoop, and that helps you make friends relationships, find clients, find your business partners, and understand the ecosystem in a hacky way.

**Lenny** (01:36:16):
Amazing. Gina, thank you so much for being here. Bye everyone.

**Gina Gotthilf** (01:36:21):
Goodbye everyone.

**Lenny** (01:36:24):
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.

---

## [7/24] What AI means for your product strategy | Paul Adams (CPO of Intercom)

**Paul Adams** (00:00:00):
This is a meteor coming towards you. This is going to radically transform society. And I think if people don't explore AI properly, it will leave them behind. I'd start with the thing your product does. "What's the core premise behind it? Why do people use it? What problem does it solve for them?" That kind of thing. So, go back to basics. And then ask, "Can AI do that?" And for a lot, the answer is going to be, "Yes, it can." For some it might be, "It can partially do it." And then, maybe for others, "It can't do that, at least not yet." And then, for some of it'll be replacement, AI would replace, it'll just do it. And, in other places, it'll be augmentation. It'll augment. It'll help people. But yeah, I think that you've got to match your product, and what AI can do, and what it will be able to do, and then ask yourself, "Okay, what are we going to do?"

**Lenny** (00:00:52):
Today my guest is Paul Adams. Paul is chief product officer at Intercom, a role that he's held for over 10 years. Prior to this role, he was global head of brand design at Facebook, a user researcher at Google, a product designer at Dyson, and his first job was an automotive interior designer. In our conversation, Paul shares some amazing stories of failure, including the story of him giving a huge presentation where he froze on stage and had to walk off. And what he learned from these experiences of failure. We then get deep into how to think about AI as a part of your product strategy, including a ton of great examples from Intercom's experience going all in on AI. Paul also shares some of his favorite frameworks, and product lessons, and so much more.

**Paul Adams** (00:04:14):
Thanks, Lenny. Nice to be here.

**Lenny** (00:04:15):
It's nice to have you here. I've heard so many good things about you from so many different people, so I'm really happy that we're finally doing this. Also, you have an Irish accent, which is always a boost for ratings in my experience, so thank you for bringing that with you here.

**Paul Adams** (00:04:26):
Yeah, that's nice to hear.

**Lenny** (00:04:28):
I wanted to start with a couple stories. So the first is your story of giving a keynote at Cannes. Can you share what happened there?

**Paul Adams** (00:04:38):
Yeah, some things that happened in work are very memorable at the time and they don't really scar you. This goes in the book that have scarred for life. Yeah, it's good. Long story short, I was at Facebook just over a decade ago. Loved it at the time. I think it was a great place to be at the time. And, basically San Francisco, I did a lot of talks for Facebook internally and externally. Facebook had a keynote slot, always had a keynote slot at Cannes, the world's biggest advertising festival. And, the year prior, Zuck had been interviewed. He was the speaker, he'd been interviewed. He'd gotten a hard time on privacy. It didn't go well as well as they'd hoped.

**Paul Adams** (00:05:14):
So, the next year they asked me to do it. Maybe it was the Irish accent that made the offer come my way. And, yeah, I got out and spun a stage, the world's biggest advertising stage. And, I'd say, I was three, four minutes into the talk, a very similar talk when I'd given lots of times. And, I just froze. I couldn't remember what I was supposed to say. It was the first ever time in my life I'd rehearsed the talk word for word. Usually, I have talking points, and things get mixed around, and it's informal. This was media trained, "Do not say the wrong thing." Kind of talk. And I just could not remember what to say. I had some version of a panic attack, walked off-stage, I was still mic'd up, cursed. Everyone started laughing. I was like, "Geez, are they laughing at me? Oh my God, this is..."

**Paul Adams** (00:06:06):
But, I managed to turn it around, I walked back out. I'd been disarmed internally in my head. And, the most of it went well. And I was famous that night. Out in Cannes afterwards on whatever the sea front, it's just like rose everywhere. And yeah, I was famous and infamous for my performance.

**Lenny** (00:06:26):
I feel like you lived the worst nightmare that everybody has when they're thinking about giving a talk. And, I think what's interesting is you survived. And, I think that's a really interesting lesson is you could freeze in front of thousands of people, walk off-stage, and then it works out okay.

**Paul Adams** (00:06:43):
Yeah. And it all happened organically, I guess, or very naturally. But yeah, ever since then, every time I walk out onto a conference talk stage, still today, I have this tiny doubt in the back of my head. It's never happened since. But yeah, I think you have to go with it with these things, when life throws you these, whatever, curveballs you have got to adapt and it's not that big a deal. None of these things are that big a deal, at the end of the day. You move on and live and learn. So yeah, but I still hope it doesn't happen again.

**Lenny** (00:07:15):
I also hate public speaking and I always fear this is exactly what's going to happen to me. And so, I think this is nice to hear, that even when the worst possible thing basically happens, things can survive.

**Paul Adams** (00:07:27):
You can turn it around. Yeah.

**Lenny** (00:07:29):
A second area I wanted to hear from is your time at Google. And, there's a couple products you worked on at Google. Both of them were not what you'd call big successes. And then, there's a transition to Facebook, which was also messy. Can you just share a couple stories from that time?

**Paul Adams** (00:07:45):
Yeah. Similar to the walking on stage thing, you live and learn. And, I was at Google for four years now and I was at Facebook for two and a half years or so. And, in both of those companies, this is at the height of... The social tech wave was at its peak. Google were very afraid of the existential threat posed by Facebook. Facebook were very confident they could pull off some new social advertising unit that would be an AdWords or something like that, that would destroy Google's revenue, eat them from the inside out. And so, being there at the time was fascinating and moving to the new companies. At Google, I worked on a lot of failed social projects, like you mentioned. Google Buzz, Google Ventilator, Google Plus. I think, a lot of the motivation for those projects came from a place of fear. It didn't come from a place of, "Let's make a great product for people. Let's really understand the things people struggle with when communicating with family and friends. Let's really, really try and create something wonderful." It came from a place of fear.

**Paul Adams** (00:08:47):
And so, during those times, I learned I think how not to lead in places. And by the way, I should say, at the time in Google, there was other things happening that were amazing, like Google were building Google Maps, an incredible product. One of my favorite products. I think one of the best products ever made. They were building Android. I was in the mobile team and the mobile apps team at the time, the Android came out. So, they can make an incredibly good product. So, I just happened to be in the social side, which wasn't as good. And, yeah, Google Buzz is a privacy disaster, and Google Plus is similar.

**Paul Adams** (00:09:24):
And so, halfway through I'd published research about groups and I'd done a ton of research. An interesting side note there is, at the time, I was working in the UX team as a researcher, I was been asked to do a lot of tactical research, like usability study type stuff, like can people use these products? And, I ended up doing a lot of formative research as well in the same session. So, I'd say to the team, "Hey, I'll do the research. I'll answer your questions. But also, I'm going to do this other thing, and I'm going to take 20 minutes doing that." And so, what we used to do is, what I used to do with people was map out their social network, all the people in it, their family, their friends, how they communicate. We'd map on all the channels, we'd talk about what worked well, what didn't. And, we did this with dozens and dozens of people over the course of maybe 18 months. And the same pattern emerged every single time, which was, people need way better ways to communicate with small groups of family and friends.

**Paul Adams** (00:10:17):
And I look back now and go like, "WhatsApp." Or it may be iMessage if everyone's on Apple. But, really obvious in hindsight. But at the time, not obvious. And so, we tried to build a product around that called Google Plus. But, again, it came from the wrong place. And so, halfway through, the research that I've done, all this research had been made public through a conference talk. And, Facebook noticed, got in touch, one thing led to another, and I left and joined Facebook, which was an amazing thing for me, personally.

**Paul Adams** (00:10:51):
Facebook was an amazing place at the time and exciting. And they were trying to do things for the other reasons, the good reasons. "Okay, let's build an amazing product for people."

**Lenny** (00:11:01):
And this was during Google Plus being built, you basically shifted.

**Paul Adams** (00:11:04):
Yeah, midway, I'm stressed to even tell you about it. The project hadn't been launched, it was still under wraps. It was highly confidential. Google had done a lot of things at the time that were the first for them. I don't know if they've done them since. But things like, everyone worked in Google Plus was sent to a different building. That building had a different key card. If you didn't work in Google Plus you could not get in. All sorts of counter-cultural things at the time. And, as a result, there was a lot of antagonism internally for Google Plus. And so, when I left in the middle of the project, leaving with all of the plans in my head to the enemy, some people saw me as a traitor, understandably. Other people thought I was enlightened, too fancy you talked to. But it was the right thing for me to do. But at the time, it was a hard thing to do.

**Lenny** (00:11:56):
I know there's also a lot of scrutiny in what you took with you and the process.

**Paul Adams** (00:12:01):
Yeah, when I left, Google assumed that I was one of the spies. I was quarantined. I told them I was leaving. They forensically analyzed my laptop, all sorts of stuff like that. So, it was pretty intense. Looking back, I can understand why that happened. But the root cause for me is that the project has been run from a place of competitive fear, which I don't think leads to good things.

**Lenny** (00:12:32):
So one of the themes through the stories you just shared is, let's say, failure is... I don't want to make it that harsh, but just things not working out. And, I'm curious as a product leader, how important you think that is for people to go through, if you think that's something that is almost a good thing? And, I guess just is there anything there that you find helpful as a coach, as a mentor, as two people that are trying to become basically you?

**Paul Adams** (00:12:58):
Very, very. It still is. It still is. I've personally failed so many times. There are two stories and the Google one is long deep tentacles. They're two stories. I failed a ton of times. I remember, when I was at Facebook I was very happy. And, I knew Eoghan and Des, the co-founders of Intercom. And, they were trying to persuade me to join Intercom. We were like, it was a 10-person company at the time. But, Eoghan said something to me at that time which has stuck with me ever since. He said, "At Facebook, you can design the product. But at Intercom, you can design the company." And, that was extremely appealing to me, a great pitch. He's like, "Just design the company with us that you want to work in."

**Paul Adams** (00:13:41):
And so, part of that was a company that embraces failure, that says it's okay to try things. I'm a big believer in big bets, high risk, high reward. I don't get as excited about incremental things. No, I haven't said that. There's of course a place for that too, especially as companies get bigger. But, I get excited about big bets. And if you make big bets, you're going to get a lot of it wrong. So a lot of the principles that we built here at Intercom are in building software.

**Paul Adams** (00:14:09):
We have a principle called Ship to Learn. And, we've actually changed it since. It's over on the wall here. Ship fast, ship early, ship often is what it says now. You say Ship to Learn. Ship fast, ship early, ship often. So, in that idea is the idea of failure. It's not going to go right. And, it's going to go wrong more often than not. But if you ship early, and fast, and learn fast, you can change fast, and you can improve fast. And, that's the culture that we, as much as possible, try to embrace and teach people. But it's much easier said than done.

**Lenny** (00:14:43):
Yeah. Especially when you're in the moment like, "God dammit. Everything's going to fall apart. I really messed this one up."

**Paul Adams** (00:14:48):
Yeah. And there's a trade-off with quality that people really struggle with. We've high standards of ourselves. A lot of Intercom comes from a design founder background. We value the craft a lot. We never want to be embarrassed by what we ship. So there's a real tension there, a real trade-off, where people have these high standards, which we encourage. We encourage them to ship fast, and learn, and make mistakes. It's a constant tension that we're navigating.

**Lenny** (00:15:17):
Speaking of taking big bets and going all in, I know there's been a huge shift at Intercom to move towards AI and embrace AI. And so, maybe just to start broadly, I'm curious just what are some of your broader insights or surprises so far in how you've thought about AI and how you think AI will integrate into product and product strategy?

**Paul Adams** (00:15:39):
What day that ChatGPT launch? November 29th, I think, last year. Ever since that day, I literally wake up every day thinking about AI pretty much. And, I read as much as possible and still feel like I'm way behind in it. I think, for me, when I talk to you about AI, people typically fall into one of two camps. You're either all in, really truly all in. This is a meteor coming towards you. This is bigger than mobile as a technology shift, as big as the internet. Maybe it's bigger than the internet itself as a technology shift, the way it'll shape society. So I'm all in. I've gone over the hill or whatever. I'm over the other side. And so, there's people in that camp.

**Paul Adams** (00:16:23):
And then, I think there's people in another camp, which is, "I've heard this before. It's hype. Last year was crypto. It was Web3. None of those things worked out. There was the metaverse." So, there's definitely I think a lot of skepticism or maybe cynicism around it. And I don't understand why. The other things didn't really pan out. The metaverse is coming back. And, I'm trying to remember, there's the law where you have the hype, and then the trough of disillusionment, and then you come out the other side.

**Lenny** (00:16:54):
Yeah, that little curve.

**Paul Adams** (00:16:55):
Yeah. And I think that's where a lot of people might be, where there was so much hype, it was so noisy, and still is a little bit so noisy that you tune it out a little bit. And, I think, some people have fallen into that camp. I'm all in in the other camp. This is going to radically transform society and it blows my mind even seeing new types of things that come out, like ChatGPT Vision just came out recently, and just seeing the things that people can do with it. And we're just scratching the surface still. So, we're all in, for sure.

**Lenny** (00:17:31):
Awesome. I want to unpack that. But, I think there's also this camp of people that like, "Yes, something big is happening. I just don't have the time to understand, to build, to play around." What have you found and/or what advice would you share to people that are just like, "I want to go deeper down this rabbit hole. I just don't know where to start, because I have so much work to do already and this isn't a side thing."

**Paul Adams** (00:17:53):
The advice I have for people, and the advice I have for myself, I'm in that too, I wake up every day to too many emails, and Slack chats, and people knocking on my door, and my desk, and all things. So, this is a challenge for me too. You just have to take the time. There's just no other way for me. And that to me doesn't mean... It's about priorities. It doesn't mean that you need to work crazy hours. I don't believe in working crazy hours. I don't know what hours I work. I don't know, 50 hours a week maybe. I think, beyond that, you start to make bad decisions and things like that. You get tired. And you need to live the rest of your life. You got to put it into your day. Whether that's setting aside dedicated time to read.

**Paul Adams** (00:18:33):
Reading is the thing. You got to read. You got to stay up to date, and you got to play with things, and try things. If you don't have ChatGPT... If you don't have a... I can't remember if it's a pro licenser, whatever, but if you haven't upgraded to get access to things like GPT for Vision, where you can take photos and you have the mobile app. And I was going out for dinner last Friday night with my wife. I try not to take work to dinner with my wife. But, I wanted to try it. And, I took some photos of her food. And, you can do all sorts of crazy stuff, like tell you how healthy the meal is or whatever.

**Lenny** (00:19:07):
Oh, wow.

**Paul Adams** (00:19:07):
Anyway. You got to try it. You just got to try it. So, my advice people is, you've got to try it. You've got to set aside the time, or it'll pass you by. It does remind me the mobile wave about a decade ago. Again, I was at Google at the time, I was working on the mobile team. So I guess, it was my job to stay on top of things. But, at that time, some companies like Facebook went all in on it, maybe a bit late, but they eventually made the brave decision. I think if people don't explore AI properly, it will leave them behind.

**Lenny** (00:19:38):
It reminds me, I think, at Facebook, Zuck, and also Airbnb, Brian did this, is he said, "Any mocks you show me for new product designs have to be in a mobile app or on a mobile web. They can no longer be desktop for now."

**Paul Adams** (00:19:50):
Right. Yeah. Same with Facebook. Yeah, that's right.

**Lenny** (00:19:54):
I guess, do you think that that's the way to approach this is as a leader, just, "Everything you bring me needs to have some AI component." That sounds probably not like a good idea, but is there something that you're thinking about, or have done of just convincing people this is where you want to spend your time?

**Paul Adams** (00:20:05):
Yeah, it's harder, for sure. It's harder, because-

**Lenny** (00:20:08):
You don't want to force it.

**Paul Adams** (00:20:09):
... Yeah, a lot of the tech is invisible. We have a machine learning team we've had on here for a long time, so we've been working in this space for quite some time. But, it's funny, even if you go back 18 months, I think if I was on your podcast 18 months ago and you said to me like, "Hey, what do you think about AI?" I would've said something like, "It's not real. Machine learning's real, let's talk about that." So, things change, and my perception of it's changed. But a lot of the improvements are behind the scenes. They're with large language models or different types of things people are building in the background of infrastructure.

**Paul Adams** (00:20:43):
So I don't know what it looks like to design mobile mock-ups that are AI mock-ups. But I do think that people need to start really thinking strategically. Maybe it's just not a mock-up stage, but start to think really strategically about their product and whether it's in the line of the media, or it's coming or not. It's not everything is. And if so, for some I think they require a foundational strategic change. Others, it might be less so. But, I think that's actually the head space that I think people need to be in.

**Lenny** (00:21:17):
Can you impact that further? What does that look like to really think deeply about whether your product is in the way of the meteor?

**Paul Adams** (00:21:25):
You can get sidetracked by the technology, for sure. And I do. I just mentioned, hey, going out for dinner and taking a photo of my food. You can get sidetracked by the tech and some of it's really cool. I wouldn't start there. I'd start with the thing your product does. What's the core premise behind it? Why do people use it? What problem does it solve for them? That kind of thing. And then, ask the question. So go back to basics. "Okay, what is my product for? And why do people love it?' And then ask, "Can AI do that?" And for a lot the answer's going to be, "Yes, it can." For some, it might be, "It can partially do it." And then, maybe for others, "It can't do that, at least not yet."

**Paul Adams** (00:22:07):
So you're going to need to map what your product does against what AI can do. And AI can do a lot. It can write. I'll give you a list. It can write, it can summarize, it can summarize text, it can write text, it can answer queries, it can find facts, it can scan text, it can scan images. It can listen to your voice and repeat it. It can take actions. That's the next big thing coming. It can take actions, actually do things. It could like, I mean, "Hey AI. Whatever the AI is called. "Change my flight to Tuesday." Right? It can do things like that.

**Paul Adams** (00:22:46):
And so, it can do a lot of things. It can build rules. So, I think any product that has any workflow in it, which is almost all B2B SaaS products, any product that has multimedia in it, they're in the media line or whatever. I don't don't know if this metaphor is working. But, the media is coming and they're in its path. And so, for a lot of these products that you just need to look at what AI can do. And then, for some of it'll be replacement. AI would replace, it'll just do it. And, in other places it'll be augmentation. It'll augment. It'll help people as the copilot ideas that are going around. But yeah, I think that you've got to map your product, and what AI can do, and what it will be able to do, and then ask yourself, "Okay, what are we going to do?"

**Lenny** (00:23:33):
Is there an example of that at Intercom or a different company of, "Here's a problem we're trying to solve? Oh, AI can actually do this fully for us."

**Paul Adams** (00:23:40):
Oh, yeah. I'll give you Intercom first. Again, this date, I think it was November 29th, etched in our head. We have Fergal who was our head of machine learning. And, Fergal just turns around that day and he's like... Okay, I think he tweeted something actually. He had a tweet that day that was like, "This is it. This is the time. This is the moment. This is the before after." I actually often talk about people... because this is a framework I have, before, after moments. This is a before after moment. That was before. And that is after. And everything has changed. So, we literally ripped up our strategy almost entirely, and started again, from first principles and said, "Okay, why do people use Intercom?" Intercom is a customer support product. And then, very soon after that, Sam Altman, who's the founder and head of OpenAI, said, "Hey, one of the first industries that's going to be disrupted is customer service." We're like, "Yep."

**Paul Adams** (00:24:35):
So we did. We totally changed how we think, how we work, and we just went heads down and built a product called Fin. We built other things first actually. Fin came later, now that I think about it. But we went all in on it. It was a little bit of a bet the farm mindset. So we've done it. I think other companies like Google and Bard have to do it, and maybe they're a little bit slow, but it's so early in this tech cycle that, I think, they're fine. So yeah, we did. It was hard, but we had to do it.

**Lenny** (00:25:13):
Can you share briefly what Finn is just for folks that aren't familiar?

**Paul Adams** (00:25:16):
Fin, first and foremost, is an AI chatbot. So, if you think about customer service, people have questions for a business, and historically, that was mostly email, and phone, and mostly ticketing based. You'd file a ticket, a lot of do not reply email, and so on. And then, came along conversational customer support, which is just basic messaging, like WhatsApp or iMessage, like I mentioned earlier. Now, there's bot first experiences and Fin is an AI chatbot, AI first, chatbot first. So the first line of defense for a customer support team is Finn, not a person. And so, it fundamentally changes. The results we've seen with Fin are mind blowing. Our biggest challenge is actually trying to help customer support teams think about organizational change.

**Paul Adams** (00:26:05):
The tech is way ahead. It's actually people wrapping their heads around what this means for the role, the teams, loads of cool stuff, like new types of jobs for people, like conversation designers, a job we have where you design the conversations that Fin does or managers. So anyway, that's what Fin is. Fin has expanded. So, Fin is now also in our Intercom inbox. They've placed a people answer queries, customers support queries, and now Fin's in there too, helping the support reps. Suggesting answers for them to use, or helping them rephrase things. So, it's now augmenting people as well as answering questions by itself.

**Lenny** (00:26:46):
I think you're one of the few companies that has pivoted fully into AI. And, I think there's a lot of lessons here about how team structures might change, product strategy, priorities, things like that. So I'm curious just to unpack a couple more things here. First of all, what impact have you seen after going all in and going in this direction?

**Paul Adams** (00:27:05):
It's very early, honestly, to be able to answer that properly. And it depends what you measure as success. So, again, there's a lot of hype and buzz with AI. So, if you're measuring it by interest, it's a huge success. Our target customer is customer support. Our customer support manager leader. And so, they're very curious. They're like, "Does it actually work?" Again, back to the earlier thing of there's so much hype, there's a bit of skepticism around it. "Does it actually work? Is it as good as a person?" And in customer support, people who tend to work in that role are typically very high empathy, care a lot about people. And so, they're like, "But is it as good as a person? Is it nice, friendly? Does it understand humanity?" And so, a lot of curiosity, and a lot of interests, and a lot of people trying it.

**Paul Adams** (00:27:57):
We have some customers who are hugely successful with it. They can answer up to 50, 60, 70% of their inbound questions with Fin. So we've some customers who see huge success. But it's early. And so, has it transformed our business financially? Not yet. I think, all fast-growing startups... If you think of AI Intercom as, I guess, a new startup, even though we're 900 people, the growth curve, you're looking for this exponential curve, as opposed to big public company linear growth curve. With the exponential one, it takes a while. The first year or two years is the bottom of that. And so, I think we're still in the trying to figure out exactly what's going on, trying to talk to educate people. But, we have enough evidence to believe it's the future for sure.

**Lenny** (00:28:53):
Are there any examples of either this product or other instances of AI just blowing your mind where you're just like, "Wow, I never imagined it would be this good"?

**Paul Adams** (00:29:02):
I go back to that before after thing. So, the first version of ChatGPT was a before, after, where we we've been working, like I said, in this space, we've had a machine learning team for a long time. The way our machine learning thing worked before ChatGPT was that there was not a manual setup. A customer support manager would have to orchestrate the bot, and teach it what to say, and just a lot of orchestration, a lot of teaching it. And then, ChatGPT showed up and it's like, "Oh, it can do it by itself." It gets it wrong sometimes. So, do people get the question wrong too? It's as good as a person nearly for a lot of these basic things. So that blew my mind. And then, that was, "Oh, it can answer questions." But then, you're like, it can reason.

**Paul Adams** (00:29:45):
There's actually a debate about whether is this reasoning or deduction. But, it can work things out. And, I'm not one for going down into these really philosophical things. I'm like, "We just need to build. Let's go back, build the product." Or whatever. But it can work things out. And that blew my mind. And, we fed ChatGPT and other companies too, we played with other LLMs, like Entropik and so on, it can work things out. And that was mind-blowing. Then you can see it doing things, like writing code. And I was like, "Wow, it's really good at writing code. What does that mean?" And then, you start thinking, here at Intercom we have a one to five ratio. So a PM has about five engineers on a team. And you're looking at this thing writing code and you're like, "What happens next? Do we need as many engineers or will their role change? And they'll start doing different types of things like reviewing code instead of writing code?"

**Paul Adams** (00:30:41):
So that blew my mind. And then, the visual stuff, like I mentioned earlier, I think the visual thing was bigger than the original one. It can parse imagery, and it can help you see the world. You take a photo of your bike and say, "Hey, what's wrong?" And It'll tell you what's wrong, how to fix it. You can be traveling, take photos of stuff. It's in a different language. It's etched in stone on a 12th century cathedral. You're like, "What does that say?" And it'll tell you what it says. It's just like how to do that. This is what I'm actually repeating most to people these days, here in Ireland, if you want to be a radiologist, so study X-rays and tell people what's wrong, and so on, and forth, it's seven years training to learn that skill. So, seven years to be a radiologist, and then you're just into the job. AI, it seems it's already better at it. So, it's already better at it, and it can ingest every X-ray ever made. No human can ever read, and think about, and synthesize every X-ray ever made.

So, of course it's better. And then, you're like, "Okay, what happens now?" I guess, the whole job changes. Radiologists will not take x-ray. Well, I guess they might take them. But, they won't analyze them, for sure. They'll look at what AI says, check that it's right, and then it's bedside manner time. Tell the patient, maybe tell them what course. So the job just fundamentally changes. And by the way, that could be amazing. Here in Ireland, we have long queues for hospitals, epic waiting lists for people getting X-rays. So, this is a really good thing possibly for people. Here's the craziest one I have. AI can listen to your voice and copy it, so it can say things and it sounds exactly like you and it's really, really good. Almost in distinguishable. You're like, "That sounds like Paul." And so, I mentioned the Metaverse earlier. I don't know if you saw Zuck talks to Lex [inaudible 00:32:35]. See that?

**Lenny** (00:32:35):
Yep.

**Paul Adams** (00:32:35):
So that was my first, "Oh." For people who haven't seen it, they met in the Metaverse, I think, or some virtual world.

**Lenny** (00:32:42):
It was a black room.

**Paul Adams** (00:32:44):
In a black room. Yeah. And, the tech has come on so they can analyze your face and build a 3D model. It's really good, really, really close. So, you can imagine, that's going to get better. Based on the trajectory of that technology, it's going to get better. And so, the voice thing and the face thing means both of those things are almost indistinguishable from a real person. And, AI will be able to ingest all the things people say and do. And, when people die, it'll be able to replicate that person. And so, there's an afterlife, hey, your parent dies and you can still talk to them. And, that could be the weirdest thing. Maybe it's not good for people. I don't know. But, that tech is just around the corner. And the AI can answer your questions, mind-blowing. It's mind-blowing.

**Lenny** (00:33:35):
There's actually a Black Mirror episode with that same premise, where-

**Paul Adams** (00:33:38):
That's right.

**Lenny** (00:33:39):
... Yeah. And I don't think it ended well.

**Paul Adams** (00:33:41):
No.

**Lenny** (00:33:43):
Be careful.

**Paul Adams** (00:33:44):
For sure. For sure. Yeah, I think, the [inaudible 00:33:48] and the voice translation thing is another one. I can't remember. Maybe it's in Mission Impossible, where it can take a voice, translate it, and translate it in real-time. And this tech is, again, just here, where if I was a native Spanish speaker and couldn't speak English, you and I could still have this podcast. Your voice would be translated in Spanish in real-time for me. It's, again, mind-blowing.

**Lenny** (00:34:10):
We're actually working on dubbing/translating podcast episodes, which is all done through AI, where it figures out what you're saying, makes it Spanish, and then also changes your lips to match. And, we're trying to launch a couple of those. And that's actually very AI-based. Yeah.

**Paul Adams** (00:34:25):
That's cool. That's really cool.

**Lenny** (00:34:27):
You mentioned that your ENG team might change your thinking, because AI can make them much more efficient and work differently. I'm curious what you've seen actually change on your team, either using AI-ish tools, or just building AI products. What do you think is most different? And I'm curious from the perspective of a team that's trying to think about integrating AI and starting to lean into AI, what have you seen most change and should change?

**Paul Adams** (00:34:52):
Ultimately, you need really great machine learning engineers. That's where it starts. And if you don't have that, then you're going to find it hard to build truly, really, truly great things. So, what OpenAI provide, and what Entropik provide, and Claude, they provide an amazing technology, but you got to build on top of it. If you really want something brilliant, you got to build on top of it. So, we adapted what they build for customer support. Maybe someday we need to go build our own LLM that's just for customer support. Maybe. I don't know where that will all go. And maybe everyone will have their own LLM for every single business. I don't really know, to be honest. Maybe these companies will provide specialized LLMs. But anyway, that's the first thing. And, of course, these people are in high demand. So, you need to invest in building out that function, I think. Really invest in building out the function.

**Paul Adams** (00:35:46):
So that's what we've been doing. Our ML team's way bigger than it was and way bigger than it ever has been at Intercom. And then, it forks. So, some projects are very heavy on that ML team and it needs them. But other projects are more front end, like the inbox stuff I mentioned earlier, where we have Fin and Fin is working, we've built the underlying technology. Now it's a question of if you have a human support person answering questions in the inbox, that's a natural chat conversational interface, pretty straightforward. What happens when there's now an AI assistant in there? How do they talk? And what do they do? And when do they interject? And how do you represent that in the user experience that feels natural? So that's a really hard design problem.

**Paul Adams** (00:36:32):
So, saying back into like, okay, we've a product team that's a product manager, a product designer, maybe three, four, maybe five engineers, and they're getting help from the machine learning team. So, we now have both setups. And increasingly, we can do more with the latter, more teams who can build on the foundational technology that we've been building over the last 12 months or so. So that's one thing. I think a second thing that comes to mind is not to think about it as bolted on. I think some people are still in that camp.

**Paul Adams** (00:37:08):
Again, I'll go back to the mobile thing. There's just so many direct parallels with it. Like I said earlier, at Google, I worked in the mobile apps team. I worked on mobile Gmail, mobile docs, and it was the mobile team. And we were in London. We're like, "Hey, we're the mobile team in London." And meanwhile, over in Mountainview in California, no one cared. It's was like, "You're 20 people. We're 200. No one uses this stuff on a phone." And again, a lot of skepticism. "No one's going to write docs on the phone. Seriously? They're going to write a full document on a phone, are you crazy?" So, don't do that. We're trying not to do that. Don't bolt it on. Don't be like, "Oh, we'll have a bunch of AI people..." And we do have some specialists. But generally speaking, we're trying to have everyone learn about it.

**Lenny** (00:37:57):
Interesting. So, I'm curious just specifically what that looks like, don't bolt it on. The idea there is don't just have a site team that's like, "They're the AI team. They're going to add AI to all this stuff." You're finding and lesson is integrated into every product team.

**Paul Adams** (00:38:10):
And we're still early there. We're still early. So, what we're trying not to do is have the AI inbox team, and they're the only people who work on AI features in the inbox. I think it's much better to have everyone learn about it. By the way, I'm a big believer in generalists, a big, big believer in... I guess, my background is jack of all trades master of none. That's probably how I describe myself. I've worked as a researcher, designer, PM. And so, I believe in generalists, and so I believe in setting teams up that way. And, yes, specialists matters at times. Machine learning for sure is a deep specialism. And in Intercom, we generally, in engineering too, much prefer people who learn new things, whether it's a new coding language, or framework, or how to design AI interfaces, or whatever, get more people being able to do it.

**Lenny** (00:39:05):
I feel like, again, your company is a little bit of living in the future, where a lot of companies are going to get to once they realize, "Oh shit. We really need to get big here." Or they're already working on it. I'm curious if there's other maybe pitfalls you ran into that you think people should try to avoid and something you could share there, or just any other lessons about making this transition that you think might be useful to other people.

**Paul Adams** (00:39:27):
Yeah, what I've mentioned so far, don't bolt it on. Stay up-to-date. I mentioned earlier, read, read. I feel like I'm behind all the time. It's moving so fast.

**Lenny** (00:39:36):
What are you reading? What do you find is most interesting and informative for reading about what's happening in AI?

**Paul Adams** (00:39:42):
I'd love to tell you that it's incredibly structured. I have a great reading list that I got to read every Sunday morning. It's pretty random. I'm on Twitter, which is now called X, of course, a lot. I follow some people on Twitter. I actually use the recommended feed in Twitter a lot. I think, because I interact and look at a lot of AI, I get to see a lot more. So I do that and I do it deliberately to try and generate more stuff. I'll search Twitter as well. There's loads of cool stuff there. There's some newsletters as well and some people I follow.

**Lenny** (00:40:12):
Any newsletters you could call out that you think are most interesting?

**Paul Adams** (00:40:16):
Yeah, Matt Rickard is one guy who talks a lot about AI. The blogs of companies too. OpenAI have a pretty good blog, and they write papers, and summarize them.

**Lenny** (00:40:27):
Cool. If there's any other ones you think of, either people on Twitter to follow or newsletters, email me after, and then we'll add them to the show notes.

**Paul Adams** (00:40:34):
Yeah, perfect. Yeah, yeah, there definitely is. I'll dig them out. Your question earlier, how do you do it? You just try. Try book out half an hour and just go deep for half an hour, and then bookmark a few things, come back to them. Like everyone, you could be so busy, so many distractions, you just got to have to set aside time.

**Lenny** (00:40:50):
Are there any other tools or apps that you find really helpful? Sounds like ChatGPT is at the center of how you play around with it. Is there anything else that you find really interesting?

**Paul Adams** (00:40:59):
I'll try other things like Bard. For example, Bard is Google's AI search engine. Rewind is another fascinating company. I think it's rewind.ai. Rewind is basically augmented AI for your memory. So, install it on your local machine, and it captures everything, and remembers everything. It's all local, so there's no privacy issues. And, you got to try these things to understand whether it's any good, or useful, or where's the boundaries, and how does it work, and so on. So, I'm a believer in that type of thing.

**Lenny** (00:41:35):
**Paul Adams** (00:43:00):
Yeah, Intercom is full of diverse opinions about things. And, I think with AI, I'm all in. I'm leaning forward. The media is coming. I'm sold. I'm way past that point. Also, no one knows. No one knows. And so, a lot of the time, when we talk internally, the strong buy-in from Eoghan, our co-founder and CEO, Des co-founder, like me, like a lot of the senior leadership team we're in all in camp. And so, that helps a lot. Of course, if you're senior leadership team in the company are all in, of course, then it trickles down. But equally, some of the hurdles have been like, "Why are you all in?" And I'm like, "An educated guess. A hunch."

**Paul Adams** (00:43:51):
The part of business strategy and product strategy that, it's just hard. It's like taste. People talk about product taste, "Who has product taste?" And a lot of it is, it's judgment based on experience. That's all I can say. I don't know. For me, personally, I don't know, I lived through the mobile thing pretty closely, having worked at Google on mobile. I lived through that phase. So, I can see the same type of thing happening now with bigger. So I'm using that experience to go all in.

**Paul Adams** (00:44:23):
But it's a challenge for some people, because they don't have that context, or they disagree with it. We have a lot of debate here about the future. Fergal, I mentioned earlier, gave myself and a few other product leaders and Des he gave us a... I don't know, is it a pitch or what? A play? I don't know, about how maybe all of our roadmap with AI is wrong. I don't know if you are familiar with the Horizons framework of Horizon 1, 2, and 3.

**Lenny** (00:44:54):
Mm-hmm. Yeah. Amazon.

**Paul Adams** (00:44:56):
Yeah. So, Horizon 1 is the medium short to medium term, next 12 months, 12 to 18 months. Horizon 2 being like, "Hey, what's happening?" Whatever, 18 to 36 months out. Or, I think, people use different timeframes, different Horizons. Anyway. We're in Horizon 1 land. We're like, "Yeah, and the next year we're going to do this." And he's like, "Yeah, but two years from now, if this path plays out, everything we're doing now is going to be irrelevant and useless." And you're like, "Oh, okay." And so, those discussions happen. And, the level of ambiguity is off the charts. So, a lot of the challenges have been navigating that ambiguity and helping people get the conviction I have without drying out voices of alternative voices and opinions, which are often valid too.

**Lenny** (00:45:53):
What does help people get that conviction? Is it just showing them examples of, "Here's something." "Wow, look at this thing. This is unreal." And, I think, partly what helps, I imagine, is the market you're in seems like such a clear opportunity for AI, feels like an easier pitch than maybe a lot of other markets.

**Paul Adams** (00:46:09):
Yeah, that's true. For sure. That's true. Yeah, showing people is definitely the easiest way. I think customer support is definitely... Like I said, [inaudible 00:46:20], number one, customer support. So you're like, "Okay, I guess we should adapt." Adapt or die is our mantra. Adapt or die. I think that there are other industries where they're on the same journey, it's just not as obvious. So for example, reporting software, Tableau or any reporting product, how do they work? Well, they're the typical read, write app, build dashboards, filtering, querying, hardcore querying, query database, get some numbers, show it in a UI. A lot of thought and care goes into how you present that data to people. The different types of charts that are appropriate help people make good decisions ultimately.

**Paul Adams** (00:47:04):
I think, again, this is hand wave, who knows. Maybe that's all done dead now. And, the reporting product of the future is just a box, and the box just goes to the database, and the box is just, "Who was our best salesman last year January? Okay. Who was our top performing representative in January? Lenny." The report product to the future might look like that. And so, project management tools is another one. There's a bunch of products that I think are just outside the most obvious customer support one. And yet, equally ripe for a newcomer to come with a completely different paradigm and potentially take over.

**Lenny** (00:47:45):
I like that this connects back to your very first point about trying to think about where AI integrates is. Think about what problem are you solving as a company. For example, Tableau, helping people visualize data. And then, the question is, can AI just do this for you? And in that case, oh, and maybe you can. And that gives you basically a whole strategy of like, "Okay, how do we actually do that with AI?"

**Paul Adams** (00:48:06):
Yeah. And, I don't know if the reporting thing will play out that way. But, if you're a Tableau type company, you've tons of designers who design dashboards, and filters, and querying type workflow. What do they do? The UI is the box. So, it's really hard to get into your head like, "We must..." If you have conviction that we must change really hard.

**Lenny** (00:48:33):
Maybe one last question here. For team members learning and starting to work within this realm, is there anything you find helpful to get them ramped up, other than the advice you've already shared, which is just read a lot of stuff, watch Twitter/X, subscribe to these newsletters, and then just try it?

**Paul Adams** (00:48:49):
I also try and read things that say it's all a load of crap. So, it's very easy... I've been guilty of this many times. Back to the mistakes you've made. I've been guilty of this many times, where I've jumped on a bandwagon and it was all wrong. And the older I get... The Web3 thing, I'm like, "I don't even know what Web3 is." Crypto, I never bought crypto. Maybe I'm wrong about that. But, I'm not a bandwagon jumper. But, maybe might've been when I was earlier. And I try these days to read the alternative opinion. People who are skeptical or think it's bad. A lot of people think this is terrible for humanity. This technology is going to eat us alive. So, I try and balance my optimism. I'm a delusively optimistic thinker, so I try and balance that with a negativity, I guess.

**Lenny** (00:49:50):
That's really good advice.

**Paul Adams** (00:49:51):
Yeah.

**Lenny** (00:49:52):
Is there anything else in this realm that you think might be useful to share before we shift to a different topic?

**Paul Adams** (00:49:58):
Oh, yeah. The other thing is, don't be afraid. I think people are a bit afraid of it. And, for example, if I started walking around our office here saying, "Hey, I think we need two engineers per team going forward." That's probably not really a good idea to do that. And I think in reality that's not going to be how it plays out. I just feel like there's loads of great studies over the years about how people don't end up losing jobs, the jobs get moved around. And also, for customer support, for example, it's a high attrition job. So, people saying, "Hey, everyone's going to lose their job. A bot's going to take over." It's like, maybe some of that will happen. But probably to attrition, as in someone quit and just didn't get back-filled. So, the doomsday scenarios that I don't think would play out as much. But, for sure, it's easy to be afraid of it. And, I think you have to lean into it.

**Lenny** (00:50:54):
I love that. Okay, I want to chat about frameworks. You have a lot of interesting frameworks you've put out there. So, maybe we do a rapid fire through a number of frameworks that you've worked with and find useful. And, you actually mentioned this before and after, which I hadn't heard about. What's the general idea to that concept?

**Paul Adams** (00:51:14):
Before, after is literally that simple, I think. We've a rebrand at the moment happening, and that'll be a before, after moment. We're redesigning our pricing. And then, the day that pricing goes live, that would be a before, after, because nothing's the same. And so, we need to go back out and talk to people again. I'm a big believer in talking. You got to talk to customers, it's the only way. You've got to talk, talk, talk, learn, learn, learn. Don't take with the safe face value, go deeper. And so, a lot of these before, after moments, once you've passed, yeah, into the after you got to start learning, "Were we right? Were we wrong? What happened? What do people think?"

**Lenny** (00:51:54):
Can you talk more about this pricing learning/mistake you shared? What do you think you did wrong? What happened there?

**Paul Adams** (00:52:00):
We had a principle called align price to value. By the way, I think, pricing is incredibly difficult. A lot of the design team who work in pricing here, I say to them, it's one of the hardest design problems I know. I think onboarding is another one. Onboarding people into a product is also. People are like, "Oh hey, you just design a few steps and it's pretty easy. People will follow the steps." Again, deceptively difficult to design great onboarding.

**Paul Adams** (00:52:30):
So, I think pricing is deceptively difficult. But we had a principle around allowing price to value. People should pay based on the amount of value they get in the product, easy to say and incredibly hard to do. Value is subjective. The price, for some person they get 10 units of value. I think that's about $5. Someone else is like, "I'd pay $5,000 for those 10 units of value." So, the biggest mistake was a lot of mistakes compounded. And, this is an area where I think we were risk averse. We've ended up with too many pricing models. We've built on top of old competitive mistakes. And, it took a brave decision to say, "We're going to start again."

**Lenny** (00:53:18):
Wow, this feels like it could be a solo episode, just talking through your pricing lessons and journey. Maybe just is there a nugget of wisdom you could share for someone that's trying to think about pricing right now based on your experience?

**Paul Adams** (00:53:31):
Number one thing I would say is keep it simple. Keep it simple. It's so tempting to... With us, for example, a lot of SaaS products have add-ons, where you're like, "Hey, we built X and that's 10 bucks." Or 100,000, depends on what product you're selling. "We built X and that's the price of X. Hey, we've just built Y. Y is awesome and it's a new thing you can do, and it unlocks all these new capabilities. People shouldn't get that for free, because it's a new thing that didn't have. So let's charge more for Y, but that doesn't really work with the other... Okay, let's look at an add-on. Oh yeah, cool. People just add on." But then, later, now you've got people who have the add-on, and people who don't, and then you're like, "Add another thing." And so, we've added tiers, with products, tears, add-ons, tearing in the add-on. Oh my god. People can't understand their bill. So, my advice is keep it simple. Fight so hard to resist the temptation to add extra ways in which you price.

**Lenny** (00:54:43):
Amazing. I didn't think about going into this topic, but I'm glad that we touched on it.

**Paul Adams** (00:54:49):
Think I was talking about scars for life earlier. That's another scar for life.

**Lenny** (00:54:54):
All right. Let's keep talking about some frameworks. Another that I found that I loved is something that you call differentiation versus table stakes. What's that about?

**Paul Adams** (00:55:03):
It's like the Kano model, if you're familiar with that. But, it's very simple. I guess, we took the Kano model and just tried to make this really crazy simple version of it. Again, I'm a little bit allergic to things like this. I even hate myself for bringing up the Kano model. I'm allergic to people over intellectualizing frameworks. And like, "Oh, well if you've seen the new different law..." Of whatever. I'm like, "Keep things simple, practical, and pragmatic. And then, let's all, again, go back to work and start building the product, so that customers can benefit, because that's actually all that matters." And so, difference versus table stakes, very simple. I think people who adopt a product, or buy a product, or switch to a product, there's two driving forces. One is the attraction of the new solution, and that's basically differentiation. So what's different and better? But critically, what's different and better in ways that customers care about?

**Paul Adams** (00:56:00):
Again, back to all the failed projects, my lesson for a lot of these was, we were different and better in these Google projects in ways people didn't care about. All sorts of Google projects, like Google Wave was an amazingly innovative product that no one really cared about. So, be different and better in ways people care about. So that's the attraction that's like, "Oh, I want to check out that. That looks cool. I want to check that out. That looks better than what I have today." But, on the other side, there's a entry requirement or table stakes. To play the game, you got to have a certain amount of things. And so, they're table stake features. They're often very boring. They're real basic stuff, boring stuff, and easy to ignore, and easy to not build.

**Paul Adams** (00:56:44):
And again, a mistake with Intercom maybe over the years is that we were much more attracted to the differentiation and built a lot of that. So we went through different iterations of our roadmap, sometimes changing over the course of a year or two, where we were all the differentiation to realize that everyone loved it and really wanted to buy, but they couldn't, because we didn't have the basic report that they needed or we didn't have the basic permission feature that they needed. And then, the robot is built based on those... Trading off why do we need more differentiation or trading off why do we need to invest more table stakes? And so, these days, the basic Intercom today is we're 50/50 probably in terms of resources, but it has swung 70/30 in both directions at times.

**Paul Adams** (00:57:26):
The last piece about it is, I think it's really powerful to look at a roadmap or look at a proposed roadmap and ask yourself, which of these do things matters more to us, not to us actually to our customers right now? The other thing that we've talked a lot about here internally is if you're a startup and you're entering any established category, customer support for us, big established category, massive, a lot of table stakes, built up over years, decades. ServiceNow, Service Cloud, Salesforce, Zendesk, decades of table stake feature building. So to play the game, you need a lot of the table stakes, unless you have incredible differentiation. So from the early years of Intercom, people just buy us alongside Service Cloud or Zendesk. They just buy us alongside. They're like, "This Intercom thing..." We were like first modern messaging and modern UX. They were like, "We want that for our customers, alongside the big giant bag of table stakes." Because Intercom doesn't have any of those.

**Paul Adams** (00:58:26):
Then over the years, we've built the table stakes to a point where, okay, now we can fully play the game and people can switch, so they can swap Zendesk for Intercom. But it took us years to get there. And then hence, if you're a startup, you need to invest a lot more in differentiation. And then, over the years, I think you start to balance the books a bit.

**Lenny** (00:58:47):
I think what's interesting about this is one, it just gives you a way to think about looking at your roadmap. How much are we actually doing? And are we doing too much table stakes? Are we doing too much differentiation? So it gives you a awareness of what's happening. And I think, it's an interesting strategy as a startup like, "Do we spend years doing table stakes and then launch? Or is it go the way Intercom went, like differentiate first we'll build everything else later?" Wonder when it makes sense to go one or the other.

**Paul Adams** (00:59:13):
Yeah. And it probably depends on the market, different categories, and all sorts of things. Yeah.

**Lenny** (00:59:20):
Yeah. Awesome. Okay. The next framework is something that you call swinging the pendulum. What is that about?

**Paul Adams** (00:59:28):
I actually mentioned an example a bit earlier. Differentiation in table stakes was swinging the pendulum. So, swinging the pendulum means, you take a step back from everyday work life, and you make the observation that something's in an undesirable state. So, maybe it's, "Whoa, we've all the differentiation in the world, but people can't adopt the product, because we've never built any of these table stakes. It's undesirable." Or, "Oh, we've now built all these table stakes and we've not been investing in differentiation. And actually, we're not that attractive to people, because switching product is a pain. And we're not just attractive to people. Okay, so this undesirable state."

**Paul Adams** (01:00:08):
And then, so you go and fix it, but the temptation is that you over-correct. And we've done this so many times in so many domains, everything from, "Okay, we don't have enough differentiation." A year later, "Oh, wait a minute, we're missing all the table stakes. Okay, we're over there." So, product building is one, people is another one. Building out teams and people. Another big one was, I don't know, maybe five years into Intercom, we were on this high growth trajectory, really good classic startup before our pricing problems. And, we looked around and said, "None of us have done this before. I don't think that's good. Undesirable state. Do we even know what we're doing? We're just a bunch of random people. Do we know what we're doing? We need to hire some experts. We need to hire some experts. If we're going to go up market, we need market people who've done it before."

**Paul Adams** (01:01:07):
So, that was undesirable state, fix it by hiring people who've done it before. And then, we hired loads of people who've done it before, and what they did was brought the culture and ways of working of their prior company to Intercom. And so, we totally over-corrected, didn't work out in a lot of cases. In most cases, it didn't work out. Because, we weren't trying to be a bigger company, that already exists. We're trying to be us. So, I think, hiring and building teams is another where we really over-corrected to find out, "Okay, it's a balance here."

**Paul Adams** (01:01:43):
Related to hiring, one is generalists and specialists, similar theme. People who've done it before, or people who are specialized. And, we hired a bunch of specialists only to realize that they're not adaptable. And, in Intercom, we have a lot of ambiguity, and we lean into the ambiguity, and people who are highly specialized can thrive in big companies, really thrive. They're invaluable employees. But in a fluid startup-y culture with a lot of ambiguity, they can really drown, really struggle. Maybe the middle of this pendulum, landing in the middle is, "Let's hire someone who has done a bit of it and have a bit of specialism, not much, but enough to try and figure it out." So, we hire a lot of those people today.

**Lenny** (01:02:34):
First of all, I love all these stories of things that don't work out, because a lot of people don't like sharing these. And, this is what people want to hear, like, "Here's not everything was perfect. Here's a lot of mistakes that are made along the way." And, it feels like this framework is a result of just doing this too many times. Is the main lesson here generally avoid swinging the pendulum too far? Because sometimes, it's worth it, like in this case of AI, is like, "No, we're going all in." Or in mobile, it was worth going all in. I guess, yeah, what do you think of when I say that?

**Paul Adams** (01:03:04):
In talking to people about this before, sometimes the conclusion of the conversation is something like, it's the only way to do it. You actually can't do it a different way." And so, maybe the question is really, how high does the pendulum go? Versus, you got to swing it, and then it's like, how far do you swing it? And for sure, you're right. With AI, we are swinging it pretty high. Maybe I overestimated earlier, if AI is in the differentiation camp to mix the frameworks, we're still building a lot of table stakes features too, building depth into the product. And that's 50/50, I think I mentioned 50/50 earlier, so that's 50/50. So, we're not totally swinging it. It's swung, but we're also doing the other thing and balancing things out. So, I think you probably have to swing it. It reminds me to know where the boundary is, is what I was going to say.

**Paul Adams** (01:04:01):
It reminds me back to the olden days stories. I remember, at Google, privacy was really top of mind, to the point that it would block decisions, block product progress, just privacy circular conversations, so many circular conversations, and nothing ever got built or shipped. I worked on a project for a year at Google and we shipped nothing in the year, just circular conversations, which killed me at the time. So, when I went to Facebook, I realized they have a different approach to privacy. And again, I'm not advocating it's necessarily good, it certainly didn't help their brand. But, there was an idea that to know where the boundary is, you got to across it. And crossing it is painful. But, if you don't cross it, you'll never know. So if you think you're going up to the boundary and you stop before it, turns out it's actually miles over there.

**Paul Adams** (01:04:54):
So I think with a lot of this stuff, you don't really have a choice. You got to cross the boundary, feel the pain, be humble enough to realize you didn't get it right, and go again or whatever the corrective course is.

**Lenny** (01:05:12):
Yeah, get that pendulum off the even pivot thing that it's on. And then, let's fix that pendulum. Let's put it back.

**Paul Adams** (01:05:18):
Yeah.

**Lenny** (01:05:20):
Okay. Another framework that I read about briefly, and I love the general idea of it already, which is something that I think you call product market story fit.

**Paul Adams** (01:05:31):
Yeah.

**Lenny** (01:05:31):
What is that?

**Paul Adams** (01:05:33):
So yeah, with product market fit, pretty basic, well understood, very important. The way I describe product market fit is, you've got to build the right product for the right market. I think, by the way, as an aside, not enough people think about the market side of that equation. A lot of product people don't think about the market side. But for me, it's very simple. The market is the people, the problems they have, and how important the problems are to them. To have a good market, you need a lot of people with the same problem, and they need to care a lot about it. Going back to the Google social stuff, we found a lot of people with the same problem, but they didn't really care. They didn't really care. What they had was fine. So a lot of people with the same problem and a lot of energy around the problem and the product is the solution to that. The market's the who, the product's the what.

**Paul Adams** (01:06:21):
And, I don't know, in my career again, so a bunch of products that were built, there were good products in good markets, and they failed and I couldn't work it out. And eventually, I came back to this idea that... And maybe someone might say, "Paul, it's marketing. You're talking about marketing." But story, the story's wrong or the story's missing. And so, sometimes, it would be a great product in a great market explained in a convoluted way. I see that a lot. I used to see that a lot at Google again, just explained in a very complicated way over intellectualized. And, as a result, people are like, "What? What are you talking about?" You don't get their attention. And so, the story is really important, as important. And actually, sometimes you'll see not great products, certainly worse on paper... I'm trying to remember the Spotify competitor back in the day, people were like... What was the name of it?

**Lenny** (01:07:19):
Ordio?

**Paul Adams** (01:07:20):
Yeah, Ordio. Ordio was one of these where-

**Lenny** (01:07:20):
I like Ordio a lot.

**Paul Adams** (01:07:26):
... Yeah, all I've ever heard about Ordio was, "Amazing product."

**Lenny** (01:07:29):
Mm-hmm.

**Paul Adams** (01:07:30):
It's failed. And why did it fail? Spotify and Ordio had the same market. They were solving the same set of problems. Ordio was arguably the better product at the time. I don't know if that's true, but arguably the better. I also think Spotify's an incredible product. But, they got the story wrong. And so, again, I think, all product people, whether you're a designer, product manager, people in research, data science, need to think about the story all the time. Work of marketing, work of product marketing, and learn about how to explain the product, as much as how to build the product.

**Lenny** (01:08:03):
Mm-hmm. Makes me think about positioning and how important that is. And, we had April Dunford on the podcast very recently talking a lot about that.

**Paul Adams** (01:08:12):
Yeah. Yeah, she's excellent. Yeah, it is really, "Why are you better and can you explain why you're better?"

**Lenny** (01:08:21):
That's such an important point. A final area I wanted to touch on is jobs to be done. So we had the co-creator of Jobs to be Done on the podcast. We had Shyam Krishnan on the podcast. They very much disagree about how effective Jobs to be Done is. I know you guys are big on Jobs to be Done. So, what are your just general thoughts on the Jobs to be Done framework? How effective was it for you all? How do you use it? What do you find work? Doesn't work? Whatever comes up.

**Paul Adams** (01:08:47):
Yeah. I'll be totally honest, at the risk of finding people do this, we worked with Bob West years ago. I think Bob's a great guy. And we followed that model of Jobs to be Done more than the ODI, I think, is the other skill of thought. Anyway. I'll try say this in a simple way. We found Jobs to be Done really good. Very, very useful. But, in a very simple way... Again, back to this idea of simple frameworks, in a simple way, separately, there's so many people who spend so much of their energy debating the nuances and peculiarities of one version. Who cares? No one cares. Oh well, I don't care. They care obviously. But your customers don't care. People you're trying to build a product for don't care,. No one cares. That's a cool intellectual debate. But, for me, maybe this is too extreme. It doesn't really have any place in the work we do. We're just trying to build a great product.

**Paul Adams** (01:09:50):
And so, for us with Jobs to be Done, it was a really good way of us centering on the customer problem, focusing on not getting distracted, basing it in good solid research informed insight, that told us the thing people are trying to do. What is the thing people are trying to do? Again, energy. Do they have a lot of energy around it? Maybe the energy thing might've come from talking to Bob actually, now that I think about it. I think it did actually. I think, the idea of this idea that you need people who have a lot of energy around the problem. And you have to interview them for that most of the time to feel the energy they have. It's very easy to see if someone's apathetic versus into it.

**Paul Adams** (01:10:30):
So, we've had it pretty good. And, we invented this job stories thing by accident. I can't remember exactly what happened. But, I wrote out this way of writing a job story basically. Well, we didn't call it job stories, someone else called it that. We just, at the time, were like... I can't even remember. It was a trigger. And, anyway, we didn't even give it the thing a name, someone else named it, I think. And, I'm just like, "We're just trying to build a great product." So, we've had it really good in that way, really simple. And then, the other one that we use a lot still here is the four forces, which is this framework of Jobs to be Done. The four forces being... There's different forces when people try and switch product. And some of it's the differentiation, table stake stuff, like the attraction of the new solution, the reasons that you might not adopt it. Habits. People have anxieties.

**Paul Adams** (01:11:26):
Here's another funny story to tell you how much... The four forces is really good. Here's a funny story, I was saying earlier that Eoghan and Des were trying to convince me to leave Facebook, which I loved at the time, join and to come. They wrote out the four forces for me to join. And then, secretly, over a few beers, talked to me and fed me my anxieties. And basically worked me on the four forces. And I was like, "That is genius. That is ingenious. Maybe it's a bit... But it's ingenious." And so, the four forces is incredibly good at helping understand why people make decisions.

**Lenny** (01:12:07):
I love that a lot of your advice just continues to come back to, keep it simple, cut away anything that isn't necessary. And, I find the same exact thing with Jobs to be Done. I find it really useful as a framework for the podcast, the newsletter, but I think there's this endless set of processes and ways of optimizing that gets people distracted. And, often just slows everything down.

**Paul Adams** (01:12:28):
Yeah, yeah. And it's interesting and fun to talk about sometimes, really fascinating, unless you're an academic. But if you're working in a company that you're trying to build a software product for people to improve their lives in some small meaningful way, it doesn't matter. Just use the thing that helps you do that. That's the goal. And use the thing that helps you do that. And that's it.

**Lenny** (01:12:55):
With that, we've reached our very exciting lightning round. Are you ready?

**Paul Adams** (01:12:58):
I'm ready, yeah.

**Lenny** (01:13:00):
What are two or three books that you've recommended most to other people?

**Paul Adams** (01:13:04):
Yeah, the two books I recommend to everyone always, I have copies in my office here, It's Not How Good You Are, It's How Good You Want to Be. It's a book by Paul Arden who worked in advertising a long time ago. It's an excellent book. It shows people that you feel an unlimited potential if you think about it the right way, everyone does. The second book I recommend to everyone and buy for people and give to them is Principles by Ray Dalio. I'm a big fan of Ray Dalio. I think he's incredible. I'm a big believer in principles. A lot of us at Intercom are... I always get those two books. And they're totally different. The Paul Arden book, you can read it in 20 minutes. Principles is that thick.

**Lenny** (01:13:38):
What is a favorite recent movie or TV show that you really enjoyed?

**Paul Adams** (01:13:42):
Most recent is The Bear, which I came to late. The reason I love the show is because I think it somewhat celebrates the grind. And I think that's important. I worked in coffee shops a lot when I was younger, when I put myself through college and stuff. And, the grind is part of life, and the grind is a necessity to get things done, and make great things happen sometimes. And I like that about it. I really like that about it.

**Lenny** (01:14:09):
What is a favorite interview question you'd like to ask candidates?

**Paul Adams** (01:14:13):
Yeah, I'll give you a slightly different answer. I don't really have certain few questions for candidates. And I don't like answer question diversity. I don't like questions that rely on memory. Like, "Tell me about the last time you did X." Here's an amazing question I got given recently by Alyssa who used to work here. I had to do referral calls. So, you're interviewing someone, you want to give them the job and they've got referees, and of course, the referees they have are the best people that they've ever worked with and their favorite managers. So this question is, "What feedback will I be giving this person in their first performance review?" It's an amazing question, because the person can't dodge it. There's an answer. And, it's incredibly enlightening.

**Lenny** (01:14:55):
And that's a question you ask on reference calls?

**Paul Adams** (01:14:57):
Yeah, on reference calls.

**Lenny** (01:14:58):
That is such a good question. I love it.

**Paul Adams** (01:15:00):
Yeah, it's a amazing question. Yeah.

**Lenny** (01:15:02):
All right, what a gem. Thank you for sharing that. What is a favorite product you've recently discovered that you really love?

**Paul Adams** (01:15:09):
This is maybe cheating, but I go back to a lot of the AI products. I think ChatGPT Vision is mind-blowing. I've been playing with Rewind lately. I was a bit late to it. Des, and Kiran, and a bunch of people here, founders of Intercom, love Rewind, use it and love it. Thing's amazing. So I'm a bit late to that. But, it's just augmented memory. It's mind-blowing. So, Rewind's been fun.

**Lenny** (01:15:32):
And they just came out with a little audio thing that can record your actual day.

**Paul Adams** (01:15:36):
Yeah, I'm not so sure about that.

**Lenny** (01:15:39):
Yeah, got some flack.

**Paul Adams** (01:15:42):
Yeah.

**Lenny** (01:15:43):
I'm not so sure. I don't know. I don't know if it's real. It looked like not a real product when they launched in, but I think it's real.

**Paul Adams** (01:15:47):
And it tippy-toes into what's okay and not okay with AI. And, yeah. Yeah, it's a cool theory though, for sure.

**Lenny** (01:15:57):
What is a favorite life motto that you often come back to share with people, find helpful for yourself?

**Paul Adams** (01:16:04):
Yeah, I have a post-it on my monitor that says, "Only work on what matters most." It's on my monitor, a post-it. And it sometimes falls off, and I have to write it again. Only work on what matters most. And, it's amazing. I go into work, someone emails me, and I'm like, "Oh, God." I'm like, "Only work on what matters most." The second one related is, stop worrying about things you can't control. And so, I have two of those. And so, only working what matters most. Stop worrying about things you can't control. It just reduces the temperature. Again, life lessons learned. I sent a lot of dumb emails in my past, like, "Red Energy, oh my God, what are they thinking?" You wake up in Dublin to a San Francisco email. And you're like, "Oh god. Keyboard." And, if your monitor says these two things, you just don't do that. You just take a breath, get a coffee, come back. Does it really matter?

**Lenny** (01:17:02):
Beautiful. The second one, I think, I learned first from Seven Habits of Highly Effective People. Have you read that?

**Paul Adams** (01:17:02):
Oh, yeah.

**Lenny** (01:17:10):
Just think about the focus, the circle of things you can control, and then there's the circle of things you can influence, and then there's the things you have no control over. And, I find that really helpful myself. I love that you have it as a post-its. I feel like, I need to make post-its of all these lessons people share as their little mottos.

**Paul Adams** (01:17:26):
Yeah, the post-it on the monitor is a real life hack, I found a few years ago. Because it's dumb in a way. The posts on the monitor, it's in the way.

**Lenny** (01:17:34):
Wait, you actually put it on the monitor in the way of your screen?

**Paul Adams** (01:17:34):
Yeah, yeah.

**Lenny** (01:17:34):
Oh, wow.

**Paul Adams** (01:17:38):
It's in the bottom left, just covering the bottom. Because otherwise, if it wasn't there, I wouldn't look at. I make myself look at it.

**Lenny** (01:17:47):
Yeah. Wow. I haven't heard of people putting it over precious real estate on their monitor.

**Paul Adams** (01:17:53):
Yeah.

**Lenny** (01:17:53):
That works. What's the most valuable lesson your mom or your dad taught you?

**Paul Adams** (01:17:58):
The biggest one, again, so reductive and simple is to be nice to people. I think, being nice goes way further than people really realize. One thing that I've learned, again, the hard way through life is you have no idea what's going on in people's lives. You've no idea. People could have all sorts of really stressful, all sorts of personal stuff going on, and the reason they did the thing at work that you didn't like is because of that. And so, I try and think, "Be nice. You don't know what's going on. You might learn later. Don't act in a way you would regret." I think, being nice in life goes far further than most people give a credit for, because it's too much of a, I don't know, fluffy truism or whatever.

**Lenny** (01:18:54):
I 1000% resonate with that. I've been told I'm too nice and I had to become a little less nice. But, I still can't lose that. So I fully buy into that. My parents taught me a similar lesson.

**Paul Adams** (01:19:08):
Yeah. And sometimes it's hard. I'd never fired anyone before I joined Intercom, for example. I really did not like doing it. And, since then, I've done it quite a few times in a bunch of different circumstances, and realized it always works out for both sides. And the nicest thing to do is to do the harder thing. It's actually the nicer thing to do. People are relieved in this example. It's a nicer thing to do. So, it can be a complicated one.

**Lenny** (01:19:37):
I love it. Final question. You're Irish, you're based in Ireland. What is an Irish food you think people should definitely try out if they ever visit Ireland?

**Paul Adams** (01:19:50):
Can I cheat and say Guinness? Is that food?

**Lenny** (01:19:54):
Absolutely.

**Paul Adams** (01:19:56):
The Guinness in Ireland. People talk about this and it's true. The Guinness in Ireland is much, much better for a whole bunch of reasons. It's basically a fresh product and it's brewed here. It's the way they think about, it's like milk. Milk goes off, Guinness goes off. Guinness is older than a few days old, tends to start deteriorating. So, Guinness Ireland is amazing, because it's made here. The other thing I think that Ireland does really well is fish. Ireland has not had, by the way, the greatest reputation for culinary excellence over the years. I think Irish food in the States in particular is not good. But, the fish here is incredible. You can get incredible fish. And Ireland's obviously an island, so there's a lot of fish.

**Lenny** (01:20:37):
On the Guinness front, is there any way to get the good stuff not in Ireland? Or is that just you got to go?

**Paul Adams** (01:20:43):
No, there is actually. You just need to be near a brewery. So Guinness is brewed in Nigeria. There's a huge Guinness market in Nigeria.

**Lenny** (01:20:43):
I did not know that.

**Paul Adams** (01:20:53):
I think they actually use a different recipe, but it's brewed there. I think the brewery in the U.S. is somewhere in the east coast between New York and Eastern Canada. So, it's somewhere there. So, often, the Guinness in New York can be actually pretty good. The Guinness in San Francisco tends to be really bad. I remember talking to someone about this that works in Guinness. One of my friends, does a lot of work in Guinness. I think the boat carried the Guinness goes down through the Panama Canal back up to San Francisco. So, it's 12-weeks-old or something.

**Lenny** (01:21:25):
Wow. Did not think we would be learning about the travel path of Guinness from-

**Paul Adams** (01:21:31):
At least this is what I've heard. The Guinness has so many myths, you just don't really know what's true. But, these are the stories I've been told.

**Lenny** (01:21:38):
... Amazing. Paul, you are awesome. 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?

**Paul Adams** (01:21:46):
I have a handle, it's everywhere. Basically, P-A-D-D-A-Y. It's Paddy with an extra A. So, P-A-D-D-A-Y. That's everywhere. So, paddy@gmail, @Paddy. It's my handle everywhere. So, that's where you can find me. I'd love people to reach out to me, right, genuinely learn. I'd love to hear from people who think my AI talk is nonsense and it's more a crypto Web3. Or, I'd love to hear people who have alternative opinions and challenge mine. That's how I like to learn and get better. So, if people have those opinions, I'd love to hear them. I'd love to talk to them.

**Lenny** (01:22:25):
Be careful what you wish for. The YouTube comments are always a spicy place. We'll see what we see. Awesome, Paul. Thank you again so much for being here.

**Paul Adams** (01:22:33):
Yeah, thanks Lenny. I really appreciate it.

**Lenny** (01:22:35):
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.

---

## [8/24] Reflections on a movement | Eric Ries (creator of the Lean Startup methodology)

**Eric Ries** (00:00:00):
People act like having a startup fail is the worst thing that can happen to you. And man, that's not even in the top 10. It's bad, I've done it, it's awful. It's really bad, but far worse is to be in a company that won't die, a zombie, undead company that you hate, but you can't leave. Oof, have I met people like that, and we're having a mental health crisis among founders that's not talked about enough. People have started to talk about the downside mental health risk, obviously the stress of being a founder is hard, but look what's happening to the people that are so-called successes? When you build a company and you sell it out and it becomes something that you find abhorrent, man, maybe you get rich, but it's not good. And so building a company you hate, that becomes a maligned force in the world, that you have to go pretend you weren't involved with or like you feel complicit in... That's way, way worse, and I wish more founders would take that more seriously early on.

**Lenny** (00:00:58):
Today, my guest is Eric Ries. If you're not familiar with his work, I would be shocked. He is most famous for creating the Lean Startup methodology and movement and also his incredibly influential book, The Lean Startup. He also coined more terms and concepts that are part of the tech culture than anyone I could think of. He currently spends his time advising founders and startups. He was a former founder and CTO, and currently is the founder and executive chairman of the Long-Term Stock Exchange.

**Eric Ries** (00:04:50):
Thanks for having me.

**Lenny** (00:04:51):
This just feels very surreal to have you on the podcast. It feels like a surreal experience. You're such a legend in product and in startups, and I'm just really excited to get to learn from you and for listeners to get to learn from you. And my first question, what are you up to these days? I know you work on the Long-Term Stock Exchange. What else is going on in Eric Ries' life?

**Eric Ries** (00:05:10):
If you can believe it, The Lean Startup came out in 2011, so it's been a little while now and it's been such a crazy ride. And basically every year since it came out, I keep thinking, "All right, that's the end. Surely that's enough." And just each year it gets crazier and crazier, and new things come my way. So, I'm building the Long-Term Stock Exchange, LTSE, I'm sure we'll talk about, and I spend a lot of time still with founders and with big company execs trying to answer their questions about how to build companies in the right way.

**Eric Ries** (00:05:41):
Obviously, been sucked into a lot of AI stuff of late, as everybody is, and one of the interesting things that actually surprised me is I spent a lot of time the last 10 years working on the issues of governance and corporate governance and how companies should be structured, not really with an eye towards technology in particular, but just with long-termism and humanism really at its core, and it turns out that those questions have just become really acute for AI companies. So because of my work on governance, I wound up meeting with and getting to work with some of the top AI companies, so that's been really interesting, but I feel like I go where the issues that are on people's minds go, and it kind of pulls me into new and really interesting things all the time.

**Lenny** (00:06:23):
Amazing, so I'm going to want to talk about all those things as we get into this. Something I wanted to mention is I feel like people don't give you enough credit for how many core concepts of startups and product building you've either invented or popularized. So what I know, obviously Lean methodology, then there's the term MVP, then there's the term pivot, and then also I think A/B testing, customer development, continuous deployment, vanity metrics as a term, I'm guessing there's many more, and then the Long-Term Stock Exchange. And I think the theme I get from this is there's a lot of first principles thinking that you've done, and so just a couple of questions here. One is, did you think you'd have this much impact on startup culture and language? And then just, where do you think this comes from, this first principles thinking that you seem to be really good at?

**Eric Ries** (00:07:13):
Well, first of all, thank you for saying all that. That's giving me too much credit, but I like the idea that it's going to balance out the too little credit I ostensibly get somewhere else, that's great. To answer your question, no, I didn't know this was going to happen. This is so embarrassing to admit now, but just to give you a sense of how different the world is now than at the time of the financial crisis, I was so embarrassed to be blogging, that I didn't put my name on the blog. I published it anonymously because it wasn't a thing that people did and people told me it would be career suicide. And there were so few startup bloggers at that time, that the top three all reached out to me personally because they saw it in their referrer logs on their website. That's how little traffic they got, that when a new person started writing about their thing and linking to them, they were like, "Who is this guy? What's going on?" It was a very different time.

**Eric Ries** (00:08:07):
And I had just finished a startup. I had left a startup that was being successful, and I had this reputation among VCs that I could make engineering teams be supernaturally productive. I had the magic pixie dust. And so, they would ask me to come in and work with their teams and I would be like, "No, listen, honestly, I'm not that special. It's nothing to do with me. It's just this framework. I have these ideas that are helpful on a team when they adopt them." And they would pat me on the head and be like, "Yeah, kid, I'm sure that's great, but can you please bring the magic pixie dust to my company anyway?"

**Eric Ries** (00:08:38):
And I would go and have these meetings, and I'm not making this up, people would yell at me in the meeting. I would get yelled at. In fact, I would be asked not very kindly to leave, and I'd be like, "I don't understand. What are you yelling... Why are you mad at me? You asked me for this meeting." And they'd be like... I'm just telling you what I witnessed with my own eyes. We at IMVU, we shipped product 50 times a day on average at a time when people were lucky to be doing it monthly if they were really advanced. Remember, it wasn't that long ago that we put the year the product came out in the name of the product. That tells you what cycle times used to be. That was considered normal, and people were like, "That's impossible. That could never work."

**Eric Ries** (00:09:15):
And at that time, I wasn't even propounding a theory or anything, I was just explaining what I had seen and people couldn't believe it. And so I had this great idea, if I write some of these stories down, then when someone asked me for these... I was doing these meetings all the time. I didn't understand the way Silicon Valley worked at that time, I didn't understand why this was happening to me, having these meetings, and I said, "I'll write the story down and then I'll send people the essay, and if they think it's crazy, then we don't have to have the meeting and I won't get yelled at." That was really as far ahead as I was thinking at that time. And then it basically took over my life, and I was being asked to speak, but people really wanted to unmask the anonymity. Who is this person? And so I came clean, I identified myself and started writing and speaking and working with companies, and it became a whirlwind.

**Eric Ries** (00:09:58):
The first principles part of it, I don't know, I've always been wired that way. I feel like maybe I'm a failed scientist. I wish I was actually good at chemistry or something. I could have actually been a real scientist, but I always really had a respect for the truth for scientific thinking. That was a big cultural value that I was raised with. My parents are doctors, it was just definitely part of my upbringing, and I was really into reading stuff that worked that way. So, it was very natural for me. I felt like as I had success as an entrepreneur, I wanted to know, why does this work? And people gave me advice. All the advice used to be of the form, "Steve Jobs once did this thing, so if you do it too, you'll be like Steve Jobs." And it's like, well, he also wore the black turtleneck. Is that also part of the... Help me understand, why does it work and is it still appropriate? Does it make sense for that industry or not? I didn't like these just so stories.

**Eric Ries** (00:10:44):
And I realized looking back, I didn't have this understanding at the time, but looking back, I feel like first principles thinking, it really has two components that people pretend are one thing, and it's more one than the other. A lot of my work is just descriptive. It's not actually telling people what to do, it's simply giving a name and a concept to a thing that already happens. That's the funniest part. In the early wave of criticism against Lean Startup, people were very angry at the idea that I was saying that a startup is an experiment like, "You can't treat a startup like an experiment." I was like, "Well, you could treat it however you want, but it is an experiment." People would like, "Well, people don't like the concept of pivot." This anti-pivot people, anti-MVP people every once in a while come out of the woodwork still to complain about it.

**Eric Ries** (00:11:25):
It's like, "well, I'm not telling you that you should pivot. I'm just saying that is what it's called when you change the strategy, but try to have fidelity to the vision." It needs a name because we do it all the time and even when we don't do it, we talk about doing it. We can't reason about it, we can't... And so this is descriptive part, and then that's the real work, honestly, is just saying what is... To me, the big question from the beginning was, what is a startup really? Why is it so different from a big company? Why are none of the best practices that I learned in my career work? It was like a survival mechanism, I want to know. And then once you've identified what it is and laid out the original principles of what you're trying to do, the prescriptive parts are just a matter of deductive logic.

**Eric Ries** (00:12:10):
It's like, "Well, given that we've made this hypothesis, what are the implications of that?" And of course, the prescriptive parts are important because that's how you learn whether your hypothesis is correct. So, that's the other thing I think people don't appreciate. People call me a first principles thinker, which I love that, it's a big compliment, but I feel like it conjures up for people this idea that I sit in a cave for years and years and conjure up the magic idea. It's like, no, I wish people had all the outtakes of all the concepts I've tried. Lean Startup was not my first try, the conceptual vocabulary. It's not the first time I got it right. It came through a lot of trial and error, a lot of trying to figure out what works and doesn't work, first in my own career, in my own work, then trying to give advice to other people and trying to translate what worked for me to see what would work for them, and then to answer the questions that I thought were the natural ones.

**Eric Ries** (00:12:57):
Under what circumstances does it work and when would it not be appropriate? What predictions does the theory make that we could then go see if are true or not true? And then the bigger picture thing is, what are we really doing here? What does success even look like? That, I think, is the thing we all really grapple with is it's very easy to come up with a theory or a method or a process that produces the maximum of something, but then it's like, "Is that thing good? Is that actually helping us accomplish some kind of goal?" And so, I think that first principles thinking is very helpful for that too, but I don't know. I guess to really answer your question, the true answer is I don't know. I've just always felt like I was wired that way. I have a love of ideas and want to know why things work.

**Lenny** (00:13:39):
So to me, a couple of takeaways from what you just shared. One is just you're wired to think in this specific way of thinking very logically, scientifically, I have a similar feeling where someone tells me a story... The way I started writing partly is people kept asking me questions about how Airbnb did stuff because they're building their marketplace. I'm like, "Here's what they did, but who knows if that was the way to have done it?"

**Eric Ries** (00:14:01):
Exactly. Did they succeed because of that or in spite of that?

**Lenny** (00:14:05):
Let's dig into the Lean Startup method and methodology. It feels like we haven't heard an update on just how things are going, where it's going, how popular it continues to be. I'm curious just, what's your sense of the state of the Lean methodology in the Lean Startup movement?

**Eric Ries** (00:14:21):
Oh, it's an interesting question. We used to do a Lean Startup conference every year, and then I stopped because of COVID and we haven't resumed yet. So, it was like we used to have an annual opportunity to bring people together, assess the state of things, hear the latest updates and stories, and then I really feel the lack of it, I miss it. We tried to do online versions, but it didn't feel right to me. And that's partly COVID and the thing that our world has been going through the last few years, but it's also partly I didn't understand what it would be like to start a movement until I'd actually done it. And I remember the first conferences we did, the first events we did had the feeling of a religious revival. People were like, "We've got the new thing. We are going to stick it to the man."

**Eric Ries** (00:15:04):
And I really thought, "My job is going to be to lead these hordes into battle." I really had a martial metaphor. I used it just a second ago, combat of ideas. I was ready for, the old ideas are going to fight us to the death and we're going to win it, and it's not like that at all. We charge onto the field and no other army ever came to charge us back, just we won by default because the people who were doing it the old way didn't really like it or want... It was very few defenders of the old way. There were very few people who came out and said, "Actually, no, Stage-Gate is actually still the correct product idea. You've got it wrong." It never happened, and in fact, the fancy startup people went from dismissing it as totally pointless to complaining that it was overhyped and over before ever passing through the intervening stage of finding out what it was. That was really interesting. I'll never forget, TechCrunch had an article, this is years and years ago about how Lean Startup is overhyped, and I was like, "You haven't even talked..." That was the first entry point to talking about it. I was like, "Could you at least learn to use the word pivot correctly and then criticize it for being overhyped? Is that all possible?" So, it went from insurgent revival to just the default thing that people did. Even the people that disagree have to carry the meme in order to criticize it. So, it was fascinating to find myself on the other side of this thing, and I would meet young founders coming into the industry for the first time, and they're like, "It seems obvious," and I'm like, "It was only five years ago that people thought this was so crazy they're yelling at me, now you think it's obvious?"

**Eric Ries** (00:16:48):
It's really interesting to have something go from controversial to obvious, and of course, tons of people who were really opposed to it at the beginning came back. Now they say that they knew it all along and they were my big... You see how it changes people's minds. So, it's hard to generate that religious energy and excitement around something that everyone views as obvious, and it really was hard for my... Just as an ego matter, I want the validation of the winning and the this, and I realized at a certain point that the victory is not that this fancy company used it or whatever, the victory actually is in the stories that people tell me about how the book was helpful to them.

**Eric Ries** (00:17:26):
That's the whole ball game. No one had to lose in order for us to win. People don't do this as much anymore, but occasionally someone still who wants to make a fight between Lean Startup and Agile or Agile and design thinking or this and that... And I tried really hard. If you look at Lean Startup, it's full of citations and connections to Six Sigma and lean manufacturing and design thinking and customer development and DevOps and software craftsmanship and everything I could find. I really wanted to show how these things work together, and then we went through a phase where people wanted me to make it into a religion for real. People used to write me and say, "So-and-so on the internet is right about Lean Startup in they're wrong. You need to make them stop." It's like, "What power do you think I have to make someone stop writing? I think they can write whatever they want."

**Eric Ries** (00:18:13):
And then the other thing that people said was, "Well, Lean Startup is about this particular set of practices. If someone finds a new practice, they're at heretic and need to be excommunicated." And it's like, "Guys, no, no, no. I wrote extensively in the book... Did you read? It's a scientific theory, which means that whatever works is Lean Startup. So if someone comes up with something new and it works, we can't be threatened and upset about it, we have to adopt it." Well, when you have that attitude that whatever works is the thing that the truth is what matters and people's quiet moments of helpfulness, that's our metric of success, it kind of takes the hype and drama and stuff that drives press coverage and what takes it all out of it, and I don't miss it at all. I feel much happier doing that than I ever did when... I used to travel a lot and do a lot more public stuff, and I think partly, again, one of the changes of COVID and conferences went away for a while, so it was a quiet time, but I feel like it's actually been really amazing. That's what victory looks like. They don't throw you a parade and say the thing... And even though people who are your critics will still grumble about it, but at the end of the day, the new entrepreneurs who come in just take for granted that this is the conceptual vocabulary of entrepreneurship, and then they do with it what they will, and I've learned to really appreciate that. As much as my ego, of course, likes to get into fights with people. It's like, "No, that's actually better, and that's what winning looks like."

**Lenny** (00:19:41):
It's so interesting that it's just you've done so well in communicating these ideas that it's just become part of the culture, and people don't even think about, "Oh, Eric Ries came up with all these things." I also feel like people push back at you on the things they disagree with, and then they never give you credit for the things that work great. It's only like, "Oh, no, MVPs don't work anymore."

**Eric Ries** (00:20:05):
Once a year at least, someone still writes to me and says that we should have used a different term for MVP, that the misconceptions around MVP are driven by the choice of the term. And I always write them back and say like, "Please tell me the better term and popularize it and I'll use it. It's a great idea." I'm more aware of the limitations than anybody else. And I'll tell you another thing that I think people don't appreciate enough, everyone wants to be a thought leader these days. It's like a disease. When Clay Christensen died, I knew him and admired him a great deal, and his endorsement of my work was one of the most important...

**Eric Ries** (00:20:39):
For me, from the old guard of management thinkers, for him to say that it was worthwhile was really a big deal to me. And yet there was this big debate, it's now a little bit older now, about whether he's responsible for all the bad things people have done in the name of disruption. And the first part of me is like, "That's an outrageous slander on Clay. That's so unfair, a bunch of tech bros like use disruption as a code word for all kinds of dumb stuff has nothing to do with his theory, has nothing to do with his work." It's like, "Have they even read the work, man?" I was one of his defenders, and especially after he passed, I was very emotional about it, it's not fair.

**Eric Ries** (00:21:16):
But then the more that I've sat with it, the more I thought, "Gosh, maybe we are a little bit responsible for the things we put into the world," and it's terrifying because of course, you can't control what people do, you can't control... A lot of people are willfully ignorant. Whenever someone says something where I'm like, "Gosh, five seconds on Wikipedia, and they could have found out the truth about the thing they're talking about." So, we live in an era where ignorance is optional, that's cool, but also a little bit scary. So I think taking on that responsibility, this is true for anyone who makes a product. I think it's not actually unique to authors at all. When you make something, put it out into the world, on the one hand, you don't have any control about what happens next, and yet I do think we bear a certain responsibility about, was it in fact a net positive? Was it helpful to people?

**Eric Ries** (00:21:59):
It's part of what motivates me to try to really get it right and not just get it right for my own satisfaction, but get it right as evidenced by what happens when people use it. And that's why testing and experimentation is such a big part of my life and my theory. To me, that's how we square the circle of our responsibility in a highly uncertain world is you go find out what happened when people use the idea and if it's not right, even after their misunderstandings, it's still not right, then you've got to make it better and find a way to communicate it more clearly, so it's kind of an eternal challenge, but I think an important one.

**Lenny** (00:22:35):
Along those same lines, is there a misconception of Lean Startup or any of the other things you put out that just really frustrates you, that just is a recurring misconception that people just continue to get wrong?

**Eric Ries** (00:22:47):
I wrote an article, God, five or 10 years ago. God, I can't even remember how many years ago now. It was like Top Misconceptions About Lean Startup, and it was like, "Number one, lean means cheap, so if you're doing Lean Startup, it means you're not raising money." And it's like, "That's not true." And then kind of I remember what they are... And they're all still prevalent, nothing's changed. I could write that same article today. It's like, "Lean is opposed to having a vision. If you were really visionary, you wouldn't do experimentation. Experimentation leads to local maxima," and whatever.

**Eric Ries** (00:23:20):
I read it in somebody's book that that's what Lean is about. And I was like, "Man, did I forget to write it in the..." I was so gaslighted that I actually went back and cracked open a copy of the Lean Startup, and I was like, "On what page do I address this?" It was like on page nine in the introduction, one of the first things in the book, I was like, "Phew, I did say it," so that's pretty common, that turn the crank thing about optimization, that's pretty common, and then pivots, people perennially misunderstand what a pivot is, and again, whether that's a descriptive or a prescriptive thing is really tricky.

**Eric Ries** (00:23:54):
I feel like at this point people are just being willfully ignorant. It's okay to criticize Lean Startup, that's no problem. It doesn't bother me. I think it's good to do, it's healthy to do so, but to just trot out those same old things, how does that advance the state-of-the-art? And how does that help entrepreneurs in any way? And I'm not even really sure what they're trying to accomplish by doing that. That's the thing that I've grown confused about is, what is the purpose of this discourse, other than just to kind be reflexively contrarian? I don't know.

**Lenny** (00:24:23):
And get some likes on Twitter/X.

**Eric Ries** (00:24:27):
Maybe you're right.

**Lenny** (00:24:29):
So along those same lines, so you wrote the book 12 years ago. If you could go back and change something in the book, is there something that you would want to change?

**Eric Ries** (00:24:39):
Oh man, I would change everything about it. It's actually why I won't let myself do it. When I was a consumer of books, I hated it when authors would come out with a second edition that would destroy what was beautiful about the first edition, including the mistakes because in their attempt to put disclaimers on everything and make everything more nuanced, you'd totally lose the thrust of the argument of the thing they were trying to do, and their own becoming famous really messes with you psychologically. So, you don't want to expose your readers to that. Go get therapy, don't destroy the thing that made your book amazing. So as an author, of course, I think so many elements of it could be improved. The one that is the most glaring to me... Well, I guess there's two. I'll mention two just because they're relevant.

**Eric Ries** (00:25:26):
One is I'm a little embarrassed, there's a chapter towards the end of the book where I talk about the scaling of Lean Startup. So it's like, "Okay, you've had success. Now, what are the principles for how you scale up a big enterprise now that has many Lean Startups within it?" And stuff like that, and I don't think I wrote anything wrong in that section, but I really cringe to read it now because it's so blithe and just like, "Step one, do this. Step two, do that." It makes it sound so easy and so simple.

**Eric Ries** (00:25:53):
And of course, I've subsequently written a whole book longer than Lean Startup just to illuminate those principles and explain how they work in real life because I actually had the privilege of getting to go do that with companies at really extraordinary scale. So, I'm a little embarrassed now to be like, "I made it sound so easy." I hate to mislead any entrepreneurs into thinking any part of entrepreneurship is going to be easy because it's just setting people up for disappointment. And the other funny bit is, you know that meme on Reddit, the Star Wars meme where Anakin Skywalker says, "I'm going to change the world for the better," and then pause, and then she's like, "For the better, right?" I feel like that is the meme of our time for the tech industry. Every company was about changing the world and we forgot to ask, for the better? I always just took it for granted that our goal was to make the world a better place. That's the values I was raised with. That's what I thought we were doing, and I was railing about it for a while. I would get depressed. Remember, don't be evil? And there's been all these moments in the tech industry where it seemed like we were going to really do something extraordinary, and then just the things that these companies become is so depressing. And I was like, " Well, I at least made it clear." And then I was like, "Did I?"

**Eric Ries** (00:27:04):
Again, I actually went back and reopened the book and I was like, "Did I tell anybody that they should change the world?" And if I did, I assume I specified for the better, and it's actually right there in black and white. Right in the introduction of Lean Startup, one of the... It's like a throwaway line, "This is the technique that will give the entrepreneurs of tomorrow the tools they need to change the world." And I'm like, "No, I should have said for the better. I didn't know I had to say it. I thought it was obvious. I thought we all agreed." So, I kind of feel like that is also a major oversight and I'm making light of it now, but it's had catastrophic consequences. Not really, I don't think Lean Startup has led people in that way. I think it has much more to do with other social forces, but I feel bad that I missed my chance to take a stand on something that has turned out to be quite important.

**Lenny** (00:27:47):
So, you saw me tweet a call for people to ask questions.

**Eric Ries** (00:27:52):
Yes, I'm really excited.

**Lenny** (00:27:53):
So, I have a few questions from the audience. The first is around the concept of MVPs. So Karri Saarinen, who was actually on the podcast recently-

**Eric Ries** (00:28:03):
Oh, great.

**Lenny** (00:28:04):
... Founder of Linear, had a question around MVPs. And his question is essentially, If you still believe that MVPs, essentially shipping very basic versions and iterating is the way to go, given that user expectations have risen a lot in any markets, iOS apps, for example, web productivity software, things like that.

**Eric Ries** (00:28:22):
I love that question because first of all, I get it a lot, and also it's important for us to really understand. People think that MVP is about a specific tactic. So, an MVP is like a bare bones, stripped down the thing that will crash your computer, but it's not anything to do with MVP. MVP is simply for whatever the hypothesis is that we're trying to test, what is the most efficient way to get the validation we need about whether a hypothesis is true or not? And so, part of a successful test is to understand what are the demands of customers in our market. Now, the funny part is people have a real fear of failure in product we all have this deep, deep, deep fear. So the first answer is, you think user expectations are high in the iOS App Store, you should try the purchasers of battery backup systems for data centers or people who build deep sea oil drilling machines or jet engine.

**Eric Ries** (00:29:22):
I've worked with companies where the standards are actually really high and it makes iOS apps seem like pretty basic. It's like, "Well, nothing blows up like your app," but even in these really high end industries in really high stake situations, the cost of offering someone to buy something that they don't like, it's really not that high. They just say no, and a lot of MVP is just about containing the liability of making a mistake. So yes, one of the things I really encourage people to do is go find 10 customers, not 10 million, but find 10 customers. Get them to use the product and have them tell you what's awful. That's okay, and I used to be so upset... When I used to launch a product if customers would argue with me, people used to be like, "You idiot, I can't believe you launched this product without features X, Y, Z. They're so essential."

**Eric Ries** (00:30:11):
And I would be like, "You're wrong..." I'd got to get mad at them, but then I got a little smarter. I'd be like, "X, Y, Z, you say?" And I'd be like taking notes, "Oh, interesting." Now, sometimes X, Y, Z would be the exact next three features of my roadmap, and again, I would want to argue with them as, "I know knew that..." And I eventually used to be like, "Oh, thank you for that wise feedback." And then when we launched X, Y, Z, they would feel a sense of ownership. "Wow, I'm the one who told him to do that. He wouldn't have even done it." But of course, the thing we're really afraid of as entrepreneurs, I think if we're really honest, it's not that people say, "You idiot, you didn't launch without X, Y, Z," people will say, "You idiot, you launched without A, B, C."

**Eric Ries** (00:30:44):
And you're like, "What the hell is A, B, C?" Never heard of that. That's the much more common response that I get. So, let's grant the premise of the question that expectations are high, and if we launch an app and it doesn't meet people's expectations, they won't like it. First of all, what really are the consequences of that? In an early part of Lean Startup, we had to do a lot to explain to people the difference between a product launch and a marketing launch. And you can launch the product to customers without telling anybody that you did that. It's okay. No one's going to find out, it's not going to be big news. And of course, once you're a big successful company, that's a totally different issue where now you put your corporate brand on stuff, but if you're an actual startup, nobody cares. So, it's okay to try it.

**Eric Ries** (00:31:29):
But the other thing that I think people don't appreciate is that MVP is very flexible. So, if you tell me... When I work with entrepreneurs, I'm like, "Listen, I'm sorry, our customer is... The bar is here and the thing just has to be that good." I'm like, "Excellent, and it can't have very many features, I guess, can it?" They're like, "Well, what do you mean?" "So, you just told me the bar is way up there, so we better do just the one critical feature at that level of quality, and then if that works, we'll do the next one." And then of course they're like, "Oh, no, no, no, I need to do all the features at all the quality." It's like, "Well, then what are we testing?" It's like, "By the time you find out whether that's any good..." And if you look at the pivot stories, I'm sure you found this too.

**Eric Ries** (00:32:06):
Very often 90% of the work in the first version is thrown away no matter how high quality it was. In fact, as an engineer, that was part of my original disillusionment with the Agile software movement then ultimately with Lean Startup is that people promised me that if I followed these best practices, I would eliminate waste from my work, but if I build something that customers don't want, that's the ultimate waste and nobody protected me from that. So, I don't really care how high quality the initial MVP is because quality is defined by the customer. And if we don't know who our customer is, we literally don't know what the word quality means. So, that's where I think founders really run into trouble and everyone's like, "Well, I'm Steve Jobs, I'm this, I have the magic taste." And it's like, "Well, first of all, do you have the years and decades of failures and experience from which that taste derives?"

**Eric Ries** (00:32:55):
If you do that then I'm like, "I'll give you the benefit of the doubt." And if you don't then, "Definitely don't rely on that, definitely do some experimentation. Go get those scars." But even if you have a taste, if you're completely right, what can it hurt to double check? My view was like, "Oh, let's have 10 customers look at it and have them throw up about how it's so horrible, that at least confirms that we're on the right track."

**Eric Ries** (00:33:13):
And then we call it establishing a baseline when we talk about innovation accounting and the metrics side of Lean Startup. Let's go find out how bad the situation is right now, so that we can then know that we improve from it. Because the thing I actually see from people who in the name of quality will wait a long time to ship a product is they ship it with really high quality and nobody uses it, and now we don't know why. Is it because our idea of quality is wrong? Is it because the value prop is fundamentally... I feel like building a high quality wrong value prop is nothing to be proud of. There's no craftsmanship in that. I once had a company that built a really beautiful product, amazing land, everything was awesome, but there was a JavaScript error where when you clicked the download button, the signup button, whatever, it didn't click. So, they launched this thing and it had 0% signups.

**Eric Ries** (00:34:00):
... click. So they launched this thing, it had 0% signups and they're like, "It's a catastrophe. We made the wrong value prop." It's like, how do you know? From one experiment you can never know. You have to be willing to do a series of experiments. Again, the logic of MVP is just, products take time to build. The best products in the world, everything takes time. It takes a month, a year. AI will mean I could build any product I want instantly. But it's not instantly, it's going to take time.

**Eric Ries** (00:34:28):
During that time that the product is under construction, there's going to be some moment in time when you have half the product. Just logically speaking, you first have 10%. When you have half the product, let's have customers use half the product. Well, it doesn't cost you anything extra. You had to do it. You build a natural experiment anyway. Have them use it and tell you it's only half as good or it's unusable, because it's so bad. Excellent, good.

**Eric Ries** (00:34:51):
The startup literature is littered with examples of people where less is more, where the crappy small thing they did turned out to be more valuable than the competitor. I'll just give you one example, one of my favorites. I come from 3D graphics and avatars and metaverse stuff, which of course, now is bad. It's one of these things goes through these hype cycles and I'm like, "Are we actually in the hype cycle or are we the drops?"

**Lenny** (00:35:12):
I think it's trending up right now.

**Eric Ries** (00:35:14):
Are we trending up again?. It's really hard for me to keep track. Even while I was working on it, every few years it was either the future or nobody wanted to do it. I bet sales of [inaudible 00:35:25] crash, you'll probably have that cyclical thing to them. When it's hot, people read it, otherwise not. Anyway, we built a version, our first version of IMVU we built with 3D avatars in a cafe or in a scene. The avatars were all anchored in place because we didn't have the technology called inverse kinematics. We didn't have the technology that would allow an avatar to stand up and walk. When you do this 3D grab, it has to work perfectly. The feet have to actually glide along the surface and it doesn't look right. You wind up in the uncanny valley and people find it horrible. So we're like, "Can't have that." So we just have the avatar to sit there. People felt the product was claustrophobic. They would always be like, "The Sims lets me move around. Why am I stuck here in the chair?"

**Eric Ries** (00:36:01):
That was a very common thing in customer feedback. We were like, "We can't afford to do the expensive thing. We couldn't do it, couldn't do it." One day as a hack, as like a little demo, I was like, "Well, I'll just change it so that when you click in the scene to a different spot, we'll just stop rendering the avatar in the first place and we'll put it in the second place." We didn't even do the proper cut. The camera would zoom over there. It was really ugly. I was really embarrassed about it. I was like, let me just play around with it and see what happens.

**Eric Ries** (00:36:29):
We shipped it to cut and I was like, this is below the quality bar. I felt bad as the engineer. Everyone involved felt really bad, but we had committed ourselves that we're going to try to experiment with stuff. We're going to see what happens. This is before Lean Startups existed. We didn't even have the concept of MVP. We're going to try it and just see what happens. We shipped it and nothing happened. No one cared. I was like, whew. Then we used to do these daily tracking surveys. We'd just sample people and ask them what they think of the product. In the tracking surveys, people started to say that IMVU was the most advanced avatar product they'd ever used.

**Eric Ries** (00:37:03):
People would be like, we used to be compared to the Sims unfavorably. Now people would be like, more advanced than the Sims. I was like, what does this mean? How did we get more of, did we improve our 3D graphics design? No one could understand why they were saying that. We used to do customer interviews. Finally, a customer was like, "It's so great, man. In InView, when you want to go somewhere, you teleport. The Sims, you got to wait for the guy to get up and walk around. It's so annoying." We were just like, "Oh, my God. Embarrassing." We didn't do inverse kinematics for a really long time.

**Lenny** (00:37:35):
I love that story. Something that I'm learning as you talk about MVP is that the idea of minimum is very fluid and very context specific. Essentially, the message isn't, build something low quality and simple. It's, figure out what is that minimum bar for your market and product. The message is just build as little as possible, whatever that is for you.

**Eric Ries** (00:37:57):
Yeah, as little as necessary. It's fascinating. I'm not joking, I've worked on jet engines and robotics and cancer therapies and all kinds, I've worked on stuff anyway, and LTSE, it took us 10 years to build the MVP for LTSE. So it doesn't necessarily mean cheap low quality. It's just whatever your hypothesis is, whatever you actually believe is going to work, let's put that thing to the test. That's all I really want. When I work with companies, first time founders especially are usually very stubborn about this and they don't want to do it. It's like, "Look, you tell me what you believe. I don't have to be right and I want to just double check that you're right by however we do it." And then once people actually start to turn that idea over in their mind, they often will be like, "Well, you know..." A classic one is like, we can't sell the thing until we build the physical equipment.

**Eric Ries** (00:38:48):
It's like, is your product bought in a showroom where people see the physical equipment? No, they buy it from a brochure. So it's like, "Okay, well how about we send them a brochure and ask them to pre-order it?" And then it's like, what? I can't do that. I can't have a crappy brochure. It's like, who said a crappy brochure? We can build a really high quality brochure in a tiny fraction of the time it takes to build the actual machine. And then it's like, well then what are you talking about, it has really good fonts and it has pretty pictures? Maybe. What's your theory, right? You tell me what do you believe about... And they're like, "Well, actually what matters is the quality of the specifications of the equipment in the brochure." It's like, now we've got the leap of faith assumption. Let's go find out.

**Eric Ries** (00:39:29):
And they're like, but hold up. But we don't know what those specifications are going to be yet. It's like, well, I saw this 500 page plan over here. What do you want it to be? It's like, well, it'd be really great if customers would accept this set of performance characteristics. Well, let's go promise that because maybe they'll be like, "That's great." And I'll give you one example. I was mentioning data centers. There's a team that sold equipment and data centers. They had a serious high-end team of PhDs working on research to make the thing way more efficient and they're going to win a Nobel Prize in material sciences in order to make this product a reality. And I convinced them, instead of paying three years and $18 million, so you don't make the thing, let's go take a brochure, take it to some customers.

**Eric Ries** (00:40:13):
And I'll never forget, they took the thing into the brochure, they took it into customers and customers laughed them out of the room and it was nothing to do with anything they cared about. It was nothing to do with efficiency where they're like, we would never buy this. And they were like, "But you haven't even looked to page two to see how efficient it is." They were like, "We don't pay for efficiency, we build data centers. How much they cost to operate is somebody else's problem." You're like, "Oh my God."

**Eric Ries** (00:40:37):
That's the thing people don't appreciate, is these insights are so obvious in retrospect that everyone's convinced that it won't happen to them. When I teach students at Lean Startup, they're like, "This is so dumb." They do one case after another in business school and they're like, "Dummy, dummy, dummy, dummy, dummy, right?" They're like, "I would never make that mistake." And I'm always like, "Look, you don't have to argue with me. Just call me back when you get a job. And when you make one of these mistakes, remember we had these conversations and go read the book then." And I guess by random chance there are some people in the world that just never made a mistake.

**Eric Ries** (00:41:11):
The dice, you roll enough dice, somebody had the experience that dice came up double sixes every time. Okay, so there are those people and they give a lot of the advice in the world, but I don't know that it's necessarily those of us who don't have the double six luck should necessarily be following it.

**Lenny** (00:41:26):
This will be a really good segue to talk about pivots because again, a big part of your message is a lot of the work you're doing is just going to go to waste anyway. Why spend all this time building it? But just to put a final point on this idea of MVP, because a lot of questions came in around just like, what is an MVP? Ben Silbermann, the co-founder of Pinterest, has this quote, he didn't ask a question in our thread, but he has this quote-

**Eric Ries** (00:41:47):
[inaudible 00:41:47]

**Lenny** (00:41:46):
Yeah. And his quote is, the hard part about MVP is that you don't know what minimum is. You don't know what viable is. And so just to give founders who are trying to figure out what that line is, some very succinct advice, how would you describe just helping them understand, here's how far you should go with your MVP.

**Eric Ries** (00:42:05):
He didn't say, you also don't know what product is. That's true. I can't tell you how many times a service has turned out to be a product or vice versa. People embody their insight about customers in the wrong way all the time. That's super common. That's funny.

**Eric Ries** (00:42:20):
All the criticisms of MVP are really just people expressing their frustration with how uncertain startups are. It's like, yeah, it really sucks. This is not a good way to make a living. If you want to retain your mental sanity, if cognitive dissonance, if you find that painful, this is not the right job for you. Because it's really hard to hold in your head, I have this ambitious vision. I know what's going to work. You got to do confidence, get everyone together. There's no substitute in this world for a human being stepping forward and just saying, "I am going to make this thing happen." And if you do that, you're putting yourself away on a limb. It's really difficult. It's really hard to admit that. And I also do not know how to make it happen. That's the truth. Whether you admit it or not, that's the truth.

**Eric Ries** (00:43:02):
So that's why I say let's just double check. So simple, succinct advice. The first tip is, write out the list of features that are necessary in your MVP. Cut it in half and cut it in half again and build that. Honestly, if you just do that, that's really not that bad. The nice thing about MVP is it's one of those U-shaped curves where if you get even in the vicinity of optimal, you're going to be fine. And most people's natural idea of what is necessary is so laughably wrong. People are naturally off by usually one or two orders of magnitude, right? Very common for you to meet a team that is trying to do 100 times more work than is necessary to test their assumption.

**Eric Ries** (00:43:38):
So first thing is just, try being uncomfortably small in the thing that you actually make. And if you're having trouble with that in the startup way and the SQL Lean startup, I really go through because it's really more for a corporate large company audience. I really go through, okay, if you want to have a process for determining what to do here, you should first brainstorm your leap of faith assumptions and categorize them this way and select them like this. Okay, now for each assumption, brainstorm the metrics you might use. Select the metric you want, what is your learning metric, and then from there, brainstorm, MVP, score them according to this formula and then use that to help people.

**Eric Ries** (00:44:17):
Anyway, people can follow that if they want. The thing I learned is that if people are having trouble coming with MVP, the problem is usually upstream in the chain of deductive reasoning from the vision down to the MVP. Usually people are just not super clear on what do I want to learn, and the most common reason is because people don't want to admit that they don't know. So as an entrepreneur to say that we want to test to find out what customers want is really hard.

**Eric Ries** (00:44:41):
I'll give you an example from my own experience. LTSC, I said, it's taken us 10 years to get the thing approved and going. It's a really very difficult product to build. One of the early iterations of it that didn't work, we were building on partner infrastructure. It was a very different product back then. I don't want to get into all the legal nitty-gritty, it's kind of dry. But anyway, it took us six whole months. It took us time, we had to raise the money, build the team, do all stuff, get all the lobbyists and lawyers, everything in place, and then we had to go do this partnership agreement. The partnership agreement itself took six months to get in place, and then we had to go to the SEC and get approval. And so it was a very complicated multi-stage process. Probably took, I think I just described two years of my life end to end there.

And the whole time I was talking to the team about our goal with this whole thing is to learn what is actually necessary to get customers to list on our stock exchange. Our goal was learning. People were like, but I thought our goal was to get this contract done. I thought our goal was to, it's like, well, yes, but the reason we're doing those things is so that we can learn whether this is actually going to work or not. And so I remember, I'll never forget during the contract negotiations, people were like, we got to take an extra week to deal with this point, and I'd be like, "We don't have an extra week." It's like, but this thing's taken two years. What's a one week? I'm like, "No, every day is so [inaudible 00:45:54] we have to get the learning as soon as possible." And I was constantly haranguing everybody involved.

**Eric Ries** (00:45:58):
We got to go faster, faster, faster. You've got to give on this point, people were walking all over us. We were getting just destroyed in the negotiation. I was the weakest lamest person, rather just like, we got to raise the money, anything to get speed. Anyway, long story short, we get all the way to the end. We get the thing approved by the SEC staff and then we get ambushed. And long story short, the SEC withdraws their approval and the whole thing is dead. The partner, we have to break up the partnership agreement, everything goes to hell. And I thought the company was going to die, and it was a totally miserable time. It was one of the worst things that ever happened to me in my life. I was totally upset. And in retrospect, I can laugh about it because it turns out, of course, it was the worst thing that ever happened to me, but it's actually the best thing that ever happened to me, as a lot of startup things are.

Because from that, we were able to pivot into the thing that ultimately got us approved. The reason I tell this story is every bit of work we did that went into that partnership agreement for almost two years turned out to be a waste of time because in the end, the partnership agreement fell apart. So if we had won a few extra [inaudible 00:46:58], my margins would've be higher if we'd extracted more fees from the partner or we would've had less liability. People always like, well, we have the liability for this and liability for that. And I think about all the things, this thing was 100s and 100s of pages long to document. None of it mattered. In the end, the partnership was never consummated, no customer, nothing ever happened.

**Eric Ries** (00:47:15):
And the interesting thing and reason to the story is that the people who went through that experience with me were so much faster on the next thing that we did. It was really amazing to see because they were like, "Now I understand what you mean." Most people live very coddled lives that have not actually really dealt with this kind of failure in their business career. Obviously in their personal lives, they'll have all kinds of trauma. And you know, they'll work at a crappy company and have a horrible experience, but they haven't experienced this specific thing where you are the hero of the hero's journey. You are the protagonist of the story. And the thing is not just a setback, but you just die.

**Eric Ries** (00:47:48):
It actually fails. It's so psychologically damaging that even people that have had that experience, a psychological defense mechanism is to tell themselves that that didn't happen. And you know it better than anybody, how many startup founders are adamant that they didn't ever fail, they didn't pivot. Everything's exactly the way they saw it at the beginning. And it's like, I've been around enough startups to know how often that is just not true, but we need to tell ourselves that story. But anyway, the number one lesson of the scientific method is if you can't fail, you can't learn.

**Eric Ries** (00:48:19):
And so if you set yourself up in a position where psychologically you can't admit that something didn't work, you can't learn. And that really is the essence of MVP. It's just like whatever the catastrophic thing that's going to destroy your company is going to be, we just want to find out as soon as possible so that there's still time to do something about it. We don't just die and move on.

**Lenny** (00:48:38):
I'm actually seeing this a lot right now. I'm an investor in a bunch of startups, and so many of them are failing right now, and they built such beautiful products, such amazing products that they spent years just like crafting, making so great. And then it's all for naught. And there's actually been a theme on the podcast recently around the importance of craft and design. And I'm curious just to get your thoughts on just when it makes sense to invest deeply into the craft and experience of a product versus the minimal viable product approach. Do you start very simple and then invest, anything's there?

**Eric Ries** (00:49:17):
Yeah, well, I think that's a great question. People use the word craft to refer to so many different things. I personally find a tremendous beauty in simplicity. So I would much rather people do one thing extraordinarily well than 20 things half-assed personally. And how many products do you use? You're like, God, there's like 92 buttons on here of which I only ever pressed one. Could you have made that button have a really nice feel? I would've sacrificed all this other stuff. And I've actually worked on microwaves and refrigerators and stuff with actual physical buttons. And even your crappy kitchen microwave that you paid $60 for at Walmart or whatever, if you've never seen one of those things manufactured, actually the amount of craft that goes in behind the scenes to wire up every one of those buttons that are never pressed by a human being, it's actually really painful if you start to think about, wow, that's a lot of human energy being wasted.

**Eric Ries** (00:50:08):
So the elements of craft I think are critically important. First of all, part of craft is perfection. Perfection is an attribute of quality. And we have to go back to the first thing. In order to know what perfection is, you have to know what the customer believes. You have to know, you have to be perfect for some purpose for some person. Some people will just say, "Well, I'm just going to build for myself and that way I solve the problem." That's totally fine, if that's true, if that's you, go nuts, you might only have a market of one, but you'll be happy. So be it. And there are startups like that where it's like, well, I don't care how big my market is. I'll just build for all the people like me and I have a huge tribe, then I'll be hugely successful. If not, I'll just be an artist doing my thing. I have total respect for that.

**Eric Ries** (00:50:44):
That's like the ends and the methods are totally aligned. Where people get into trouble I think, is when they want to use craft as an excuse to not get any feedback. So what I tell people is first of all, there's an element of craft that is just like whatever you do, how are you going to go about it? Whether you're building an MVP or a fully featured whatever thing you're doing, I'm a software engineer by training. My code is a certain way, I have a certain craft in the way that I write software because I think that's the best way and that produces the best outcomes. I will never compromise that. And compromising that in the name of going fast is stupid. Write crappy code. You spend more time firefighting than you do writing code in the future.

**Eric Ries** (00:51:23):
So a certain amount of craft is just about keeping your options open. And actually it's very much favorable to speed, using the right primitives, having the right abstraction layers, using the right tools in the right way, having high quality people in your team, all those things that you go faster, not slower. And a big part of Lean Startup is about helping teams get into that optimal configuration by acting as a speed regulator. Because there's such a thing as optimal speed, which we can get into if people are interested.

**Eric Ries** (00:51:48):
But another part of craft is just an excuse for just avoiding feedback, making things pretty in the way that I want them to be because I want them to be that way. And even there, when I meet people like that, people are just like, "Sorry, my artistic ethos is this and it has to be this way." Then I'm like, "Excellent." Then that's not one of your leap of faith assumptions that you're willing to test. So be it. Don't pretend to test it, just be like, I'm not, we're just going to do it this way because that's how we do things and it's fine. And I think when company has a core value, I'd rather go out of business than violate my core value. I also respect that too.

**Eric Ries** (00:52:25):
But then that to me, that means having a respect for craft, for design, for perfection, that increases the need for experimentation and testing for all the other stuff, because we've already invested a huge amount of our energy and force into this thing that we really care about. Well, then the other stuff, and do we also have to do this fancy press campaign? Do we also have to go put the founder's face on billboards and put them up around town? Are those all part of your craft? I just feel like people use that as a catchall excuse to do all kinds of stuff.

**Eric Ries** (00:52:55):
But I think the idea that craft is a signal to your customers about the things that you actually care about and that you're going to take care, it is part of making a promise to customer that they're going to believe. If that's your thesis, that doing an MVP that lacks craft doesn't test the thesis. So I think people want to set up a dichotomy here that doesn't really exist. I'm totally in favor of that when people have that authentic desire. But I also meet a lot of people that are just faking it. They don't have taste, they don't have a design ethos, they don't have... So if you don't have that stuff, where are you going to get it from? Well, good news experimentation will get you there if you let it, because you'll eventually learn the habits of mind, the patterns of the things that work, that make sense.

**Lenny** (00:53:38):
I really like that advice of, as a founder, build the company you want, if you want to build, why create a business and a company you're not excited to be working on? And if you end up failing, it's on you. That was a big mistake it turned out, but at least you tried and you're not building a company you don't want to work at. And then as a product leader, I don't know how much, if you have as much control to build a product the way you want, but try basically.

**Eric Ries** (00:54:01):
I always tell people to just get fired for doing it the way you think is right. There's nothing that was a faster career accelerator than being known in the industry as the person who stands for that principle so much that you got fired over it. The people that magnetizes to you are going to be way happier. You're going to be so much happier being a place that appreciates that. That was a big career accelerator for me. Not that I actually got fired, but I was willing to be fired for my beliefs. And I remember sitting there, I was going to a board meeting where for sure I was going to be fired. And I was like, "Well, I just don't believe in building products the conventional way." This was again before Lean Startups. So I was like, I didn't even have a language for it, but I had a strong conviction that the way I was doing it was the right way.

**Eric Ries** (00:54:41):
And I was like, well, I'll be known as the guy that got fired for that and eventually someone will want to work with me because that's what they want. If nobody wants that, then I'll go find a job in a different industry. I don't want to be an industry that doesn't... That's how I want it to be. And I think that people don't appreciate the extent to which... People act like having a startup fail is the worst thing that can happen to you. And man, that's not even in the top 10. It's bad. I've done it. It's awful. Okay, it's really bad. But far worse is to be in a company that won't die, a zombie undead company that you hate but you can't leave. Have I met people like that. And we're having a mental health crisis among founders that's not talked about enough. People started to talk about the downside, mental health risk. Obviously the stress of being a founder is hard, but look what's happening to the people that are so-called successes. When you build a company and you sell it out and it becomes something that you find abhorrent, yeah, maybe you get rich, but it's not good. And I mean, the other day a friend was telling me about a friend of his who sold this company, exited for, I say $300 million or something, made a lot of money and committed suicide not that long later. People follow the Tony Hsieh story. I knew Tony, it was a horrible tragedy. What's going on? So I just feel like there are worse things than having your startup fail. And so building a company you hate, that becomes a maligned force in the world that you have to go pretend you weren't involved with or you feel complicit in what... That's way, way worse. And I wish more founders would take that more seriously early on.

**Lenny** (00:56:16):
That is such an important point and something I see a lot too, just companies, the founders started that are just alive, but they were almost never going to succeed, and they're kind of stuck. They don't want to shut it down, they don't want to give money back. What advice do you give those sorts of founders that you feel like are just stuck in a zombie company like that?

**Eric Ries** (00:56:35):
It's really hard. I mean, of course if it's going to fail, you should shut it down. But everyone's like, but I thought it's always darkest before the dawn. And it's like, sometimes it is. But you know what else that's really dark? When you're dead. So everything comes back to, I used to tell people, the most uncomfortable laugh line in my early talks about lean startups, when I talked about, people used to talk a lot about steep jobs in the reality distortion field. And I would be like, okay, you're in the reality distortion field. You're on the flat part of the hockey stick. How do you know the business plans? I actually lived through this once. There's a business plan, the business plan says six months after launch, we'll have almost no customers and almost no revenue. And that's when the hockey stick will commence. And I remember being there in month six being like, we are on time, on budget this plan is cheap.

**Eric Ries** (00:57:24):
Everything's happening just like the plan, hockey stick to commence. I'm walking to my watch. And then we just stayed on the flat part into the far horizon and people would laugh and I'd be like, okay, now if you're following a startup leader, or you yourself are in the reality distortion field and you're on the flat part of the hockey stick, how do you know if it's ever going to stick? Or you're just going to be... And people would be like, "Ha ha ha ha." And that is a really scary situation. It's like we all have these moments of doubt and sometimes the right answer is to overcome the doubt and go for it. And it's actually part of the genius of the startup system. People people criticize venture financing and all the problems with the Silicon Valley and of course, we do it to ourselves so there's plenty of things to criticize.

**Eric Ries** (00:58:10):
One of the genius things about it is at the end of the day, you do run out of money. You're forced to declare bankruptcy, that's actually a really positive feature of the system. So a lot of founders just can't do it. But I will say, the thing I try to ask people to do is really take some time to introspect and just ask yourself, do you actually want to be here? If you could magically wave a magic wand and you were to start a new company right now, would it be this one? If it's not, there's no indentured servitude anymore. It's okay. It's okay to move on. And then the question is, then everything moves into a tactical conversation about shut it down, give the money back, do a really hard pivot into the new thing.

**Eric Ries** (00:58:51):
It depends a lot on the specific factors of the situation, but I think we do founders a disservice if we act like this is easy, or I mean, and it's gut-wrenching and it's really difficult and not to be too spiritual about this, but it really goes right to the issue of ego identification. For so many people, they are their company, and so for the company to die, they also must die. It feels like you're going to die. And I think that's part of the mental health problem. So people as they get older, as they mature, as they have a spiritual practice, I hope they can learn to dis-identify with the company and not feel like it's so personal, so that it is possible for the company to die without them dying. And then they can take what they learned into the next company or into the next pivot or the next iteration of what it should be.

**Eric Ries** (00:59:38):
Or sometimes the right thing to do is just to step aside and let a different CEO take over. There's so many ways you can go about it. But as with any pivot situation, the hardest part is always just to admit the facts as they are. And then you do it yourself versus just like, what is the situation? Is it working? I can't tell you how often people just can't accept it's not working. And you get investor updates. How many investor updates have you ever received where it's like, we're crushing it, everything's going great, and the very next investor update is, we're out of business, giving money back. It's like, well, your last investor updates said you were crushing it. There was absolutely no indication there was any problem. No, of course it wasn't an indication, but we're just lying about it. So don't be that person.

**Lenny** (01:00:18):
That's actually an amazing segue to where I wanted to move to, which is around pivoting. So I've done a bunch of research on consumer startups, B2B startups, and the numbers I see, and I'm curious if you see similar numbers is around a fifth of consumer startups, ended up pivoting to a completely different product and almost half, like 40% of B2B companies ended up pivoting to a completely different product. Does that sound right from your experience?

**Eric Ries** (01:00:42):
Yeah, that does sound right. So it's interesting, I used to do this exercise for founders where I would tell them the story of IMVU two different ways. The first way is one in which we got everything completely wrong and just sounds like we were to complete idiots and we had to pivot so many times. And then I would tell the same story again, but where we got everything right and we were geniuses and everything that happened vindicated. And then people wouldn't believe me. I was like, "Both stories are true." Choosing which elements of what actually happened to emphasize and where to put your weight, you can tell the story. So yes, I would say there's the percentage of people that know that they pivoted and then there's another percentage of people that didn't admit it, but they actually did. And it's really hard to assess from the outside.

**Eric Ries** (01:01:25):
I mean, I know this from having worked with enough startups where I know the outside story and I know the inside story, and they're just really different. I mean, Paul Graham used to boast about that as one of the features of Y Combinator, that the founders they would get to come to the dinners would tell you the true story of what really happened, and that was critical information you couldn't get anywhere else except at Y Combinator. And I was like, wait a minute, is he saying that everyone just lies on stage when they tell the story publicly? I don't know if that's something to boast about. You're calling all your guests liars. And then I've hosted a lot of those events. I'm like, oh yeah, people lie on stage. I see. So I think part of the problem is just trying to find out the truth of what happened is really challenging. But there's another element that I think is interesting, which is, so pivot is defined as a change in strategy without a change in vision. So we have this idea that the founder has the vision, then they try to figure out how to make the vision happen and they find a different way, but the vision stays constant. But the truth is a little bit more complicated than that, because the founder's vision also evolves. Founders discover what the vision actually is through the process of building the company. So again, not to be spiritual about it, but I actually believe that building a startup is in large part a process of self-discovery. You actually are discovering what is true about the thing that you yourself believe. And partly that's because when we fantasize about the vision that we never have to make any trade-offs, the product is infinitely popular, infinitely cheap, everything's great.

**Eric Ries** (01:02:50):
It's just like there no trade-offs to be made, where real life forces us to make trade-offs. And then you find they're like, "Oh, I have to choose?" Would I rather have a high-end product only for really rich people or would I rather have a product for this industry or this sector or this group or that group? It can be painful, but also founders learn to talk about the things they care about over time.

**Eric Ries** (01:03:12):
So I mean, go on YouTube. If you've never watched the interview with Zuck on his couch at Stanford talking about Facebook, it's remarkable. Just some college news person just happened to catch an interview with this guy at a critical moment in his life when he just didn't know what he was talking about yet. And now he's really ambitious. Now Facebook's vision is this really ambitious thing and people are very at pains to say that he always had that vision from the beginning. And he talks about it all, and that may be true, but the documentary evidence exists, and I'll just give you one of my own stories about that.

**Eric Ries** (01:03:48):
In one of my companies, we moved offices relatively early on because we started out in a really, really crappy small office and we moved to a larger space. And I remember sitting in that office when there was just five of us and we sat down and we had a meeting where we specked out what we would now call the MVP as well as the longer term vision for the company. And we had this whiteboard and all of us debated what features should be in and out or what should be on the whiteboard. And I can remember writing down, I have a visceral, I have a physical memory of writing down the things that were going to be necessary for the company to succeed and being right, and my co-founders arguing with me about not having their perspective and their being wrong, and I'm like, good thing.

**Eric Ries** (01:04:29):
It's one of the things I remember telling this story. Anyway, we moved offices shortly after that time and that whiteboard was lost, and then years later we moved offices again and someone was cleaning out an old storage closet and that whiteboard was just happened to have gotten shoved in the closet. Someone pulls it, they're like, "What's this?" And I looked at it, I'm like, "Oh, that's the whiteboard we used to hang in our main conference room, and it still had the notes from that meeting sitting there on the whiteboard." I was like, this is so cool. Historical moment. I'm taking a picture. And then I'm like, wait a minute, this is weird. It's in my hand. It's recognizably in my own handwriting, but many of the things that I'm writing there are horrible ideas. I'm like, that's not what I thought back then. I was on the other side. That's my co-founder's bad idea. That's not my idea.

**Eric Ries** (01:05:20):
And I had this realization that it's not just that I learned something through the course of building this company about strategy. My own understanding of the vision of what we were doing was different, but the thing that's so critical to understand is I even to this day have no psychological memory of having changed my mind about it. I still have the original memory of writing those things on the whiteboard, and I really thought someone was playing a trick on me at first because what I could witness with my own eyes on the whiteboard contradicts my actual memory of the thing. And I was like, which of us is right? And of course, I had to admit, the physical evidence, you got to win out.

**Eric Ries** (01:06:00):
But I think it's important also to understand how much that is true. And that's like, again, go back to why science is so important. Why do we write all the elementary things about science? We write our hypothesis down, we subject our things, we do that because human psychology is so buggy and people who are fighting with their generative AI chatbots and stuff are starting to see, those are nothing but a reflection of human theory of mind. So we're starting to see it in alien creature that, wow, our intelligence has all these weird behaviors and gaps and things, and of course we want our robots to be perfect, but it's like, well, first look in the mirror and realize that you yourself carry all those cognitive biases and you've got to put in place a structure to get around them or they're going to destroy you.

**Lenny** (01:06:42):
That is an incredible story. It makes me think about, I think it's exactly what you said, not only are the stories you hear often intentionally not accurate or true, and they're kind of a myth that have been created, but also you forget exactly what happened and you tell a story that didn't really happen. That's wild. 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 in Q4, they had the highest marketing source revenue quarter to date.

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**Lenny** (01:08:22):
So you talked about pivoting. I never knew this about the term pivot is that you keep the vision the same. And I actually have this list of companies, B2B companies in this case, that pivoted. In their cases it was very different. Let me go through them real quick. And I'm curious, what do you call it if they don't keep the vision consistent? Segment started as a university classroom lecture tool. Loom, which just sold for a lot of money to Atlassian, started as a marketplace for companies to hire subject matter experts. Slack famously started as a game called Glitch. Box apparently started as a box to put photos and content in on Facebook. And Retool started as Venmo for the UK.

**Eric Ries** (01:09:04):
That one I didn't know.

**Lenny** (01:09:05):
I found that out through Twitter where one of the YC partners replied and shared that story with me because I also didn't know. And I think that's a good example where no one ever tells you that fact.

**Eric Ries** (01:09:15):
Right.

**Lenny** (01:09:16):
[inaudible 01:09:16].

**Eric Ries** (01:09:15):
It's like well, that's an important part of the story to know. Exactly, exactly.

**Lenny** (01:09:19):
I think it was a quick pivot. I think they got to YC and they're like "No, let's do something else."

**Eric Ries** (01:09:22):
This is why it's so hard to evaluate from the outside because oftentimes there is a thread of connectivity that from the inside makes sense why we went from this thing to that thing. And it's often something unusual. It'll be something like well, while we were building the game we had to do this thing first because our values were like, you can't build a game without this thing. And then this thing turned out to be more valuable than the game. And then you're like "Oh, why are we building this game? This is the thing we actually really care about." So people are like "Well, I thought your vision was to build a game." I was like "Well, maybe but why did they build that thing first? Other people build games without building that thing." So that's why I say it's a process of self-discovery. Oftentimes the vision is discovered more than chosen in these stories. And from the outside it can seem really, really weird. And part of it is also that some people really need the failure of the first thing to appreciate what is great about the second thing.

**Lenny** (01:10:22):
I think Segment is a good example where they tried a bunch of stuff and then they posted this random thing on Hacker News and it just blew up.

**Eric Ries** (01:10:28):
Sometimes it blows up so much that you're like wow, that's amazing. But oftentimes the new thing will get 100 signups. And if you'd started with that as your first thing you would've be like "100 signups who cares." But if you've done 20 things in a row with zero signups, man, you're like "God, somebody likes this thing." Sometimes it's your first try but sometimes not.

**Eric Ries** (01:10:46):
And again, not to go back to Facebook all the time but that's such a famous story that people know it. In the movie, there's that famous scene where they live in the house in Palo Alto and they run into Sean Parker and does the ... Apparently that's real, and they really were living in that house. They really were working on Face ... But the thing that gets missed from the story is that Facebook's already started at that point, it's already being successful, and they're on the break between semesters on the summer. And Dustin Moskovitz, and Mark Zuckerberg, and Adam D'Angelo, and I forget who else are living in this house together.

**Eric Ries** (01:11:18):
Someone told me this story about what they were actually working on at that time. It wasn't Facebook. Zuck and D'Angelo had already moved on from Facebook and decided it wasn't successful enough and they were like ... One of them was working on a system where you could use gestural controls on your webcam to program computers because they wouldn't get carpal tunnel. They were sitting on Facebook and it was ... I should ask Dustin if this is true. I believe Dustin Moskovitz taught himself to program so that he could keep up with the demand of people who wanted to open Facebook at new schools because the virality was so insane. And I was like wow, you can be even building Facebook and not know. People are like "Well, if I told you that story without telling you the name of the founder you'd be like that's no visionary." I'm like "No, it's Mark Zuckerberg." No one has ever accused him of having a lack of vision, but somehow this is true.

**Eric Ries** (01:12:13):
So I feel like part of this is about just admitting the complexity of these stories is a little bit more ... There's more to the story than you really realize. These are imperfect people. And the pivot is really about learning, right? The original idea of the pivot was one foot anchored in the thing, one other foot moving from basketball, right? Anchored in what you've learned and yet so connected. So if it was truly a complete shutdown, start over again, nobody and nothing in common I would be like, that is not a pivot. But that's just actually quite rare.

**Eric Ries** (01:12:42):
Usually, there's some critical insight or element of the first thing that is carried over into the second thing. And if you were there, if you know the story, you'll be like oh, wow, that makes sense in retrospect. And again, I think this cuts against our whole idea. The thing we think it's like to be a visionary is you just ... You know all the answers. You're like a biblical prophet who sees the future. But that's not what it's like. It's really much more about having the courage to see the world as you think it ought to be and then dance with that wherever it takes you. I think it's a much more element of courage than of intelligence or anything else.

**Lenny** (01:13:19):
You're so full of amazing stories, Eric Ries. I never knew this Facebook story. Thinking about a founder who is maybe going through a period of considering a pivot ... There's a lot of startups right now just not struggling. Not struggling but struggling.

**Eric Ries** (01:13:35):
The 2021 Vintage is having a rough time.

**Lenny** (01:13:37):
Exactly. I'm curious just what advice you have for founders that are trying to decide, is this time to pivot? Should we give up? Should we stay the course? Just any tactical pro tips.

**Eric Ries** (01:13:49):
So first of all, if you're asking whether you should pivot or not you probably know the answer already. That's the first thing to just straight up say. People call me sometimes they're like "I want to know if I have product market fit." Well, the fact that you have time to call me and ask me this question already tells me the answer. If you have had product-market fit you would not have time for this. When it's working there's no time for naval gazing, there's no time for ... If you've never lived through a company going through product market fit it's such a rush, it's such an insane thing. The whirlwind of it is so amazing and so horrible at the same time. There's just no time for anything else. If you're not sure you're sure. So that's the first thing is just can you admit it to yourself? Can you do it?

**Eric Ries** (01:14:29):
If you admit that it's not working then what do we do? What I really ask people to do in these situations ... It's like give yourself a fixed period of time to take some decisive action and see if it feels better. If you can't agree that it's not working then okay, can we take six weeks to try to make it work? We have this assumption, we're going to try to test it, and we're going to ... Instead of working on the 29 other things that we have to do in the future, can we just spend all of our time 100% on the one and only one thing that matters right now? And just go heads down on that for a fixed period of time and see can we move ... Is it possible to move the needle in that thing?

**Eric Ries** (01:15:07):
Because one of the things that is true about startups when it's not working is that they're stuck in this law of diminishing returns where you just ... You can test yourself. Everything you try doesn't work, nothing works. It's like Thomas Kuhn and his theory of scientific paradigms. One of my favorite things that he talks about is that when an old paradigm is replaced with a new paradigm it's usually only because the old people die out and the new people replace them. A lot of researchers are like why does that happen? It's not that the new people are magically smarter than the old people, it's just the old paradigm gets to the point where there's no more experiments to run that are fruitful. And young, ambitious people want to run productive experiments. And the new paradigm gives them a thing where every experiment reveals something really amazing and they just naturally gravitate. It's not actually a formal process of abandoning the old and going to the new.

**Eric Ries** (01:15:55):
And that's true here too. Most people are not consciously able to let it go, they can't do it. So okay, find yourself a paradigm where the experiments are productive. I can't tell you how many startups I've been where they're like "It's up to the right." I'm like "Oh, really?" It's like "Yeah. At first it was 10%, now it's 10.5%, then it was 10.6%, then it was 10.65%, then it was 10.657%." You're like "Guys, yes, it's up and to the right but it's not what you need it to be for this to work." So give yourself a fixed amount of time on the current thing if you have to. Once you say, "Okay, the thing's not working." Do we have enough time for something new? Could you give yourself six weeks to try the new thing? If you're a bigger company you'd be like okay, we're in a ... Maybe you can't have a whole company work on it but can we have a team? Somebody, at least one whole human being, not a part-time committee. Somebody is full-time heads down trying to make the new thing work on a deadline.

**Eric Ries** (01:16:52):
And if you're a small team and there's only three of you, can you just put the whole thing on pause for a minute and give yourself a fix? If it was one weekend, that would be better than nothing. What can you actually afford? It'd be nice if it was six weeks but if it's only one weekend, no problem. What is the new thing you want to do? Now that you've agreed among yourselves that you're going to do that for a fixed period of time, everyone go around the room and say, "If I could start this company over again the thing I wish we were doing was."

**Eric Ries** (01:17:19):
And no one wants to go first, but since everyone's going to have to do it you're like "Okay, I wish we were doing this other thing." "Why?" And sometimes the first person goes and everyone's like "I've been wanting to say that same thing for months." And it's like "Wait, we all actually secretly want to do this other thing but we all are afraid to let the others down." It's like "That's actually great new" ... "Well, good." Don't mourn that 18 months of your life you just wasted, be excited about the fact that you actually are on the same page about the new thing.

**Eric Ries** (01:17:49):
Anyway. Everyone says the new thing. See if one of them stands out to you, do that one. If you all agree do that one. If you have three things that you're equally excited about do them in order. Everyone gets one month. We've got three months of money left, well, the first month we'll do the first thing, second one we'll do ... And we'll just see if anything sticks. And then sometimes people do that and they're like "I'm just exhausted, I just want to die." If everyone goes around and says, "I'll just give the money back it's okay, don't die. Let the company die it's all right." When you raise too much money, and you've got your cap tables all messed up, and you ... I feel like for our 2021 Vintage brothers and sisters, sometimes you just need to try again with the right capital structure, it's not possible. Make the structural changes you actually have to make to give yourself a chance to do something you care about. If you don't have that what are we doing here? Life's too precious for that.

**Lenny** (01:18:43):
That is awesome advice. Very tactical, very real. On the point you just asked of what would we be doing? What would you want to be working on? I imagine many people today would be answering AI-related products. And this is a good segue to where my next question is just, how are you seeing AI change the lean approach, product development, the way teams are run? Trends and changes you're seeing in all of the stuff that we've been talking about?

**Eric Ries** (01:19:10):
I mean, we're entering into a really interesting phase of humanity, and technology, and civilization. To know the right answers to those questions requires empirical knowledge that nobody has. That's exciting about it. And also, of course, some people find it terrifying. What I'm seeing so far is that, first of all, people are afraid of AI. But not really afraid of AI they're afraid of corporations with AI. AI doesn't do anything by itself, it has to be embodied and deployed by humans who have bad alignment. And so everyone's talking about AI alignment. I'd be a little more sanguine about AI alignment if the company's doing the aligning were better at aligning their human intelligences. I'm blanking on whose law it is. Always these named laws. So the idea that your software comes to reflect the organization that produces it is somebody's law. Conway's law maybe.

**Lenny** (01:19:59):
Let's call it Ries's Law.

**Eric Ries** (01:20:01):
No, please don't. I forget whose law. Anyway. That is going to be true on steroids in AI where we're training in machine intelligence and we're transmitting values to it. Those are going to be our organizational values. And tech has severely underinvested and neglected in creating governance and alignment structures to have those values be explicitly embodied in the organization which is why so many of our companies have become disappointments, and so many people feel betrayed by the companies they themselves help build. It's actually sad. So AI is going to force us to take those issues seriously no matter what.

**Eric Ries** (01:20:35):
You asked about how it affects lean startup. At the end of the day, AI is a management technology. The thing it does is manage intelligence and other intelligences. Watch people struggle to make AI agents work. It's been really interesting to me how often I've played with a lot of those tools myself. It's amazing how often you program the agent and it will be like okay. You give it a task like go take over the world or whatever, go make a really successful ice cream stand. Or you give it any task you want and it'll be like whatever. These AIs are programmed to never say no so whatever you say it's like no problem and it'll be okay.

**Eric Ries** (01:21:08):
First step, write a business plan for taking over the world, and that will spawn a new agent with a new AI. Be like okay, your job is to go write this business plan. And sometimes it'll go try to write the business plan, but oftentimes it'll spawn ... The subtask will be like oh, first thing I need to do is spawn an AI agent that knows how to take over the world and have it write the business plan. Everyone will just pass the buck to somebody else. It'll go into an infinite regress. It's like, first thing we need to do is research this. And then the thing that comes back, and now we've learned to research that we need to research 10 more things. Each of those 10 things require researching 10 more. So many ways this can go wrong.

**Eric Ries** (01:21:44):
And anyone who's been a middle manager who reads these transcripts will be like "Tell me about it, buddy." I once was doing an AI agent and I wanted it to write me a 30-day course. A transcript or a 30-day course for teaching people lean startup. Someone had asked me to do that. And I was like great, I'll have the AI do it for me. And it was amazing. It was like okay, no problem. Day one, what is lean startup? How does it work? Day two topic, what is an MVP, how's it work? Dot, dot, dot continue like this for 30 more days and you'll have a 30-day course. I was like yes, because I know that but could you please fill out the other 30 days? It was like no problem and it spawned a new subagent. It was like, given these two as an example please fill out the other 30 days. And it was like got it. And it was like how to do a task in 30 days.

**Eric Ries** (01:22:27):
Well, first look at these two tasks, then create similar things for 28 more days, then return the results. It's like no, no, I'm asking you to do that. If you ever watched the Monty Python no, can't guard him If he's a guard skit, it's like that. We're talking past each other. It's really interesting to see how AI, as we learn to understand it we will be able to develop different ... It will really change management a lot because it changes the individual span of control quite a lot.

**Eric Ries** (01:22:58):
One of the most hard problems in management is that in order to touch a lot of things we need a lot of hierarchy because just the expansion factor of each one has this many reports, has this many reports, this many reports. That's what's required in order for us to summarize a large amount of information. If you have 100,000 employees they're having 100,000 ... Doing 100,000 things, the CEO needs to know what's going on, that's really difficult. So there's this massive amount of human labor required just to summarize and understand what's happening. Well, AI's really good at summarization, it's actually one of its main strengths. In the not to distant in future it'll be very easy for someone to just be like "Summarize for me everything my company is doing." You won't need tons of middle managers to do that for you it'll just know. We don't even know what we would like to build organizations where those powers are available to everybody.

**Eric Ries** (01:23:49):
The last thing is, people are very focused on whether this is going to lead us to utopia or dystopia. Most people have a very firm conviction about what's going to happen, and therefore what needs to happen now to prevent something bad from happening. So you have the people who are like "We have to stop, pause, blow up the data centers because it's going to be this bad thing." People who are like "We have to have government intervention to prevent research on this thing, we have to ban open source. For every one of the things somebody wants to do somebody else is saying, "That is actually the thing that leads to the dystopia," right? Banning open source is what leads us into a corporately controlled autocracy that's even worse than the thing that you were afraid of.

**Eric Ries** (01:24:26):
A very common question I've been getting from people in the industry who are having an existential crisis about what should they do with their life in the face of this AI. And as you say, all the people whose startups are failing are like I want to be working on AI. Okay. For everyone who's got a grass is greener attitude about that ... The people that are actually doing it, and quitting their jobs, and going to work on AI, the first thing they confront is What should I do that will have a positive effect? It's actually really difficult to find out some ... Everything I propose doing someone's telling me that that's actually the evil thing to do and vice versa. A big part of lean startup has been ... For me, it's been just about learning how to deal with uncertainty in my life, right? So how do you deal from a business perspective? How do you deal with situations of high uncertainty? And it could be scientific, it could be experimental, it could be ... Just all these different values that are about coping with uncertainty.

**Eric Ries** (01:25:18):
And so the question people are asking me is basically, how do you take ethical action in the face of high uncertainty? And so the framework that I've been using I found very helpful and I hope other people will get something out of it is ... The aperture of possible futures that AI makes possible is so incredibly wide. And Predicting it requires a really deep understanding of a bunch of empirical questions, as far as I can tell, nobody knows the answers to right now. So given that it's not knowable what's going to happen ... You're not an expert enough. As far as I can tell nobody knows. The people who are most expert are actively doing the research to try to find out the thing that will help us predict. There's nothing you can do about that, you've got to wait for someone to go find that thing out. The thing that makes sense is to pick actions today that make ethical sense in a wide variety of future scenarios and do those. And what's really interesting is that takes people out of total paralysis about it into there's actually some very clear things that we should do. Whatever your doomsday scenario is we need more transparency right now, right? That's critically important. We need more state capacity, we need more competent leaders, we need companies who are committed to certain values. It changes the way that we think about these technologies in relation to ourselves as individuals.

**Eric Ries** (01:26:34):
And that's really my goal, in my work here, is just like how do we get people off the sidelines and into the fight doing things that are actually likely to be worthwhile? As I'm talking to you I'm like oh, it sounds a lot like the idea that most of the work you do in a startup is going to be thrown away after you pivot so don't do that work. It's not really a special unique insight it's just taking the same approach to coping with the uncertainty of entrepreneurship and now applying it much more broadly because everything's about to change.

**Lenny** (01:27:01):
It sounds like this connects a lot with the work you're doing now around governance and long-term stock exchange. And I want to get into that. But before I do, I'm curious if personally you're finding AI to be useful in some part of your life using a tool? Or, if there's a more interesting example of a company using a lean startup approach with AI integrated, is there anything that comes to mind of just something that you've seen to be practically valuable with some of the AI tooling?

**Eric Ries** (01:27:26):
When GPT-4 was first launched, I saw a friend of a friend just was posting a friend of theirs. A story about someone who was using it for cold sales outbound right when it first came out. They had downloaded a list of 10,000 Shopify stores with metadata, which I googled you can buy that for 100 bucks. They just told GPT to the roll of Python script for each store. GPT-4, please pitch this store owner something that my outsourcing company could build for them and be really creative about it. He didn't even read the emails he just sent them one after the other. And when the person would reply he would look in the email to see what he had pitched them and then talk to get the person on the phone.

**Eric Ries** (01:28:12):
The things that it pitched were so wildly creative and cool, it was really interesting. They were in the tone of the store, they were really ... They used clever puns. So he was showing me screenshots of the person writing back being like "You had me at blah, blah." It was very good sales prospecting. So okay. That's an incredible story about experimentation at a super high rate. We could never have done anything like that even five minutes ago and now it's going to become completely routine.

**Eric Ries** (01:28:41):
But it's also a story about how all of our communication channels are about to be supersaturated with AI-generated experimentation whether we want it to or not. If this technology holds the way we think it will, it's pretty clear that every company is going to be sending just huge volumes of AI- generated email such that people are going to need AI-generated email clients to read the email for them and summarize it for them. People make jokes about, I'm going to write three bullet points, my AI will turn that into an email, send it to you, your email will redact it back to the three bullet points. Couldn't we have just exchanged three bullet points in the first place? We're wasting a lot of silicon. A lot of GPUs were burned to move these three bullet points from point A to point B.

**Eric Ries** (01:29:24):
I don't think that's as silly a story as it sounds. I actually am excited about the possibility of AI-powered marketplaces to be far more fair than the way we do it today. Because if you think about that story, the problem fundamentally is that you have a massive number of people who could create things for store owners. And if all of those people emailed every store owner on the planet every day what they could do, it would be an overwhelming amount of information. So neither side is really capable of doing that. But AI is capable of doing that.

**Eric Ries** (01:29:56):
So imagine a world in which everybody is required and it's also ... But it's also really easy to do, to define a procurement policy. What am I interested in buying, right? What problems do I want to solve? What am I interested in buying? What information do I want to have? And my agent reads my inbox for me with this filter and applies the filter completely fairly. It doesn't matter if I played golf with so-and-so last week or whatever, just if the proposal comes in and it's credible, and the AI is really diligent about making sure it's not spam, then it will bring the thing to my attention. But it won't show me the email, I won't be tricked by its clever Al Ries-style positioning nonsense.

**Eric Ries** (01:30:34):
It will give me the essential information that "Hey, did you know that there's this thing that could actually save you a bunch of money?" You're like "Oh, okay, great." That is so much better than advertising could ever be. And it's also way more fair. We could then say, "Okay, actually, we would like every conceivable vendor to send every ... As many emails as they want at any time, just blow me away with all the things your thing could do. Let your AI go crazy trying to convince my AI that your thing is actually good. That's not wasted time, that actually create a lot more fairness in the world, and create a really even playing field for procurement for information. Think about journalists and pitches. You just see so many situations where we've established hierarchical gatekeeping structures because that was the only way to manage the volume of information that had to be processed for that thing to happen. When those limits are removed it could be terrible but it could be really awesome.

**Lenny** (01:31:27):
I love your optimistic vent on all the things we're talking about, I really respect that. And that might be a good segue to the final thing I wanted to chat about which is just the stuff you're working on now. So you talked about you're working a lot on helping companies with their governance. Also, I think you work on company culture, and helping companies make money, and profit, and build real businesses. And then that, obviously, connects to long-term stock exchange. Can you just talk about what it is you're spending your time on there and where you see big opportunities?

**Eric Ries** (01:31:54):
Yeah, sure. I mean, I think it's one of the big, big, big issues that we're grappling with. If I compare the questions I get asked by founders today versus 10 years ago, these issues are so much more in people's minds than they were back then. When I work with a founder for the first time, we'll often do a thought exercise that's like "Okay, we've talked about culture, we've talked about the company, it's like okay, great, why should anybody trust you?" They're like, "What do you mean?" We're talking about companies now building stuff that is so invasive into people's lives, so much more powerful than it was before. And really honestly, this is just about taking seriously the rhetoric about changing the world.

**Eric Ries** (01:32:33):
And so many tech companies, when they're raising money are going to change the world in fundamental ways. And when they're being asked to take moral responsibility they're like "I'm just a little database vendor." It's like you can't have it both ways, buddy. Are you the Superman who's reordering the whole world to your whim? Well, then you have moral responsibility for the outcomes. That's a hotly debated point right now but I feel like it's actually super ... People have already made it clear in their rhetoric where they stand there, they're just trying to evade that responsibility.

**Eric Ries** (01:33:02):
So the next gen of founders aren't ... Don't find this complicated at all. People feel a real sense of responsibility to make the world a better place for the real things. Okay, great. I'm working on so many companies that are straight out of science fiction. I mean, the company that does travel from San Francisco to Tokyo in one hour. And you're like, it's unbelievable. Actual weather changing. The real thing where you're like, we're going to change the amount of habitable land on the planet and solve famine and drought forever. Obviously AI, there's these just incredible possibilities and ... In nanomaterials and quantum computing. I could go on. There's just so many cool things going on.

**Eric Ries** (01:33:42):
But they all have really dire consequences. I mean, I was talking to a really advanced biological AI company where ... Imagine having an LLM. Imagine ChatGPT but for biological compounds. We'd be like "AI, could you just synthesize for me a molecule that has these properties just described in natural language?" And it's like "Sure." That could be incredible. Think about the cures and the diseases. That's going to be an amazing transformation on technology. But it has such obvious risk and downside that we have to take it really seriously. Why should anyone trust you with this power? And people always say the same thing, "Well, I'm a really good guy. I'm your bro, man. I've got good intentions." It's like "Well, who gives a crap about that, you could die, you could be replaced. Some investor could sweep you."

**Eric Ries** (01:34:28):
How many stories can I tell you about startups where the investors change management involuntarily? The fundamental problem is that no individual person can ever make promises on behalf of an organization, it's not possible, it's a category error. You're replaceable. And the reason is because organizations are actually alive. They are superorganism with their own soul and their own life. We are their selves and organs when we make them. Founders don't create them we birth. And that's different. We don't own them, they're not slaves. We nurture them. That's different. If you want your organization to be trustworthy, the promises it makes ... If you want to win the public's trust by making promises they can believe, you have to embody those promises in the structure of the organization itself so that even if you weren't there the promise would be kept.

**Eric Ries** (01:35:20):
And people act like that's impossible but there are lots of examples. I mean, think about the code of medical ethics and the Hippocratic Oath. In the US if you want to do healthcare you have to have a care delivery organization that is staffed and run by doctors, not by private equity guys. There's all these things. Where we know how to build structures that are organized around some purpose, so what should that purpose be?

**Eric Ries** (01:35:44):
I was talking to a former Googler ... I hate to pick on Google because they've always done a lot of good things in the world. But they're, I think, the locus of a lot of tech people's disappointment in the world. And so this is nothing unique to Google but I just happen to be talking to an ex-Googler. And he was talking about the values, and the company, and his disappointment, and what had happened in the many years that he'd been there, the good and the bad. I said, "Okay, answer me this question. I'm going to ask you two different things, and for each thing I want you to tell me, what is your assessment of the probability that this thing will happen in the future? Thing number one. What do you believe is the probability that Google will file its next quarterly report on time?" He was like "100%." I was like "How 100%?" I'm like "As certain as the sun will rise, bet your life on it?" He's like, "As certain as the sun will rise 100%." I was like "Excellent, I agree."

**Eric Ries** (01:36:26):
A second question. "What is the odds that Google would be complicit in something that would make them money but at the expense of murdering somebody?" He's like, "They probably wouldn't do that." I was like "Probably, 100%. As certain as the sun will rise." He's like "Well, no." I was like "Oh really? What do you have?" I said, "Well, come on, what if they're running a self-driving car as they kill somebody and they cover it up? What if they will a social media product and it's conflicted in a genocide? Facebook went through that." He's like "I don't think they would do that on purpose. The difference between the thing that is certain and the thing that we don't know." I was like "Okay, why is that?" We treat that normal. Of course, companies file that report sometime. Is it because in the human heart fidelity to finance rules is hard coded, but care for other humans in their life is not? People don't give a crap about quarterly reports.

**Eric Ries** (01:37:14):
We have built a massive apparatus in these organizations to make sure that certain things happen. Companies are really good at things that they care about, and therefore we can learn something interesting about the things that they care about by what they choose to be good at and what they perennially are not good at. My view is that what it means to be a for-profit company, we've gotten it wrong. We're basically incorrect. Making a profit is actually about maximizing human flourishing. That's what it means to be for profit. So our current category says that Philip Morris is a for-profit company, and the Smithsonian is a not-for-profit but that's just backwards. Smithsonian does a lot more good in the world than the Merchants of Death at Philip Morris. I think we've just gotten confused. All forms of making money are the same but we all know that that's not true. There's exploitative extractive ways of making money, and then there's truly additive ways of making money that actually create net new value.

**Eric Ries** (01:38:08):
And so if companies are dedicated to human flourishing and they want to be the company that will create net new value, and they don't want to become a bureaucratic nightmare, they don't want to become a rent-seeking blob of discriminate math. We don't want that to happen. We have to encode those promises into the company in a deep way. And I think that's really what governance is about. The whole ESG movement, all the discussion about this has gone totally off the rails. Philip Morris has actually great ESG scores it's absurd. How can that possibly be right? We have to find a better way forward.

**Eric Ries** (01:38:43):
Again, going back to lean startup and first principles. Once you go back to that first principle and say, "What would it look like if every person in a company felt a fiduciary duty to promote human flourishing? How would you do it? And what would be different?" I've started to meet founders who are building companies like that and it's almost unrecognizably different. I've been framing this, of course, in terms of the big things. Obviously, if you think about the weather control startup. That needs to be right, not just because if a super villain and got their hands on it would be really horrible but also because you can easily imagine ... They got bought by some private equity firm who's like "This is awesome. We can now put every town in a zero-sum competition with their neighbor for the good weather and extort them both from" ... That would be just as horrible. We don't need superviliany for this. None of us should want our technology to be used in that way so we need to prevent that from happening.

**Eric Ries** (01:39:33):
So when we put that in that ethos, we make that part of every decision, we finally can create the environment that people really want to work in just to make great products. I feel like most people I meet just want to work on something awesome. And we act like giving, that just happens. But I've worked with so many companies now, even the ones that are really truly great ... You go meet a team who says, "We had the island of freedom, we had the full" ... We were able to do it exactly right. That's one of the most satisfying experiences in my career.

**Eric Ries** (01:40:06):
You ask people, "Why was it" ... "How was it made?" And they're like "How was the product made?" "No, how was the island of freedom that you lived on made?" And they're like "I don't know, ask my boss." I've done this exercise. I've asked the boss, and the boss's boss, and the boss's boss. And sometimes I'll go all the way up, and it'll be like "Well, actually the founder of the company, who's still around, made it so." But sometimes no one knows. And you're like "Who's in charge here? The board is in charge.? They're like "I don't know. The CEO asked me to serve on the board." The company chose its own board, the board chooses the C ... It's all self-referential. And it's like where did it come from? We view it as an accident, it just happens sometimes. But that's because we're not engineering these beings to create the outcomes that we really want. And I just think this is a blind spot.

**Eric Ries** (01:40:52):
As company builders, we're so focused on the product and not nearly focused enough on the organization. We tend to say at the surface level stuff like culture, we don't get into the deeper stuff. So, yeah, I think as builders, as an industry, we need a new movement to say. "We are going to build companies where human flourishing is the thing at the beating heart. We're going to wield that as a competitive advantage to not only change the world for the better but also make a lot more money."

**Eric Ries** (01:41:17):
That's the crazy thing about it is these companies are worth a lot more than their competitors. Without naming the company, I talk about a company that is an incredible ethos of love and just ... It actually loves their customers, it's amazing. Everything cascades down from that central premise, including the instruct ... Every CEO I meet is so frustrated all the time. I can't get people on the same page. I tell them what to do but they don't listen. It's like maybe part of the reason you're having trouble with this is the strategy you're communicating does not actually make sense to people. Well, this one really makes sense. Treat your customer like you would treat your own parents. People are like "Oh, that's actually really easy and clear, I understand exactly what that means." And so their customer loyalty is unbelievable. Can you imagine what their retention is like if you-

**Eric Ries** (01:42:00):
And so their customer loyalty is unbelievable. Can you imagine what their retention is like, if you actually felt... You call customer service and it's like you're reaching your guardian angel rather than some bored customer service rep? It's amazing. So their competitors are like, "This is not fair. It's unfair to compete with this. This thing is a monster."

**Eric Ries** (01:42:17):
But when you're going to a customer like, "Hi, would you rather work with a company that's owned by some private equity schmuck, or a company where some of the prosperity you helped me generate gets reinvested in you and your community?" It's a competitive advantage to do the right thing. So I feel like that we're going to have a new wave of founders who take that seriously, who are going to just... They're going to steamroll. It's going to be really awesome to watch.

**Lenny** (01:42:42):
I can see how you started a movement, maybe accidentally. I am mesmerized, I am sold. If people listening are also sold and want to build a company this way, what can they do? Is it work with the long-term stock exchange? Is there something they could do to help move their company and product team and business in this direction?

**Eric Ries** (01:43:00):
I feel like there will come a time when there's a lot of resources about how to do this, and there aren't a lot right now, so it's a bit thin. I'm working on it, but we're still trying to figure out the right way. But I am hoping to start doing some events and some things to talk about this stuff, so people should feel free to reach out or follow me on the usual places.

**Eric Ries** (01:43:19):
If people want to do it themselves, talk to your lawyer. This is definitely one of these "talk to your lawyer" moments. I've worked with enough companies, I've actually been around long enough that I've worked with multiple companies that have gone from zero to IPO and beyond. So I have personal friends who've taken their company public who are now extremely wealthy, and who sometimes even call me and are like, "Hey, I run this massive multinational company. Can we talk about this very specific situation that's come up at work?" I still am involved in those companies. I still get to hear sometimes what it's like to actually do it.

**Eric Ries** (01:43:49):
And one of my main takeaways of that entire process is that it's always too early until it's too late. So what happens is people hear something like what I'm saying, like, "Oh yeah, we need to make sure... Here's some things you can do." Obviously you can become a public benefit corp or a social, what's it called, in California, a social purpose corporation. There's legal designations you could take. That's fine. You could talk to a company that, because their startup involves building a technology out of something that comes out of indigenous cultures, they took 10% of their company and they put it in a foundation, the trustees of whom are tribal leaders from the cultures that they interact with, and those people that has an economic role and a role in governance. You can establish a foundation like that.

**Eric Ries** (01:44:31):
You can do what's called the board mission pledge where the people on your board are required as a condition of being on your board to pledge that they'll use their business judgment under Delaware law to support the mission, not just the narrow interest of shareholders. You can build, we call it an LTSPV, which is basically a financing instrument that operates like a regular SPV, but every LP in the SPV has to sign a contract to say that they will support the mission of the company if you ever want to do something like a B Corp version, or if there's ever a situation where it's unclear whether they're in favor of you doing the thing that's right by your stakeholders long-term, they're pre-committed to that, and we assign trustees to oversee those shares rather than just the narrow interest of the shareholders.

**Eric Ries** (01:45:10):
I can go on and on. There's all this stuff you can do. So I get companies, I got founders excited. I've been getting founders excited about this for a long time. I've now been long enough at this that the founder will go to their lawyer and the lawyer will say, "Listen, sounds great, but you don't need to do that right now. You can always do it later." And they're like, "Okay." And then the companies going bigger and they'll do some financing round. Each financing round, it's like, "Is this the time?" "Ah, that's fine, we could just do it later." And then it's like 18 months from the IPO, they've hired a CFO and there's a bankers and the whole thing's on rails, and the CEO's like now, "Hey, did we ever establish that foundation thing for our non-employee stakeholders?" And they're like, "Huh?"

**Eric Ries** (01:45:44):
"The thing, remember we talked about, you said it was too early?" "Oh yeah, I remember that. Have we done it?" "Oh no, it's too late." "It's too late?" "The thing's on rail, shareholders wouldn't like it." The banker's like, "Oh, you don't want to put that in your IPO prospectus." It's like, "Wait a minute, when was the right time? You're telling me that 18 months ago, July 3rd through 7th, there was a four-day window and it was the right time? It's never the right time. Why is it never the right time?" And I've seen founder after founder after founder get steamrolled. One of the only exceptions I know is a mutual friend of ours who actually stopped the IPO process and was like, "No, I won't file the paperwork." They tried to steamroll him and file the paperwork without him, and he said "No, until I see this thing in there, we're not doing it."

**Eric Ries** (01:46:24):
And it was a very contentious thing, took a tremendous amount of political capital. I admire him immensely for doing it, but most founders don't. Most founders just go along, and the thing never gets done. So the most important thing is to sit down with your lawyer and just take them through a few hypothetical situations and ask them, are you properly protected against this specific thing? For example, if tomorrow Philip Morris shows up... Pick your favorite evil. I've used Philip Morris because my dad's a pulmonologist, so I grew up as Philip Morris as the ultimate of evil corporations. But pick your favorite evil corp. If they show up tomorrow and they offer you $1 per share more than your company is currently worth to buy it from you and your investors in order to use it to sell cigarettes to children, do you have a fiduciary duty to say yes or a fiduciary duty to say no?

**Eric Ries** (01:47:11):
Believe it or not, if you went to a fancy law firm and they filed for you the standard articles of incorporation that are used in Silicon Valley, most governance experts upon reading those documents would say, "You have a fiduciary duty to say yes." If that doesn't horrify you and make you want to jump out a window, I can't help you at all. And if you don't care, fine, I got nothing to say to you. If you don't care, you don't care. There are really sociopathic people in this world, and they build sociopathic companies, and I can't help you.

**Eric Ries** (01:47:39):
But if you do care, sit down with your lawyer and just be like, "Hey, is this true? Could this happen to me?" And they'll be like, "Yeah, obviously." And you'd be like, "If I'd like to prevent that, what could I do?" And they'll be like, "Well, your investors might not like it. Investors like it this way. It maximizes their returns." And you're like, "Yeah, but that's not what I asked you." And your lawyer is good enough to know the answer to this question. What can you do? And if they can't go back and rewind the video that, Lenny, I just had named a bunch of things. You can do founders preferred shares, you can do all this stuff.

**Eric Ries** (01:48:10):
Just ask them about some of that stuff. And don't ask them, "Should I do it?" Ask them, "Tell me for each thing, can you give me the pros and cons of doing it?" And then they'll be like, "The pros are it might actually allow you to save your company's soul in a dire situation like this. The cons are investors might not like it too much." So sit there and be like, "Hmm, I'd like to do it. That sounds good. Thank you for advising me on the pros and cons. You work for me, you're my lawyer. I'd like to implement this thing."

**Eric Ries** (01:48:33):
And honestly, just pick a few of them to get started with. And over time, what you need to do, last piece of advice, every founder wants the one weird trick, this is how Lean Startup started too. People were like, "Can you just tell me the one weird trick to keep my company innovative forever?" It's like, there's no one weird trick. You want to do the right thing, it is a relentless and constant process. We need to build a structure of the company so that at every level, at every moment, every decision the company makes, somebody in the room making that decision feels like they have a fiduciary duty to do the right thing.

**Eric Ries** (01:49:06):
If that's the outcome you want, then this is going to be a perpetual process of constantly trying to find ways to create the alignment that is needed between the governance, the management structure, and the actual operations and culture of the company. Those are not separate things. They're actually only one thing, because it's just one being. You have a skeletal system, a muscular system, and a circulatory system, but those things are not separate. They work together to produce you, the being. And the same thing is true for these governance structures. So I think most founders are under-indexed, under-invested in that, and that's why we get to these horrible outcomes.

**Lenny** (01:49:38):
To give founders a little ammo in doing this, because as you said, investors are not going to be excited to sacrifice profits, employees may not be. Other companies that you can share that have done this and have implemented some of these things that are public? And if not, what confidence can you give founders to be like, "Many, many amazing companies have done this and it's actually not that hard"?

**Eric Ries** (01:49:58):
I don't like to name specific company names in venues like this, because then people always are like, "Well, but what about..." It's just, people like to do the whataboutism thing too much. And also I like to let companies speak for themselves. I have way too much confidential information, and I just have to be really careful about it. But nothing I'm describing here is hypothetical or unreal. I have witnessed this many, many, many times myself, and every story I tell, it's a real company that you can meet. They're real people that are out there.

**Eric Ries** (01:50:24):
And they're not always the loudest. The loud voices in our industry tend to be the ones that have something to sell, and these companies are just quietly doing the right thing. They don't really need to tell you about it because they're doing it. So there's an inverse proportion to the loudness and controversy and meanness of the thing, and how likely it is to be accurate, unfortunately.

**Eric Ries** (01:50:47):
What I will say is this is kind of an open secret in the world. So here's the thing that really surprised me. I thought the way that we build companies, like the standard corporate governance practices that we all do, must be well established in research. They must be well backed up. It must be the only and best way. But when you start studying these things, you find the exceptions really fast. I got into this because of Toyota, only because I called the thing Lean Startups, I wanted to borrow stuff from lean manufacturing, I studied Toyota.

**Eric Ries** (01:51:18):
Well, Toyota has a really weird corporate governance system, which is part of the old Japanese keiretsu system where the Toyota family is intertwined in its ownership with their supplier... By modern standards, it's a terrible rat's nest of disastrous corporate governance practices. But if you look at the literature, everybody who studies Toyota is like, "Well, the reason they're able to do this awesome stuff is because they have a philosophy of long-term thinking." I used to be like, "Well, how can you have a philosophy of long-term thinking if you're subject to quarterly returns?" And they'd be like, "Oh, they don't pay attention to that stuff because they have this other structure."

**Eric Ries** (01:51:48):
I'm like, "Oh, that's weird." So for a while I was like, "Oh, I guess it's just Toyota. We should build more Toyotas." But then there's all these family run companies out there where the family has produced this outcome. And then I started to meet foundation controlled companies. It's funny, OpenAI is the hottest new thing. OpenAI is a nonprofit foundation with a wholly owned for-profit subsidiary. I thought that was like, "Wow, OpenAI." That's actually very common. There are a lot of companies like that in the world. In certain European countries, it's actually 20 or 25% of the companies, public companies, are all structured that way. So it's actually totally normal.

**Eric Ries** (01:52:21):
And I did a talk for one of those companies a few years ago, and it blew my mind, because when I would go there and talk to them, I was talking to their CEO and their leadership and I was like, "Oh, what's it like to deal with the public markets and quarterly?" And they were like, "Well, we don't do that." I was like, "Oh, is that a major source of competitive disadvantage? You guys are a nonprofit." And they're like, "Are you kidding me? We crush our competitors, because they have to waste time on all that stuff. We don't waste time on it." I was like, "Oh."

**Eric Ries** (01:52:48):
Anyone ever heard of Warren Buffett? Why do his companies have a competitive... People are always like, "Oh, if you're giving up profit, your investors might not like it." I'm like, "These companies are world destroyers." What are we giving up? That's why I go start with the wrong definition of profit. We'll actually make a ton more money if we do it this way. And Amazon, for all of its flaws, the long-term thinking and the customer centricity, that's a major source of competitive advantage.

**Eric Ries** (01:53:14):
And I've worked with Amazon, I've worked with many of their competitors, and the funny part with competitors sitting there, they're like, "Oh man, Amazon's entering our market, and we need to do X, Y, Z." And I'm always like, "Do you think Amazon's doing X, Y, Z?" And they're like, "Oh no, they don't have to do that stuff. We have to do all this bullshit that our investors require and the activists and whatever." It's like, "Well, if you're competing against them and they don't have to do that crap, maybe you should try doing it their way." And they'd be like, "Oh, our investors wouldn't like that."

**Eric Ries** (01:53:36):
I was like, "Your investors want you to get your butt kicked by Amazon? Are you sure?" So I actually think... One of my realizations here is that the investor centric view of corporations, what's called the shareholder primacy theory of corporations, it's just wrong. It's wrong even if all you care about is maximizing returns for shareholders. Shareholders have this propensity to be the person who killed the goose that laid the golden egg, and it's been going on for 150 years. These case studies go back to the 19th century. This is an old, old, old idea.

**Eric Ries** (01:54:03):
And the solutions are actually all hidden in plain sight. So I was reading a research paper the other day that studied some of these, I think it was in Denmark, foundation controlled companies versus level matched public companies that are not foundation controlled. And they found the foundation controlled companies outperformed from a financial performance perspective.

**Eric Ries** (01:54:19):
And I was like, "How is this not the most incendiary result ever?" If this is true, so much of the indoctrination we've all received about what it means to be a for-profit company is just wrong, because those companies should be riddled with slowness and agency problems. I know the theory so well, I can tell you all the things that ought to be true. If those things are not true, what's up? And then I was like, "Wait a minute. I've been to these foundation controlled companies." I've been to Hershey, it's just controlled by, the founder donated the shares to a foundation that runs a school.

**Eric Ries** (01:54:51):
I've seen it with my own eyes, and even having seen it with my own eyes, it took me a while to realize, "Wait a minute, this is an open secret." So I was kind of horrified to find out that this is well-known, and yet was never offered to me. How come no one ever offered me the chance to build a company this way? And if you study even OpenAI or any of these companies that are now structured this way, it's always very idiosyncratic. They were on the standard path and then something happened that allowed them to do something unusual. And I was like, "Well, I don't understand why we have to wait for it to be idiosyncratic. Why don't we do it on purpose?"

**Eric Ries** (01:55:20):
And so I started to conceive of this idea, I call it the spiritual holding company, basically the thing at the center that is responsible for the soul of the overall ecosystem of companies, that is the enterprise. And you can see that obviously in the OpenAI example, if anyone has studied the anthropic long-term benefit trust, it is not coincidentally structured that way, but you see lots of examples where that's what's done.

**Eric Ries** (01:55:47):
And I started just pitching it to founders and said, "Look, let me try to show you what the benefit of this would be." And I've been amazed how many founders break down. I've had founders start crying with me where they're like, "This is what I always really wanted to do, but I never felt like... No one would talk to me about it. I didn't think it was possible. I want to put... There's a critical stakeholder I want to put at the center of everything I'm doing, or there's some reason why we're doing this, and I want that to be the thing." I was talking about a startup who's trying to get... And again, it's not like a Kumbaya thing, do-gooder whatever, virtue signaling bullshit. It's a competitive issue.

**Eric Ries** (01:56:20):
There's a company that is working to recruit academic researchers to leave their lab and come work for the startup full-time. It is one of the most difficult recruiting challenges there is, because it's not talking about kids out of some school. It's tenured professors who are leaving behind a very good life to go do this thing. They would only do it if they profoundly believed in your mission, but they're not naive.

**Eric Ries** (01:56:41):
And the first question every one of those people ask is, "How do I know this technology's not going to be used for evil? I have complete academic freedom. I'm going to give that up for you. Make me believe that this is the real thing." And if you're like, "Well, we believed in some manifesto and we're good people and we got money from some investor who's promised you he's going to be a good guy," that is not going to cut it.

**Eric Ries** (01:57:04):
And so they're having to do the whole thing, sit down with their lawyers. "What do I have to do to make this promise real for these people to make them want to join?" And I've just seen that over and over again. If we have the courage to do it, it can solve what are really today considered insoluble business problems. So it's cool, but I think it's scary for people to feel like they're doing something different. And so I think over time we'll get more of these stories on the record. There'll be more precedent for it. But I got to say, not to hearken back to Lean Startup too much, but I'll never forget sitting with early people who were like, "What's the proof? What big company is doing this?" And I'll be like, "Just wait. If you don't want the competitive advantage now, you can get it later."

**Eric Ries** (01:57:46):
And many of the people... Look back on who was profiled in those books. Many of the early Lean Startup adopters are very successful people today because they didn't feel like they had to wait. They were able to think for themselves and apply the principles in their own life. And I don't ask anyone to take this on faith. This is not like, "You have to do what I say." It's more just like, think for yourself. If this makes sense to you and no one can explain to you why it's a bad idea in ways that you find compelling, give yourself permission to at least try it and see what happens.

**Lenny** (01:58:13):
What a beautiful example of first principles thinking, looping back to our very first question. I think this is going to be the longest episode we've done yet, which is amazing. Also, I think it might be my new favorite episode, so that's a good conversation.

**Eric Ries** (01:58:13):
Thank you for saying so.

**Lenny** (01:58:27):
With that, we've reached our very exciting lightning round. We'll see what sort of lightning we find. Are you ready?

**Eric Ries** (01:58:34):
I'm ready.

**Lenny** (01:58:36):
What are two or three books you've recommended most to other people?

**Eric Ries** (01:58:40):
There's a book called "The Enlightened Capitalists" that is just a hundred years of people trying to fix this problem and failing, and the detailed case studies, and no founder should ever read it end-to-end. It's too depressing. But it's important to know some of these stories of founders that they're willing to talk about their regrets on their deathbed that they wish they had done differently. And for those who think there's one weird trick, this will help disabuse you of that notion, but it's helpful to understand that mistakes have been made before so that we can do better going forward.

**Eric Ries** (01:59:11):
On a happier note, I really want more people to read Ken Liu's "The Dandelion Dynasty". It's a silk punk fantasy series, but it's written by... He's a wonderful writer and it's like, if you want to see what real optimism about engineering and the ability of engineers to change the world, but transformed into a totally different environment, it's just such a great read. The audiobook is really good also, and I've been kind of plugging that lately.

**Eric Ries** (01:59:38):
And then if you want just something that's pure fun, it's not really the season for a summer read, but also a really good audiobook is the Murderbot Diaries by Martha Wells. She's just such a great writer, and I know it's a very frivolous thing on the surface, but there's actually a lot in there, and I won't ruin it for... Nothing I would say would be a spoiler, but there's actually a surprising amount of depth for what is really just a fun action adventure kind of read. I can't wait. I hope it is someday made into a movie. If they do it justice, it'll be really terrific.

**Lenny** (02:00:12):
What's a favorite recent movie or TV show?

**Eric Ries** (02:00:15):
I really have been try... I don't have time anymore. I have young kids, so my media consumption days are extremely, extremely limited. But I've been kind forcing myself to slog through a bunch of the Disney+ Star Wars series, which have been almost universally disappointing with the exception of Andor. For those that have not seen Andor, it really is very good. Not good for a Disney+ Star Wars show, it's actually good for television, which I couldn't believe when I saw the premise of it.

**Lenny** (02:00:41):
Also a huge fan of Andor, and I've recommended it many times. And I feel like now every new Star Wars series, I'm just comparing it to that bar, and it's not...

**Eric Ries** (02:00:47):
That's the problem. It's like, if they would just make that creative team or they would just let them make shows, it would be okay. It would redeem all the rest of their failures.

**Lenny** (02:00:56):
Yeah, or just keep making sequels. I'll watch them all. What is a favorite interview question you like to ask people when you're interviewing them?

**Eric Ries** (02:01:03):
My favorite interview question of all time is to ask people to describe a best practice that they learned in their career and to really get into it. Like, "Tell me the story of how you learned the best practice," you just let them go on, and then you'd be like, "Great. Tell me a situation where that best practice would not be applicable." Most people can't do it.

**Lenny** (02:01:23):
So interesting. What is a favorite product you've recently discovered that you really like? Whether it's an app or something physical.

**Eric Ries** (02:01:31):
I was just singing the praises of a product to a friend. It's the most boring and stupid product ever. It's just a humidifier. And you'd be like, "Okay, how can you mess up a humidifier?" But actually, it's very difficult to get it exactly right. There's all these little attention to detail craft. We were talking about craft, it was on my mind. It's a very humble appliance, and it's actually, I've gone through 10 different models trying to find something that doesn't drive me...

**Eric Ries** (02:01:58):
Because you want to run it at night, but if it has a light and it's on all night, that's really annoying. If it makes a noise, that's no good. There's all these things where you're like, "Boy, if anyone had used the jobs to be done framework for one minute on what this physical device is supposed to be, this is the product they would've built." And I can't believe... It's so interesting in modern capitalism, there's so many categories where there isn't a product like that, or there's just one. You're like, "How come every product is not like that?" And the forces we've been talking about are the reason why it's funny to see it represented in such a humble object.

**Lenny** (02:02:30):
What is the actual humidifier that you found?

**Eric Ries** (02:02:33):
It's the Levoit 300S ultrasonic humidifier. Lavoit 300S. It's just a really well-made $60 appliance. It's nothing special.

**Lenny** (02:02:45):
They're about to see a spike in sales. Go Lavoit.

**Eric Ries** (02:02:49):
Somewhere, somehow, there was a product management meeting where they talked about how to make this thing, and I can picture it right now. Somebody was like, "Look, the way we make these things sucks. Can you please let me just put the thing that's normally on the bottom, let me put it on the top and let me put this in there and put that in there?" And someone was like, "Who cares? That's going to add 3 cents to the cost and reduce our margins by whatever." And someone was like, "No, really think we should do it right." So we like to reward people like that.

**Lenny** (02:03:15):
Yeah, and this is going to take us off-topic potentially, but I've been thinking more recently about how most often the best stuff comes from just one person's singular control over how to do that thing over and over and over.

**Eric Ries** (02:03:27):
Yeah. There's actually, if you study Toyota production system, they have this job that's called the chief engineer. I wish more founders knew about this, because when you become large, it's important to be able to empower the founders that work for you and not just only see yourself as the founder. So the chief engineer is the person with the moral authority over an entire line, like a car from start to finish.

**Eric Ries** (02:03:47):
And I don't know if this is still true, but back in the days when people were writing a lot about Toyota, inside the company, the car is not called a Toyota Camry. It is called "so-and-so san's car". And the thing about the chief engineer is they have no reports. Nobody works for them, they just have what's called the big room, if you've studied that whole thing. There's a place where they are, and they have a small staff, but they have the design and the car, and as the number of people who work on a car, it swells up and then it comes down. Because you have the design phase and then you go into production, and eventually the number of people goes back down.

**Eric Ries** (02:04:21):
The most important thing you have to do in a product is make trade-off decisions. And if you just let people make their own trade-off decisions, it's totally different. It's really difficult to have any kind of coherent design like thrust. So the idea is like, "This is the person who makes those." If there's a fight between two departments about how much the thing should cost or if someone asks a question, like, "Listen, I can improve the aerodynamics of the thing by this much, but it will cost this much, and it will mean we have to take this button and turn it from metal to plastic," you have someone who can actually be like, "No, that button has to be metal. We made a promise that this is going to be." Or "Button doesn't matter." You just need someone who knows that thing. It has to be that you can keep it in somebody's head. So yeah, called the chief engineer.

**Lenny** (02:05:00):
Just when I thought we were done with golden nuggets in this episode. That is so interesting. I think that makes so much sense, and I also agree that should happen more often at companies. Wow.

**Eric Ries** (02:05:09):
Yeah, it's very much missing structures.

**Lenny** (02:05:12):
[inaudible 02:05:12] All right, two more questions. Do you have a favorite life motto that you like to repeat yourself, share with folks, something that you come back to often that helps you do the right sorts of things?

**Eric Ries** (02:05:22):
Well, I won't get into the whole explanation. The motto is that nothing real can be threatened, and nothing unreal exists.

**Lenny** (02:05:30):
We'll have a whole other episode just unpacking that. Amazing. Final question, you invented a lot of terms, a lot of concepts. Is there one that you don't think caught fire and that kind of spread as much as you thought it should?

**Eric Ries** (02:05:44):
Oh, yeah. Yeah. I got tons. I got tons, man. The cutting room floor is full of so many things. I went through a really extended period of trying to use... But it was before Lean Startup, I tried to use cell biology as the metaphor for a startup. It should have been... I wanted something more biological and less mechanical. I never got one person to understand what I was talking about. It did not work.

**Eric Ries** (02:06:06):
But I'll tell you the one that surprised me the most. This is such a small one, but I really thought that this would take off and people would be way into it. I did a lot of writing about it and then I couldn't get it to stick. So everyone knows viral loops. There's also engagement loops, and I was like, "Oh, just like we have viral loops, which is about how products grow, we should also have engagement loops, which is about how people stick."

**Eric Ries** (02:06:28):
And there's a science to stickiness, and people have written about that from the point of view. "How do you make your product more addictive?" But that's not really what this is about. This is about being able to model the dynamics of how customers flow through. And a version of that is in the Lean Startup. We have what I call the law of sustainable growth, which is a situation where new customers come as a natural side effect of the actions of past customers.

**Eric Ries** (02:06:52):
And so that is obviously true of the viral loop. Everyone knows the paid engine of acquisition where you have, whether your marginal profit per customer drives your ability to invest in customer acquisition. But there's also what I call the sticky engine of growth, which is kind of like the vestige of this idea that made it into the Lean Startup. But I actually think that that's a whole really interesting thing where, if you think about, the way to think about it is if someone is living their life, having a happy time, then for some reason they use your product, why did they use your product? What made them come back to your product?

**Eric Ries** (02:07:24):
And it's actually, there's not that many things it can be. It might be because you gave them a synthetic notification like, "Hey, please come back to my product," and they did. It could be because some kind of organic notification took place, that is, like, they got an email from a friend on your platform that was like, they got a notification that was driven by... One of the most successful customer emails of all time is PayPal's, "You've got money, click here to take the money." It has a very high click-through rate, maybe second only to Facebook, "Someone has tagged you in a photo, but we're not going to tell you which photo it was. So you better click, right?"

**Eric Ries** (02:07:58):
So something happened. If it's not one of those two things, then it's got to be because of positioning. Something in your brain on its own told you to use that product. Why did you go start playing World of Warcraft? Did you have to get a notification to remind you? You like playing it, no one had to tell you. You like you doing it, or something happened in your life that made you need, you're hungry so you went to the thing to get the food.

**Eric Ries** (02:08:25):
Because those are the only ways by which people come back to a product, those all can be measured, studied, and understood to the same level of precision as we have with viral loops. I can't for the life of me understand why viral loops gets all the attention and no one is remotely interested in the science of engagement. I was a time when I thought engagement loops would make me way more famous than Lean Startup ever would. I was very, very wrong.

**Lenny** (02:08:49):
This also reminds me that you also, I think, were the first person to talk about growth as loops and these specific loops and a growth engine, which now a lot of people talk about.

**Eric Ries** (02:08:57):
Yeah, [inaudible 02:08:57] growth is mine, yeah.

**Lenny** (02:08:59):
Yeah. So wow, we discovered another one. I imagine there's many more. Eric, this was incredible. I definitely think this is my new favorite episode. Thank you so much for being here.

**Lenny** (02:09:07):
Two final questions. Where can folks find you a line if they want to reach out potentially? And then how can listeners be useful to you?

**Eric Ries** (02:09:13):
You still find me at theleanstartup.com. I'm @ericries, E-R-I-C-R-I-E-S, on all the usual places, although I really don't do a lot of social anymore, so joining my mailing list at theleanstartup.com is probably the best way to keep track of the major things that I do in my life. And then, yeah, I do try to get on some social from sometimes to make some announcements. And if people want to reach out, I'm just eric@theleanstartup.com.

**Lenny** (02:09:35):
How can listeners be useful to you?

**Eric Ries** (02:09:37):
Oh, that's really sweet. Honestly, people need to just take these ideas and do something with them, and then you learn something from it, and then tell me what happens. That's all I want in exchange. Just tell me what happened. Even if you... The people I've learned the most from are the people that tried to use my ideas, thought they were the stupidest thing they ever heard of and doesn't work and they're mad. Tell me, I want to know all about it, because really my job, the way I see myself is, my job is just to try to understand these things. I just want to know the truth. If I'm wrong... I don't like being wrong, I'm as attached to my ideas as anybody else, but I try really hard to find out what is true. So if you discover something new, please tell me. That's all I ask, is let me know.

And if you don't try, then how are you ever going to discover anything new? Every day I meet people who've just heard about Lean Startup for the first time. For me, it's so old... Every day people read the book for the first time and they have a question about... So if that's where you're at and you just discovered it, excellent. I wrote a couple books. You can go read them, please [inaudible 02:10:38] for those ideas. If you're someone who's jaded and you're like, "Oh, I'm so tired of hearing about Lean Startup," I mentioned a few new ideas in this conversation. Go try one of those. And even if it doesn't work, or if it does work, or even the people I've learned a lot from are people who, they tried it, and in the process of it not working, they had another even better idea, and then they went and did that.

**Eric Ries** (02:10:59):
Well, go do that. All I ask is you tell me what happened. I want to learn from people who are making this happen. And I hope as we come together as a, not just as a Lean Startup movement, but as a startup movement, as a group of people who fundamentally believe that we can make the world a better place through the building of organizations from scratch. We have that as our belief, that the future is not scary. Newness is not something to be feared or opposed, but there is a responsible, methodical, value-creating way to make positive change in the world. That's an ethos that is not universally shared, and that if someone's listening to your podcast, my assumption is you're in our tribe. So we have a collective responsibility to think about, "What do we stand for beyond just my company, my founder, my story, but what do we as a group? What are our shared and collective values, and how do we make those manifest in the world?"

**Eric Ries** (02:11:53):
I'll leave you with one last idea. We collectively have so much power it's crazy. Because the system the way it works now, what I've learned about our current, what they call late-stage capitalism, financialized engine of capitalism, is that it is value-destroying in so many ways. And although markets discipline companies and they require them to create more value than is destroyed to stay alive, new companies, the ones that we've built, are so valuable.

**Eric Ries** (02:12:21):
The core insight that makes the thing is so valuable that the being that you've built can withstand so much damage before it collapses. And yet, if you look at the average tenure of companies in public companies, you just look at average CEO tenure, all the metrics you look at are really grim here. We're destroying companies faster than we create them, such as that the total net number of public companies in America is down more than half from a peak that was in our lifetime. It's not that long ago. What's going on? Well, the system requires a steady supply of fresh meat to replenish that which it destroys.

**Eric Ries** (02:12:54):
And if you're listening to this podcast, you probably are one of the peddlers. So you're the manufacturer of the thing that the system requires for its basic survival. And so as a matter of fact, we as a group, we get to set the terms by which this is done. And so if we want to stop selling our beings, our babies, our children for money, we don't have to do that. If we want them to have a certain ethos themselves in the world, we want them to be trustworthy counterparties and do something for the people we care about, we can insist that that is the precondition upon which we will give our everything to.

**Eric Ries** (02:13:26):
And so I don't want to say that I know all the answers or that my values are the ones that should win out, but I do think that we do have a certain shared set of values that we ought to be more ardent in defending. And I hope your listeners will take that to heart.

**Lenny** (02:13:40):
A beautiful and empowering way to end this. Eric Ries, thank you so much for being here.

**Eric Ries** (02:13:46):
My pleasure.

**Lenny** (02:13:47):
Bye, everyone.

**Lenny** (02:13:50):
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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## [9/24] Unpacking Amazon’s unique ways of working | Bill Carr (author of Working Backwards)

**Bill Carr** (00:00:00):
... Jeff would say, we took it as an article of faith. If we served customers well, if we prioritized customers and delivered for them, things like sales, things like revenue and active customers and things like the share price and free cash flow would follow. So therefore, when we're making a decision thinking about a problem, we're going to start with what's best for the customer and then come backward from there. That informs what's the work you have to do to then create this new solution for customers.

**Lenny** (00:00:33):
Today my guest is Bill Carr. Bill is the co-author of the book Working Backwards, which is a synthesis of the biggest lessons that Bill and his co-author learned from their many years at Amazon. Bill joined Amazon just five years after it was founded, stayed there for 15 years where he worked on the books business, and then as VP of Digital Media, launched and managed the company's global digital music and video businesses, including Amazon Music, Prime Video, and Amazon Studios. After Amazon, Bill was an executive in residence at Maveron, an early stage VC firm, then chief operating officer at OfferUp. And these days, Bill runs a consulting firm called Working Backwards, LLC, where he and his co-authored, Colin Breyer, help growth stage and public companies implement the many practices developed at Amazon.

**Lenny** (00:01:20):
In our conversation, we go many levels deep on how to actually implement a number of the practices and ways of working that helped Amazon become the success that it is today, including the process of how to actually work backwards, how to organize your team with a single-threaded leader, how to divide up your metrics into input and output metrics, how to practice disagreeing and committing, how to implement the Bar Raiser program in your hiring process and so much more.

**Bill Carr** (00:04:30):
Thanks, Lenny. Thanks so much for having me. Pleasure to be here.

**Lenny** (00:04:32):
It's my pleasure. So, I was reading your book, and something that I recognized as I was going through this is just how many new ways of working Amazon contributed to the way tech and business runs. And I made this little list, and I'm curious if there's anything I'm forgetting that's obvious. So, obviously the idea of working backwards, the idea of one way and two way door decisions, the concept of disagreeing and committing input and output metrics using memos versus decks, just the idea of two pizza teams, and then I know that evolved into single-threaded leaders. Is there anything else that's just like an obvious core thing that's maybe almost too obvious that I don't even think about that Amazon contributed?

**Bill Carr** (00:05:10):
The one that's non-obvious and is really the way in which Amazon created a set of leadership principles that were very real, and the way in which Amazon created a set of processes to reinforce them. I think I certainly haven't encountered anything quite like that. It was very intentional. So, that is also a distinctive element of that we try to point out in our book.

**Lenny** (00:05:42):
Awesome. Okay. So, maybe we will come back to that, because that is also really powerful mechanism. So, the question I wanted to ask about this is there are companies that are bigger than Amazon, that are more successful than Amazon, that have been around longer than Amazon, but I don't think any other company has contributed so many unique, new ways of working and also been able to coin them into such shareable ways. What would you say it is about Amazon that enables this sort of way of working and also just making things so just proliferate through the culture?

**Bill Carr** (00:06:13):
That's actually one of the reasons why Colin and I set out to write our book because everyone knows about Amazon as a innovative product company, at least certainly during the time I was there, which was from 1999 through the end of 2014. The company rolled out all kinds of innovative products. The Kindle, AWS, Alexa, Echo, the Prime subscription itself is innovative and...

**Lenny** (00:06:41):
And it's all those things, by the way.

**Bill Carr** (00:06:43):
Yes, a lot of people around the world use all those things. And obviously, Jeff was a huge driver of those things. But what people don't realize is that Amazon was actually, to some degree, equally focused on process innovation. In many cases, by the way, we stood on other people's shoulders, we cannot take credit for having... For most of these, there were other inspirations or we built on work that others had done, which by the way, was what I think all great companies should do. And again, that's also why we wrote the book was because we would like to allow people to stand on Amazon's shoulders to learn what we learned, and then take all or part of these things and build from there.

**Bill Carr** (00:07:28):
But to more directly answer your question, how or why did this happen. So, this period of both product and process innovation actually occurred in this one narrow window of 2003 to 2007. During that window of time, all of the products I just mentioned and all of the processes except for one were all developed in this one four year period.

**Lenny** (00:07:53):
Wow.

**Bill Carr** (00:07:54):
And this is the period actually where we were going from hypergrowth stage, zero to one company, to what I would call one to whatever, a thousand, infinity. That next step that companies have to make where what happens is things become very complex. We're no longer just a bookstore, we sell a lot of things. We actually branched out beyond just a retail business, we had a third party marketplace business. We were experimenting in those days with providing running websites for third party retailers in those days too. We were developing new things. We were in many countries around the world. So, we'd become very complex. And what happens to that point is that then you reach this point where the CEO can no longer be in every important meeting, can no longer be involved with hiring every person. And you need a system, a method to run the company effectively. And Jeff Bezos is fundamentally, he's a very scientific and analytical thinker.

**Bill Carr** (00:09:07):
His undergraduate degree was in computer science, I'm pretty sure. Although I think he actually started off wanting to get a physics degree, he ended up moving over to computer science. He spent his early days at DE Shaw as a quant on Wall Street. Very quantitative mind. So, he applied this... When he thought about this problem, he said, "Well, I need to be scientific about this. There needs to be some system or some approach, some mechanism for me to be able to manage such a company. So, I'm going to experiment, like a scientist would, with different ideas, different hypotheses, implement them and see what works, and iteratively improve." So that was the mindset which we took... Which by the way, we applied both to process innovation, but also product innovation.

**Lenny** (00:09:55):
Awesome. I had Eric Reson, and he also happened... I thought about this at the same time, he contributed a lot of core concepts to the way tech worked, and he actually brought up a couple concepts that were on the cutting room floor, basically things that he thought would be things people adopt everywhere. And I'm curious, is there an example of that at Amazon where you built a process and had this clever term for it and just never spread or never actually worked at Amazon? Anything come to mind?

**Bill Carr** (00:10:20):
The dev team, the design team, the product team, they're all in one group, and they'll go operate autonomously, but not completely autonomously because we, the senior leadership team, Jeff and the S-Team want to know that they're on the right track. So, we're going to create something called a fitness function, which was let's figure out what are the four or five or six metrics that matter most for your particular area. Let's give a weighting to all of them and then let's create an index for those, and we'll measure that index up and down. And that's the fitness function.

**Lenny** (00:10:52):
That is a very nerdy way of organizing teams. I love it.

**Bill Carr** (00:10:55):
Yeah, super nerdy. But we realized after, I don't know how long, several months or a year of doing this, so the fitness function was not a good idea. This is what I would describe as a compound metric where you try to take several important metrics and munge them into one. The problem is it's actually becomes totally meaningless. When you're measuring things, you're trying to understand what actions or reactions are creating the good outputs that you want, revenue, customer growth. But by putting them all together, you basically obfuscate that. And what really we realized is we need to just break each one of these out individually and manage them each in its own way. So today, I discouraged teams and companies from creating any sort of compound metrics.

**Lenny** (00:11:44):
I've done that once, and it was a terrible idea as well, where we had six different metrics and every quarter, we were going to move a different metric that contributed to a higher metric. And what we realized is we just never learn how to get good at one thing, and then it turns out there's always one thing that actually impacts the bigger goal most. See, you just end up working on that thing anyway.

**Lenny** (00:12:03):
Let's actually go deeper into the single threaded leader piece since you mentioned it. It's actually come up a lot on this podcast of people working this way where they have a single threaded leader. And so clearly, it's worked. And I guess we'll just help people understand what does a single threaded leader actually mean, and then why is it such an effective way of working.

**Bill Carr** (00:12:23):
So, the concept of single-threaded leadership was first... When I was born from this time of complexity at Amazon, and where again, large... Once you get to a certain scale, you get to a point of where there are competing departments, competing interests, and they're competing for some centralized pool of resources. For all of you who are working for a tech company, this is this pool of engineering resources, or today, data science and AI resources. There may be other constrained resources often designed as a constrained resource. But the point is now all these teams want that pool of resources to go build stuff for them, but they're in competition with each other. So, most companies solve this by having an intense, centralized, highly collaborative process. We decided to go in the other direction for the reasons I mentioned, which were that we're just fine, that we're spending all our time in these meetings, planning, and a lot of the work we were doing, the artifacts we create, the documents, the projections, we're actually not very useful either, we're bureaucratic time wasters largely because a lot of the assumptions built into them were deeply flawed.

**Bill Carr** (00:13:35):
So, you're debating numbers in these documents that are based on flawed assumptions, which is a waste of time. So, what we realized instead was how do we get... The three things we really wanted were ownership, speed and agility. And so, we experimented with that and said, "Let's create teams that can stand alone, where there's a single leader and the cross- functional resources that they need are all either directly report to them or are dedicated to them." So they don't necessarily have to be a straight line direct report. In Amazon's case, for the most part it was. There were some dotted line, but it could be all straight line, it could be all dotted line, it could be a mix of the two. But fundamentally, we've moved from what we called a project orientation to a program orientation.

**Bill Carr** (00:14:24):
So, a project orientation means, oh, we are going to do this project to change our search result page and algorithm, and the project is defined in this way and it's going to take six months. The resources will come and swarm on that, and then they'll move off to some other thing in some other part of the company. The program based orientation says, let's stick with the search example. There's a team that works on search, and they always work on search. And instead of thinking about things on a project by project basis, they think holistically about what they need to do to improve search. They have a set of metrics by which they're looking to drive those metrics largely. Ones that they can control. Things like what percent of the time is a customer clicking on one of the top three results in my search page, or how many milliseconds does it take for the page load time in this browser type, on this device type, et cetera, et cetera.

**Bill Carr** (00:15:21):
And they then are running their own roadmap. They're deciding what are the most important things for us to go work on, and having a prioritized list of those things and be able to start at the top of the list and work their way down with the pool of resources that they have. Sometimes, and most times, they may want more resources to be able to tackle more, but they spend less time in resource contention, resource fighting, and instead, focus on building what they can build with the resources that they've got.

**Bill Carr** (00:15:54):
And so, the benefit of this is if there are success or failures, they're really dependent on themselves now. The only thing they could maybe argue about how they could do better is if they had more resources, which they can petition management for. But this way, it also solves a big management problem, which is instead of management, senior management refereeing every item on a roadmap, they're refereeing which teams have how many resources, which is more of like a once or twice or three times a year decision versus refereeing everything on the product roadmap. And then all the resource contention issues, that's a daily issue. And so, it frees teams up then to actually go and sprint ahead. There's a lot of work you have to do to get ready for this. For example, in a software environment, when we first started and we had a monolithic code base that was not pretty, we weren't ready to do this because you have all those interdependencies.

**Bill Carr** (00:16:56):
Once we moved to a service-based architecture, and then teams could own their code with defined endpoints, APIs that other teams could understand that are well-documented, then we could move in that direction. And the other thing is we had to create, what I would call, countermeasures because there's no free lunch in org structures, any org structure, you're trading off one thing for another thing. In this case, you're trading off potentially functional excellence. So, in other words, if you no longer have every single engineer or every single marketing person or every product person or every biz dev person reporting into a C-level leader of that particular function, and instead, they're spread out in small teams across the company reporting into some generalist who is probably not going to have functional expertise in several of the functions that they're leading, you risk the problem of then the people in those teams not gaining functional competency. That's the downside. And we can talk more about this, but we created a lot of countermeasures to still enable us to have functional excellence while creating these single-threaded teams.

**Lenny** (00:18:07):
To drill into this a little bit further, is the origin of this, this recognition at Amazon that the best stuff comes from one person's vision and just one person driving and one person's ask being on the line versus the often, the decision by committee approach?

**Bill Carr** (00:18:24):
It is less about that. I do want to be clear, it's one leader and their team who are accountable and responsible. So, with respect to what are we going to go build, how are we going to go measure success, all those things, this team and that leader are responsible for documenting that, writing their plan. Now, they don't just get to go off and do that. There was an intense review process at Amazon where either at some level, whether it be the vice president, senior vice president, or all the way up to the Jeff level and his direct reports called the S-Team, this plan would be reviewed and scrutinized deeply as well, and there'd be a discussion, an interchange, and basically getting alignment between the senior leadership team and each one of these single-threaded teams on that plan before the team could go off and run.

**Bill Carr** (00:19:17):
The beauty of that though is that once we'd had those discussions, those interchanges, then the teams were free to sprint hard after their plan. They didn't have to worry about whether was, "Am I aligned with my CEO? Am I aligned with my senior vice president?" They could know that they were. But yes, this creates then clear... If they're going to deliver it or not. It's up to that owner and that team. Whereas when you have this highly cross-functional approach and there's not one clear person who's responsible for this one project that's on this roadmap, I've seen many CEO pull their hair out saying, "I have no ownership and accountability here. How do I have that?" They're pushing on a string. Because they can't because their different people and leaders are part owning, half owning a long list of things instead of fully owning a short list of things.

**Lenny** (00:20:15):
I like that. I like metaphor of pushing on a string. Is this approach similar to just the GM model, or is there a big difference when someone's thinking about going GM model versus the single-threaded leader approach?

**Bill Carr** (00:20:27):
Yeah. Obviously, there are probably different definitions of what people consider the GM model, but I would consider that being this person is a P&L owner, and you can, of course, create mini P&Ls within a P&L. Like for example, in the book business, we could, and I don't know most of the time we didn't do this, but we could have created a P&L owner just for fiction books, or just for professional and technical books, which is a very large category with big differences between the others. And then you say, "Great." Then that team, they have their own dedicated team. They're fully responsible for the revenue numbers and other numbers. But you have to be thoughtful about how you do this because one of the three questions you have to ask when you establish one of these teams is, does the team have the resources within their control to effectively manage this part of this department, this product, this P&L?

**Bill Carr** (00:21:23):
And sometimes then if you narrow things down too much in some cases, then the answer is no. In other cases, the answer can be yes very easily. A great example, this was in Prime Video, one of the businesses that I managed, we could create a single-threaded team who just was working on applications for TV sets, like Samsung, Sony. We could create another team that's working on game consoles, and another team that's working on mobile phones and tablets. And then within each one of those, we could further break it down. We could have one team working on Xbox and another one on PlayStation, another one just on iOS. In those cases, then it's very clear how you can break the teams down and they can have very clear ownership.

**Lenny** (00:22:06):
Awesome. Let's go back to the countermeasures topic, and then even just a little more broadly. You talked about one thing that was important to put in place before you moved to the single threaded leader model, which is creating APIs, and basically breaking apart this monolith. What are some other things that you think you need to put in place to be successful in trying to shift to this model?

**Bill Carr** (00:22:26):
The other thing was these functional countermeasures. So, let's stick with the engineering, for an example. So, in 2004, 2005-ish, I started managing a single-threaded team. Actually managed two different ones, one for music and one for video, which are now Amazon Music and Prime Video. They weren't called that in those days. But I started managing a small team of software engineers at that point. Well, I have never... Well, I have written lines of code, but that would be back in high school, and we're talking about Basic and Pascal. I have a master's in business, a background in marketing. I'm a generalist, okay? So, I'm not equipped to coach. I couldn't possibly conduct a code review. I couldn't possibly conduct an architectural review. I couldn't possibly coach or mentor an engineer on how to improve their craft. But I was one of many of these examples.

**Bill Carr** (00:23:28):
And there could be reverse examples where instead of me being a business leader, I was purely an engineer, and now I'm managing a team that does marketing and business development. I wouldn't know anything about those things if that had been my background. So, what we did, and I'll stick with the engineering examples, we came up with various countermeasures. One example was that we still had a C-level leader of engineering in Rick Dalzell, and most of the core infrastructure and core services still reported into Rick. So-

**Bill Carr** (00:24:01):
Core services still reported in to Rick. So it was things like payments or infrastructure search, and Rick still could be a technical leader for the whole company and he and his team could create things like what are the standard ways that we're going to do code reviews? What are the standard ways across the company that we will interview and screen engineers? What does the promotion process look like? What are the defined steps getting from an SD1 to an SD2, SD3? How do we document and describe what are the requirements? There are many things like this. 

**Bill Carr** (00:24:41):
Effectively, what it also meant is that anyone who is an engineering vice president, or in many cases a director, they would often have something else beyond their day job of some sort of subject matter expertise area where they would also contribute to the company. A good example of this would be that they might sit on a panel for promotion from a certain level to another level in the engineering world, or they might be available to do code review outside of their organization for another organization. So people had other jobs in addition to their day job to build and maintain functional excellence. There are a lot of examples like this across the company.

**Lenny** (00:25:23):
Let's go in a different direction and talk about one of my favorite principles of Amazon, which is disagree and commit. I think in the way I even describe it I know is wrong. I think people hear this term and they often use this principle incorrectly. For example, it actually starts with have backbone and then disagree and commit. So I'd love to just hear how you've seen this actually implemented well and what people should do and think about when they're trying to implement something like this at their company.

**Bill Carr** (00:25:49):
So when I was at Amazon, there were 10 leadership principles and they've since expanded them. But of those 10, this was always the least well understood when I was at Amazon too, and partly because it is actually the most nuanced and difficult to actually use. So here's what it means. What it means is that have backbone and disagree, meaning when we are making any kind of a decision, important decision, if you are part of that team, part of that unit, it is your obligation to voice your point of view if you disagree with your approach that's been taken. The point of that disagreement, by the way, is to provide usually additional information or a new point of view that people have not considered.

**Bill Carr** (00:26:40):
So I like to geek out a bit on the process of decision-making and have read more and more about this. I think that Peter Drucker probably has the best writing on this topic. But as he would describe it, good decisions are made by first understanding all the different points of view and pros and cons to the potential issue at hand or the potential direction, and that great leaders, what they do is they solicit these different points of views. They have a team that they work with to debate and discuss things. So another way to think about this, a king and their court. In an ideal world, if you assume that there's no political motivations, the court is there to advise the king and help them think through different problems and provide different and opposing points of view to allow the king to arrive at the right decision.

**Bill Carr** (00:27:41):
This is sort of no different than that which is the disagree part is about bringing forth new information, new data, new point of view that would be contrary to the current direction. So that's the disagree part and you're obligated to do it as we would describe sort of all the way up the chain if necessary, if it's an important issue and people are not hearing or understanding your point of view. Now the important point is first of all about hearing and understanding your point of view.

**Bill Carr** (00:28:11):
What would often happen, I can tell you if someone in a leadership role, someone come to me with a disagreement and many times I'd appreciate it, by the, way because they'd bring some point of view that was useful, but sometimes they bring the disagreement and cite the reasoning behind it and I already knew that reasoning. We'd already thought of that reasoning, we already thought of that, in which case I would say, "I hear your disagreement. We have already considered that factor. But even though that factor is there, here are these other factors that outweigh that."

**Bill Carr** (00:28:42):
Now that is the point at which as long as the disagreer is hearing back from the leader that they understand their point of view, understand why they are pushing back and seem to fully understand it, and they've taken that into consideration, that is the point for them to commit. Because the point is you provided your information, they've processed that information and they've decided to go this way with the knowledge of that. Where people get confused about is they don't maybe understand when they're supposed to stop disagreeing is one thing, and so hopefully that explanation made people clear this is when you're supposed to stop, and then the commit part done well means that it's not just like I'm going to commit, I don't really agree with what we're going to do, but I'm going to get behind this.

**Bill Carr** (00:29:39):
Ideally it's, oh, now I've heard the argument, I've actually now thought about the argument and hopefully that person has now understood why we're taking that direction. So their commitment is based on that understanding because then they can reflect that understanding back to their organization too. Because the worst thing to do is to say, "Yeah, we're committed to this. I don't really agree and I still think it's wrong, but I'm committed to it." That's not actually commitment. This is really about decision-making and understanding the facts and information that people are going to use to make a decision and then be able reflect that back.

**Lenny** (00:30:22):
I imagine there are many times I've gone through this where I still don't agree. What's your advice to a manager or to a report of just like, okay, when you actually still don't agree, how do you behave? Do you just behave like, yes, I agree with this and don't really voice your concerns or something else?

**Bill Carr** (00:30:37):
I work with Jeff on all kinds of different new ideas. Jeff doesn't think a normal person. His level of sort of creativity and the way he thinks, the timescale of which he thinks, there's many ways about the way he thinks that there was no one else in Amazon that thought that way. So there'd be times when even after we've had that discussion, I would maybe still disagree, but then what I would do is I'd focus on, okay, well what is the kernel or the core of why Jeff thinks that we should do this and I would focus on that kernel. I got great advice actually from one of my managers at one point, Steve Kessel who said, "You have to look for what that is, and then your job is to then take that kernel and try to run with it and expand it and try to see how I can take that idea, that concept, and then make it into something viable."

**Bill Carr** (00:31:41):
It doesn't always work, but it's about then having that understanding of what it is, not just sort of going through the motion of stomp, stomp, stomp through it. That's not going to work. Also, I've seen people who try that and their career doesn't go very far. You have to have some degree of faith that there's something there and I'm going to try to do the best I can to make that part. How would I productize that idea? How would I make that viable from a business point of view or whatever the different constraints are.

**Lenny** (00:32:18):
Awesome. So the advice there is focus on the parts you agree with and think about how you can find out if it's actually right or not.

**Bill Carr** (00:32:25):
Agree with, or even just you may not even agree, but what is the core of what that person is thinking is the big benefit or good guy or thinking vector that they're on that's causing them to want to go in this direction.

**Lenny** (00:32:42):
Thinking vector, love that term. Along the same lines, another principle that I love is leaders are right a lot. I feel like this is a term that it almost goes unsaid. You almost can say this in a lot of companies. I'm curious just the origin of why that became an important principle and then how it's implemented at Amazon.

**Bill Carr** (00:33:03):
Yeah. So going back to this last discussion, so one fallacy we should all acknowledge is that when you're making these decisions, and you're trying to use data to make decisions, you can make the data kind of look however you want it to look to sort of try to meet your decision. If I'm looking at some issue and I've got some big dataset, I can come up with ways of looking at a dataset to support this idea and ways of looking at that dataset to not support it. So the data rarely makes the decision for you. What is happening is then a lot of judgment and interpretation of the data, weighing that, weighing various factors to then come to a decision. 

**Bill Carr** (00:33:49):
That is sort of the right a lot part. The right a lot part comes from having what we call sort of sound judgment, which generally come... Some people maybe are born with this, not a lot of them, mostly they get it through experience. A lot of experiences actually about being wrong, by the way, about making mistakes and by having looked at a lot of problems, made decisions or observed others making decisions, being a student of that, and then using that to understand then how to weight different information when making a decision.

**Bill Carr** (00:34:27):
So right a lot is that you're good at that and that then it proves, and that generally speaking, people want to follow someone who ends up by and large going in the right direction, right? You're the leader of a team. The team is petitioning you on multiple sides. If you keep kind of going off in some direction where most of the team is scratching their head saying, "I don't think that that was the right decision," they're not going to want to follow you very far and you're probably not going to go very far. So this is something that you develop through experience and I'd say from having the opportunities to observe and work for others that are good at this.

**Lenny** (00:35:12):
I love that it's a lot. I like that it's not just leaders are right. It's right a lot.

**Bill Carr** (00:35:18):
Yeah, yeah. No one is right every time. That is totally unrealistic. Yeah.

**Lenny** (00:35:26):
Let's talk about the titular concept of your book, and that's a word I've never used, but I think it's appropriate, which is working backwards. First of all, just what does it actually mean to work backwards versus working forwards?

**Bill Carr** (00:35:37):
The title of the book comes from two things. One is one of the leadership principles, which is that customer obsession, and the principle states something along the lines of that great leaders start with the customer's needs and work backwards from there to sort of meet those needs or solve them. Then also because we created a process in this window I was talking about earlier, the 2004 to 2007 window, we created this process for new product innovation called the Working Backwards PR/FAQ process. They both refer to the same idea, which is that as your guiding star or the point from which you're going to start is what are the customer's problems or what are the customer's needs, and then figure out, okay, well what would be the solution to that, what are potential solutions to that? 

**Bill Carr** (00:36:40):
To do those things, starting with without the constraints of my financial constraints, my resource constraints, my legal constraints, my engineering constraints, whatever all those constraints may be, because the problem is what most of us do is we start with those constraints and work forward from there, or we start with things like I got to increase revenue. How do I increase revenue? I need to increase active customers. How do I increase active customers? For customer oriented behavior, we tend to start with those things which may often lead you in the wrong direction.

**Bill Carr** (00:37:22):
Whereas we had, as Jeff would say, we took it as an article of faith. If we served customers well, if we prioritized customers and delivered for them, we took it as an article of faith that then things like sales, things like revenue and active customers and things like the share price and free cash flow would follow. So this is important because I still can't give you objective proof that that is true, I don't know who could, and so it was saying this is an article of faith that if we do that we think those other things will work out. 

**Bill Carr** (00:37:57):
So therefore, when we're making a decision thinking about a problem, we're going to start with what's best for the customer and then come backward from there. Then in that coming backward process, we're going to have to figure out, well, to do that, gee, I'm going to have to solve this engineering problem, or I'm going to have to figure out how to make this thing cost less or make this thing faster or solve one or more problems. That's the backwards, that informs what's the work you have to do to then create this new solution for customers.

**Lenny** (00:38:36):
Awesome. So just to summarize, you start with what are the customer's needs and problems, and I think a big part of Amazon's approach is what are the lasting problems they'll always have, which is I think it's lower prices, faster shipping and all those things, and then think with no constraints. When you work with companies to implement this idea of working backwards, is it always what is the customer problem and need versus revenue or growth or something like that? Or is there other examples of where you work backwards from at different sorts of companies?

**Bill Carr** (00:39:07):
Well, the working backwards part is strictly about the customer's needs. Yeah, we don't want to work backwards from revenue. I guess we didn't really use this term for sort of other things like cost structure. Cost structure was actually a part of working backwards from the customer that if we had a low cost structure, we could afford to give customers lower prices, therefore let's figure out how to have a low cost structure. Because in itself, driving down costs, doing things more efficiently doesn't inherently benefit customers because you could just choose to take more profit. It only does if you decide that in doing so I'm going to lower my prices to customers or provide some other benefit. So no, we used it in this method of I'm starting from the customer, and then very specifically, we used it in this method of new products and features that I'm going to go build on behalf of customers. 

**Lenny** (00:40:10):
**Bill Carr** (00:41:31):
Yeah. So the first shift is to take this, so that's just a concept, right? Working backwards. Well, how do I turn that concept into a scalable, repeatable process? That's exactly where Jeff's mind went. Eventually, without getting into the origin story, we came up with this process called the PR/FAQ process. So what it means is that whenever we're devising a new product or feature, we're going to start by writing a press release describing the feature and describing it in a way that speaks to the customer and to some degree the external press and world where the idea is, in my description of this, it better jump off the page of something like, wow, as a customer I will really need this.

**Bill Carr** (00:42:17):
So what I work first is to say, okay, for your product development process, let's start by using this method as the method to decide what am I going to go build? And oh, by the way, to use it as a method to sort between a lot of different choices of what you might build. In summary, the way that process works is that PR, you're going to describe very carefully and clearly who's the customer, what's their problem, and what's the solution that you're planning to build. That sounds really simple and easy, but it's actually very hard to do that well. to crisply and clearly define those. The first two things are the things that are hardest to define, like who's the customer? Like anyone says, "All restaurants are my customer."

**Bill Carr** (00:43:08):
Okay, well, that's a mistake. Now, I mean, which kinds of restaurants are your customers? In what kinds of cities? In what kinds of formats, et cetera, et cetera? Then what is the specific problem you were solving? Ideally, you would some way have quantify that problem or there's some data or customer insights that have led you to understand that problem, to know that it is a meaningful and big problem. Ideally a problem that people would pay money if you could solve that problem for, because you can just look at the economics of that problem, and if instead they use your solution, this would be beneficial to them.

**Bill Carr** (00:43:50):
So I work to have them first implement this PR/FAQ process is the first step. Then the next step really is to go from there to say, "Okay, writing PR/FAQs is one thing. Well, how do I actually use them? How do we actually develop them?" Because there's this iterative nature to writing PR/FAQs where it's sort of a concentric circle review. You start off small with one author and with low fidelity writing these things, and then you start to share them with a small group and get feedback and improve it, a wider group, get feedback and improve it, and onward and onward until, depending on the size and scale of your company, you get up to the CEO as a way to strengthen, improve and really codify this idea and determine whether it's a great idea or not. So I help them understand how does that work? How do you do this iterative process? Then once you've done that, then what do I do with these PR/FAQs once I've got them? How do I then think about that with respect to my roadmap?

**Lenny** (00:44:55):
Awesome. Okay. That was an awesome overview. I'm going to fire off a couple of questions around the first part. Do you still suggest people do it as a press release? It feels like press releases aren't a thing anymore. Do you ever suggest people do it as a tweet or as TikTok video or a blog post?

**Bill Carr** (00:45:09):
Good question. So the first thing is it's not a real press release, okay? We could change the nature of it, and if instead we wanted to call it the customer problem solution statement, right? We could just change it to that because there really are three money paragraphs in this. First of all. Yeah, it's not meant to be a real press release, so don't use the language you would use if you were sending an actual press release. This is like an internal document. Okay. So that's the first thing.

**Bill Carr** (00:45:42):
The second thing is the heart of it really is that first paragraph, it's a short description, that second paragraph, that's the problem statement, and that third paragraph, that's solution statement. If you wanted to ditch the rest of it and the artifacts of the press release, you could. I think there are other benefits to it, like the headline, is this headline long and drawn out and I can't even tell what the heck this thing is from reading this headline? If you used a tweet that wouldn't work very well. 

**Bill Carr** (00:46:11):
The date is also a meaningful thing when you write the press release. The date is meant to be a hypothetical timing on which you're envisioning launching this thing which tells the reader something. Are you thinking that this is something that's so simple and easy, we're going to launch it next month or so complex that we're going to launch it in a year from now. So there are some other directional cues within it. Like I said, with everything, these are tools that people can use and I'm sure that companies will find other ways to improve upon these tools, but if you don't use those parts of them correctly, you're kind of missing out on what's the main benefit that your getting out of this.

**Lenny** (00:46:50):
Do you try to write it in a way that would be announced, like a press release feel? Or is it mostly just who is the customer? Do you try to pitch it as a part of this experience?

**Bill Carr** (00:47:01):
So you try to write it in that way, but the one thing is you don't want to use hyperbole. It would be very factual with numbers, data rich document too. So again, not like a real press release. A lot of internal confidential data would be in this press release.

**Lenny** (00:47:25):
Got it.

**Bill Carr** (00:47:25):
So it's a tool that has a very specific use to it.

**Lenny** (00:47:34):
Is there a template that we can point people to in the show notes to help them craft this? I think there's a version in your book maybe, but is there some online that we could point people to?

**Bill Carr** (00:47:43):
Yeah, so we have a website related to the book, which is www.workingbackwards.com, and there's a resources section within there and you'll find a template.

**Lenny** (00:47:53):
Amazing. Okay. Then the concentric circle piece. So the idea there is basically get feedback from an increasingly larger swath of the company and it sounds like a big part of that is also get buy-in as you go- 

**Lenny** (00:48:00):
... swath of the company. And it sounds like a big part of that is also get buy-in as you go along the way.

**Bill Carr** (00:48:05):
Yes and no. So first of all, there are some things where you may write it and you, the author, if we were in the old world, would take the piece of paper, crumple up and throw in the trash can, which is, in your own, you've realized, "Now that I put this down on paper and read it, this is not actually that good of an idea. I'm going to try something else." By the same token, you may then have written one you think is a pretty good idea, and you show up here or your manager and they give you feedback that makes you want to then ball it up and throw it into the trash can.

**Bill Carr** (00:48:38):
So part of this concentric circle thing is not just that everyone you write lives on and gets all the way to the CEO. There are no stats in this, but let's just say in some imaginary world where, yes, all these things... You're a product manager and you've got a director of product management you report to who reports to some senior vice president of division who reports to a CEO. Well, if you truly run this out and you write 100 PRFAQs in a year, maybe 20 of those make it their way to the CEO. The point is not every single one of them is destined to go that far. The numbers get narrower. And this leads me down to the concept of what you're really trying to create is a product funnel, not a product tunnel. And with a funnel, meaning lots of things at the top, fewer things at the bottom. The tunnel means that everything that comes in is also going to come out the other side.

**Bill Carr** (00:49:40):
And the problem with that method is that it means you're not actually having a method of consideration and comparing it against other things that you might build or how you deploy what are, frankly, most companies, your most precious resources, which is your engineering team, you should be looking at various choices. You should think of yourself honestly as a venture capitalist. They don't fund every company that they meet with. They actually fund a very, very low percentage of them. And at Amazon, we had lots and lots of PRFAQs that were a great idea, but we didn't ship them because we had other ones that were just a better idea, which had a bigger potential impact. So you want that. You want to create this corpus of ideas that are well-thought-out and select the best ones.

**Lenny** (00:50:27):
It feels like a lot of these processes are basically just ways to stop stupid shit from happening. I think the narrative is a good example where you have to expose your thinking deeply. This is a great example of that.

**Bill Carr** (00:50:39):
Yeah. And it's also, I would say, an example of where this is a process to prevent the other process, which is the product development process, from becoming the thing where you just get locked in on, "What are we doing in this sprint, what are we trying to get done," and focused on shipping stuff. What I recommend is you try to break that into two different processes. One is the process of deciding what you should go build, and that's what the PRFAQ is designed for. And then once you've decided that, then, yes, by all means, use all that good thinking, freight, "Now how can I ship it efficiently and effectively with few to no bugs?"

**Lenny** (00:51:19):
I was just reading this Harvard Business Review article, I think that's called the thinking to doing gap, where a lot of companies just spend a lot of time talking about ideas and solutions and not actually doing anything. And so I'm curious how you try to avoid that at Amazon considering there's this period of just like, "Let's explore, explore, explore, and we're fine."

**Bill Carr** (00:51:39):
There's a couple ways, and of course I'm somewhat having to imagine what are the problems in such companies where that's going on. So one such version of this problem is what I'd call the-big-idea-that's-not-fleshed-out problem. So I'm sure that every single person listening to this podcast has either themselves done this or have witnessed others in their company who come up with a concept of like, "Oh, I think if we built this, boy, that would really solve things or that would really work well or that would really grow things." And it may sound good to everyone, it may sound good to you, to everyone, and then maybe you start then working on building it. But the reality is that actually once you've spent some time looking at that idea more deeply, you then start to identify several roadblocks or maybe a fatal flaw with this idea. And in fact, no, you shouldn't waste any of your time going into building that thing because it has a fatal flaw.

**Bill Carr** (00:52:46):
So one problem is that companies get stuck, I think, where they never actually go do that documentation. And so it's a debate and discussion about concepts that aren't really well fleshed out. And so people's ability to actually evaluate them in any realistic way is they don't have a good way. And so in those situations, what gets done is probably more of a function of politics or will or a culture of completely top-down. I think the other way is where they're debating and discussing things that they just don't have good methods where then they can take things, and then go build them, meaning they probably don't have the right org structure or processes in place to then go take the good idea, assign it to someone who will own it, go look at it. And after they have owned it and gone and look at it, if it works, then they and their team can go actually build it.

**Bill Carr** (00:53:50):
What I always found as I became more senior in the company and my role became bigger and bigger is that when something came up, some idea that didn't neatly fit within my org structure, I couldn't necessarily delegate it to someone that this... There were only two things I could possibly do, which is just set it aside altogether because otherwise it'd just be a real distraction to people or I had to decide this was a compelling enough idea that we were going to take a resource, could be one person, could be a whole team, depending on the idea, and I'm going to have to assign that resource to actually go look at this and work at this. Otherwise, it will never happen.

**Lenny** (00:54:31):
I've been through those many times. Okay. So there's two more concepts I want to try to touch on before we wrap up. The next one is the idea of input and output metrics. This is something that at Airbnb, we super implemented, it became a very defective way of thinking. And actually there's a lot of Amazonians that ended up at Airbnb, a lot of leadership. So there's a lot of this stuff that we ended up doing like the memos. And so on the input and output metrics, could you just describe what that is and why that's so important, why people think about metrics in the wrong way often?

**Bill Carr** (00:55:03):
Yeah, so the origin of this one really was, again, in our early years at Amazon, '99, 2000, 2001, we were a public company then, we were growing. But then growth started to... It wasn't just all up into the right and like, "Woo-hoo." Every company's going to hit a wall eventually, and it's not going to be... If you're so lucky to even been at a company where it's just going up into the right with no gravity, good for you, because million people never experienced that.

**Bill Carr** (00:55:36):
What most people experience is the reality is that there's a lot of gravity pulling against your revenue numbers and you've put a plan out there and you wanted to grow 15% or 20% or 75% or whatever it was, and now you look like you're not going to hit that number this quarter. And so what ensues then is, "We're not going to hit our number. What should we do about that to hit our number?" And this often happens with, well, there's a month or a month and a half left in the quarter, and then we would run around like chickens with our heads cut off and come up with a bunch of ideas that tended to be promotional in nature and tended to be price reduction in nature, or we'll send this extra email or extra ad or whatever it might be-

**Lenny** (00:56:19):
Another Prime Day.

**Bill Carr** (00:56:19):
Right. And the reality is we did that, we went through that enough times, several quarters, and we started to realize, "Huh, these fire drills don't really work." We didn't really get meaningful progress against the number with these last-minute things we decided to go do. And oh, by the way, they were a big distraction. If they did work at all, they pulled revenue that might've just gotten in the next month or next quarter into this one. So it wasn't really a zero-sum game there. And we realized we're not really actually working on things that matter to customers that are going to move the needle over the long term.

**Bill Carr** (00:56:58):
And this is about the same time when Jeff and the S-Team were reading the book, Good to Great. And you have to ask Jeff what it is, but if you ask me, I think that this was the single most influential and effective management book for our company because what it caused Jeff to do, and I won't describe what... Most of you probably know what it is, if you don't know what it is, go read Good to Great. It is, in my opinion, the best, most important management book you'll ever read. Because what it did is to help us codify our growth flywheel, meaning what are the inputs that if we improve these things, which in our case, was how do we have broad selection? How do we have a great customer experience or great customers experiences in retail? Things like how easy was it to find what you wanted to buy, how easy was it to buy it, and how fast did it get to you. Were the prices low? Do we have lots of merchants on our platform? And by the way, could we drive out costs?

**Bill Carr** (00:58:06):
So we identified these things on our flywheel. And this identification of these things was such a critical moment for the company because then it realized, "Okay. Well, what we need to do is spend our time focusing on how do I measure each one of those things, and then how do I improve each one of those things?" So it shifted our focus away from this short-term thinking of pushing the revenue number up to this longer-term thinking that if we just improve these things, whether it's... There's no day that people will wake up 10 years, 20 years, 30 years from now and say, "All else equal, I'd rather shop at a store with fewer items than more items or a store with higher prices than low prices or a store where things get to me more slowly versus more quickly." So if we can just improve these things, this is our path to winning. So those were all inputs to the customer experience. And so we then figured out ways to measure them creating a set of input metrics.

**Bill Carr** (00:59:03):
And so then when we would develop our operating plans and review our business each week and set our goals, we were hyperfocused on those inputs and the input metrics. As a simple example, there was one tool that Jeff and the leadership team, the S-Team, used called S-Team goals, which are effectively a list of what they would harvest would be like, "Here are the most important goals for the company that I've harvested from all of our operating plans." And I can't remember exactly what year, something around 2007, 2008, they looked at that list, which is about 500 items long by the way, and they counted it up. And of that list, only 10 of them actually had a financial metric in it, like revenue or free cash flow or gross profit. These other things we're generally speaking, all... One of those inputs, like I mentioned to you about low prices, and selection, and speed of the customer experience.

So, yes, the point was, again, it's this other article... So we took it as an article of faith that if we can just improve these inputs, the outputs will take care of themselves. The inputs are the things that drive the outputs, which are revenue, customer activity, free cashflow. And so one of Amazon's... It's not really a secret, but one of Amazon's great strengths is [inaudible 01:00:28] focus on those things and make just continuous process, continuous improvement on each one of them and measure them rigorously.

**Lenny** (01:00:37):
The flywheel, you reminded me. It feels like that's another concept Amazon proliferated through all of companies is everyone's trying to create their own little flywheel, and I imagine everyone has that image of the Amazon flywheel in their head with a little orange circle in the center and the black arrows. On the topic of input metrics, just briefly, what is an example of a good input metric? Because I imagine people that are listening are like, "Oh, shit. I got to think about my metrics as input and output now." What's a sign that's a good input metric?

**Bill Carr** (01:01:02):
A sign that's a good input metric is, first of all, map your end-to-end customer experience. I never worked at Airbnb, but, okay, step one is that they clicked on some ad somewhere and showed up in the website or the app. Now you're in the app. Now you're looking at this first screen. Well, the first thing, what they're doing is they're browsing and/or they're searching. Okay. How are we measuring the speed, quality, and ease of that browsing and searching? Now they've got onto a detail page for an individual property. How are we measuring the speed, ease, and quality of the different actions they may take like reserve... Forgive me if I get any of my terminology wrong. I'm not an Airbnb-

**Lenny** (01:01:47):
You are, but it doesn't matter. It's close enough.

**Bill Carr** (01:01:51):
So then you've reserved. Now you have interactions with a property owner. How do I measure the quality of those? How many messages go back and forth? Is a lot of messages a good thing? Is that a bad thing? At first, you may not know the answer to that question. Same thing every step of the way. Then there's the actual rental experience. How do I instrument and measure every part of the customer experience? So you know it's an input metric if it is measuring something with respect to the customer experience. Which ones are the right metrics, which ones are the most causal to the outputs, I couldn't begin to tell you this is actually what you're getting paid for. You work at Airbnb to figure that out. And basically through an iterative process of measuring, observing, improving, and looking at what the effect is on your outputs.

**Bill Carr** (01:02:49):
So, again, we didn't really create this concept. This is a concept from Six Sigma, which is using DMAIC, which is I have a process, there's an output of this process, but the inputs are a black box to me. So how do I understand those inputs? Well, DMAIC stands for define... Oh, boy. Define, measure... The A is going to come back to me in a minute. Improve and control. And I'm going to have to... Oh, gosh. The A is lost. I've lost it for a second here. But-

**Lenny** (01:03:26):
Oh, here it is. I'm looking at... Define, measure, analyze, improve-

**Bill Carr** (01:03:30):
And analyze. Thank you. Yeah, duh, analyze. So we just use that process, which was... And by the way, the way we think about it first is like, "Well, you need to throw a lot of things at the wall. You don't really know which of these things are going to be the most causal." So you know you're doing input metrics. If it is, do you control it? Meaning can you apply resources to make this thing better or worse? Does it touch customers? It doesn't always have to touch customers, but if it is affecting the customer experience, it's almost certainly is an input. And then which ways you're going to measure that input? You need to try more than one way, because again, we tell a story in the book about one of our most important input metrics, which was how much selection do we have, and we were actually not measuring that right for several years. We had to refine that measurement.

**Lenny** (01:04:23):
So I don't know if you saw this, but I asked on Twitter what questions I should ask you and tell people you were coming on. And something that came up a bunch is with working backwards, obviously some products Amazon has launched have not worked out. Say the Fire Phone is a classic example. What have you learned from that process of just like, "Okay. [inaudible 01:04:42] won't work out"? Also knowing many things are not going to work out, there's no way to really [inaudible 01:04:46].

**Bill Carr** (01:04:47):
Yes. So the one important thing to share is that all these tools that are described in this book that Amazon is using, whether it's using documents and meetings or the PRFAQ process or input metrics, is that none of these things give you the answer. They are tools to help you make decisions. So sometimes you're going to make the wrong decision. Fire Phone is a great example that comes up often, people ask, "Well, if you've got this great PRFAQ process, how did you get Fire Phone?" So I was tangential to the Fire Phone team and I worked on it closely and different people have different opinions, so I'll just share my opinion, which is that if you think about, again, how does the PRFAQ process work? Well, there's a customer problem.

**Bill Carr** (01:05:36):
Well, what was the problem that the Fire Phone was seeking to solve for customers? I would argue this is a case where we made the mistake of what we had a technology solution in mind, which was 3D effects. And then we took that solution and we're then in search of a problem. I don't think it solved any meaningful problems for customers. And candidly, we had to build a version with the music application and the Prime Video application for this phone. And I couldn't figure out how this 3D part would make it better for the customers to discover, watch, or playback any of these media. Maybe there were games that could have been a great solution, I don't know. But I think the simplest place to go when you see a failed product is to ask yourself, what problem did you solve? And I could get into all kinds of other examples outside of Amazon too, but 9 times out of 10, I think that's where... If it wasn't poor execution, if the product was executed correctly, what was wrong with the concept of the product?

**Lenny** (01:06:48):
I imagine there was a lot of disagreeing and committing on that concentric circle process. Is there anything that you've found of just the number of disagreement and commits in this process of PRFAQ filtering out, I don't know, that tells you maybe this is not a good idea?

**Bill Carr** (01:07:03):
Not necessarily. So I'll tell you partly also why the Fire Phone happened was, from my point of view, I think that we had had a number of successful products where, in some cases, there were a lot of people who doubted whether it would work. A lot of people inside Amazon doubted that the Kindle was going to be a good idea. I remember contentious board meetings on this topic. So even within a company that was considered innovative, you would have a lot of people that would doubt things. I can tell you that for years is working on Prime Video, I would tell people about what our envision was of you watching on your TV set and we're going to have our own motion studio. We'll make our own movies and TV shows. And they would laugh at me. They thought that was crazy. So that's not necessarily the sign of whether the product is right or wrong. And so that's a problem actually, that makes it harder to know.

**Lenny** (01:08:02):
Yeah. And I think something Amazon's incredibly good at is being okay with a lot of failures, and I think that's part of the reason there's been so much innovation. Is that true?

**Bill Carr** (01:08:11):
I'd say it's partially true. I mean, again, it's hard for me to do a compare and contrast with other companies. But I can tell you did we have a lot of things that we launched that failed? Yes. Some of them are very public and obvious. I'll give you one that people don't really realize. It's something called... We had a feature in the early 2000s called Slots. And what it was was it was basically third parties could bid on different search terms and put a little ad in there.

**Lenny** (01:08:11):
Sounds familiar.

**Bill Carr** (01:08:42):
Well, obviously, that works now on Amazon, but it didn't work then because we simply didn't have the scale that Amazon has today. So a lot of times a product idea, a perfectly good idea, you just have the wrong time or the technology isn't there. I mean, Jeff wrote about a product that was a puck that sat in your kitchen that you would talk to and ask it for things and could shop from it. He wrote about that in 2004. Well, the technology wasn't there to be able to create that little puck, which one day would become Echo. It was a decade away. But we had a lot of things we launched that failed. We were not afraid to take what we considered a well-calculated risk. I think many, many companies are less willing to do so, less committed to product innovation, and really do not want that fear of... They do fear failure, and they're really focused on their near-term financial goals. It's not their fault. It's the way a public company and Wall Street interact with each other creates this dynamic.

**Lenny** (01:09:55):
Just to pull on that thread a little bit more. It feels like a lot of companies talk about, "We're okay failing. We're okay launching things that don't work," but then in practice, their performance review is impacted. Teams get shut down, budgets get pulled. Is there something that you recommend to companies that want to actually improve in this? What could they actually change and actually do this well?

**Bill Carr** (01:10:16):
Yeah, I just spoke with actually a senior executive at a well-known Silicon Valley company about this topic the other day and said, "Well, what is it we had structurally at Amazon, especially from a people point of view, that would enable or encourage people to take these risks?" Because, yes, in a lot of companies, if you go work on the project that fails, then your career is in the garbage can and/or your compensation system, you're going to lose out on that bonus. So there were two things. One was our compensation system. So there were no performance bonuses. So if I was running the book business and I had a killer year from a financial point of view, there was no extra kicker for me. And if I ran the book business and it had a bad year, there was no financial penalty for me either because our compensation was based on the stock price.

**Bill Carr** (01:11:12):
So we all had an incentive to do what was right for the company, frankly, over a long-term because trying to win off of short-term fluctuations off Wall Street is a losing proposition, which meant that therefore, if I am... Because I had that situation, I moved off of working on our largest P&L, and then the book business and music and video business, now I'm going to go work on digital media. There is zero business there. This might not work. Well, my compensation didn't change as a result of that. It didn't change one way or the other. We tended to also have a performance management system that then would change compensation based on evaluating what did you actually deliver more in an input method. We cared about the outputs too, but just there are plenty of people that could be-

**Bill Carr** (01:12:00):
Just, there are plenty of people that could be in a business that's up and to the right but has nothing to do with them. And so we tried to focus more on, well, what did you actually build and contribute, ways you improved selection or lowered prices, or whatever that might be. So those two things about the compensation mattered a lot. And then the second thing was having a CEO who was really committed to it and it wasn't something that they delegated to someone else.

**Bill Carr** (01:12:31):
So Safi Bahcall, I think, writes about this in his book Loonshots, where part of the conditions that are necessary for innovation to occur are that you actually create different structures of decision-making, of approvals, of all kinds of things, if you create some team that's going to go build something new and innovative. Because most of the structures inside a big company are designed to crush and impede a small innovative team that's trying to go build something new. They need speed, but approval here, approval there, it's going to get in their way.

**Bill Carr** (01:13:10):
We solved that two ways, one was when we went to go build digital media and AWS, we put two of our smartest leaders in the company on those things, Steve Kessel and Andy Jassy. And number two, they were meeting with Jeff regularly. Jeff was deeply engaged with them, reviewing what are we going to go build? Part of the decision to decide where we're going to go build. And so he could then also, between their seniority and of course him being the CEO, they could run interference on these sorts of things too. So even if you want to have innovation, even if you really do crave it, you're willing to take the risk, if you don't set up the organization in the right way, you're just not going to get it.

**Lenny** (01:13:52):
Amazing. I'm glad we got into that, I wasn't planning to talk about that and I'm glad we did. Final topic, this concept of Bar Raisers, it feels like it's been such a core way of allowing Amazon to scale successfully, and I think that's something a lot of people can implement, it's a very one-off thing you could just implement at your company. Can you just talk about what this idea of a Bar Raiser is in the hiring process and then what people can do if they wanted to add this to their hiring process?

**Bill Carr** (01:14:19):
So the Bar Raiser hiring process is a process, it was actually one of the first ones that was established and published, pretty early in the company's history back in 1999. And we created it for a simple reason, to quote one senior leader at Amazon, "We had new people hiring new people hiring new people." We were in our hyper-growth phase, okay? The company was only, what, three, four years old, and we were growing like a weed at that point.

**Bill Carr** (01:14:47):
So this started off actually in our tech org, and what our senior leaders in tech realized is, my gosh, we hire some new engineering leader, and then the next thing is that their job is to go hire the senior managers, and they'll go hire managers. And all these people have been here for a week, so they don't really even know our company yet, they don't know our culture yet, they don't know our standards yet. So what information are they using to make these hires, and what information they were using is obviously they were just using their own personal judgment, and their personal judgment combined with whatever criteria they used at prior companies that they worked for. So let's say if they came over from Microsoft, if Microsoft had some methodology or criteria, they probably would just apply that.

**Bill Carr** (01:15:38):
Well, is that methodology or criteria relevant to our company? Because every company has a different culture, and I'm here to tell you that if someone's been a super successful vice president at Microsoft, does not mean they could be as super successful at Amazon or at Google or Facebook. Sometimes they can, but these companies are very different, they all do work very differently. The way leadership happens and decisions are made are very different. So how do we fix this problem other than letting it run rampant and basically hire a bunch of people who are, we don't know if they fit our culture and we don't know if they fit our high standards we have for what we expect of engineering leaders or engineers?

**Bill Carr** (01:16:21):
So they created this Bar Raiser process, which by the way, they borrowed from Microsoft, which had a process called As Appropriate. And the concept was that on every interview loop there's one person, who is not the hiring manager, who doesn't report to the hiring manager, who's not the recruiting manager, they're in the business, they're a software development manager, or they're a marketing manager, and they are on the interview loop and they're a Bar Raiser, which means when we get to the debrief meeting, they will run that meeting, not the hiring manager, not the recruiter, they will run the meeting. And it also means that they technically have veto power over the hiring manager, which, by the way, a good Bar Raiser never uses, or I never saw a Bar Raiser use. I was a Bar Raiser, and in my 15 years at Amazon I never used it, never saw it used.

**Bill Carr** (01:17:14):
And then finally, which actually was not true in 1999 but later became true, was once we established our leadership principles, we created a set of objective criteria that would be used and an interview methodology that would be used in every interview, which was the objective criteria would be our leadership principles, and the methodology would be behavioral based interviewing.

**Bill Carr** (01:17:33):
So this Bar Raiser basically would be a subject matter expert on how this process worked, they'd conduct the debrief to make sure that we were actually adhering to the process, that people were sticking to the objective criteria rather than saying, "I don't think we should hire this person because, I don't know, they don't seem to want to work here enough." Maybe that's a valid reason, but it's actually not part of our objective criteria. And so the Bar Raiser was there to act as a balance also on the urgency bias that every hiring manager has, which is like, I got to fill these roles, but rather than filling them with the next warm body they find, make sure they fill them with people who actually meet our standards, fit our culture and meet our standards for functional excellence too.

**Lenny** (01:18:21):
Such a cool process. Two questions along these lines, one is who has the final decision in hiring, is it the hiring manager?

**Bill Carr** (01:18:27):
Yes.

**Lenny** (01:18:28):
And this is just off advice from the Bar Raiser?

**Bill Carr** (01:18:31):
Yeah, so this often gets confused. The decision maker is the hiring manager, the whole interview loop and the Bar Raiser are actually just there to help the hiring manager make the right decision. Now oftentimes the hiring manager could feel like this is actually a bureaucratic process and a group of people that I have to sell and they're just in my way between me and hiring this person, which is kind of a natural feeling to have.

**Bill Carr** (01:18:54):
But one of the feedback I would always give managers who are new to this is like, no, no, no, that's not the way to think about it, think about these people are helping you, because the amount of time you're going to put into the hiring process may seem like a lot, but if you hire the wrong person, boy, that amount of time you're going to have to deal with managing that person, that's going to be a lot more, the impact on the team, impact on you. So making a great decision here is important, they're here to help you.

**Bill Carr** (01:19:20):
So yes, the final decision is with the hiring manager, technically speaking the Bar Raiser could block them from a decision to hire someone, but they would, well done they would help the hiring manager see the reasons not to hire the person through a Socratic method and how they would guide the discussion.

**Lenny** (01:19:40):
And then when you're choosing a Bar Raiser, is there any suggestions you have of who to choose and how often you pull them into these things? Because it could also be a huge time suck.

**Bill Carr** (01:19:49):
It is a huge time suck, and it sometimes could be up to 10 hours of my week spent actually as a Bar Raiser. The selection process is you start with, as a company, I would recommend if you wanted to do this, you'd pick a department to pilot it with. Pick people who are A, care a lot about your hiring process, B, appear to be good interviewers, and C, seem to have high standards. It's also a great role for people who are earlier in their career by giving them this additional leadership opportunity. It's a great way to grow and develop leaders, by the way, because this added responsibility is a great way for them to start testing out leadership. And you have to train them properly and you have to have dedication to the process, but I generally would try to pilot it within one group at first.

**Lenny** (01:20:41):
One last question before we get to our very exciting lightning round. Many people are listening to this, they're considering implementing some of these things, trying to figure out how to actually make these real. If someone were trying to move along the path of becoming more Amazonian, which of these elements and processes do you think often has the most impact? And/or is there something fundamental that needs to change to allow for some change like this to happen at a company, in your experience?

**Bill Carr** (01:21:10):
Yeah, good question. And the first thing I'd say is one thing to be careful of is a lot of times when I'm talking to a company about these processes they say, well, does this mean we need to turn into Amazon? And first thing I tell them is, well, first of all, I couldn't turn you into Amazon if I wanted to, because you have your own culture. And secondly, no, that's not the idea is for you to try to become Amazon, the purpose is to sort of look at these processes and best practices they have and consider adopting parts or all of them into your organization to improve these, every company of a certain scale has these same processes, so this is just a different way to do them. So you should have scalable, repeatable processes for each one of these, pick one, here's one choice of ways to do these things.

**Bill Carr** (01:21:58):
The other piece of advice I give is that a lot of these changes are relatively profound, they really require buy-in all the way up to the CEO, if you're really going to change the way you do product development, or if you're really going to change the way you do hiring, that probably requires buy-in of the CEO, and so I would seek to get that probably before I would move too fast. Some of these things, though, can be piloted in your own little group, like your one little product development group. You want to decide you want to start writing PR FAQs, you probably can decide to do that. But again, try to check with your leadership.

**Bill Carr** (01:22:32):
The other thing I would just tell you is that for any of these processes, these in our book, or any book, implementing a new process is not easy. And if you go into it lightly and dip your toes into it and try it out, it's probably not going to work for you, because it'll be hard at first, and it requires some level of commitment to actually work through that hard part and say, I'm really committed to doing this, and it will take a few months for you to get good at it. So you have to have commitment and discipline to get through it. Anyone can really do these things, it just requires commitment and discipline.

**Lenny** (01:23:10):
And in our chat we've basically just scratched the surface of a lot of these things, if people want to dig deeper there's obviously your book Working Backwards, which we'll link to in the show notes. I know you also work with companies to implement a lot of these practices. Could you just talk about what it is you can help folks with and then how to potentially engage if they're interested?

**Bill Carr** (01:23:27):
Sure, great. Yeah, Colin, and I, one of the reasons we wrote this book was to pass on what we learned to the next generation of business leaders at scale with a book, but also because we had a passion to work with companies directly one-to-one. And so we are advisors, consultants, call it what you will, but non-traditional, we don't have a team of people working for us. Each of us just work directly with the companies who engage us.

**Bill Carr** (01:23:55):
And generally speaking what we do is the right kind of company for us to work with, first of all, has to achieve a certain scale. Companies that are in the product market fit phase, they need to focus on getting product market fit, they probably don't really need to focus much on how they put in scalable, durable processes. Like sure, some of these could definitely be helpful to you even if you're in that phase, but really these are designed for, my company's become complex now, I've got multiple product lines, it's well over 100 million in annual run rate, growing fast, complex. So most of our clients are either large, well past series C private companies, or they're public companies. And in most cases, a C-level leader, or the CEO themselves, has read our book and recognizes that they have a lot of the same problems that we had at Amazon, and looks at these as useful solutions and wants us to help them implement them.

**Bill Carr** (01:24:56):
So we tend to usually first actually go in and do an assessment of how they do things today, because to help people move from one place to another we have to understand where they are, and then we come up with a prioritized list along with that, the CEO and C-level leaders, of what are the things that would be most useful, what are the symptoms and problems you're having and what are the root cause solutions that could be found in these processes? And then we sort of prioritize those and come up with a plan to work within the organization to help them implement those. And what's also different is that we're very hands- on working at all levels of the company, and as we do it we will be there in the meetings with the teams to help coach them and teach them along so that we make sure that it actually gets implemented properly and to spec, and they get to the outcome they want.

**Lenny** (01:25:45):
Sounds amazing. How would people engage with you if they wanted to explore this?

**Bill Carr** (01:25:51):
Simple way is you can just send an email, I'm bill@workingbackwards.com, and Colin is colin@workingbackwards.com. You can also just check out our website, www. workingbackwards.com. We have some information there, we have a contact us form, those would be the best ways.

**Lenny** (01:26:05):
Okay. Well with that we've reached our very exciting lightning round. I've got six questions for you, are you ready?

**Bill Carr** (01:26:11):
I'll try.

**Lenny** (01:26:12):
Interestingly, as I look through the list, many of them relate to using Amazon, which is pretty funny. The first is, what are two or three books that you've recommended most to other people?

**Bill Carr** (01:26:23):
So I'd say in the management world, not surprisingly, Good to Great. I'd say Drucker on Management, or Drucker, The Effective Executive. And then the other one I'd say that's a little bit different is I'd recommend the Steve Jobs biography. I never worked at Apple, but looking at that arc, a lot of the way those things worked was not that different from what I experienced at Amazon, so it's a good window into what it's like to be inside some company, tech company, that goes through product innovation and big growth. On a personal basis, recent books would be Seveneves by Neal Stephenson is a favorite, and A Gentleman in Moscow.

**Lenny** (01:27:05):
Amazing. Can you get them all on Amazon?

**Bill Carr** (01:27:07):
Yes.

**Lenny** (01:27:07):
Another Amazon related question potentially is do you have a favorite recent movie or TV show? Might be on Prime, might not be.

**Bill Carr** (01:27:15):
Yeah, my favorite recent movie is the latest Dune movie, and I can't wait for the new one to come out.

**Lenny** (01:27:20):
When is that coming out? It seems like I've been waiting a long time.

**Bill Carr** (01:27:22):
I think it's supposed to come out next month. I used to know this, I used to have to know the answer to this question, but I don't anymore. But I anxiously await the next one, I thought that last one was awesome. I even liked the original Dune movie, so I'm probably unusual that way. And I just watched, along with my wife, we just enjoyed watching the TV series A Spy Among Friends, which was on MGM+.

**Lenny** (01:27:50):
MGM+, I have not even heard of that.

**Bill Carr** (01:27:52):
I had not actually heard of it either.

**Lenny** (01:27:54):
Another one to subscribe to.

**Bill Carr** (01:27:55):
But you can basically go onto Prime Video and you can find this show and you can subscribe to MGM+ through that.

**Lenny** (01:28:01):
Thank you Prime. What is a favorite product you've recently discovered that you really like, maybe that you bought on Amazon, maybe not.

**Bill Carr** (01:28:08):
This one I did not buy on Amazon, and this one is, most of you may not understand this one, but I'm an avid cyclist and I got myself a new set of wheels for my road bike this year, actually my road bike and my gravel bike. It's the Zipp 303 Firecrest, the latest model, and boy, these are just fantastic wheels. They're light, they're sturdy, they absorb all the bumps well, I can use them on a road bike, I can use them on a gravel bike, awesome wheels.

**Lenny** (01:28:35):
Wow, that might be the most obscure random product that we've had yet. Recently we had a humidifier, so I like this collection of products we're building here. Create a wishlist on Amazon maybe.

**Bill Carr** (01:28:47):
Nice.

**Lenny** (01:28:47):
Do you have a favorite interview question that you really like to ask?

**Bill Carr** (01:28:52):
Yeah, it's actually quite basic, it's tell me about your most significant professional accomplishment. And I have to always clarify this, by this I mean not some award you won or some promotion you got, I mean something you built, or some product, some process, some organization you built, something like that. And I could basically then, once they get into that example, ask a lot of probing and follow-up questions and I could fill an entire hour interview just sticking with this one example to really understand how they... Using the STAR method, which is to try to understand everything from the situation to the result, and everything they did in between, who they influenced, how they'd influenced, what decisions they had to make, what roadblocks they encountered. If I just pull on that one string I can learn a whole lot about a candidate.

**Lenny** (01:29:46):
Next question, what's a favorite life motto that you often find yourself coming back to, sharing with friends, that you find useful?

**Bill Carr** (01:29:55):
Well, one that I end up coming to a lot professionally, and somewhat personally, is this one called slow is smooth and smooth is fast. This is a, I believe the origins of this one are actually from the Marine Corps for the Scout Snipers, so not trying to promote that particular craft, but the point of it is that actually, and we did this a lot at Amazon, it really oftentimes, to really to go fast, you actually need to go slow first and to be very clear on what you're doing and where you want to go. Most people confuse speed with velocity, and the difference between the two is that velocity has both speed and a vector to it, meaning there's some specific destination. And so I see a lot of people who are going very, very fast, but the destination isn't very clear, they haven't really thought that out well. So slow is smooth, smooth is fast.

**Lenny** (01:30:57):
There's a similar quote that I've always thought of, of you've got to go slow to go fast. And I always thought it was was Stephen Covey, but I just Googled as you were chatting and it's someone named Peter Senge in the book Fifth Discipline.

**Bill Carr** (01:31:11):
It took me a while, I always wanted to go fast first and not go slow first, so I'd say a lot of my personal development and growth, it's a big thing that I learned from Jeff at Amazon.

**Lenny** (01:31:25):
Final question, I don't know if you'll have an answer to this, but is there a pro-tip that you could suggest for using Amazon? Something that people may not know about how to get the most out of using amazon.com?

**Bill Carr** (01:31:36):
Sorry, I have no secret insights. There's not something like if you go on Monday mornings at this time the prices are lower, or something, or in stock is better. No, I know of no such thing.

**Lenny** (01:31:49):
Which I think is great, because it's built exactly as it should be for customers.

**Bill Carr** (01:31:54):
I guess so. But it used to be, maybe in the days of the slower internet, that I would tell you to go at non-peak hours, but this isn't really an issue anymore.

**Lenny** (01:32:06):
That'd be wild if that was still an issue. Bill, this was everything I hoped it would be, thank you so much for being here. You already shared where folks can find you online, so I'll skip that question. So final question is, how can listeners be useful to you?

**Bill Carr** (01:32:19):
We're always looking for feedback. You can post a review on Amazon for our book, that's probably the best way. You can fill out the contact us form or send us an email telling us what you found most useful in the book, or what you actually found is missing, what would you like to learn more about? If we were to write another book, or write more, what would you like us to tell you about?

**Lenny** (01:32:46):
Amazing, and that's bill@workingbackwards.com if they have that feedback. Go buy the book Working Backwards on Amazon and other places, and workingbackwards.com to learn more. Bill, thank you again so much for being here.

**Bill Carr** (01:32:59):
Thanks so much, Lenny, really enjoyed it.

**Lenny** (01:33:00):
Me too, bye everyone.

**Lenny** (01:33:04):
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.

---

## [10/24] Mastering product strategy and growing as a PM | Maggie Crowley (Toast, Drift, Tripadvisor)

**Maggie Crowley** (00:00:00):
If you ever find yourself saying something like, that's not my job, that's probably a thing you should do. And you know what? It probably isn't your job and it probably is someone else's job and you can spend your life getting frustrated at that or you can just get over and get the work done. And people who are willing to just get the work done will move faster. Their products will be more successful and they probably aren't carrying around all that anger and crappy emotion because as a PM, for better or for worse, and maybe this is not how we all want it to be, but you're oftentimes the emotional center of the team and it's your job to keep people motivated, keep people excited, keep them bought into the project, and you just have to keep that optimism going and it's hard work and part of it can be just like, you know what? Let me take that on. I'll do this thing. I'll hop on this sales call, I'll implement this with the customer. You just have to do whatever it takes.

**Lenny** (00:00:57):
Today my guest is Maggie Crowley. Maggie is currently vice president of Product at Toast. Prior to this, she was VP and head of product at Charlie Health, senior director of product at Drift, director of product at BevSpot, a product manager at TripAdvisor. She's also got an MBA from Harvard Business School. She was also an Olympic speed skater, which is insane and incredibly cool. And in our conversation we discuss the three most common threads across the best product managers that she's worked with, hired and managed how to very tactically write out a product strategy to share with your team and manager why being data-driven is a red flag for product thinking. Why product content you find online can be dangerous. Her best advice for how to break into product management. Also, the impact writing online has had on her career and so much more. Maggie is amazing.

**Maggie Crowley** (00:04:10):
Thanks for having me. I'm super excited.

**Lenny** (00:04:12):
You put out so much content across podcasts, blogs, tweets, I'm sure there's other things I haven't even seen. And so what I've done is I've scoured all of your content as much as I could to find topics that we could dig into in our conversation today. And I thought it'd be fun to start with how to become a successful product manager and what it takes to be a successful product manager, especially long-term in your career. You've worked with a bunch of PMs, you've hired a lot of PMs, you've managed a lot of PMs, and so I guess the question is just what are some common threads you've seen across the best product managers?

**Maggie Crowley** (00:04:50):
Yeah, it's an interesting question mostly because I've worked in startups, zero to one, scaling stage startups, enterprise, all that kind of stuff. And there's a lot of content out there I think on how those roles are different and how PMs are different across those different types of companies. But what I've seen is that there are some standard things that are the same across the role no matter whether you're a consumer, B2B or startup or a large company and in particular about what sets PMs apart from one another. And the things that I look for when I'm hiring or when I'm looking to promote people or when PMs stand out, even when you're not looking are three things.

**Maggie Crowley** (00:05:31):
First, I think the best PMs are really good at breaking things down and simplifying things. So, finding at any moment what is the really truly the only thing you need to do, especially in a big company, there are 8 million priorities, there's 700 OKRs, there's 25,000 projects you could work on, and teams will get bogged down in that complexity. Similarly speaking at a startup, you might think that it's easy to find the one thing to do, but at the same time there's so many fires that are happening and so many things you could do in such a world of opportunity that even just picking one and sticking with it is really difficult. And so the best PMs not only can find the one thing to work on, but they can stay with that one thing long enough to actually finish it.

**Lenny** (00:06:15):
I think that's a really interesting point, because it sounds simple. Also, just this idea of simplifying, but I think there's so much up there partly because within simplifying is prioritizing and you can almost boil down the job of the PM as they're just prioritizing and telling people what is next. And so I think that's a really powerful point you're making.

**Maggie Crowley** (00:06:33):
Prioritization is a tough word because there's so much wrapped up in that and what it means to prioritize. And I've worked for people who wanted to understand the formula for prioritization and why this thing and how can you prove that this is the right thing to work on and not that thing. And then a week goes by and then they want to reevaluate the priority and they want to re-litigate the priority. And so it's so much more than just a moment in time deciding, but it's the ability to stay with it and to make sure that it continues to be the most important thing, that you finish it and actually see that it works and that you can get people to continue to stay excited and engaged in that project.

**Maggie Crowley** (00:07:13):
Because I think a lot of when we talk about product, it's like, oh, what should you build? What should you ship? But then you actually have to ship that and that can take a week, a month, three months, six months, a year. And so as a PM, your job is to stay on that and be the person who's beating that drum over and over again, and the best PMs are the ones who can do that and have the resilience and the energy to stay with it.

**Lenny** (00:07:38):
Energy. That's a really important part of that. I'm going to ask you how you suggest people get better at these things. So, either we can go into how you found you get better at simplifying or we go through all three and then we can come back, however you prefer.

**Maggie Crowley** (00:07:51):
Let's just do all three really quick and then we can dig in.

**Lenny** (00:07:54):
Sounds great.

**Maggie Crowley** (00:07:55):
So, yeah, first one, simplifying. I think the second one has to do with this point about sticking with something and it's following up on results. So many people in the spec or the one pager or something will say, okay, here's the metric that I care about. Here's what I want to move. Awesome. Maybe they'll even write a SQL query, get a dashboard going, figure out what the number is today, that gets you some extra points, but the really, really good PMs remember to follow up. Because especially when you're in management, couple layers up in management, I'm not going to remember to follow up on that feature, but if a PM comes back to me and says, "Hey, remember we did that thing, here's what happened." I can't tell you how rare that is and how many times as a leader you might have to ask for that and for the people you don't have to ask that of is one of the best things when I'm looking at PMs and it's easy.

**Maggie Crowley** (00:08:43):
It's not hard to do that, especially if you've set up metric tracking or you know how to pull that information or you have somebody who can help you get that. It's pretty easy to do and it's really high value activity. And then the third thing, and I think maybe we'll talk about this later too, is that a phrase actually we were talking about David Cancel before we started carrying the water, and this was a big theme when I joined Drift, and this is about how you can't be a good PM if you're not willing to do the hard boring unglamorous work of customer support, sales, marketing, writing, copy, project management, you have to do that stuff. It's your job. No one else is going to do it, because at the end of the day, you're responsible for outcomes and results. So, you're the person that has to do that, and if you're willing to do that work, that's what's going to make your product successful, which is what makes you successful.

**Lenny** (00:09:33):
It's such an interesting list because when you ask most people what you need to get better at to become a great product manager, it's always communication skills, collaboration skills, vision, strategy, and it feels like these are input metrics to what it's normally what people think about.

**Maggie Crowley** (00:09:50):
Those things to me, communication, super important, analytical ability, really, really important. The ability to look at a, especially if you're doing something that has a user experience component, the ability to look at that and understand if it's going to work and build up intuition around that, also really important. Those are things that I would see as sort of basics of the role. These are the things that make you great at the role and strategy to me, and hopefully we'll talk about strategy in a bit. It's one tiny slice. You do a strategy, but it's 5% of the work that you do. Yes, it's important because you want to get your strategy and you need to pick the right products, but at the end of the day, the person who has a good strategy will not be as successful as the PM who ships more stuff, gets more reps and has the ability to actually create impact. So, to me, you could be great at strategy, but if you're not good at this stuff and your stuff isn't getting out the door, you're never going to be that great at the job.

**Lenny** (00:10:48):
And impact is the other one. Everyone's always like, what makes a great PM? Oh, drive a lot of impact. And again-

**Maggie Crowley** (00:10:52):
But they never say how.

**Lenny** (00:10:54):
Right, exactly.

**Maggie Crowley** (00:10:54):
It's like, cool, let's do a strategy, let's have impact. Then when I was starting off as a PM, I was hearing this advice and reading about it and I was sitting there saying, awesome, I want to create impact. And I'm looking at my job thinking, now what? Yeah, impact. Let's do it. Where is it? How do I find it? Someone help me.

**Lenny** (00:11:14):
I love it. Okay, so let's go back to these three and I'm curious just what you found helps you become better at these things and also just an example if you can share. So, say what's simplifying? How does one build that muscle?

**Maggie Crowley** (00:11:27):
This is a tough one because some people, a broad generalization that I think comes up in things like when you're interviewing PMs for a job and you say things like are they a simplifier or are they complexifier? Do they make things complicated? And so some of it's a little bit of just who you are and how you think. But having said that, there's one tool that I use that I actually learned from my dad when I was in grade school, which is when you write something, for example, and a lot of what we do as PMs is written, when you write something, read it out loud, literally just read the thing you wrote out loud and half the time you'll realize it's way too complicated, it doesn't make sense. Or what happens is when someone comes to me and they say, okay, I'm working on this thing, check it out, can you read it?

**Maggie Crowley** (00:12:10):
I read it and then I put it down and I say, "What are you trying to say?" And 99% of the time they say, "Oh, users are really struggling with this problem. We found this in research and we think that the way to solve it's to do X", but that's not what the document says. And so my reaction is always, and if anyone who I've worked with is listening to this, they're going to laugh is always, "Just say that. Just say that thing. The thing that you said to me in conversation is the thing you should write." There's no reason why your pros in a document has to be a certain way. We're not in school. Our goal is to get things done. So, those are just some simple tricks that I've used to help simplify what I've already been working on.

**Maggie Crowley** (00:12:54):
And as for how to boil things down and really find the most important thing to do, which is another part of simplification, I think the best thing you can do is just get as many reps in as you can, have people review your work and listen to them. There's a thing that happens I think with PMs where you join a company and then all of a sudden it's like my boss doesn't know what they're doing and the highest paid person's opinion and the founder wants to swoop in and mess everything up, but those people had an insight on the market that you're in that made the company worth founding and they probably know more than you and so you might want to listen to them. And so find people who can review your work, listen to them and ask them to help you simplify.

**Lenny** (00:13:39):
I'll share a couple other things that came to mind as you were talking, because this is a very hard thing to teach and you kind of have to do it again and again and honestly, I have this one manager who taught me to simplify in my writing and strategy docs one-pagers and things like that, and I think that actually had a big impact on my newsletter success is learning just to strip down as much as you can and anything that isn't necessary. So, there's a couple things that I'll share real quick. One is there's this book I read called On Writing Well, that is one of the most impactful books for writing for me, and the whole book is like, I don't know, 20 chapters and every chapter is more things you should cut from your writing and they show all these examples of like, here's a before and here's an after.

**Lenny** (00:14:18):
And all these words were cut and nothing changed. They're completely necessary. So, I think that book can help and partly it's just like what is not necessary? You think all these adjectives are important. Another thing I found really helpful is the rule of thirds, I guess the rule of three, of just always having three. Try not to go beyond three when you're giving strategy bets or priorities or things like that. Just try to keep things under three.

**Maggie Crowley** (00:14:44):
Yeah, it's a very sort of business school ex-consultant point of view that I do agree with and share, which is there's always three things or fewer, never more than three things. You have to have a nice round couple and if you have a fourth, you've got to figure out how to squish it in there because it just doesn't look right if there's four.

**Lenny** (00:15:02):
Agree. Yeah, even though I've been guilty of more than three, try hard to avoid it.

**Maggie Crowley** (00:15:07):
Yeah, you're using notion and you have your three bullets expanding and there's sub bullets, but at least you have that top line.

**Lenny** (00:15:13):
That's right. The other thing is I think that there's just a focus you need to get good at just like, people often want to lump together a bunch of ideas and then every time you do that it just dilutes everything. So, I think there's just a lot of power and pick the thing, pick the thing that's going to have the most impact and cut other stuff that may have some impact but is much less important.

**Maggie Crowley** (00:15:31):
I think again, simplification is something and prioritization, which is sort of the same thing, gets tossed around a lot as a thing you have to get good at, but it's really challenging. Getting to the one thing you should do is extremely difficult and being able and having the gumption to say no to all those other things is really hard, because there's probably at any given time, 10 things you should do, but you can't do 10 things, you'll never be successful if you do that in a number of things. And so you have to pick one.

**Maggie Crowley** (00:15:59):
And so it's both figuring out how to get confident in your decision and then B, having the willingness, and maybe I should have added this to my what makes great PMs list, the willingness to make the bet and be responsible for it. And that's what I think separates the PM role from a lot of other roles and why it's such a challenging job when done right is because you have to be willing to take responsibility and it's your job to pick the thing and it's your job to be accountable to your team for picking the thing so you better get it right.

**Lenny** (00:16:32):
Ownership such an important part of just being a PM. Again, coming back to this interview I just did with an ex Amazon guy, that's one of their principles at Amazon is just leaders, basically ownership, feeling like you have ownership of what you're working on.

**Maggie Crowley** (00:16:46):
I agree, but to me at least the word ownership doesn't have the same oh shit feeling as you're making a bet. You make a bet, that means you know that there's a chance that the thing you're working on is not going to work out and you still have to be the one to do the thing, jump off the ledge, drop in on the ski run. So, ownership to me never signaled that risk that I think comes with being a PM.

**Lenny** (00:17:10):
Good point. On the simplify concept, it reminds me at Airbnb, one of the core values at Airbnb for time was simplify. Is this idea that we should always try to be simplifying, and then it turned out the founders realized we're not actually great at this and it's unfair for us to say this is a value for not doing it. So, they actually cut it as a core value because their feeling was we shouldn't have aspirational values, we should reflect who we actually are, and they actually cut two different values to be more clear, even though they still want to simplify, they're just like, we're not actually good at this, so why are we pretending like we are.

**Maggie Crowley** (00:17:45):
I think maybe I'm good at it on paper, but there's been many times where I've been in situations where things are not simple and you just have to keep fighting for it.

**Lenny** (00:17:54):
Someone's trying to think about, okay, I want to become better as a PM and I'm going to try to start simplifying. What are examples of simplifying? Is it reduce your email length? Is it one pager focus? What are these buckets of things? And then also if there's an example of something you've simplified that comes to mind

**Maggie Crowley** (00:18:12):
On what to simplify and more specifics, I would say anything can be simplified and shortened. Maybe another way to say shorten it. Definitely emails. I read them sometimes don't love them. Make them short. The Minto principle is something that I would recommend everyone do, which is put the headline, the full conclusion first and then you're supporting argument second.

**Lenny** (00:18:36):
I have a newsletter post about that exact concept that people that I will link in the show notes that gives you-

**Maggie Crowley** (00:18:41):
Fantastic.

**Lenny** (00:18:42):
The Minto Pyramid principle.

**Maggie Crowley** (00:18:42):
Yes, everyone should do that. A lot of new PMs fall into the trap of thinking that they should have some sort of buildup. Don't do that. Just tell me whatever the thing is, everyone will thank you. Doing things like that, things like you said, limiting your strategy docs, your conclusions, your next steps to three things maximum. I would generally say a rule of thumb would be pretty much every doc you write, you can delete the first two paragraphs that you've written. You don't need them. My dad, again, to go back to my dad when I would write, and this sounds cruel, but I promise it wasn't. When I would write a paper for school, he would just, and this is we didn't really have computers, whatever, he would just take away the first page and he'd be like, just start here. He would go, "Everything on the first page is crapola, don't use it."

**Maggie Crowley** (00:19:30):
And he wouldn't even read it, which would drive me crazy. He would just like, "Oh, it's crap. I don't care about that." So, I would do that and then just get other people, there's probably somebody around you that's good and find people to edit your work and to look at it. I have a little Slack workspace that has three people in it, me and two other women who are product leaders, and we oftentimes send each other our work still and we say, "Hey, I'm struggling with this. Can you read it? Help me make it simpler. Can you help me fix this up?" And we do that for each other. So, find a peer maybe who's in a non-competitive space who can do that for you. I mean I still use those people to help me.

**Lenny** (00:20:10):
That is extremely cool. Can you talk more about this group that you have?

**Maggie Crowley** (00:20:15):
Yeah, I don't know if it's a group. It's like three friends. Shout out Alexa and Daphne. Yeah, I mean the three of us all worked together when we were at Drift. We've stayed in touch and I've just found that in order to be good at your job continuously, you need people who can help give you feedback, and the more senior you get, the harder that is. And so having people who can give you another point of view who maybe you can vent to if it's not appropriate as a leader who can give you other experiences that they're going through has been incredibly valuable. And so we just have a little group chat that is focused on product.

**Lenny** (00:20:49):
That is so cool. Is there a tip you could share for someone that wants to create something like this? Is it important for you to have worked with them before? Is Slack a good way to communicate? Anything there that's just like, oh yeah, here's a cool tip.

**Maggie Crowley** (00:21:00):
Slack just worked for us where we are during the day, and I think having easy access to it was important. You could probably use WhatsApp or a literal group text. There are small community, there's one, I worked in healthcare for a year and a bit, and there's a Slack community that somebody organized for heads of products and healthcare startups that is similar to those really, really powerful and a really great space to be in. And so you just have to kind of suss out where these things are. You work with amazing people and there's people around you who are going to become your friends, and so keep an eye out for them and keep in touch with them when you leave a job because you never know when they might become your little Slack workspace.

**Lenny** (00:21:39):
Oh, I love it. Okay, I'm glad we talked on that. Okay, back on track. The second bucket you described as following up on results, is it just do that. Is there anything more you can add there?

**Maggie Crowley** (00:21:49):
I put reminders in my calendar. I mean, yeah, it's just do that. But if you're launching a product, usually you release something and you have that initial push of a couple of weeks where you're finding bugs and you're maybe you're pulling metrics and everyone remembers it, then I would remember two weeks after that, a month after that, six months after that, put a reminder in your calendar to check your dashboard or check the metrics or check whatever it is that you were doing, and you won't forget and then share them with whoever might care about it. And it's as simple as that.

**Lenny** (00:22:20):
And is the reason this is one of the three things you think are most consistent across great PMs, that it helps your manager see you like, wow, Maggie's so on top of everything, or is it more that you learn from that experience and drive more impact or is it both?

**Maggie Crowley** (00:22:36):
It's definitely both. I'm not going to pretend like if you're just great at your job quietly that you're going to get what you want. Just if you're toiling in the background, doing a great job getting results. If you have a great manager, maybe you'll be successful. Great managers are few and far between, and I am of the opinion that I never wanted to rely on someone else to get what I wanted. And so I would always make sure to share that, always make sure to share my progress because I didn't want to leave it up to chance that someone would notice. So, I would suggest doing it for both reasons. And that's one of those things that people want to pretend that everything's perfect and we're all great and we're always going to get what we want and always going to get that promotion, but you have to work for it.

**Lenny** (00:23:22):
I love that point. It reminds me what I find one of the most important traits of a great product manager is they create this aura that they've got this, they put something on their plate and they're not going to drop it, that the threads are not going to be forgotten. And this connects to me there. They feel like Maggie's going to tell me what happened with this experiment. I don't have to think about it as a manager.

**Maggie Crowley** (00:23:45):
Yeah, that's a really good point. And then you mentioned this a little bit ago, the side benefit is that you learn more. You will go back and learn why something happened or why it didn't happen, and the more that you follow up on what you've been doing and the more you learn, the better you get every time you ship something. To me, the other answer of what makes a great PM is family shipped a lot of stuff. The more you ship, the more you learn. And that's why it can take years to build up expertise because you just have to ship a lot of stuff.

**Lenny** (00:24:19):
There's a lot of people that are always frustrated. They're not getting promoted quickly enough as a PM. They're not moving off the ladder like, oh my god, I've been a PM for two years. I'm not a senior PM yet. Can you speak more to just that thought and just how long it takes to get actually good? I guess I'll share briefly in my experience, it took me four years to actually know what the hell I was doing as a PM and then things started to really take off. What's your experience?

**Maggie Crowley** (00:24:40):
I would say similarly, it took a lot of years to feel confident that I knew what I was doing. My first PM job was a product management rotation job at TripAdvisor. I had no PM background. It was after business school and I left those two years thinking, yeah, I've worked on four different teams over the two years. I've shipped all this stuff, I'm good. Went to a startup, there was another product person there, they left and I was the only product person at the startup. And I realized really quickly, I had no idea what I was doing. I had no one to learn from. I had only had two years of experience and I was not ready for that job. I didn't feel confident in the decisions I was making. That's why I joined Drift is because that team had all these really incredible product thinkers on it and they were shipping all sorts of stuff. They had all this momentum and I thought, okay, that's where I'm going to go to learn.

**Maggie Crowley** (00:25:29):
And so then two more years. So, that's five years until I really felt like I knew what I was doing. And that's because it takes a long time to ship stuff. And so to people who want to progress, you can progress by job hopping, you can progress by going in and out of startups. But to me staying at that, when I was at Drip, I was there for almost four years. I got to see two or three cycles of the same product and I learned more from that than I did out of the year or so I spent doing other things each at a time because you got to see the consequences of your decisions and that's rare. And people, myself included, of course you want to get promoted, of course you want to move up. I'm ambitious. Lots of people are ambitious, but for better or for worse, spending the time is really helpful and I think allowed me to move faster later because I had just spent the time grinding it out for a while in order to be better later.

**Lenny** (00:26:31):
So, is that advice you often give of go deep into a company or a product versus just bounce and track a bunch of different companies or depends?

**Maggie Crowley** (00:26:39):
It depends. There are lots of really good reasons to bounce. I've done it, many people have done it, but I was surprised at how much I value that experience of having stuck around for a while and how much I learned from it was something I hadn't expected going into it, especially because you don't hear that point of view as much or as I wasn't hearing that point of view as much when I was thinking about the sort of arc of my career, but I'm glad that I did it. And then of course people always want to get promoted, always ask that question and my answer is always create impact and that can take time.

**Lenny** (00:27:16):
At my first job, I was there for nine years and then I started a company for a year and a half and then we sold to Airbnb, and then I was at Airbnb for seven years. So, I'm very much on that train of just, not that I intended for that to happen, but I definitely went deep and I think there's pros and cons, but there's so many pros to that, so many reasons. Okay. Let's talk about the last part, which is the third point you made, which is carrying the water, I think is how you described it.

**Maggie Crowley** (00:27:42):
Yeah. This one, there's no tips and tricks. It's just do the work. If you ever find yourself saying something like, that's not my job, that's probably a thing you should do. And you know what? It probably isn't your job and it probably is someone else's job and you can spend your life getting frustrated at that or you can just get over and get the work done. And people who are willing to just get the work done will move faster, their products will be more successful and they probably aren't carrying around all that anger and crappy emotion.

**Maggie Crowley** (00:28:17):
Because we touched on this earlier as a PM for better or for worse, and maybe this is not how we all want it to be, but you're oftentimes the emotional center of the team and it's your job to keep people motivated, keep people excited, keep them bought into the project, and you just have to keep that optimism going. And it's hard work. It's really hard work to stay positive and to keep people amped for that thing. And part of it can be just like, you know what? Let me take that on. Let me grab that, whatever. I'll do this thing. I'll hop on this sales call, I'll implement this with the customer. You just have to do whatever it takes.

**Lenny** (00:28:55):
It reminds me of one of your lessons that you shared, in one of your podcast episodes. It was one of your PM lessons of 2021, and the lesson was, when in doubt it's your job as a PM, which I think relates very much to which it just shared. Can you speak to that?

**Maggie Crowley** (00:29:12):
It might actually make sense to put this in the context of the other roles that are part of the team. So, as an engineer, your job is to write the code to really reduce this down and build the thing and make it work to spec. As a designer, maybe your job is to design the thing, design the solution, design the user experience. Obviously there's lots more complexity in that role. Design your amazing engineering, your amazing TLDR, caveat, whatever. But as a PM, you don't have that thing, right?

**Maggie Crowley** (00:29:41):
It's not like, oh, my job is just to write the one-pager. That's not true. Your job isn't just to pick the problem. Your job is to deliver a business result. And so you're uniquely positioned to have to fill in all the gaps because no one else is incentivized to do that. As an engineer, you can finish your work and hand it off and say, I did it, and the good ones care, but you don't have to care. As a PM, you're not going to do your job unless that problem gets solved for the customer or the user at the end of the day. And so your job is to make sure everything happens for that product.

**Lenny** (00:30:17):
It reminds me of another interview you did where you talked about how a lot of the PM job sucks. It's not as glamorous as people often think, and most of the job is these really boring, annoying things. I guess, is there anything you want to add there of just a lot of people want to get into PM, they're like, oh, I'm going to run the show. It's going to be so great. I'm going to be a product manager and tell people what to do. But that's not how it is.

**Maggie Crowley** (00:30:41):
It's just one of those things that people, and when I joined product, it was just sort of becoming a cool job. It wasn't the hot job on campus when I was in business school. That was more private equity, venture capital. And now there's a sense of cachet around it. But again, it comes back to that earlier point, which is you do get to do cool stuff. You get to decide what gets built. That's cool. You have a lot of ownership like we talked about. You could see it as you have a lot of power, but at the same time you're responsible.

**Maggie Crowley** (00:31:12):
And so with that comes this responsibility to get it right, to make the right bets, ship the right products, get them out the door. And so there's a lot of bullshit work you have to do. Again, project management is one everyone hates on. QA is a really good one. You should QA your products. That's great if you have a QA team, you should QA them. You should know how they work. You should implement with your customers, you should be able to sell them, you should be able to find users. All that stuff is stuff that you should be able to do, and none of it is above you.

**Lenny** (00:31:42):
If someone is listening and they're not a PM and they are not convinced to not get into product manager, they still want to become a PM, what is your best advice for selling that is trying to get into product management of how to actually break into product management?

**Maggie Crowley** (00:31:55):
I thought about this one a lot and I consulted the Slack workspace team. Because it's been a long time since I've tried to get into product. And so I didn't know what was going on these days because it's hard and I don't know if things have changed. I went to business school and that's how I got in. There was a program that took MBA students. I think there are some entry-level programs out there, big tech companies, if you can get them, I think they're really hard to get because they're very few and far between. And so the most common two paths that I've seen are people who switched laterally within a company. Again, challenging but can be done. Or people who joined startups. So, when I was at my last startup, I did hire someone who was coming out of business school who hadn't been into product into a PM role. And I can't say I wouldn't do it because it was awesome and she was amazing, but it takes a lot of work.

**Maggie Crowley** (00:32:49):
The reason why people don't do it is because as a manager, it takes a lot of work because there's so much that these people need to learn. And what we ended up doing is she and I spent four months working together in a WeWork in person to help her onboard really quickly into the role, which was so rewarding. And I loved every second of it, and I wish I could do that again and again and again. But to get that, she basically just hounded me. Christina, if you're listening, you emailed me a lot. We talked a lot and we waited until the time was right and then you finally convinced me to do it. So, I don't know. I don't if there's a reliable path that I can say this is what my advice would be other than try a startup network. See what you can do.

**Lenny** (00:33:33):
And you've made up this point elsewhere, which I think is an additional key piece is once you have a PM title on your resume, everything gets easier. As a hiring manager, I'm just like, I look at a resume like, oh, they've never been a PM. This isn't the role. It's rarely that someone wants someone that's never been a PM.

**Maggie Crowley** (00:33:51):
Yeah. And I tell people, I do unsurprisingly talk to lots of people who either are in product or want to be in product. And that's one of the things I always tell them because if they're deciding between roles and they have an opportunity to do something, and my advice is always, if you can get someone to stamp you with the product manager role, take it. Because to your point, it's what we screen on. It's for better or for worse, it's just like you have to get that first job. And then once you get that first job, it all gets easier. You can get in and then you can talk about your experience because then the second question I have is, what have you shipped? So, it's like, have you been at PM before? What have you shipped? And it's fascinating how quickly people can't answer that question. And the people who can are always several steps ahead of the people.

**Lenny** (00:34:36):
Let's shift topics and talk about product strategy. Many people are told you need to get better product strategy. You're not great at strategy. A lot of people are also just confused, what is strategy? How do I get better at strategy? How do we describe a strategy? And you have a really great explanation and overview of how to think about this stuff. So, I'd love to hear your take on just how do you actually write out and describe a strategy.

**Maggie Crowley** (00:35:04):
Sure, yeah. And another thing that happens, and I'll give the outline, but another thing I hear, especially as you get further in your career, and unfortunately if you're maybe an underrepresented person in tech, is that you need to be more strategic. And so that's feedback that almost always happens, especially if you're a woman in product, in tech who's knocking at the door of a leadership role. You've probably gotten that feedback. And so I made it my mission to figure out what the heck is this thing? How do I do it? How can I do it in a way that is demonstrable so that I'm never getting that feedback that's like, oh, she's not strategic. And so what I did was something that I kind of did in the background because I had an engineer who I worked with who really wanted to understand why we were doing what we were doing, and he was not satisfied with sort of a surface level answer.

**Maggie Crowley** (00:35:57):
And he was just pushing and pushing and pushing. And so what I did was I just wrote out a Google doc and I started with like, okay, and not fancy, these are just bullets. What is the mission? What is the point of the company? What are our goals? Maybe we have some sort of high level framing of what we're working on. And then I had this big section that was just the landscape. And in that section I put in what's going on with our business? What's happening with our products? What's our point of view on the market? Who are our competitors? A SWOT analysis, key risks that we might be facing. Just dump that all on paper. Then what are the current quarters business goals or however you do planning, what are the current things that your company's working on? Then I put in, all right, that's sort of the context that we're operating in.

**Maggie Crowley** (00:36:44):
Then I wanted to understand where are we. So what is an honest accounting of the current state of your product, the business overall, and then the specific area that you're working in. What works, what doesn't work? What are your customers saying? Bottoms up feedback, users, customers, teams, what are your support tickets? Get that all out on paper. And then really importantly, where are your technical hurdles? What are the big pieces of tech debt? What are your engineering and technical teams always harping on that they want to invest in? Are there some big things coming down the pipe that you need to think about? Just get everything on paper. And then usually in the process of writing all that down, you'll start to see, okay, I kind of get where we are. I kind of get what the challenge is. And then you write a section that's like, what's the opportunity?

**Maggie Crowley** (00:37:34):
From all of that, what's going to bubble up as the top one or two opportunities for your team? Where do you want to play? Where can you win? Where's the unique? Based on your unique competitive advantage, where do you think you all should be and why? And then based on that opportunity, what are the challenges? So, what's going to be the hardest about taking advantage of that? What has to be, another way to frame it is what has to be true about the world for that to work? That's a one that's been helpful. And then what would you do? Take a swing at writing down your solution, what you would need to build, how might it work? Anything that you have, this is where I would say three bullets, maybe what you might want to do and then a plan. If no one else had an opinion, how would you go about it?

**Maggie Crowley** (00:38:26):
How would you sequence it? What would you do? How might you get the team to work on it? What would your team have to look like? How much would it cost to do it? All that you can start to layer in all that kind of stuff. And then I just share the doc. Share it with everybody. There should not be any secret. And you should be able to walk all the way from your company's mission down to the individual priority on your team and see the logic chain and why you got there. And if anyone doesn't agree with it, they can call out where their disagreement lands in that landscape. But at least then you've put everything on paper, you understand how you got to where you're going, and then you can have an argument about the different pieces and points of data and feedback that you're getting, but at least people understand how you got where you got. And then it doesn't become like, I don't agree with you. It becomes, I don't agree with this point.

**Lenny** (00:39:18):
This is such a cool way of doing it. By the way, is there a template that we can point people to that has this sort of-

**Maggie Crowley** (00:39:23):
There's not, I've only ever done it in a loose Google doc and then it just grows and changes. I can maybe try to write up those bullets, but it's just like I just make headers and then I just start dumping content in it.

**Lenny** (00:39:36):
Yes, that's all people need. If you end up creating that before this comes out, we'll throw it in the show notes. And if not, people can just bother you on Twitter and ask Maggie, where's that template that we talked about?

**Maggie Crowley** (00:39:44):
Yeah, I'm happy to write it on a piece of paper and take a photo of it and send it around.

**Lenny** (00:39:49):
There you go. Just make it really grainy and an artifact. We found Maggie's template. This is awesome. So, I've never heard of a version of this with so much depth into the landscape, and I think that's so smart because so much of conflict and disagreement comes from you just don't have the same information or the manager, exec or whatever doesn't think you have the information. So, if you just lean into, here's everything that I know and here's what's happening, and if you disagree with this goal, tell me, and then it'll change the plan.

**Maggie Crowley** (00:40:17):
Right.

**Lenny** (00:40:18):
And yeah.

**Maggie Crowley** (00:40:18):
Part of it's also that typically speaking, when you're doing a strategy, you're doing it at a higher level. So, I don't think every product needs a strategy. Every feature doesn't need a strategy for example, you don't need to do this if you're working on a tiny slice of a product and you have user feedback, don't overcomplicate it, just do the stuff that makes sense. But especially as I've gotten more senior in my career, the questions are bigger and the impact is broader and the timelines are longer. And honestly, it was also because I wanted to get it right. I didn't want to make a bet on something and put a bunch of resources against a problem and get it wrong. And so this was also homework that I wanted to do for myself to know that I was going to do the right thing. For some reason, I'm always paranoid that other people have more information or doing it better than I'm doing it.

**Maggie Crowley** (00:41:11):
So, I was like, okay, I have to write it all down and then make sure I got it right and share it with everyone and make sure that they agreed with me so that I didn't screw this thing up. And it just was such a useful exercise that I kept doing it. And of course people don't read it. People only read a tiny section. You'll run into the same problems you run in with everything else, but at least I knew that I had done the work and if people cared to engage with it was there.

**Lenny** (00:41:33):
So, along those lines, I was going to actually ask, how long do you find this should be depending either on the timescale, say you're doing a quarterly strategy or a year, how many pages should this doc be as any guide?

**Maggie Crowley** (00:41:46):
It's long. It gets real long.

**Lenny** (00:41:48):
What is long?

**Maggie Crowley** (00:41:53):
The actual content, I end up writing a summary to go back to the Minto principle. I end up doing the whole thing, then putting a summary at the top so that there's one, within the first, above the fold, if you will. You can kind of get the point and the suggestion on what I think we should do or what the strategy should be, should be customizable in that section. But it can go 20 pages just because if you really want to get deep in a competitor or there's interesting market dynamics, interesting technological changes that are happening. Sometimes I'm screenshotting other companies marketing websites and dumping that in there. And that might be some interesting comments. So, it doesn't have to just be words or it can be all kinds of different things that you might want to put in there.

**Lenny** (00:42:37):
And you made the point that it's not like you expect people to read this whole thing. There's the summary that gives them a conclusion and in theory if they want to really dig into it, they can. But I guess how do you find that balance of writing everything and making it so long that no one's ever going to read it to like this is actually going to be useful to someone and plus here's a summary.

**Maggie Crowley** (00:42:58):
It comes back to the reason why I write the document in the first place. And that's for me. So, it's my homework to do my job effectively. I just make sure to share it. And I find that my, especially my engineering and design counterparts, if you're working in a true triad, will almost always engage really deeply on the doc because they're pretty much also on the line and they want to make sure that when they sign their teams up to do whatever it is that they believe in the thing that you're working on.

**Maggie Crowley** (00:43:28):
And so I find that those people will engage pretty deeply. Sometimes you'll have more junior folks on the team that'll just be interested and they'll get really into it too. And then there's some people that'll skim the upfront part and either say, yeah, that looks great, or You're dumb, I hate this. And okay, sure. There's always those people. So, it never really mattered to me that people read the whole thing. It was more I knew I had to do it to be confident in my own decisions and then I could facilitate a conversation, so it didn't really matter.

**Lenny** (00:43:58):
**Maggie Crowley** (00:45:28):
Yeah, I think, obviously this is where product content gets really challenging because obviously I can't really talk about the stuff I'm currently working on.

**Lenny** (00:45:36):
Just tell us all of the secrets. And that [inaudible 00:45:38] know.

**Maggie Crowley** (00:45:38):
The toast PR department would be really unhappy with me. It's questions like, if you're a director of product somewhere, maybe you're running a section of a business and it's annual planning. We're in Q4. What are you going to do next year? How do you answer that question? How do you back up your choices for that? You use a doc like this. Maybe you are realizing that the product that you're working on doesn't really matter, it's not really making an impact. You're kind of treading water. I would use this as a tool to figure out, okay, well what else could you do? So, yeah, quarterly planning, annual planning. If you feel like your team needs to make a pivot or if you think that there's a really interesting new opportunity that your business or your team should go after, is another time I might use something like this.

**Lenny** (00:46:30):
Awesome. This reminds me a little bit of, I keep mentioning this chat with Bill Carr that I had who is an early Amazon exec and how the narrative approach at Amazon, one of the benefits of that and the reasons they go there is partly for you to realize this is a bad idea before anyone even needs to give you feedback. And that's why they force you to write six pages in depth about your idea and then it goes in these concentric circles through the company. And idea is like, here's okay, and this is just not a good idea. Here's all the reasons why. So, I think there's a lot of similarities there.

**Maggie Crowley** (00:47:00):
Yeah, there are many, many times when if you combine this artifact and process with the point about simplification where through that process you just start cutting so many things because then what happens is, let's say you've gone through this exercise and you're like, okay, I know exactly what my three things are that I want to work on. Then there's a moment where you take the strategy and then you look at your roadmap and they're never the same. And the roadmap is just bloated with all of this random stuff that like, oh, well, we have to do that because of this, or we have to do that because of that.

**Maggie Crowley** (00:47:37):
This thing we're still working on, this is like six months delayed, so we're still going to do the thing. And then all of a sudden you've got 90% of your resources committed to things that don't track against your strategy. And it's a really interesting moment as a leader especially to sit there and go, well, what do we do? What do you do when you have that problem? And especially if you're a PM, you probably don't have the agency to say, scrap the entire roadmap and work on my new strategy. But at least it allows you to think about critically about whether you should be doing what you're doing and allows you to evaluate whether those things are still the most important things to work on.

**Lenny** (00:48:09):
I'm going to summarize the template real quick, and then I'm going to have another question kind of along the lines. So, if you're trying to create your own little template, you start with the mission of the business, and then I imagine you also share the mission of your team because oftentimes it's a little more specific, if you're working on it like a product team strategy. Then there's a landscape of what's happening. So, you include competitive, SWOT analysis of competition risks, product state, business state, things like that.

**Lenny** (00:48:38):
And then you share the current goals of what you're trying to achieve as a team slash business. And there's an account, honest accounting of what's happening in the product and technical hurdles and things like that that'll keep you from moving, I guess, achieving some of these goals. And then you share, here's the opportunity I see, how we win and how we actually achieve this opportunity where we place bets and things like that, or we could place bets. Then challenges of doing this, what needs to be true for this to be possible? And then you finally get to, here's what I think we should do, essentially the solution, ideally three bullet points, and then the plan. And I imagine the plan is step one, get sign off from exec. Step two, resource the team. Step three, start on this design research sprint.

**Maggie Crowley** (00:49:26):
Pretty much.

**Lenny** (00:49:26):
Awesome. All right. Amazing. Somebody will create this template if you don't end up doing it.

**Maggie Crowley** (00:49:30):
Yeah.

**Lenny** (00:49:32):
There's another-

**Maggie Crowley** (00:49:32):
I hope somebody does.

**Lenny** (00:49:34):
Okay. That'd be awesome. If they do, I will tweet it and we put it in the show notes.

**Maggie Crowley** (00:49:34):
Great.

**Lenny** (00:49:39):
So many promises already from this podcast. Along the same lines, you also have a one-pager template and process that I think people find really useful. So, how about we chat about that one briefly and then I'm going to go in a whole different direction.

**Maggie Crowley** (00:49:52):
Okay. Yeah, I don't think I have much to say about this. That has not been said by many people many times, but whether it's a spec, a PRD, a one pager, I don't even know what else people call it. It's the document that you use to define the thing that you're doing as a product team, and that means product design, engineering, your little squad. And what I think is really useful about this process is that it's the PM's artifact. So, designers produce designs, engineers write code. What do PMs do? A lot of people might say nothing. In theory, we write at least this document and it can be a pain. I've seen lots of ways where it hasn't been done very well, but when I think it's done really well and when it's really effective is it's a tool that allows the PM to start with why. And if you structure it correctly, the most important section in my opinion in the document is the first part, which is like what is the background and context?

**Maggie Crowley** (00:51:00):
What is the problem, why does it matter and why does it matter now? And if you get those things right, the rest gets really easy, but it gives you a chance as a PM to center the team around the problem, why that problem exists, whether it's created by your own product or it's something the user is experiencing and why that problem is worth solving. That's a part that I think people sometimes forget to think about and why it's we're solving right now versus all the other problems you could be solving and then it can become the home base of the decisions that you make along the way. So, I think it's best when you have those sections and then also best when you write down on this day, we made this decision or we decided not to do this or we decided only to solve this part of the problem, not this part of the problem. Keeping a running list of that and a link off to all the different artifacts and research and things is helpful for a team.

**Lenny** (00:51:52):
So, just to summarize, what would be the headings again, just if someone's taking notes and wants to create the rule template?

**Maggie Crowley** (00:51:57):
I don't think these templates have to be really complicated. It's like background and context. The problem. I would literally write why this problem matters and why this problem matters now. Don't make it complicated, just answer those questions and if you can do that, and then again, it's only really helpful if then you bring that document before you go any further to your team and you use it to have a conversation and you get the smart people around you to take shots at it. I should have mentioned this earlier with the strategy. The first person I go to is typically speaking my engineering counterpart and I say, shred this, go through it, rip it apart, vomit comments on it, tear this down how it gets better. And as a PM you can't be precious about your work. You need people to poke holes in it.

**Lenny** (00:52:48):
The why this matters now point is so interesting. I don't often hear that and I think it's such an important part of specs and plans and strategies because there's so many things you can do and there's certain things that are perishable that you can only do now. That if you don't do now you miss up the opportunity. And so I think that's a really interesting element that most people don't include and it reminds me of, I think I've done enough podcast episodes now where I'm just connecting all these things as people are talking. [inaudible 00:53:16] the John Nash thing happening where Karri, the founder of Linear talked about this concept of side quests as a founder. Because he's so good at staying focused and I was just like, "How do you stay focused and just get stuff done when you have so many people coming out?" He's just like, "There's the main quest and then there's the side quests and side quest I don't need to do right now. There's the main quest which is build up really successful business." And I feel like this is a good example of that in action.

**Maggie Crowley** (00:53:39):
Yeah, I love his take on quality and taste too.

**Lenny** (00:53:43):
Yeah. What a gem.

**Maggie Crowley** (00:53:44):
Yeah, big fan of that. But yeah, I mean it's really hard to stay disciplined, it's hard to stay focused and to your point, there's a million things you could do at any given time, especially if you work at a bigger company. And so the why now is an important question to answer because if not, somebody's going to ask you. So, you may as well think about it.

**Lenny** (00:54:02):
Yeah, it's interesting why now comes up a lot in investing in startups but rarely in product building and it feels like it should. Although I will say in the research I've done, why now ends up not being that important for startups being successful or not. So, I think there's a two sides to that coin. Anyway, I'm going to move on to a different topic and this might become a new thing that we do and I'm going to call it contrarian corner. I asked you if you have contrarian opinions about things before we started recording this episode and you had some really good ones. So, there's a couple topics I'm going to chat about and we'll see if this becomes a recurring theme and you're laughing and nodding your head, what are you thinking as I say this?

**Maggie Crowley** (00:54:39):
I'm thinking about when I had a podcast, you would do a show on a topic and we would click the end recording button and then every single guest would be like, I had no idea what I was doing. I made it all up, it was waterfall. None of that matters. I didn't know what I was ... People would say the wildest stuff and I would sit there as a PM and just think what. We just talked about this framework, we just talked about this thing and that's how you're supposed to do it. And then they would get off the official part and just say, yeah, it's wild. Nothing goes the way you want it to go. We're all just kind of making it up as we go. And so I hope that you get more of those takes in this part of the show.

**Lenny** (00:55:18):
I'm very sensitive to that point right now because someone just tweeted about how they're just finding that many of my newsletter posts about how companies write product are the ideal version of what they do and I rarely or they rarely share, here's all the challenges we're having, which I think there's truth to that, but I also get into a lot of failures on this podcast. Actually, I think the podcast is a lot more of just here's things that go wrong versus the newsletter. So, I'm just like shit, I need to do more of that. So, I love that you mentioned that and let's see what we can get into. But I guess maybe before we get there, is there an example of something that didn't go just along the lines of some sort of failure slash mistake?

**Maggie Crowley** (00:55:59):
I might be foreshadowing, but a question I ask in every product interview is what's the worst product you've ever shipped? And that's because I don't think you're a good PM if you haven't shipped something that's really shitty, you just haven't had enough reps, you haven't done it enough time. And it's not only that you've done it but that you can admit it and which one it is. That's so important. And I remember, it was so dumb, I'm still so mad about this, that we did this. I won't name which team, which company, I'm not going to call that out, but we decided we needed to do a rewrite, red flag number one of a existing product and engineer who I'd worked with many times. We had a really good relationship and this person was like, yeah, yeah, it's going to take six months, no problem.

**Maggie Crowley** (00:56:47):
Core part of the product been around for forever. One of those things that the code is still, it's still the code written by the founders kind of thing. It didn't take six months, it took two and a half years. It still wasn't done. It almost never, it went on for so much longer than it should have. It took us forever to get to feature parody. It was the worst project. So, many people rotated in and out of it. Everyone thought it was dumb, sunk cost fallacy, just the worst. And it's because A, we got arrogant and we thought we could do it. B, we skipped discovery. We didn't really write a one-pager, we just went for it. We didn't do enough technical and design research into what the requirements would actually have to be. And there you have it.

**Lenny** (00:57:34):
And did not work out or was it a huge success in the end and it changed the trajectory of the business?

**Maggie Crowley** (00:57:39):
Absolutely not. But you know what, I didn't get fired, so it's fine.

**Lenny** (00:57:43):
I feel like I've gone through those experiences and then three, four years later it's like another, maybe this rewrite and redesign may work because we haven't updated this thing in a long time.

**Maggie Crowley** (00:57:52):
Just don't do it. Don't rewrite. If anyone ever tells you to do a rewrite, don't do it. A side by side re-write, nope.

**Lenny** (00:57:59):
Yeah, what I run into is once you get too far down a redesign slash rewrite everyone's building in that new world and then you launch an experiment's negative and then it's just like, oh, we just got to launch it. We're going to claw back. We're going to get figure out how to get back to neutral someday.

**Maggie Crowley** (00:57:59):
Yeah.

**Lenny** (00:58:15):
Yeah.

**Maggie Crowley** (00:58:15):
Yeah. Don't do that.

**Lenny** (00:58:16):
Good times. Okay, well maybe we'll start a failure corner. That could be a new segment. We may have a little sound and theme music, but this time we have contrarian corner and you have a couple contrarian opinions about a couple topics. The first is product management. What is something that you believe about product management that maybe other people are less convinced by?

**Maggie Crowley** (00:58:39):
The one I like to have in this area is that people who are really excited about being data-driven, to me that is oftentimes a red flag for their product thinking, especially if it's an executive who's saying things like, oh, so we make all our decisions with our dashboards. To me that says that the team is over-emphasizing quantitative data at the expense of qualitative data and they're not using good judgment. They probably don't do a lot of direct user research. They don't really understand the humans who are using the thing, what they need, what they care about, and they're managing via a dashboard. And maybe if they got really, really good at picking metrics, it would be fine. And oftentimes maybe it is fine. Maybe you have a high volume business that's really easy to run experiments on and that works for you. But most PMs, most jobs, most products, you're going to be better off talking to 10 users and you'll get more and better insights out of why things are happening than you would with any dashboard.

**Lenny** (00:59:51):
So, the takeaway there is just be careful when someone is saying they're super data-driven. Our team is super data-driven or company company's super data-driven.

**Maggie Crowley** (01:00:00):
Yeah, and maybe it's true and that's great. I am not saying that you don't need data. You absolutely do need to instrument your products and understand if it's working at scale, but you can't forget that, you need to know why. It won't tell you why anything is happening. If you don't understand why it's happening, I don't think you can come up with good insights about what you should do next. One quick story on this. I remember really early on in my career, Adam Medros, who was a VP [inaudible 01:00:24] at TripAdvisor, we were in a room, just had this meeting called product review that was amazing when I first joined and someone was justifying this project and he just, I hope he is okay with me saying this because this is my memory of this moment.

**Maggie Crowley** (01:00:38):
He was just like, this is an obviously better thing. Just do it. Stop. Stop it. Stop doing all the stuff that you're doing. Stop with these numbers, whatever it was that they were doing, if it's obviously better, if it's logically better, use your good judgment and do that thing and let's move on. And I've always thought about that, but you can just do the obviously better thing.

**Lenny** (01:00:58):
Yeah, I love that I pull that card sometimes, but I think you almost have to do it that way of just like, okay, everyone, this one's just obviously a good idea. Let's just do it. Enough research. Okay, another topic that you have some interesting opinions about his product content very close to our hearts, both my heart and your heart. Do share.

**Maggie Crowley** (01:01:20):
Really if you're going to make good content, you have to sanitize and frameworkize the thing that you're working on. And then slowly, I think for a lot of people who are reading it and looking at it, their thinking starts to become, well look how well I did this framework. Look how well I implemented this thing. And they lose touch with the point which is creating impact. And so all of this content makes it really noisy and then makes people think that, oh, if I just do these things that I'll get what I want. And now I'll just check off my list and then I checked it off and then I should get my promotion at the end of the day. But it's like the best PMs have built up so many different frameworks and they can apply them in different ways. And then sometimes they throw them out and they say, nothing I have in my toolkit makes sense for this moment, but I know what to do because I have intuition and I have data and I've talked to users or whatever.

**Maggie Crowley** (01:02:16):
And so content sometimes can get in the way of the impact because you're trying to apply it and you think that the point is the framework and the point is the one pager or whatever it is that you're doing when it's not. And then if you're a leader and maybe if you've had the good and ill fortune of having published content, someone comes to you and says, well, you said in that one podcast episode that you don't believe in roadmaps, so why are you asking me for a roadmap? And then you're the who's sitting there being like, well, it's a little more complicated than that. And that was a fun take that I had, but I actually need to understand what we're doing because planning and I need to figure out what my budget is, blah, blah, blah.

**Lenny** (01:02:52):
That's so funny that I didn't think about you as a leader having put stuff out that people put back at you. And I think your point about one for you, for people to consume content online about how to do product management, you have to really distill it. And to your point, it often loses the nuance. Because if you had all the ones, no one's going to even read it so complicated and long. And then the other point of there's also just it has to be interesting. So, if it's another just like, here's how a roadmap really is successfully and it's like what everyone's already done, no one's going to read it. So, you always have to have a new take. And with that comes, it's not actually always true. I just wanted people to react to this idea.

**Maggie Crowley** (01:03:32):
Yeah, I mean it's helpful. I think there's some people who create, I mean there's many things at my last role, we all had your newsletter and we listened to the show and then people would bring, I should have found a clip, but I can't remember, there were a couple of moments where we would listen to a piece of it or find an article and say, oh, this could help. Or what if we did it that way? I think there was a newsletter article about Figma and they had some templates. They're like product review template for FigJam. Love that one. Use that one all the time.

**Lenny** (01:04:06):
Amazing.

**Maggie Crowley** (01:04:06):
So, yeah, I mean the stuff's really useful. It's just like you have to be smart about when you apply it. And then if you're a leader and there's all this content available, you have to know why you're not following the rules.

**Lenny** (01:04:18):
If they're just like, hey, look at this newsletter post letting you write, we should be doing it this way. Versus I think people assume these are the one way to do it or innately will work at your company. And I really like your point, which maybe counter to what I do, but I think it's an important nuance that I feel like I should add to every newsletters. This isn't necessarily going to work at your company. Sometimes the culture is different and this won't fit or this isn't a complete version. As much as I try to give people, here's everything you need to do this thing well, there's always a little bit missing

**Maggie Crowley** (01:04:55):
And I think if you don't have that context, it can be a little demoralizing like, well, how am I ever going to do that thing that they get to do at this magical company? But again, if you view it as more like here all the tools that you can add to your toolkit and you pull them out when you're in a situation from which they can be useful, that's how I think about it. Versus this is the one way to do it like you said, the only way you can write a one page or the only way you can write an experiment, it's more like you can do it in many different ways.

**Lenny** (01:05:19):
And I find myself, I'm not actually, I rarely tell people here's the way to do it. Usually what I try to describe is here's how the best companies do it, as much as I can get into and leave it to the reader to decide is this going to be a fit for me, should I try to implement it? But still, I think there's an implication. This is the way to do research, here's the way to do roadmap, here's the way to prioritize. But I think it's interesting that you also, yourself create a lot of content and you actually found a lot of value from being, let's not call you content creator because I don't like being labeled as a creator myself.

**Maggie Crowley** (01:05:55):
Someone one's called me a product influencer and I'll died like a little bit.

**Lenny** (01:05:59):
That's how I feel. I'd love to hear just the impact you've seen from spending time creating podcasts and blog posts and tweeting about really great stuff because a lot of people are thinking about investing in this stuff.

**Maggie Crowley** (01:06:11):
Yeah, it's probably the best thing I've ever done for my career and I am so grateful for the people whose idea it was, who supported me and especially at Drift, when that became such a part of what we were doing at that time. And it's been helpful for a couple of reasons. One is just networking and access. I probably wouldn't be here today if I hadn't done that and if a friend of a friend had read the thing, it's like it just creates so many more connections. And so access to people and networking is one of the first benefits.

**Maggie Crowley** (01:06:51):
Also building a personal brand is really helpful if you want, one of the things that I always wanted to do with my career is try to make it so that I'm always employable. I just didn't want to, I'm an 08 grad not to put my age out there, and it was a hard time. And so I've always had this in the back of my mind, you want to be able to have a solid career. And so I thought that investing in my personal brand would be a way to help me get access to roles. It helps in recruiting as well when I'm trying to hire people. Because a lot of my job now is bringing people in and because I've been vocal about how I like to work and who I am, a lot of people and they will send me a note and say, I want to work with you, or I want to work on a team like that.

**Maggie Crowley** (01:07:35):
And that's huge because if my job is to hire people, then that's great and people can get a sense of who I am without needing to be on the phone with me. My favorite benefit outside of those things has been that it's helped me learn more from the work I've done than I otherwise would've been able to. Because in order to make content, you have to think through what you did, you have to summarize it, process it, make it interesting for people. And then especially if it's in a podcast meeting, talk to somebody about it. And the process of doing that means that you're paying attention to what you're learning along the way. And so often we don't do that because we're busy working, we have our lives, things are happening. And that to me is, I think what's made me a better product person faster is because I spent the time to think about what I was doing in a way that I wouldn't have if I didn't have to write something down.

**Lenny** (01:08:28):
Something that comes across in your content that you've somehow figured out is to avoided being cringy and very thirsty for followers. And I think when a lot of people here build a personal brand, it's like, I don't want to.

**Maggie Crowley** (01:08:44):
I know. It makes me ill even saying that, it's like too gross.

**Lenny** (01:08:47):
I never thought of it or wanted to think of it that way. And I'm just curious what advice you'd give to people that want to go down this route without feeling, I guess one, is just feeling like they're being cringey, and two, avoiding content people be like, oh my God, I can't believe this stuff [inaudible 01:09:02].

**Maggie Crowley** (01:09:02):
Yeah, the clickbait tweet thread situation. I think the step one's going to be cringe. Your first 10, 20, however many posts are going to be bad. I would imagine if you went back and listened to your first episode, you would be cringing just because you've learned so much since then. Right?

**Lenny** (01:09:02):
Yeah.

**Maggie Crowley** (01:09:22):
It's natural.

**Lenny** (01:09:23):
Although randomly the first episode ever is the most popular episode. So, with [inaudible 01:09:29], which I could see why it was so popular.

**Maggie Crowley** (01:09:30):
So, it went really hot with your first guest.

**Lenny** (01:09:34):
That's right. That's right.

**Maggie Crowley** (01:09:35):
So, yeah, first get over the fact that it's going to be cringe. It's going to be cringe. Like anything, you just have to get started and it'll fade away eventually and you don't have to think about it. Two B, this is such gross advice, but you have to be authentic. It has to be real. And I think what came through in the show that I did was those were my real questions that I was really working on.

**Maggie Crowley** (01:09:59):
So, we joked about how we would turn off the recording and then we would get the real story, but I would turn the recording off and I would say, okay, we talked about this thing. Here's actually happening in my job today, what would you do? And so those were real questions that I had, real processes that I was working on and real advice that I needed at that time. And I think that's why it was valuable is because I was actively a PM and the way that I'm still actively in product, that was always something that I wanted because it meant that the content had to be relevant for me and wasn't just for likes and share.

**Lenny** (01:10:34):
I think there's some two really important points there that stood out to me. One is your stuff's going to be terrible if you don't actually have any background or experience in the things, you're just pretending. It's like you're acting like someone that knows about this thing, but you don't actually. And so I think that's an incredibly important part of this is don't try to become an online creator person if you haven't done the thing, because people will see that you don't know what you're really talking about and you'll run out of stuff and it'll be like, okay, well I did it for two months and I have nothing more to say.

**Maggie Crowley** (01:11:03):
Right.

**Lenny** (01:11:05):
And then the other piece is there's a guest who shared this quote that has stuck with me from Einstein, which is something like, "Seek not to be successful but of value." And I find that that's a really good framing for sharing stuff is just share things that are interesting to you and useful and come at it from this is useful, not from, I'm trying to build a following. Because people can tell if that's the-

**Maggie Crowley** (01:11:30):
Yeah, people can absolutely tell. And the other thing is there's a little bit of too cool for school mixed in here and there are definitely people who will tell you your content is cringe or make fun of you or whatever because that's what they want to do. And I'm not even going to get into psychology of that, but people will do that. And I've always been of the mind that the really interesting people out there, people who are unashamedly interested in stuff and who are like, yeah, I'm nerding out about this and I'm sharing it because I'm interested in it. And for better for worse, I love working in product. I love the job.

**Maggie Crowley** (01:12:08):
Even all the gross stuff you have to do, it's super interesting. You meet really cool people, you get to ship stuff, you get to see the stuff get used by people and solve problems. It's a really cool job and I've always been interested in how to do it better and it doesn't matter to me that some people might think that's cringe because that's cool, but this is what I do all day long, so I'd like to get better at it.

**Lenny** (01:12:26):
I think that's such a big part of it. I didn't even mention that. Just it needs to feel really authentic and clearly for you is just like, there's just stuff I want to share because it's really interesting to me.

**Maggie Crowley** (01:12:37):
Yeah.

**Lenny** (01:12:37):
The way I actually started writing was exactly the two reasons you just shared. One is I wanted to learn the thing and so writing helped me figure things out. And then two is I just thought it was interesting and I found it useful and I just assumed other people might find it useful. So, I did also learn, and I wonder if you found this too, is that you think the things are not going to be that interesting or useful to people, so basic for you, but people find the most basic stuff so interesting. Because there's always more to learn about how to roadmap, how to prioritize, how to hire, how to talk, to have difficult conversations, performance review.

**Maggie Crowley** (01:13:15):
All of that is absolutely true. And I think one of the first pieces of content that I was really happy with was I was working with somebody and they were making a PowerPoint presenter slides or whatever, and I just wrote out in my notebook like, okay, here's how I do that. I start with an outline on paper and then I draw little boxes for the slides and I write out the headline of the slides. And then once I have a tight outline and I have the literal text that will go across the top of each of those things, then I sketch out how I want the slides to go. And then I go into Google Docs and I actually make the slide.

**Maggie Crowley** (01:13:51):
And it was like some silly little thing and this person sat there and said, holy, you just totally changed the way I did this and this took me 75% less time than it would've taken me otherwise. And I was like, I may do this dumb drawing. Why is this a big deal? And yeah, that's when I realized that the stuff that's easy for you might be a stuff that is most interesting because it's something that maybe you're really good at that you don't realize.

**Lenny** (01:14:13):
I think people need to really internalize that point. If there's something that you're doing that you consistently find useful and works often, that is going to be really useful for someone to hear. So, that could be a good place to start. Maggie, we've gone through everything that I was hoping to get through and more, which is awesome.

**Maggie Crowley** (01:14:32):
Great.

**Lenny** (01:14:32):
Before we get to a very exciting lightning round, is there anything else that you want to share or touch on think might be useful to leave folks with?

**Maggie Crowley** (01:14:41):
My hope is always that people listen to stuff like this and realize that it's messier than you think you can fail a lot and still be successful and that they should have fun. I think that gets missed in a lot of the product content is like, have fun, enjoy it. People are weird, people do weird stuff and you build stuff for people, which it makes it all very entertaining. So, I've always found a lot of joy in the job.

**Lenny** (01:15:04):
And to your point of carrying the water as a PM where you're kind of doing all the things, it's like you can create that fun. You can make the team your own fun and change the culture, create the culture. I find that so underappreciated for PM.

**Maggie Crowley** (01:15:16):
Absolutely.

**Lenny** (01:15:17):
Okay, well with that, we've reached our very exciting lightning round. Are you ready?

**Maggie Crowley** (01:15:21):
I'm ready.

**Lenny** (01:15:22):
Maggie, what are two or three books that you've recommended most to other people?

**Maggie Crowley** (01:15:27):
First, most common one is probably the Presentation Secrets of Steve Jobs, the little tiny one, really great way to improve your speaking skills and your presentation skills and to get distracted executives to agree with the point you're making. So, that's one. Thinking in Bets by Annie Duke is the second one. Coming back to the point about being able to make bets, I think that one's a really interesting one. And then bonus third one, this is more like a desk reference that I now have on my desk, the Scaling People book by Claire Hughes Johnson. I really enjoyed the way that one is working and it just sits on my desk and I reference it every once in a while, especially as manager.

**Lenny** (01:16:11):
I have it both under my laptop right where I'm sitting and then also way behind there and it's one of the most popular episodes I've done with Claire, so if folks haven't listened to that one. Highly recommend. She's incredible. Great choice. What is a favorite recent movie or TV show you've really enjoyed?

**Maggie Crowley** (01:16:27):
Okay, so my husband is in the industry, as we say here in LA, and so we watch a lot of good and bad shows in TV, but I think my favorite one that I've watched recently was Slow Horses. Gary Oldman is incredible. Highly recommend.

**Lenny** (01:16:43):
Wow, I haven't heard that one yet. Good tip. What is a favorite interview question you really like to ask which I think you already gave away, but let's touch on it again.

**Maggie Crowley** (01:16:51):
I did. Yeah, it is what is the worst product that you've ever shipped? I think the best answers are ones, and I don't even care if someone listens to this and then I do this in an interview, people immediately laugh a little bit. They remember the horrible thing they did and then they share that horrible thing with you. And it tells me you have some humor, you're humble and you can point out when you've made a mistake. You've done enough to be able to confidently say, of course I've made a mistake. Because none of us are perfect. And you know how to spot those mistakes and you can learn from them. And I've always found that those conversations are the most interesting.

**Lenny** (01:17:29):
What is a favorite product you've recently discovered that you really like?

**Maggie Crowley** (01:17:33):
One because I've seen you on Twitter, you're a future fit guy.

**Lenny** (01:17:36):
Yeah, I'm.

**Maggie Crowley** (01:17:37):
Is that correct?

**Lenny** (01:17:37):
I use it three times a week. I love it.

**Maggie Crowley** (01:17:39):
Yes. I was also a future fit person. I think it's great. It's a great product. I'm now on Ladder Fit.

**Lenny** (01:17:46):
I've heard of that.

**Maggie Crowley** (01:17:47):
And personally, I love not being, I don't have to talk to the coach every day. I don't need the accountability, so that's not a thing that I needed as an ex athlete. So, for me, that didn't serve me and I like the anonymity of it and it comes with a totally unhinged group chat for your whole team. It's fantastic. I'm really enjoying it.

**Lenny** (01:18:07):
Sweet.

**Maggie Crowley** (01:18:08):
So, that's one more of a funny one. And the second one, not to get real niche, but I think good products are products that are focused. They do one thing incredibly well and they're not, to your point about side quest, there's no side quests. I'm a new mom. There's this app called Pump Log. I have never seen an execute so well on one problem. There's not a single thing where I think, oh, I wish it did this. It does it. It's like I paid $14 for it. I've never paid for an app like that in my life.

**Lenny** (01:18:40):
Okay, I'm downloading it right after we finish. Do you have a favorite life motto that you either repeat yourself, often like to share with folks, find useful, and just kind of living life?

**Maggie Crowley** (01:18:51):
I'm sure there's mottos' I could say that would be aspirational mottos', but the real one is if it's worth doing, it's worth doing well. And again, from being in sports to going to school to being in product, in my opinion, if you're going to do something, do it to the best of your ability because that's what you do with your day. You spend so much time working, you may as well be good at it or trying to get good at it. And that's always how I've lived my life.

**Lenny** (01:19:20):
I so love that message. I always think about that. Final question, you are an Olympic speed skater, which I don't think people would know necessarily. That's insane. My question is there some bad speed skating that would surprise people that would be like, what?

**Maggie Crowley** (01:19:38):
Ooh, that is one I've never been asked before. The whole experience, I've obviously learned a ton from it, and I think what might surprise people about being a small sport athlete is that you have to think in four or eight year chunks. And so it's one of those things where you grind for so long in a dark corner and then you get a chance to get the light to shine on you and you learn how to love the process. Especially for speed skating, I was a long track speed skater, it's a 400-meter rink.

**Maggie Crowley** (01:20:15):
You just are always turning left and going in a circle. There's not a lot going on. It's just you and your thoughts and you just really, really learn how to get good at perfecting something over and over again, and you learn how to grind, you learn how to focus, and I think it's also cool you get to go superfast. But yeah, I don't know if that would surprise people about speed skating, but I think just about being a small sport elite athlete, it's really about years and years and years of toiling and silence to get maybe one shot at something great.

**Lenny** (01:20:46):
So, much of what you just said would apply 100% to product management and I love that. Maggie, you are awesome. Two final questions. Where can folks find you online if they want to reach out and maybe ask you any follow-up questions, and then two, how can listeners be useful to you?

**Maggie Crowley** (01:21:00):
You can find me on Twitter for sure. By LinkedIn, but just speaking of cringe, I just can't get into LinkedIn posting.

**Lenny** (01:21:09):
LinkedIn's gotten better, I'd give it a shot. It's actually pretty interesting now, which sound weird to say.

**Maggie Crowley** (01:21:16):
Thinking about it, I better go back to work in a couple of weeks and thinking about LinkedIn. But yeah, Twitter for sure, LinkedIn for sure, and I've always tried to be helpful to other people, so I don't have an answer for how people can be helpful to me, my goal is really to share what I've been doing, the rooms that I get to be in, the access to the content and the people and the learning that I've had. So, hopefully I can find ways to keep sharing that.

**Lenny** (01:21:39):
Maybe check out Toast and use Toast when they're at restaurants.

**Maggie Crowley** (01:21:42):
Oh yes, Plug, Toast. Come work with us. We're the best. I get to work with John Cutler. It's phenomenal.

**Lenny** (01:21:50):
Legendary, previous guest. Are there roles you're hiring for just for folks that are listening and just like, hey, maybe I should go do that.

**Maggie Crowley** (01:21:56):
There are always roles that are open. I don't know what the most open roles are right now, but yeah, check it out. It's a great place.

**Lenny** (01:22:01):
Willing to the careers page.

**Maggie Crowley** (01:22:03):
Awesome.

**Lenny** (01:22:03):
Maggie, thank you again so much for being here.

**Maggie Crowley** (01:22:05):
Thank you, Lenny. It was awesome.

**Lenny** (01:22:07):
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.

---

## [11/24] Marketplace lessons from Uber, Airbnb, Bumble, and more | Ramesh Johari (Stanford professor, startup advisor)

**Ramesh Johari** (00:00:00):
Marketplaces are a little bit like a game of whac-a-mole. One example that I came across with one of the companies I worked with that I love is our new supply side was having a pretty bad experience.

**Ramesh Johari** (00:00:12):
So what we decided to do is build some custom bespoke features that were really going to direct them to more experienced folks on the other side of the market. Good. And then, yeah, lo and behold, pretty soon those metrics start to look better. But then we're looking at it, we're like, "Wait a second. Now the existing folks on the other side are having a worse experience," so you kind of whiplash around. You're like, "Oh, wait a second. We better do something about that." So we take them, we try to match them up with the more experienced folks, and now suddenly a month after that, you're like, "Wait a second," and your metrics just keep moving around. And that's because the whac-a-mole game here is ultimately, a lot of marketplace management is moving attention and inventory around. Many of the changes that are most consequential create winners and losers. And rolling with those changes is about recognizing whether the winners you've created are more important to your business than the losers you've created in the process.

**Ramesh Johari** (00:04:35):
Thanks so much for having me, Lenny. It's great to be on. 

**Lenny** (00:04:38):
It's great to have you on. A big thank you to Riley Newman for connecting us. Riley was the first data scientist at Airbnb and head of data science at Airbnb, and that role is actually a really good microcosm of what we're going to be focusing on in our chat today. We're going to get super nerdy about marketplaces, and experimentation, and data. I know that's your jam. Are you ready to dive in?

**Ramesh Johari** (00:05:00):
I really am. Yeah. And I actually want to thank Riley too. I got to know Riley when I was at oDesk first as a research scientist, and then I directed their data science team. This is way back in 2012, and I was looking around for people who are experts on how we think about data and marketplaces, and Riley Newman came up and so I invited him to come talk to us at oDesk, and we've stayed in touch since then. 

**Ramesh Johari** (00:05:26):
Those were early days of where this industry was, and I've had a kind of lengthy career now thinking about those kinds of problems. So I'm pretty excited to talk about it with you.

**Lenny** (00:05:37):
Let's start broad and set a little foundation. You have a really interesting way to describe what a marketplace business even is. So Ramesh, what is a marketplace business, and also why is data so important and such an integral part of building a successful marketplace business?

**Ramesh Johari** (00:05:53):
It's interesting when people sit down and think about, say Airbnb, what does Airbnb sell? Average person is like, "That's pretty obvious. Airbnb sells rooms. I go there to book a room I want to stay at," right? Other people say, "What does Uber sell? Uber sells me rides. I'd use Uber when I need to get a ride from somewhere to somewhere else."

**Ramesh Johari** (00:06:10):
And in some sense, you're not wrong. I mean, you go there. That's a platform to get these things. But that's not what the platform is selling. That's a really important distinction. There are people on the platform that are selling that to you. The hosts on Airbnb are selling you listings. The drivers on Uber are selling you rides. But Uber and Airbnb are selling you the taking away of something, which is a weird thing to think about. What they're taking away is the friction of finding a place to stay. They're taking away the friction of finding a driver.

In economics, we call those things transaction costs. When you take econ 1, you learn about markets and how supply meets demand, and we get prices out of that. But what you don't learn until econ 201 is that markets don't always work. And one of the reasons markets don't always work is because we have what are called market failures due to the presence of these kinds of friction. So what's a market failure? It's that Lenny wants to get from Palo Alto to Burlingame and he can't do it. Why can't he do it? He doesn't have anyone to drive him. Well, why doesn't he just call someone to drive him? Well, who's he supposed to call? Who are those people? Are they out there? Are they willing to drive him right now, right at 10:00 AM on a Friday? Are they willing to take him somewhere?

**Ramesh Johari** (00:07:22):
When I want to stay somewhere when I'm traveling, a friction is, who's willing to give me their room? I mean on principle, there's people who are willing to let me stay in their living room, but I don't know who they are. 

**Ramesh Johari** (00:07:31):
So those are frictions, and what the marketplaces are selling you is taking the friction away. That's what you're paying them for. And it's an important observation, because what that means is the marketplace's customers aren't just the people buying the rides, they're buying the listings. Actually, the hosts are Airbnb's customers, and the drivers are also Uber's customers. So both sides of the marketplace are the customers of the platform. Both sides depend on the platform to help the platform take that friction away. Because just like you want a place to stay or you want to ride, the driver is at Uber because he wants to earn money by taking people places. And the host is on Airbnb because they want to earn money by selling their listing.

**Ramesh Johari** (00:08:10):
I think this concept that we're making money by taking transaction costs away is such a fundamental idea that's misunderstood around marketplaces. That when you're an entrepreneur starting a marketplace or thinking about your business model, I think you can be wildly off if you forget that that's the thing that's fundamentally your value proposition. And then you asked about the role of data, and more broadly data science in marketplaces.

**Ramesh Johari** (00:08:36):
So it's an interesting thing, right? The example I always love to give are the ancient Agoras in Greece or Trajan's Market in Rome. When you look at pictures of these things, what really stands out to me is the rock. I mean, these things are made of stone. It's not like you were going to move a booth from one place to another place without moving a lot of rock from one place to another place. 

**Ramesh Johari** (00:09:00):
So you flash forward to 2023, and here we are with technology undergirding pretty much every kind of commerce now. And it means we can architect and re-architect the marketplace kind of on the fly, and we really are doing it all the time.

**Ramesh Johari** (00:09:14):
And these frictions that are getting taken away, they're getting taken away because of data and data science. So I really want to highlight three pieces of this for people, which I want you to think of them as a cycle. But to start with, let's just lay them out one at a time. 

**Ramesh Johari** (00:09:29):
One of them is finding people to match with. So that's the problem of, "I want to stay somewhere. Who is out there, who's willing to let me stay with them on a given timeframe?" And then if I'm a host, I have a listing. Who is out there, who's willing to stay at my place when I have it available? So that's finding matches.

**Ramesh Johari** (00:09:49):
Then there's making the match. And so here, going back to my time at oDesk, a big problem that we dealt with there was if I've got multiple applicants to my job, who should I hire? Who should I interview? It's a common problem we face in the real world, but now it's all remote. I don't meet these people in person. All I've got is this application they submitted to me. I need help triaging that. Okay? So that's helping make a match out of possible partners you can match with.

**Ramesh Johari** (00:10:16):
And then finally, we make matches. Well, what do the matches tell us, right? I mean, if you stay somewhere in Airbnb, you learn something about the host, you learn something about the listing. The host learns about you too. And that's all information that the marketplace should feed back in. So this is where we get to rating systems and feedback systems, even passive data collection, right? Did you leave your booking before you were supposed to leave? Well, maybe that's a sign that something didn't quite work out the way you wanted to work out. So that's passive data collection. Did you leave five stars? That's active data collection.

**Ramesh Johari** (00:10:47):
Get all this back in, and what does that do? Well, that lets us do a better job finding potential matches and make potential matches in the future. Every single thing I just said, finding potential matches, making matches, and then learning about those matches, and then cycling back again, that is the data science in marketplaces. 

**Ramesh Johari** (00:11:05):
And I feel like every marketplace that you could think of in any vertical has those three problems to deal with and relies on algorithms in data science to help them solve it. And in turn, that is I think really the underpinning of taking those frictions away.

**Lenny** (00:11:22):
Many founders try to start a marketplace business, think about marketplace opportunities where they don't exist. And there's often these recurring failures of types of marketplaces that just don't work in an area. I was just writing a couple ideas down while you were chatting like cleaners, getting cleaners as a marketplace doesn't seem to work ever. Car wash, there's a classic failure too. Getting tasks done for you on demand as a marketplace seems to not often work.

**Lenny** (00:11:46):
So this might be too big of a question, but I'm just curious if anything comes up of when someone is starting a marketplace or thinking about starting a marketplace business, what do you find are the most common flaws in, this is probably not going to work as a marketplace? 

**Ramesh Johari** (00:12:01):
That is such a fantastic question, and I want to preface what I say with a couple of comments. So one of them is that I've worked with a lot of different marketplace companies, but anything I say is pertaining to something more sensitive. I may not name the company over the course of the podcast.

**Ramesh Johari** (00:12:17):
But the other more important thing I want to say is that I'm a professor at Stanford, and there's a reason I'm not a successful scaled entrepreneur of marketplaces, and that's because I probably haven't unlocked the key to exactly the question you asked. But nevertheless, I have some thoughts on it.

**Ramesh Johari** (00:12:33):
The most important one is this. What I've found talking to people who want to start what they think is a marketplace is that they think too much about a marketplace before they're a marketplace. That in my view is the biggest failure mode.

**Ramesh Johari** (00:12:46):
You mentioned specific things, cleaners. I wonder about that, right? Is it something about the cleaning industry? It possibly is. I don't claim to be an expert on the microeconomics of the cleaning industry. But often it's not that, it's that I thought I was building a marketplace from the beginning, and that's not the way the world works. So I'll give you one vignette of this that I really like, and that's UrbanSitter. 

**Ramesh Johari** (00:13:09):
So first, UrbanSitter is a babysitting marketplace. We can talk about their whole life story, but I think what's most interesting is really the early days. And in the early days, what I found interesting, the way I found out about them actually is that we were stuck looking for some help. And I found out about this new platform where the clever thing was when you used to hire a babysitter, it's like pre Venmo days, you needed cash on hand. Because when the babysitter's done at the end of the day, they're usually high school suits or something. They want to get paid. They're not going to take your IOU, that you'll send them some check in the mail the next day.

**Ramesh Johari** (00:13:43):
And unfortunately, you often don't have cash. They don't take credit card. They're high school students. That was an incredible friction to address, which is literally just we accept credit card payments for babysitting. That's it, right?

**Ramesh Johari** (00:13:55):
Now from there, what happened is they took advantage of Facebook networks between parents and babysitters to build trusted introductions. So let's say my sitter wasn't available. I get to know sitters in the Facebook network of that sitter. And once they overcame that first thing to get some liquidity onto their platform, they could move towards asking, how do I solve for these frictions that I talked about earlier? How do I solve for helping people find potential matches? How do I solve for people making those matches, right? You can't do that when you don't have liquidity on your platform. It's silly to tell someone, "Hey, I'm really going to help you find all those drivers out there, even though I only have three drivers on my platform." That's not a friction you're solving for. 

**Ramesh Johari** (00:14:36):
So in their example, as they evolved, they actually shifted their monetization model away from billing specifically for this friction of allowing you to pay with credit cards, instead to now billing for how you were interviewing and contacting sitters. They had a two-part plan for that. One with a pay as you go menu, one with a more of a subscription option. But the key thing was either way, what you were paying for now was finding potential babysitters, not paying them with a credit card. That wasn't the key thing anymore.

**Ramesh Johari** (00:15:05):
So what's the moral there? The moral is a marketplace business never starts as a marketplace business, because what we think of as a marketplace business is something which at scale is removing the friction of the two sides finding each other. But when you start, you don't have that scale. 

**Ramesh Johari** (00:15:22):
So when you start, you had better be thinking, "What's my value proposition in a world in which I don't have that scaled liquidity on both sides?" And that's bespoke. It means different things. And in the case of oDesk, where I started, that initial thing was that remote work is a weird thing, because basically you've somehow got to know that this person who you're not next to is doing what you're asking them to do. And so the initial value proposition of oDesk was to provide tools for workers to verify they were working the hours and doing the things that they said they were doing, screenshots and various kinds of tracking.

**Ramesh Johari** (00:16:01):
And then in return for that, to be able to provide guarantees on both sides. So now the workers could say, "Hey, I worked what I said so I should get paid." And the employers could say, "I actually see that you worked what you said. And so I feel comfortable that I got what I paid for." That was the initial value proposition, is resolving a trust issue at a remote scale.

**Ramesh Johari** (00:16:21):
At that point, liquidity isn't the game. It's asking, what's a problem that people in this space are facing that I can deal with when I'm not a scaled marketplace? So again, with the cleaning industry, I can comment on that from personal experience, but otherwise, I think that's the way I would think about it. It's almost never about building a marketplace when you're building a marketplace.

**Lenny** (00:16:43):
That's very similar to the advice I always give marketplace founders, is 90% of your problems are going to be non marketplace specific problems. They're going to be the same problems any startup is going to have. How do I grow? It's going to be the same things you need to do.

**Ramesh Johari** (00:16:58):
So one thing you said was, "That's what you tell marketplace founders." I mean, something I've actually pressed hard on in my own way of thinking about this is that maybe we shouldn't talk about the concept of a marketplace founder. Really there's founders. And I think every entrepreneur... I mean one way to think about it, right? It's very hard to think about a human business endeavor that has not been disrupted by the potential for transactions to take place online.

**Ramesh Johari** (00:17:24):
And if that's the case, it means literally any founder is a marketplace founder. It'll be a choice they make after they grow as to whether they want to build a platform. I mean, to take a very hot recent example, no one in their right mind would've thought of OpenAI as a marketplace, but OpenAI is a marketplace now. They may not want to call themselves a marketplace, but they have plugins. The plugins are flooding that platform. People have played with it. It's not an easy thing to find the plugin you need for what you want to do. And that really is a two-sided thing now. There's the plugin creators and there's the users. And they may believe it, they may not believe it, but they are a marketplace. 

**Ramesh Johari** (00:18:04):
So I think a different way to think about it is every founder is a marketplace founder. It's going to be a choice they want to make for themselves of whether they want to become that platform. That's I think one. And two is because that's the case, I think one of the other challenges I find founders struggle with is you don't want to overcommit your future. And what I mean by that is that you're building up trust, and you're building up a sense of what kind of business you are in your early days. If you believe that this kind of platform future awaits you, or market platform future awaits you, there may be choices you're making early on that are tying your hands later. 

**Ramesh Johari** (00:18:41):
A great example of this is when oDesk started, it was because the tools they were providing were for ongoing monitoring of work. It's a very natural thing to say, "We will just take a constant fraction of the dollars that cross the platform." That all works well and good until after you become mature. Some of these relationships between worker and employer last a long time, and most of the value was generated now not so much because they're able to track each other, because the trust is now there, but because they found each other, because they're able to build that relationship through oDesk.

**Ramesh Johari** (00:19:16):
That meant that the longer that goes on, the less value the platform is adding into that relationship, but you're still pulling 10% of all the dollars. So what does that lead to? A word that most marketplace CEOs know well is disintermediation, which is where you were intermediating between the two parties, and now disintermediation means that essentially they're like, "Hey, we don't need you anymore."

**Ramesh Johari** (00:19:39):
My favorite example is we had some stuff delivered from IKEA by a Thumbtack worker once, and my wife is like, "Oh, thanks a lot. You're so reliable." He's like, "Hey, great. Here's my business card. Ever need me again? Just call the number on the back." And that was it. Thumbtack got their one lead gen, and then we didn't need the platform anymore. 

**Ramesh Johari** (00:19:57):
And I think this issue for oDesk meant that after they merged with Elance and became Upwork, they had to think a little bit about, "Okay, what's the monetization strategy we want to use? How do we address this issue that longer term relationships may disintermediate? And does that mean you need a pricing plan that actually takes that into account?" So early commitments in this case to a particular pricing scheme, particular monetization, can really tie your hands as you then realize later you actually are a platform.

**Lenny** (00:20:26):
I really like this message. It makes me think about Substack actually, which started as just a platform for newsletter writers. And then they're like, "How do we make this more valuable?" Because they take a cut of everyone's revenue. And they've actually invested heavily on helping drive demand to writers, for example, me. And at this point, over 80% of my subscribers come from Substack's network. And so they've built this marketplace element exactly as you're describing, where they just found, "Here's a pain point, writers need more subscribers. How do we help them drive subscribers?" So they figured out all these ways to create demand.

**Ramesh Johari** (00:20:58):
That's a really positive story, where they managed to actually expand the frontier of their business by enabling that network. For every one of those, there's unfortunately a lot of negative stories. I mean, one that I think is very painful is how eBay had a lot of challenges with its seller community as it introduced more and more fine-grained sources of fees.

**Ramesh Johari** (00:21:25):
And I think a lot of that, I mean there's many, many treatises at this point written on eBay, and their history, and how they got to the point that they're at. But I think one kind of simple thing I do want people to think about there is that the sellers on eBay who had matured with the platform, who had grown with it, had come to develop certain expectations about what their lives on that platform would look like. And it's understandable, because a lot of these businesses, they had built their livelihood on that platform. That was their entire business. 

**Ramesh Johari** (00:21:56):
So when you now reach in and you say, "I'm going to completely change the rules of the game in which your business model operates," from the perspective of those sellers, that's a breaking of a social contract that's been developed over a very long time. So I love the Substack example, because that's like, "Hey, let me amplify our social contract." But I think for every one of those, there's an eBay warning sign that you can trap yourself a little bit.

**Lenny** (00:22:24):
Just to close a loop on this really, I think important point, a lot of people listening to this are probably, "I'm a marketplace founder. I'm building a marketplace," are going to hear this and be like, "Oh shit, maybe I need to rethink how I think about what I'm doing." What would be your piece of advice to people like that? Is it focus on the friction point and it may be a marketplace solution, it may be a managed marketplace, it may be you own the supply? Is that the advice, or what would your advice be to someone that's like, "I'm building a marketplace"? How should they reframe their thinking?

**Ramesh Johari** (00:22:54):
Let's go back to kind of thinking about this concept of a marketplace of reducing friction. So the litmus test I like to give to someone who claims to me that they're building a marketplace business or they're a marketplace founder is do you have what I would call scaled liquidity on both sides of your platform? What does scaled liquidity mean?

**Ramesh Johari** (00:23:13):
What it means in lay terms... And by the way, I am a data scientist, and I love to think about these quantitatively. But fundamentally, if it doesn't pass the smell test, then you don't have to keep going with the data science. The smell test is scaled liquidity asks, "Do I have a lot of buyers and a lot of sellers on my platform, or do I only have one of these two, or do I have neither?" If you don't have both, you could call yourself whatever you want to call yourself, but at this moment in time, you're not a marketplace. If you have one, congratulations. You've won the game on one side of the market. And now you if you want, you have a choice point. You can lean into growth on the side that you're doing well with. You got a ton of users, ton of buyers? Great. Lean into it, get more buyers. That's one option. There's no shame in not being a marketplace. Scaling a business is scaling a business. If that's the way to do it, do it. 

**Ramesh Johari** (00:24:05):
If you decide you want to be a marketplace, then at that moment when you've got a lot of buyers, but not a lot of sellers, or a lot of sellers, but not a lot of buyers, the choice you're facing is, how do I take advantage of having that one side scaled to attract the other side? We can talk more about that, but there's a lot of ways to kind of hack that, to think about how... So to take Uber as an example, they would walk into a new city, and one thing that Uber was commonly known for doing this was back in the days when really Uber Black was the only service is they just hand out coupons for free rides at events, parties, things like that, to take people home. And that was a way of saying, "Hey, we're subsidizing the drivers in the city. That's our scaled side. Now we're going to use that subsidized driver base to attract riders." 

**Ramesh Johari** (00:24:49):
So that's like, how do you get that flywheel going? And again, many people have written about how to take liquidity, scaled liquidity on one side, and use it to attract the other side.

**Ramesh Johari** (00:24:59):
If you don't have either side, don't worry about it. Don't worry about being a marketplace. Worry about scaling one side. And in that world, it opens your visibility up completely into the advice of many, many startup advisors. People who have advice not so much about scaling a marketplace, but about scaling a startup. 

**Ramesh Johari** (00:25:22):
And I want to say you got to let the ego go at that point. It's fine to articulate to people that your vision of the future is to be a platform or marketplace. As I said, virtually every business is going to have that option at some point in the modern tech enabled economy anyway. So you're not saying something people don't already know when you tell an advisor or an investor that. But I do think you need to be humble enough at the starting point to recognize that there's no sense in talking about a marketplace if you don't have scaling on either side yet.

**Lenny** (00:25:52):
And then it becomes a question of a business model, unit economics of, can I build say a DoorDash, not as a marketplace? Can I just hire a bunch of people delivering? Is this even possible in a different route?

**Ramesh Johari** (00:26:06):
Yeah, that's a great point. One of the things I think that's useful for people to think about here that you're raising, at some level, it's kind of tied up I think with that question of whether I should have employees, or contract or freelance work on one side of the marketplace.

**Ramesh Johari** (00:26:23):
And that's actually a pretty old question in economics. The way we talk about it often is a distinction between a market or a firm. And one of the interesting puzzles in economics, Ronald Coase is a famous economist who thought about this is, "Well, if markets are so efficient, why do we need firms? If markets are efficient at matching labor up with things that need to get done, why would you ever need a firm?" And that's one of the earliest recognitions that transaction costs are a real thing. And that's one of the things that firms are solving for.

**Ramesh Johari** (00:26:52):
And I love what you're saying because what it's recognizing is, "Hey, for your frictions, the best resolution to that might not be to have a marketplace. It might actually be to have very tightly controlled labor." A good example of this actually, Stitch Fix, I think one of the things that's cool about Stitch Fix is the experience that people had early on with stylists at Stitch Fix.

**Lenny** (00:27:13):
I'm a happy customer, by the way. I think [inaudible 00:27:16].

**Ramesh Johari** (00:27:15):
Yeah, I think one of the great things about that experience is it felt magical to have someone who kind of got to know you. But that depends on a relationship that doesn't feel like a freelance relationship every single time you're going back. 

**Ramesh Johari** (00:27:31):
Another example that I would pull out is pretty much any healthcare platform. So for example, for physical therapy, it'd be weird if every time you went to a physical therapy platform, you just got randomly matched to whoever happened to be available then. So I think there's some curation that needs to happen of that relationship. Does that mean full employee? Maybe not. But it does mean you have to think a little bit about exactly as you brought up, what's the nature of curation of your labor pool?

**Lenny** (00:28:01):
Awesome. Okay, so let's come back to a point you made early on around the importance of data and the power of data in actually making your marketplace a lot more efficient and work more effectively. So say that you have a data scientist, or a data analyst, or someone that is helping you optimize your marketplace. Where do you often find the biggest leverage and opportunity for a data person to help you make your marketplace more effective?

**Ramesh Johari** (00:28:25):
This is an incredible question, right? Because I think I could answer it a number of different ways. One question I think that's kind of basic, it's just what should this person be doing? And I'm going to actually evade that question a little bit. I'm going to give some examples of what they could do, but I feel like that's one where context matters a lot. 

**Ramesh Johari** (00:28:45):
So as an example, at ride-sharing or grocery delivery marketplaces, pricing means actually, what do you pay for that ride? Or what do you pay for that delivery? So that's actually the price that's set at the moment you actually place the order. Just to be clear, by the way, if you order from DoorDash, I don't mean the price of the restaurant. I mean, what do you pay to DoorDash, right? What's that fee? Is there a surcharge, because it's surge or whatever? Okay, so that's a thing, right?

**Ramesh Johari** (00:29:11):
But that's not really a thing in a marketplace where the platform's not setting the prices. So in Airbnb, really hosts are the ones who are in charge of setting prices for their listings. 

**Ramesh Johari** (00:29:21):
One answer to your question is, if I'm in a place like Uber, Lyft, DoorDash, I want to have good data scientists thinking about pricing. Because that seems like something which should be heavily dependent on the instantaneous state of supply and demand in my marketplace. So that's one type of answer is, well do I need data scientists working on pricing? Do I need data scientists working on search? Why search? Because maybe in my marketplace, finding the needle in the haystack is really the biggest, highest friction problem. So maybe I need a lot more data scientists saying about search. 

**Ramesh Johari** (00:29:51):
That's what I'm going to evade. Okay? I'm going to focus more on something completely different, which is just a more philosophical point about what a data scientist does.

**Ramesh Johari** (00:30:00):
So in a lot of companies today, especially, a main thing that you ask data scientists to do is build what's called a machine learning model. Now, machine learning model even already can mean a lot of things to a lot of different people. I'm going to focus on something very concrete. You're asking them to predict something. 

**Ramesh Johari** (00:30:16):
When I started at oDesk, this is in 2012, one of the funny things about me is I started at oDesk because I'd had a academic career up to that point in about 10 years, just building mathematical models of things. I was not really very much of a data scientist up to that point. What I expected would happen is I'd go to industry and I'd be told, "Hey, look how important data is." And definitely my eyes were opened.

**Ramesh Johari** (00:30:40):
And one of the first things I was asked to think about is, well, okay, someone comes to oDesk, post a job, workers apply to that job. Predict which of these workers is most likely to be hired on that job. That was the narrow question. And so why is that a good question? Because we have a whole awesome set of tools now to solve that kind of a problem exactly. How do we do it? Take a lot of past data of past jobs, past applicants, past hires that were made. Then we ask these crazy big black box algorithms, "All right, do the best job you can predicting who's going to get hired on this job with these applicants." And we use that data to test how well these algorithms are doing. That's machine learning in 30 seconds basically. So we're working on this problem. Great. 

**Ramesh Johari** (00:31:25):
And then I kind of poked my head up a little bit. I go, "Why are we working? What is this going to do?" Well, it turns out the reason these kinds of things are important is they get used to make decisions. So what kind of decision do you make with that? Well, one thing you do is you say, "Well, if I could predict who's most likely to be hired, then I should just rank people based on that, and that would be a good matching algorithm. That'd be a good way to sort and triage applicants for employers when they're screening, trying to figure out who to interview, who to hire." Great. Sounds pretty natural.

**Ramesh Johari** (00:31:58):
And then you think about it a little bit, and this to me, it's such a passion project to get people to understand that this is why the humans in the loop that help us in businesses and making sense of data are so critical, is the following problem.

**Ramesh Johari** (00:32:15):
If you think about it a little bit, you realize what that algorithm is doing, it's really just picking up on patterns in past data. So yeah, that's great. This person is likely to be hired. But what we really want is something different. We're trying to add value by ranking people. 

**Ramesh Johari** (00:32:32):
So to give another example that's similar to this, when you're a marketing manager, and you've got a cracked data science team that's built a long-term value, lifetime value model for you, you're not going to get in trouble with anyone if you send your highest value promotions to the highest LTV customers, right? Who's going to blame you for that? Because you're like, "This person is worth a lot, and I sent them this promotion." Say that in your monthly report, nobody's going to give you a hard time.

**Ramesh Johari** (00:32:59):
But the problem with that way of thinking is actually predicting what their lifetime value is isn't really the question. The question is, how much more are they going to spend on my platform because I sent them that promotion?

**Ramesh Johari** (00:33:11):
That's a very different thing. It's a differential rather than an absolute. I'm not interested in their absolute LTV. I'm absolutely interested in the difference in their LTV because I sent them this promotion.

**Ramesh Johari** (00:33:21):
And when you look at it that way, what you realize can happen is picking up on patterns because of good predictions, right? Finding the people that have high LTV because you predicted that is very different than making good decisions, which is about saying the difference in their LTV is going to be higher because I sent them this promotion. 

**Ramesh Johari** (00:33:39):
I love this example, because I taught a class here at Stanford. It was like an executive education class. We had all the executives from a company in the room, and one of the people in the room was the chief marketing officer. And I just asked this question like, "Hey, okay, let's say you got this great LTV model, who would you send the promotions to?" It's like, "Definitely the highest LTV people," and there's a CMO in the room. And so it's a little bit of a delicate situation, like pushing back a little bit, right? 

**Ramesh Johari** (00:34:03):
I do want to be clear, there's reputational reasons you might do that anyway. I mean, I'm not trying to get away from that. But just to make the narrow point that predicting is about picking up patterns, but making decisions, it's about thinking about these differences.

**Ramesh Johari** (00:34:15):
Now, why is that important? Because we learn in high school, correlation is not causation. That's a phrase everybody has heard all over the place. What does that have to do with this? Well, when we teach people to build machine learning models, we're asking them to make predictions, we're asking them to find correlations. Prediction is inherently about correlation. But when we ask people to make decisions, we're asking them to think about causation. "If I make this decision, then will I actually increase the net value of my business? Will I have by sending the promotion, increased the likelihood that this person is going to spend more on my platform?"

**Ramesh Johari** (00:34:50):
And so the first and most important thing that I feel very strongly about in what would I get a data scientist to do is no matter who they are, even if it was that person in the weeds thinking about building this prediction model for hiring, get them to be thinking in the back of their mind always that their goal is to help the business make decisions. And that the distinction between causation and correlation matters a lot. We can talk a lot more about how does that play out in terms of their day-to-day work. But at least at a starting point, you have to recognize that the first step is always recognition that prediction isn't the same thing as making decisions.

**Lenny** (00:35:27):
So the takeaway here is as a data team and as a data scientist on the team, is help the business make predictions. Are there a couple more examples you could share of just what is an example of a decision that you think they often should be making and using data to help them with?

**Ramesh Johari** (00:35:41):
Maybe the right frame of reference for this, and the word that an academic would use is causal inference. So what we're changing from is machine learning to causal inference. So let's think that through in a couple of different use cases that are related to that marketplace data science flywheel I talked about earlier. Finding matches, making matches, and then learning about matches.

**Ramesh Johari** (00:36:04):
So finding matches, like you said, a core part of that is search and recommendation, and each of those relies on rankings. So I want to be able to rank order. Let's say I go do a search on Airbnb. On a rank order, the different listings in the marketplace, right? At some level, it's true that what I'm trying to do there is I'm trying to just predict, what are you going to like the most? 

**Ramesh Johari** (00:36:24):
But I think there's an important piece of that also, which is that I want to think a little bit about the distinction between two different ranking algorithms. That's the real decision that's being made. 

**Ramesh Johari** (00:36:35):
And when I think about the distinction between two different ranking algorithms, I don't want to be only comparing them in terms of how well they recreate the choices people made in the past. The way I'm really going to evaluate those is in my market, does one of those lead to better matches or more matches than the other one, right?

**Ramesh Johari** (00:36:54):
So Airbnb as a business, what are the most obvious core metrics? It's bookings and revenue. So you're going to want to ask a very basic question. If I use the ranking algorithm Lenny just developed last night versus the ranking algorithm Ramesh developed last week, does Lenny's ranking algorithm lead to more bookings than Ramesh's ranking algorithm?

**Ramesh Johari** (00:37:11):
And it's so important to put it that way starkly, because that's so different a question than, does Lenny's ranking algorithm do a better job of predicting over the last two years what bookings people made than Ramesh's ranking algorithm? So that's I think at that level.

**Ramesh Johari** (00:37:24):
Then we talked a little bit about ranking at the point of making a match, and I think that's where this hiring issue popped up. Because in the end, while we might have these predictive algorithms to rank who you're going to hire, that's not the important question.

**Ramesh Johari** (00:37:38):
Interestingly, the important question is actually to evaluate the quality of the match that's made. And we would do that through the next step of that flywheel. We'd ask ourselves, what ratings did they give back to that freelancer? Do they hire that freelancer again? So you're comparing two different algorithms not through their ability to recreate the past, but their ability to make matches in the future that can be objectively evaluated to say, "Hey, I increased the value of the business. I actually made better matches this way." And then rating systems, I think we could talk quite a bit about a similar phenomenon there too.

**Lenny** (00:38:12):
**Ramesh Johari** (00:40:21):
Yeah. First of all, I'm really glad you broached the E word. I was dancing around it, and I'm really glad that we talked about experiments. Because yeah, one of the big lessons of this recent conversation we've been having is just, how could you possibly know that difference without doing something like experimenting? 

**Ramesh Johari** (00:40:38):
So yeah, I am a big believer in experiments. I mean, I'll just lay those cards on the table. I love working with businesses that think experiments are important to helping make good decisions.

**Ramesh Johari** (00:40:49):
Now all that said, I am also someone who feels pretty strongly about this exact issue that you're raising. It's just, you can't experiment your way out of everything. 

**Ramesh Johari** (00:40:57):
And one frame I like to give people is that although you might say you're an experiment driven business, some businesses will proclaim, "We literally test everything." What that kind of leaves aside a little bit is there's a lot of degrees of freedom in what it means to test everything.

**Ramesh Johari** (00:41:15):
Because ultimately, what's getting built and tested are choices that are made through the organizational structure, the data scientists, the PMs, the engineers, everybody's on... Before we're running experiments, we're actually thinking about even what's worth experimenting, what designs are we coming with? So that's one.

**Ramesh Johari** (00:41:33):
And the other big one is, how long do we run these experiments? Okay, that's a big choice. And what I generally believe, and I think there's a paper we can link to later that I'll point your readers to as well that... Not my paper, from some folks at Microsoft.

**Ramesh Johari** (00:41:49):
What I generally believe is we're risk averse on both these two dimensions, that what people decide to test in a world that has promoted experimentation for everything tends to be more incremental by design. Okay? And we'll come back to that actually, answer the because in a second. So that's one. And two is people tend to run experiments for a long time, and probably longer than they should.

**Ramesh Johari** (00:42:14):
Now, what do I mean by these two things? So what's interesting to me about this dynamic is experiments don't live in a vacuum. Companies have incentives. And in companies that really go all in on experimentation, one of the things that gets wrapped up in that is the incentives around experiments. Because if you go all in on experiments, a common thing you'll see is data scientists get judged based on how many wins they had that quarter. How do you get more wins? 

**Ramesh Johari** (00:42:43):
Well, it's easier to get wins when you're being incremental. And because it's important to have wins, you have to run them long enough to demonstrate that they're really wins. You're less willing to cut something off in exchange for trying something riskier.

**Ramesh Johari** (00:42:56):
So the big lesson of this Microsoft paper, it's called A/B Testing with what's called Fat Tails, which in lay terms just means you're running a business where there's potentially big opportunities out there if you look at the effects of the experiments that you run. There's a couple of lessons there about both trying a lot more stuff that's not all risk averse, and not necessarily running everything for so long. So really getting velocity up.

**Ramesh Johari** (00:43:20):
So you could see that there's a big incentive problem there, because the culture that says it's okay to fail big actually requires changing the terminology of wins. This is one of the things I hate most in A/B testing, I have to say. I get where it comes from. Experimentation was never historically in science about winners and losers. It'd be weird if it Ronald Fisher who's kind of the father of experimentation with his agriculture experiments talked about winners. I don't think that's necessarily how he talked about things. Experimentation is always very hypothesis driven. It's about, what are you learning?

**Ramesh Johari** (00:43:53):
And that's really an important distinction because what it means is if I go with something big, risky, and it, "fails," meaning that doesn't win. Nevertheless, if I was being rigorous about what hypotheses that's testing about my business, I'm potentially learning a lot.

**Ramesh Johari** (00:44:11):
So a great example of this kind of thing is that there's an important feature of marketplaces is badging. So sometimes, it's really important to have badges on your top-rated profiles or whatever, when people are searching. 

**Ramesh Johari** (00:44:26):
And without going too far into the details, a common finding with badges is that badges you think are going to be great actually turn out to be terrible. And one reason they're terrible is they focus too much attention on the badged folks, and pull too much attention away from the unbadged folks.

**Ramesh Johari** (00:44:44):
And if we judge that only in terms of winners and losers, you throw the baby out with the bath water, you're like, "Well that badging idea was terrible. So ditch that, no badges."

**Ramesh Johari** (00:44:51):
But that's not what it's telling you. It's teaching you something about how inventory is being reallocated, how attention's being redirected through the badges. And you really want to think not in terms of winning and losing, but learning.

**Ramesh Johari** (00:45:05):
So learning is a win. And I feel that that's a cultural thing fundamentally. It's very hard to somehow attach dollars and cents at the top to data scientists running experiments that fail, but learn. And ultimately, I think getting into that space where you experiment more, meaning you don't run all your experiments for quite as long and you accept the willingness to try experiments that are into the tails where you might fail bigger is a cultural thing. It's about saying that, "We're allowing that to be part of our social contract with our data scientists," or actually our employee contract with our data scientists, that not everything is just about how many launches you had and how many wins there were.

**Ramesh Johari** (00:45:45):
It's okay to say, "That's how I want to use experimentation," but if you're going to use it that way, then I would say don't be a, "We experiment everything," business. Because then I think you need some other way to deal with these big changes that teach the whole company a lot, but maybe can't fall into the incentives you've created for your data scientists.

**Lenny** (00:46:04):
This badging example is, I don't know if you're referring to the Airbnb example, but I actually led the launch of Superhost at Airbnb, which is the ultimate badge on Airbnb. And there was a lot of concern from the data team that it would destroy the marketplace, because they've built, as you've described, this very well-crafted ranking algorithm, with just a prediction of exactly as you described, which listings that guest is most likely to book and be successful booking. And then we're about to throw a badge on random listings in the results. And so this one data scientist on our team's like, "No, we can't do this. This is insane. We're going to destroy it all."

**Lenny** (00:46:42):
And we still went ahead with it. We ran an experiment showing the badge to some people and some not, actually, it was no impact at all. Which Superhost itself had no impact at all on the business as far as we could tell initially, which is also bittersweet because it felt like, "Why did we even work on this thing?" There was a slight benefit where a host felt better, they felt more satisfied with being a host, but I went exactly through what you described, so that's pretty funny.

**Ramesh Johari** (00:47:11):
Without necessarily going into the weeds on the data science of Superhost, I think there's a lot wrapped up in what you said. I guess another thing I'll say is that I'm a big believer that you don't throw your understanding of the business out the window when you process experiment results. And it's partly, I guess what I mean by this is data science is really about accumulation of evidence. It's never about one finding in isolation. And so another kind of trap I think is to sometimes say, "Well, I hit stat sig on my A/B test, green light. It's all go."

**Ramesh Johari** (00:47:47):
And I think you had Ronny Kohavi on your show, and he made a similar point that there are different levels of evidence, and just having an outlier A/B test that goes against everything you believe about your business doesn't mean that you somehow have controverted all your knowledge. And I think that's one side of it.

**Ramesh Johari** (00:48:05):
The other thing is you can't always measure everything that's important that's needed to really develop a full sense. So with Superhost, one of the things that's hard to measure is the long-term impact of Superhost. Because in the short run, Superhost causes a rebalancing of inventory. There's going to be winners and losers. Part of Superhost is actually about retaining hosts that get the badge over a longer period of time. Recognizing that hypothesis actually says something about maybe how long the experiment needs to be run or what kinds of data analyses need to be done. 

**Ramesh Johari** (00:48:38):
And in the end, if you can't do that, you can't run it long enough, or you can't do that data analysis due to sparsity of data or lack of data to address the question, it matters what you bring to the table. What are your beliefs about that?

**Ramesh Johari** (00:48:51):
So what I like to tell people to do there is I like to push people to be what's called quantified rather than data-driven, which is, okay fine, some things we can't measure. But maybe you've got a leadership team with different beliefs about what they think the retention value of Superhost is going to be, and they might be all over the place.

**Ramesh Johari** (00:49:10):
You can process your experiment results in the context of these competing beliefs. It's almost like a prediction market kind of a thing. And start asking, "Well okay, if this is what we believe about our business, this is what the data is telling us out of the experiment, let's put those two together and ask, is this enough for us to make the bet that we're still going to go with it?" Even though maybe that short-term test you ran was flat.

**Lenny** (00:49:31):
That's actually exactly how I think of Superhost looking back. It was a great idea. I'm really happy. I can't even imagine Airbnb without that, even though there's no evidence, at least initially, that it made any impact. I'm guessing they looked at it again, and maybe there's something that came out of it. But even if it had no impact, it just feels like it made the marketplace better. And that was a big learning for me. It doesn't need to always drive a metric that you can measure. There's just like, this is the way it should work.

**Ramesh Johari** (00:49:59):
So one of the reasons the thing you said happens is because marketplaces are a little bit like a game of whac-a-mole, okay? And what I mean by that is, so narrowly in the context of Superhost, because you're redirecting attention to some hosts at the expense of... It's not even obvious if bookings can really go up. Maybe you get lucky and maybe you get a bunch more bookings. One reason you probably wouldn't expect that in the first place is there's only a limited number of Superhosts. How many more bookings are they going to be absorbing because of all this extra attention? And you're taking attention away from other people. Without doing any data analysis, my prior would've been that booking should probably go down.

**Ramesh Johari** (00:50:33):
And one example that I came across with one of the companies I worked with that I love is we were working together over a period of time, and in a month, we looked at some of the data and it suggested that our new supply side was having a pretty bad experience. Say, "We got to do something about this."

**Ramesh Johari** (00:50:55):
So what we decided to do is build some custom bespoke features that were really going to direct them to more experienced folks on the other side of the market. Good. And then lo and behold, pretty soon those metrics start to look better. But then we're looking at it, we're like, "Wait a second. Now the existing folks on the other side are having a worse experience."

**Ramesh Johari** (00:51:12):
So you kind of whiplash around. You're like, "Wait a second, we better do something about that." So we take them, we try to match them up with the more experienced folks. And now suddenly a month after that you're like, "Wait a second." And your metrics just keep moving around.

**Ramesh Johari** (00:51:24):
And that's because the whac-a-mole game here is ultimately, a lot of marketplace management is moving attention and inventory around. Sometimes you get lucky and you really expand the pie for everybody. But I think Servaes Tholen, who was CFO at Upwork that I got to know there and then went to Thumbtack later, he had this line when he came to visit our class that I love, which is, "You have to recognize when you run marketplaces that many of the changes that are most consequential create winners and losers. And rolling with those changes is about recognizing whether the winners you've created are more important to your business view than the losers you've created in the process." And it's a hard reality, because nobody likes to articulate the idea that a feature change is hurting some of the people in your marketplace. But because of this fundamental constraint baked into how marketplaces work, many of the things that we would choose to do and the reallocation they create can't necessarily create observed high expanding wins in the short run. You're often making bets that that's where you're headed, partly through the reallocation that you're doing right now.

**Ramesh Johari** (00:52:30):
And so I think that's interesting about Superhost to me is that partly points to thinking about, what's the objective you would've defined, the metric you would've defined in the short run that captures this idea of a trade-off?

**Lenny** (00:52:42):
That's a great way to think about it. I wanted to come back to this idea you're sharing of maybe you should run experiments more quickly, not wait for stat sig, have a culture of learning versus impact. In practice, it's very difficult, because people are measured by impact. There's performance reviews, there's promotions, there's how much impact did this team drive, are going to look at their experiment results? You've worked with a lot of marketplace companies, a lot of different companies. Is there anything you've seen about something you could do to help the company shift and actually work this way, while also recognizing success, and who's doing great, who's not, which team's driving impact, who's not?

**Ramesh Johari** (00:53:22):
Interestingly, it's actually an active area of research for me now. What I mean by active area of research is I care a lot about the incentives that we create for data science through how we set up reward mechanisms. So there's a couple things I think that could be helpful, that are maybe there may be a little bit less about... Maybe I'm not going to directly answer the question you ask, because I think that's a hard one, right? I think I recognize that measurement on impact is critical. Well, let me answer that actually from the most obvious way first. I think there's a cultural issue here that's really critical. 

**Ramesh Johari** (00:53:56):
One of the things I often find is that my PhD students, our PhD students here often go off and get great data scientist jobs. And in one sense, they're doing amazing stuff. They apply really technically sophisticated methods. But when I look at the problems they're working on, they're often more at the margins of the business than they should be. 

**Ramesh Johari** (00:54:13):
And it's a cultural thing. It's basically because if you're measured narrowly on impact and that's all anyone sees around you, then it's very hard to engage with the creative aspect of business change and the strategic aspects of business change. 

**Ramesh Johari** (00:54:26):
So the cultural aspect there is, I think it's partly incumbent on the leaders to expect something more of their data scientists. And what I mean by expect more is that you expect them to do more than deliver narrowly defined, statistically rigorous results to you in their reports. You're actually expecting them to talk also about what they're learning about the business in the process. So where that's headed is there's this concept of being hypothesis driven, which is like the technical phrase. What does that mean? Again, in a more lay sense.

**Ramesh Johari** (00:54:58):
What it means is tests aren't going to be defined only in terms of winners and losers, that each test should also say something about what will we learn about a business flow, a funnel, preferences of the guests, preferences of the hosts. What will we learn about their demand elasticity if we're changing prices around? These kinds of things. So it's possible to articulate in an experiment doc, a launch doc, what are the hypotheses that are being tested? So that's one thing I would say is just culturally, setting the norms that learning is part of the discourse, and it's expected actually I think is important.

**Ramesh Johari** (00:55:33):
But the other thing I would say that's maybe a little bit more about programmatically, what could a data science platform team do? A funny thing about experiments is that we throw past learning away effectively. And this is just an artifact of how we analyze experiments, that the statistical methods used typically, P-values, confidence intervals, these fall into a branch of statistics known as frequentist statistics. And the idea behind frequentist statistics without being overly technical is just I let the data speak for itself. There's no beliefs brought to the table about where that data came from.

**Ramesh Johari** (00:56:10):
But if you think about this in a company, in A/B testing a company, it's a weird thing, right? Because I might've run 1,000 A/B tests in the past on this exact same button, or call to action, or color, and now I am going to completely ignore that and focus only on this. 

**Ramesh Johari** (00:56:23):
So there's ways to take the past into account, to build what's called a prior belief before I run an experiment, and now take the data from the experiment, connect it with the prior, to come up with a conclusion of, "Okay, in light of the past plus this experiment, what's it telling me about the future?" And that falls broadly under the category of what's called Bayesian A/B testing. 

**Ramesh Johari** (00:56:46):
So that's one of the things I think can help culturally, weirdly. It's a super technical thing, but I think it can help culturally, because what it's doing is it's now rewarding people for contributing information to that prior. And I think it then becomes possible to say, "Your experiment that failed actually moved our prior." And that's an important thing, because by doing so, you're now altering how we're going to think about this flow or this pricing plan in all future experiments.

**Ramesh Johari** (00:57:14):
So there's an information positive externality, positive network effect that's generated for the rest of your business if I can somehow encode what you learned into the analysis of future experiments. So this is one thing. There's strong connection between the culture and incentives of A/B testing and the ability to actually incorporate past learning into these prior beliefs.

**Lenny** (00:57:35):
I love that you're doing research in this area. We should bring you back when you've completed it and have the ultimate answer for everyone to change how they operate. 

**Ramesh Johari** (00:57:42):
Yeah, one of the great things about professors is we never complete anything and never have ultimate answers.

**Lenny** (00:57:47):
Oh boy.

**Ramesh Johari** (00:57:47):
Yeah, I'll do my best though.

**Lenny** (00:57:50):
This touches on a really interesting concept that you shared with me around how, just learning isn't free. People think that they could just learn a bunch of stuff and there's not a cost to it. I'd love for you to just chat a bit about what that means.

**Ramesh Johari** (00:58:02):
Let me start with an anecdote, that I just absolutely love this anecdote. I use it every year in class. So I was talking to a real estate platform, and they had a marketing data science manager who's basically responsible, as many marketing managers are, for allocation of ad spend across different channels.

**Ramesh Johari** (00:58:22):
And what they discovered had happened at the end of the year is in one hand, the team had done great, but the manager had held out some subset of arriving visitors, not showing them any of the innovations they were making.

**Lenny** (00:58:39):
Like a holdout group? 

**Ramesh Johari** (00:58:40):
Yeah, exactly. What's called a holdout group in experimentation. And one thing about this holdout is it wasn't authorized. That's not the way things are supposed to work. They've got their ad spend, allocate out your ad spend, great. So at the end of the year, they looked at the hole out and they're like, "Wow, that cost us a couple million dollars, something in that range, and it's not a trivial amount of money. What's the deal? What were you thinking?" Basically. And of course the answer was, "Well, I get that I cost you that much, but number one, now you know what my team's worth. And number two, you would never have had that answer unless I'd done that on my own."

**Ramesh Johari** (00:59:16):
Now, why is that so powerful? I think what I find so interesting about experiments is that when you don't know something, it seems not even a question that you would allocate some of your samples to all options, right? Treatment and control. I have two different ways of doing something. I don't know which one's better, so of course I'll give some samples to each. After the fact you're like, "Treatment was better. What the heck were we thinking? Why'd we give all those samples to control? That doesn't make any sense now." There's this great Seinfeld clip where he mentions getting a bill at the end of a large luxurious meal, and people stare at the bill like, "We're not hungry now. Why'd we order all this food?" So it's the same thing. I mean, you know treatment's better now. Why'd you waste all those samples on control?

**Ramesh Johari** (00:59:59):
And I think that is such a powerful observation that you have to put yourself in the frame of reference of when you didn't have the answer. And at that moment, what you're essentially saying to yourself is that it's worth paying to learn the answer. I think it sounds obvious the way we're saying it now, or this anecdote of the marketing manager and the holdout sounds obvious. What's culturally not baked in I think is that idea. And the reason I say it's not culturally baked in, by the way, is because of the language of winners and losers. Because if we use that language, we're implicitly saying is that we wasted time when we ran an A/B test on loser. If I reward you for shipping winners, then what I'm really telling you is all the time that you spent testing out failures was wasted time.

**Ramesh Johari** (01:00:46):
And I think, of course, you don't want to keep data scientists around who regularly are just generating failures. That's not my point. 

**Ramesh Johari** (01:00:54):
But my point is there's a disconnect there. On one hand, we can all look at the story of this marketing manager and chuckle at it. And yet, every day we're instantiating language and processes that are reinforcing that same theme, which is essentially trying to say to you, "If you're wasting samples on things that don't ultimately end up being a winner, then the act of doing so is a failure."

**Ramesh Johari** (01:01:16):
So I really feel that that idea that you have to pay to learn, again, it's a cultural thing, but it's also an education issue for businesses are populated by people of all stripes. Not everybody comes from a data science or experimentation background. And this idea that learning is costly is not natural, actually. It's not natural as a matter of human nature. It's certainly not natural as a matter of running a business.

**Lenny** (01:01:41):
I love that example of the real estate platform where it's very viscerally, clearly cost. They lost because they didn't roll out experiments to this group for a long time. Such a good example of this idea in action. 

**Lenny** (01:01:55):
You mentioned star ratings. I know you spent a lot of time on designing rating systems. Sorry, I didn't mean to imply star ratings. That's just one implementation. Rating systems in general.

**Lenny** (01:02:05):
So maybe just to keep it focused, say a marketplace founder is trying to decide and design how they do ratings, and reviews, and things like that. What's a couple pieces of advice you'd give them for how to do this correctly? And is there a model marketplace you'd point them to like, "These guys really do it really well"? And I know it's super specific based on the marketplace, but is there one just like, "They really nailed it"?

**Ramesh Johari** (01:02:30):
Oh man, that's a tough one. I think I'll answer the second part first. I don't feel like anyone's really nailed this. Yeah, I think there's a lot of innovation that's happened, but I think fundamentally, we're still playing with the same kind of tools that we had when eBay and Amazon first started thinking about how to do rating systems ages ago. 

**Ramesh Johari** (01:02:48):
And part of the reason we haven't nailed it is because there's a lot of dynamics in play that lead to what's called rating inflation, where if you look at ratings over time in the marketplace... One of my colleagues, John Horton, who was a professor at MIT and has worked very closely with Upwork, we worked together when I was at oDesk, he was the staff economist there. He's written a couple of really nice papers with this empirical phenomenon that over time, you see the median rating inflating, let's say on marketplaces like oDesk, like Uber, like any of these.

**Ramesh Johari** (01:03:16):
And there's a lot of reasons for this, but one of them is just that there's a reciprocity issue, which is it's effectively, from your perspective, it's kind of costless if someone says to you, "Hey, please leave me a nice rating." And if you're seeing them or you're interacting with them, most people don't want to be mean. So that happens. 

**Ramesh Johari** (01:03:35):
But there's another aspect of it, which is norming. As the ratings in the marketplace go up, they get normed, so that now you're in a condition, you're like, "A four star rating. I'm really screwing this person over." Whereas maybe when the marketplace started, you didn't think that. 

**Ramesh Johari** (01:03:47):
So definitely one thing that we worked on in our research was to think about renorming, the meaning of some of these labels. And renorming could mean something like rather than the star ratings just being poor to excellent, the top rating has actually exceeded expectations. You could go one step further and you could say, "How did this compare to this experience you had in the past that you rated really highly?" And Airbnb had something like this in place, where they would actually ask you to compare, or ask you questions about expectations.

**Ramesh Johari** (01:04:19):
I find that that's really valuable because it's easier for people to say, "That was good but didn't exceed my expectations. That was good, but definitely not better than this amazing stay I had two months ago," than it is to say, "Well, I'm going to ding this person and give them four stars." So that's one issue.

**Ramesh Johari** (01:04:36):
And I think another thing I want to point out for any marketplace founder is that something you want to be really careful about is the concept of averaging and whether are the implications of averaging. And that's because a default for many marketplaces is to just average the ratings that people get. It feels very natural, right? Lenny's got five ratings, let me average them.

**Ramesh Johari** (01:04:57):
And that actually has some pretty important distributional consequences for the marketplace. Distributional in the sense of who wins, who loses. And that's because if you're averaging and you're really established on a platform, think of a restaurant on Yelp with 10,000 reviews, it's irrelevant what the next review is. It doesn't matter. Nothing's moving it at that point.

**Ramesh Johari** (01:05:17):
If you're new and you break into that market, and your first review is negative, you might be completely screwed. In fact, there's some early work on eBay that showed that if your first rating's negative, that could actually immediately cause an 8% hit on your immediate expected revenue, say nothing of long-term consequences. Subsequent work has found that that's a significant indicator of potential exit from the platform, just because now it's very hard to find work. And some platforms do things like maybe they won't show your ratings until you've accumulated a few.

**Ramesh Johari** (01:05:46):
But in the end, this kind of distributional fairness aspect of averaging is pretty significant. And one of the recent papers that we've written is trying to get platforms to think a little bit about that. There's ways to address that interestingly, through the same concept of a prior. And the prior basically says hey, if someone comes into the marketplace and instead of averaging them, I average them together with a prior belief, then maybe what that prior belief does, it says, "Yeah, you got one negative rating, but maybe you got a little bit unlucky," and maybe my prior belief is something which actually pulls your rating up a little bit and allows me to still have you alongside others in the marketplace to give you a chance at getting work, getting rides, etc.

**Ramesh Johari** (01:06:28):
So I believe pretty strongly in this kind of distributional fairness element of designing rating systems. I think it's been understudied. And I'll say in general actually, I think rating systems are understudied, which to me is astonishing. Because the biggest change from those Agoras and Trajan's Market elements of those kinds of markets, to me the biggest change is that we get to see what happened with our matches.

**Ramesh Johari** (01:06:52):
So as a data scientist working on marketplaces, I feel like it's incredible that more of us don't spend our time thinking about what we're learning from the matches, and what these rating systems are telling us, and what the impact of that is on who wins and who loses in these markets, kind of thinking about the social implications of these things. So that's something I'm pretty passionate about.

**Lenny** (01:07:14):
I also led the review system flows for a while at Airbnb, and one of the things I'm most proud of is launching what we call double-blind reviews where you don't see the other person's review until you leave your review. The intention was to create more honesty and more accurate reviews.

**Lenny** (01:07:32):
It turned out the biggest impact was review rate went up, because people get this email, "Ramesh left you a review. If you want to see it, should leave a review." And that really increased review rate, which gave us more data. And it was a really fun experiment to work on. 

**Ramesh Johari** (01:07:44):
There's a great concept in the literature on rating systems called the sound of silence, which is this idea that there's a lot of information in ratings that are not left. So Steve Tadelis, who's a professor at Berkeley, he had a really nice paper with some folks at eBay talking about what they called effective percent positive, where rather than normalizing just by the ratings, they normalized by including ratings that weren't left. And what you found was this was much more predictive of downstream performance of a seller. So there's a lot of information in that lack of a response. So it's cool that you're able to get more of that out.

**Lenny** (01:08:23):
So much easier just to not leave a review than leave a bad review. Right? The downside to you is just much better. Oh man, marketplaces are so fascinating. I could see why a founder would want to be a marketplace founder, because it's just such an interesting space. And hearing your feedback of, no, you're not a marketplace founder. Let's think about the problem you're solving. And it might be a marketplace, might change people's minds. Also, I feel like there's a podcast episode in every topic we touched on. I know we just scratched the surface a lot of things.

**Lenny** (01:08:52):
I know you got to run. Before we get to our lightning round, is there anything else you wanted to highlight, touch on, leave people with that are maybe working on marketplaces, thinking about a marketplace?

**Ramesh Johari** (01:09:01):
I think one of the high level points I would make, and like you said, there's an entire podcast in this topic, is that I think people want to imagine LMs and AI driven data science automating out large parts of what it means to do data science in industry. And I think that's probably the wrong perspective. In some mundane sense, that's true. It's easier for me to code than it used to be before. It's easier for me to develop visualizations than it used to be. I can make dashboards faster. So programmatically, I think it's true in some basic sense.

**Ramesh Johari** (01:09:35):
But what I believe pretty strongly, and I teach data science here, and my students are asked to use LMs and generative AI on a weekly basis on all their assignments. So I've got an up close and personal beat on this, but I believe very strongly actually is what AI has done for us is it's massively expanded the frontier of things we could think about our problem, hypotheses we could have, maybe things we could test. It's just an astronomical explosion of explanations, and ideas, and principle.

**Ramesh Johari** (01:10:06):
And I really think actually what that does is puts more pressure on the human, not less. I think it becomes more important for humans to be in the loop in interacting with these tools to drive the funneling down process of identifying what matters, at all levels. That ranges from you're carrying out a data scientific analysis, and now because you've got these tools, you can hypothesize 10 explanations, maybe 100 explanations. Which of those are you going to focus attention on? What are you going to tell other people to focus their attention on? To you're running experiments, used to have 10 creatives you're testing for a marketing campaign, you got 1,000 creatives, you're testing for that marketing campaign. Maybe that completely changes the game of what it means to run an experiment. What are you actually looking for now? How do you evaluate that you found something that was good enough?

**Ramesh Johari** (01:10:52):
And I think these questions are not getting enough attention. I think people are looking for the automated tool that really cuts the human out. But what I've seen so far, and again, who knows? By 2024, I might have a totally different answer for you. I don't think so. But at the moment, what I see is that humans have actually become far more important to the productive data science loop, not far less.

**Lenny** (01:11:16):
Such an important point. I feel like we need to add AI corner to this podcast where we always think about, how does AI impact what we're talking about on this podcast?

**Ramesh Johari** (01:11:23):
Yeah, I can see that. I totally see that. 

**Lenny** (01:11:25):
Okay, we might start doing that. Ramesh, with that, we've reached a very exciting lightning round. I've got six questions for you. Let's try to knock through them so you can go teach your class. Are you ready?

**Ramesh Johari** (01:11:35):
I am ready.

**Lenny** (01:11:36):
All right. What are two or three books you've recommended most to other people

**Ramesh Johari** (01:11:40):
When it comes to books, I have one I love that I start with always, which is How to Lie with Statistics. It's a tiny book, Darrell Huff from 1954, which is just for anyone that likes data at any level, it's such a fun read. It's a great book. 

**Ramesh Johari** (01:11:55):
The second thing I recommend to people, and actually this is true even for people who are not expert, is David Freedman was a statistician at Berkeley who passed away in the 2000s, early 2000s. His writing was fantastic in getting us to think hard about process. He was especially fond of what he called shoe leather statistics, where you rolled your sleeves up, you got on the ground, boots on the ground, really getting in there, really trying to understand your data.

**Ramesh Johari** (01:12:27):
His writing is fantastic, his explanations are fantastic. He has a few different books at different levels I think people would love reading. Most importantly, what I like about it is he puts such emphasis on driving evidence and understanding of your processes that generate data. And I find often, data scientists don't even look at examples.

**Ramesh Johari** (01:12:44):
So at oDesk, it meant are you looking at actual jobs, and what's actually going on in your product before you're trying to do data science on it? So I think that's a Freedman insight, Freedman mantra, and so his writing is great.

**Ramesh Johari** (01:12:58):
The last one I was going to mention has nothing to do with data science or anything. It's called Four Thousand Weeks by Oliver Burkeman. I'm not a huge self-help type person, but I really like this book a lot. I think it's a little bit stoic in its approach, like stoic philosophy. But the basic point is you're only on earth somewhere in the neighborhood of 4,000 weeks, and my wife and I have this term we call infinite Q, which is no matter what you think you get done on a given day, more stuff's going to just keep coming in.

**Ramesh Johari** (01:13:26):
And he basically says that recognizing that is liberating. Because once you recognize it, it doesn't matter what you do. You're always going to have too much to do. There's no point in stressing out about having too much to do. And just that small shift of mindset than puts a lot more attention on the usual thing people worry about, which is, where do I want to prioritize my time? So he has a great way of writing about it, some concrete rules of thumb to help manage that way of thinking. And yeah, I think it's a great book.

**Lenny** (01:13:52):
What is a favorite recent movie or TV show?

**Ramesh Johari** (01:13:55):
I am a climber, and one movie that I really liked was The Alpinist. I know a lot of people have seen Free Solo, but for anyone that kind of likes that genre, I would recommend they watch The Alpinist.

**Ramesh Johari** (01:14:06):
I think climbing is an interesting sport because has very much a psychological aspect of it. And I think that movie is pretty good at this meta level where you reflect a little bit on, what does it mean to make a movie about people who are obviously putting themselves into such risky situations? So I really enjoyed that.

**Ramesh Johari** (01:14:25):
On TV, we've been watching Only Murders in the Building, but I'm enough episodes behind right now that I probably won't say anything more, because I am trying to avoid any spoilers and I'm sure there's people out there trying to do the same. So great show though on Hulu.

**Lenny** (01:14:39):
What's a favorite interview question that you like to ask candidates that you're hiring?

**Ramesh Johari** (01:14:43):
I interview people probably that are a little bit different than most of your podcast listeners. But that said, there's one question I like to ask a lot, and that's if you imagine... Often in our interviews in academia, whether it's grad students or faculty will ask people about their plans.

**Ramesh Johari** (01:15:00):
And what I like to ask people is, "Okay, now imagine everything works out, all the challenges you're facing work out, all your plans work out, everything hits the top end of your vision for what this could be. What do you imagine is the impact of having done that? Who's being impacted by that? Why is that a big deal that happened?"

**Ramesh Johari** (01:15:20):
And I find that's a really valuable question to ask, because first of all, many people haven't thought about that. We're so short-term focused, we don't even think, "Boy, if everything worked out, what would be the big deal because of what I did?" Startup founders tend to be better at this than most people obviously.

**Ramesh Johari** (01:15:35):
But another reason I like it is because you will find in that conversation that their vision expands a little bit of additional spheres that are touched or impacted by what they're thinking about doing. So on both sides, it's kind of a revealing question, I think. So I find that important for my line of work, but my hunch is that might be useful for some of your listeners too.

**Lenny** (01:15:57):
Yeah, such a unique perspective on interviewing, versus most of the guests that I interview in tech company.

**Ramesh Johari** (01:16:03):
Yeah, normally there's a coding question, right? I should say I would never ask a coding question post November 2022 after we got AI to help us code. I think it's a superpower.

**Lenny** (01:16:15):
AI corner. What is a favorite product you've recently discovered that you really like?

**Ramesh Johari** (01:16:22):
I also really like cycling. And I'm not ashamed to admit that I think that e-bikes are the greatest thing for cycling. Admittedly, I'm late forties, so maybe I'm the right target demographic too. But yeah, I love my e-road bike. It's great, because it's not one of those with a throttle, you have to work, but it kicks in just when you're on your sixth hill and you don't want to go up the last hill anymore on the way home. So yeah, that's amazing. I think that's just transformative for people that like cycling, but have busy lives.

**Ramesh Johari** (01:16:51):
And I think another one that my son who's 10 roped me into actually, is we were in Santa Cruz browsing at a kitchenware shop of all places, and he saw an outdoor pizza oven, a tiny portable one. And he just did research for two weeks and insisted we get one. 

**Ramesh Johari** (01:17:07):
So he got one over the summer, and after we got it, he refused to eat pizza out anymore as a 10-year-old. So maybe that's the best thing I could say about the quality of pizza you can get from a home outdoor portable pizza oven.

**Lenny** (01:17:20):
Oh my God, I'm hungry. I am going to go have to get some pizza now. What is a favorite life motto that you like to repeat to yourself, share with folks, find useful in your day-to-day?

**Ramesh Johari** (01:17:31):
A lot of my work involves talking to students of all stripes. And I guess these students go on to be data scientists, go on to be founders, and a lot of them go in the tech industry. So maybe in that sense, that advice is relevant. 

**Ramesh Johari** (01:17:43):
My main thing I tell people is slow down. I think what I've found has been happening, is we're so convinced that speed is the way you're going to find the right answer, that I just don't think we slow down to develop meaningful mental models of the things we're doing. That's certainly true in the research projects I work on. It's consistently true when I talk to people in business, and I ask them about their... By mental model, I just mean if you're running a marketplace, what is your model of what people care about? What makes people stay versus leave? What makes matches work versus not work? All those things shape a roadmap in your mind. And I think a lot of roadmapping, a lot of execution, paper writing in academia has all just become far more fast-paced, at the expense of deeper thinking about these kinds of structural features of the thing you're building. 

**Ramesh Johari** (01:18:41):
So with my students, but also I think with people I interact with in industry, I think slowing down is actually more of a virtue than it's given credit for.

**Lenny** (01:18:50):
Very similar to a motto that a recent guest shared, which I think was go slow to go fast, or stay smooth to go fast.

**Ramesh Johari** (01:18:59):
Yeah, I like that. Maybe I'll pilfer that, when I go talk to my grad students [inaudible 01:19:03].

**Lenny** (01:19:04):
Final question. You're a professor at Stanford University, which sounds incredibly cool. What's something about being a professor at Stanford in particular or in general that would surprise people, either good or bad?

**Ramesh Johari** (01:19:17):
Yeah. I mean, we've had a rough ride, as everybody probably knows. Stanford's been in the news for a lot of not so great reasons, I think over the last five years especially. 

**Ramesh Johari** (01:19:29):
So I don't know if this is the right kind of surprise, but I think one thing that I find really energizing at Stanford is people have never asked me for credentialing here. And what I mean by that is that I came from a bunch of other good schools, and obviously I've spent time in industry with a lot of great companies. And a kind of cultural dynamic that can often develop is, "Well, before I'm going to talk to you, I want to know something about why you're worth talking to. Give me your credentials. Where are you a grad student or where are you a professor? Tell me about yourself first."

**Ramesh Johari** (01:20:10):
One of the things that I found very surprising when I came here is just how that never happened at any level. Grad students tell me this all the time. Go talk to someone across campus and just launch right into a conversation about how your X meets my Y, and we have something we could do together. As a faculty member, it happens all the time. I just had a conversation a couple days ago with someone about effectively a marketplace of experiment designs for nano fabrication here, which is totally out of left field for things I do, and yet seamless. Our conversation was about the substance rather than the credentialing.

**Ramesh Johari** (01:20:46):
I really think part of the reason for that is that Stanford is sort of unique in that it doesn't have a weakness across the board. We have strong professional schools, law, business, medicine, strong engineering schools, strong humanities and social sciences. And then that and the weather is what I usually tell people honestly, which matters a lot. People are willing to walk anywhere. I think those things combine to create a culture and an environment where you don't credential everybody.

**Ramesh Johari** (01:21:09):
And I think that means a lot. I think that's something that I haven't found elsewhere. And if people wanted to know something about what's Stanford's like on the inside, I think that's one aspect of it that probably isn't discussed very much. I think that's part of what makes it really fun to be here.

**Lenny** (01:21:27):
It's also an incredibly dreamy campus, that is very joyful to walk around. That helps, I'm sure. Ramesh, I feel like we got people's brains tingling. I think we've created new marketplace founders, and also convinced people maybe they aren't marketplace founders. So maybe we netted out zero new marketplace founders. Two final questions. Where can folks find you online if they want to reach out? And how can listeners be useful to you?

**Ramesh Johari** (01:21:49):
I think the easiest way, if someone's interested more on the industrial side is probably LinkedIn. You send me a message or connect there. Also, because I'm an academic, I have my own Stanford webpage, and it's pretty easy to figure out how to find me there as well.

**Ramesh Johari** (01:22:02):
And how can listeners help me? I kind of feel the most important thing that someone listening to this could do is take forward some of the messages that came out in terms of what it means to be data literate. And I think there's a lot you can do to educate yourself there. 

**Ramesh Johari** (01:22:18):
Maybe one final thought I'll share is that in the same way that AI generates a lot of ideas, AI also generates a lot of prose. And in data science, that can actually be deadly because you're getting more explanations that sometimes maybe are extraneous. 

**Ramesh Johari** (01:22:35):
So taking that as a little vignette, I think that what the world needs is data literacy on the part of people interacting with these tools and with each other. So that's the thing I care most about. The things I teach, the things I do research on, they're all connected to that theme. And so that's where I'm pretty excited. I do work with companies regularly, and so if there's interesting opportunities that fall in the sphere of stuff we've discussed on the podcast, always happy to listen.

**Lenny** (01:23:00):
Awesome. I think we've made a dent in helping people become a little more data literate. Ramesh, thank you so much for being here.

**Ramesh Johari** (01:23:07):
All right. Thank you so much, Lenny.

**Lenny** (01:23:08):
Bye everyone.

**Lenny** (01:23:11):
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.

---

## [12/24] Redefining success, money, and belonging | Paul Millerd (The Pathless Path)

**Paul Millerd** (00:00:00):
Take three hours during a workday. Has to be during a workday. Block off your schedule, sneak out. People can pull this off. Go for a walk without a destination or do something from your childhood that you used to do all the time. Did you use to play basketball? Did you use to paint? Did you use to play an instrument? And just pay attention. What is emerging? Do you feel bad for sneaking out of work? Where does that bad feeling come from? What does that mean about your definition of work and what work means to you?

**Paul Millerd** (00:00:30):
A lot of people have never really thought about, why do you work? People say money. Okay, that's fine. But what else? Why? Are you trying to be a good person? Do you see a good person as somebody that works every day? Maybe. These are a lot of scripts people grow up with. You're really just creating this space to get in touch with, how do I actually feel about work? How do I get to know myself more? Are there things that I've lost touch with that really bring me alive?

**Lenny** (00:00:59):
Today my guest is Paul Millerd. Paul is the author of The Pathless Path: Imagining a New Story for Work and Life. His book is getting a lot of traction within the tech community, because it explores a different way of living, essentially breaking free of the default path for your work and your life that we all basically start on. What Paul describes in his book is almost exactly the path I took to figure out this very weird and wonderful work that I do now with the newsletter and podcast. And because of that, I think this is an important conversation to have, because it may inspire you to explore a different path in your own life.

**Paul Millerd** (00:04:38):
Excited to be here Lenny.

**Lenny** (00:04:40):
I'm more excited to have you on. You published a book called The Pathless Path, which I have right here. Last I heard you've sold over 40,000 copies of this book, which I know puts it in the top 1% of books sold, possibly in the top 0.1% of books sold. It's an absurdly high number for books sold. People don't really know this. And especially for a self-published book, it's a huge success.

**Lenny** (00:05:02):
And I thought it would be good to start with a concept that you call the default path. What is the default path?

**Paul Millerd** (00:05:08):
Yeah, I think the default path is different for everyone and slightly different in every different culture. It's really the story in your head about what you should do. And most of us have some sort of script that we're living out. This is especially powerful when we're in our late teens and early twenties, right? We're trying to execute a script.

**Paul Millerd** (00:05:31):
And it can be different in every country. In the US it's sort of like go to college, get good grades, get a good job, make a good salary, buy a house, get married, have a family, things like that. And when it comes to work, the default path is get a job and work continuously for all of adulthood.

**Paul Millerd** (00:05:50):
And when you opt out of the default path, there aren't really offerings. People have a hard time even contemplating it. You'll trigger insecurities in other people by just existing outside the frame of the default path. And it's the default path in their head of their conception of how the world should work and does work, right?

**Paul Millerd** (00:06:15):
So a lot of what I explore is what is life beyond the default path, and what are the stories we can use to one, at minimum, feel better about what we're doing? And two, what are the stories we can adopt to thrive?

**Lenny** (00:06:32):
I imagine many people listening to this are feeling like, "No way I'm on the default path. I'm doing so many interesting things. I'm doing what I want," but they probably still are on this default path. What are some signs that might tell you that you actually still are on this path, and there's such a new direction you could explore that you haven't explored?

**Paul Millerd** (00:06:50):
Yeah, I think there's nothing wrong with the default path. The difference I would make is, are you conscious about what you're actually doing? What are the costs of your game? What are the trade-offs? What are the implicit contracts are you creating with yourself? A lot of times when people quit their jobs, they forget to fire the manager in their head. They don't realize they can take the afternoon off to spend it with their kids. They've created this implicit contract that Monday through Friday, eight to 10 hours a week you have to work. And that may work for people, but are you actually opting into that, or are you just sort of accepting the default? 

**Lenny** (00:07:35):
I think it's a really important point. It's totally fine to stay on this default path. It's not for everyone to try something totally different. Can you talk a little bit about just how to think about the benefits of that and the trade-offs of, "Okay, this is great, I'm going to stay where I am"?

**Paul Millerd** (00:07:48):
It's interesting. I did not think my book would resonate with people that were firmly in the traditional work role. Full-time jobs, big companies, things like that. But I've had many people reach out that say, "Wow, this sort of loosened the tightness between my identity and my work reality, and loosened it up a little bit. And I'm able to play with it a little more." I had one friend, he said, "From your book, I made a list of the four priorities. Right now I'm getting three of them. And it's helped me become more aware that I'm actually getting these three things that I prioritize. I'm missing the fourth. I'm probably going to have to make a change two years from now. Maybe another role, because I do want to lean into that fourth thing." I think it's really just about remixing your path. My hot take is that we're all on a pathless path. You were at Airbnb. Airbnb, every two years were there was a different company.

**Lenny** (00:08:53):
Absolutely true.

**Paul Millerd** (00:08:54):
Right? And so we're constantly needing to reinvent and reevaluate. And I think thinking of our lives as this smooth trajectory up this corporate ascent sort of limits the possibilities of our own life. So just acknowledging that we are being disrupted. We all have personal lives where we have relationship challenges, health challenges, external shocks, inflation, things like this, that are changing our reality all the time.

**Paul Millerd** (00:09:25):
And it sort of sucks that there aren't these comfortable middle class jobs that are growing and abundant. They're shrinking. David Autor, a economist from MIT, has pretty good research on this, and it's just making people a little more unsettled. It sucks, but this is the reality we're living in, especially places like the US becoming super tech heavy. And how do you navigate that? It's hard. Everyone's struggling with their relationship to work.

**Lenny** (00:09:58):
Let's actually talk about the pathless path. You've been kind of touching on various ways of thinking about it. What's the simplest way of thinking about this concept of the pathless path?

**Paul Millerd** (00:10:07):
I really shied away from trying to define it super clearly. I think I have this passage at the beginning of the book that it's like the pathless path is basically a shift away from the default. It's a shift away from not knowing what you're doing as a problem to be solved toward an embrace of uncomfort, discomfort, and uncertainty. 

**Paul Millerd** (00:10:32):
And it's sort of a personal journey of shifting away from operating around scarcity towards operating from a sense of abundance, having faith that things might be okay. And on a path like yours, this is a necessary condition. You have no idea what comes next, because nobody has been on the Lenny path before. 

**Lenny** (00:10:57):
True. 

**Paul Millerd** (00:10:59):
Right? And a lot of us are in this situation. Now if you're an accountant at an accounting firm in your early twenties, maybe there is a track, and you can sort of plan it, and it's pretty legible. But even still, I would argue that developing a relationship with uncertainty, not knowing what's happening, experimenting a little more, it's all of these things in one. And it's sort of my attempt to come up with a better narrative around work.

**Paul Millerd** (00:11:27):
And it's been pretty cool, because a lot of people are embracing this and now using the term like, "I'm on my pathless path." And it allows people to sort of name it and gives them comfort. 

**Paul Millerd** (00:11:40):
I've had people email me that have been on a path for seven years, and they're like, "This is the first time I actually felt okay about my path," because a lot of what my book is, is an exploration of, why does it feel so weird to do your own thing? Why does it actually feel shameful to leave a full-time job? Which is an aberration in the history of the world.

**Lenny** (00:12:06):
I imagine a big question everyone's mind right now is, "This sounds amazing. I would love to just do the work I love and break out of this path. How do I do that?" And I want to talk about that. But before we do that, what are some examples of pathless paths people have ended up doing? Something just to make it a little more real of, here's what people have ended up doing with their life. 

**Paul Millerd** (00:12:29):
So I think it ranges from a short sabbatical. And to someone like you or me who are sort of on this path and committed to this creator path, and things like that, there's a huge component of their creator economy. Not the creator economy from a VC perspective of all these startups that are going to save creators, but creators that are actually betting on themselves, finding some deeper satisfaction, a better relationship with work and committing to it. But it also encompasses people that are independent freelancers, that have a stable path, more predictable income than creator economy stuff. And it also includes people that are jumping from job to job.

**Paul Millerd** (00:13:16):
I also have examples of people that are older. I talk to a lot of people in their fifties. They've solved their financial problems, but they've lost that sense of aliveness. And they're looking to re-inject that, and they need maps of how to approach that, how to think about that, what are the models, things like that. 

**Paul Millerd** (00:13:37):
So yeah, it's a pretty big umbrella. It's a nice way to claim everyone's path, but I think the shared ethic is really a sense of possibility, and opportunity, and optimism. 

**Lenny** (00:13:54):
So just to kind of list out some of these end, and I think what's interesting is there's no end to this. It's an endless path to continue discovering. There's actually this quote that I wrote down here that I'll read that I think is a really nice way of thinking about this pathless path. "The goal is not to find a job, make money, build a business, or achieve any other metric. It's to actively and consciously search for the work that you want to keep doing."

**Paul Millerd** (00:14:15):
The big shift there, the big shift for me actually, when I left my job, I wanted to run away. I wanted to escape work. I wanted to not work. And I more or less accomplished that. I basically lowered my cost of living in Asia to about 1,000 per month. 

**Paul Millerd** (00:14:34):
But then I started developing this relationship with writing, and creating, and all these things I actually really enjoyed. And I wasn't doing them to be famous or grow a following. I just really liked them and I liked doing it in public, because I was meeting others that were engaging on these ideas. 

**Paul Millerd** (00:14:52):
So the big aha for me was, "Oh, you can design around liking work." The hidden assumption I had around work for the first 32, 33 years of my life was work sucks. You have to figure out how to tolerate it.

**Paul Millerd** (00:15:13):
And within that frame, try to do your best to enjoy some of it. But ultimately, it's a trade-off of your time. You have to suffer through it. A lot of it is going to suck, and you have to put up with that.

**Paul Millerd** (00:15:26):
Now, I think I'm very protective of what I do and don't do. This is why it was very easy for me to say no to Penguin. I didn't want to write a second book for them. I want to write a second book the way I did, which was super fun process. Writing a book was one of the most fun things I've ever done in my life. And so I sort of think about protecting them. 

**Paul Millerd** (00:15:48):
And a lot of people are looking for meaning through work in a job shaped container. And I think that's just really hard to find. You can find it for short bursts, but maybe after seven or 10 years, it's just not doing it anymore. 

**Lenny** (00:16:05):
So let's talk about how to go about finding your pathless path and create the space and opportunity to do this. Because again, a lot of people listening are like, "I have bills to pay. I got kids to take care of. I got a home, I got a mortgage. I can't just go on a sabbatical, explore, travel, and find here I'm going to start a newsletter." So what have you found are ways to enable this exploration without risking everything? 

**Paul Millerd** (00:16:31):
A three month sabbatical is much more attainable than people think. Companies are desperate to keep people and are much more open to things like this these days. And the way I frame it is if you're assuming you're going to work continuously in adulthood, that's about 500 months. Try to find three months of that where you can create space and reconnect with yourself, explore things, just see what emerges, see how you feel. I think this is so vital for people in their thirties or forties who've worked for 10 years just to reconnect with themselves. 

**Paul Millerd** (00:17:11):
And three months in a total of 500 months, people accomplish much more impressive things than that, like saving for their dream home. That is such a powerful thing people aim for that they make it happen. Even people that don't have a ton are able to make that happen, because it is such an important priority. And for me, I think creating this space was more important than owning a house, getting married. It was the most important thing for me.

**Paul Millerd** (00:17:42):
And I actually quoted your piece. I pulled up the quote. It said, "Lenny Rachitsky took a sabbatical after a long career in product management, thought he would return to work. But by the end of the break, it was crystal clear to me that I was ready to move on to a new adventure." And then you said several weeks into your sabbatical, you stopped checking your email. "My heart was no longer in the work. I didn't yet know what I wanted to do next, but I knew it was time to shake things up." And you probably weren't in that state when you were still at Airbnb. 

**Lenny** (00:18:16):
That's right. I was super into the work. And I think the way I thought about it is the Kool-Aid kind of exited my bloodstream, and taking that time off kind of created separation. And then I started thinking, "Man, is this really what I want to be doing?" And that visceral feeling of getting excited about the work disappeared, which was crazy and scary. 

**Paul Millerd** (00:18:35):
Yeah. And so you have smart listeners, and smart people are great at excuses. So they'll say, "I can't do it because of this." I always think these things are much more possible if they really are the main priority. 

**Paul Millerd** (00:18:48):
So what I tell people is fine, don't take a sabbatical. Take an afternoon. Take three hours during a workday. Has to be during a workday. Block off your schedule, sneak out. People can pull this off. Go for a walk without a destination, or do something from your childhood that you used to do all the time. Did you use to play basketball? Did you use to paint? Did you use to play an instrument? Do one of those two things, even better if you do both.

**Paul Millerd** (00:19:19):
And just pay attention. It's a sort of form of work mindfulness. What is emerging? Do you feel bad for sneaking out of work? Where does that bad feeling come from? What does that mean about your definition of work and what work means to you?

**Paul Millerd** (00:19:38):
A lot of people have never really thought about, why do you work? People say money. Okay, that's fine. But what else? Why do you work? Are you trying to be a good person? Do you see a good person as somebody that works every day? Maybe. These are a lot of scripts people grow up with. Or people that don't have a full-time job, are they bad people? 

**Paul Millerd** (00:20:04):
And so you're really just creating this space to get in touch with, how do I actually feel about work? How do I get to know myself more? Are there things that I've lost touch with that really bring me alive?

**Lenny** (00:20:19):
It's interesting how much of what you described, we didn't know each other before we met for this podcast episode, but so much of what you say is exactly what happened in my path. I took three months off exactly. I took a sabbatical. I started poking around, exploring, doing a little writing. And basically led to what I do now, which is a crazy thing I never imagined in my wildest dreams. And so clearly this works.

**Paul Millerd** (00:20:43):
Yeah, and I think people will say, "You can do that because you worked at Airbnb," or, "Oh, you can do that because you"... I've talked to hundreds of people. So what I did before the pandemic for years was I opened up my calendar every Wednesday and I said, anyone that wants to talk to me about work can talk to me about work.

**Paul Millerd** (00:21:02):
So at this point, I've probably talked to 500 plus people about their relationship to work. And the reason that's not surprising about what happened to you is it happens to almost everyone. The sabbatical almost has a 99.9% approval rating. 

**Paul Millerd** (00:21:22):
I talked to one person. She was like, "I took a sabbatical, I stayed at home. My husband was still working for two months. I couldn't wait to go back to work." I was like, "Cool. You're the first person I met that didn't get anything out of a sabbatical."

**Lenny** (00:21:37):
That's hilarious. I haven't met that person. So your advice is try to take a sabbatical, and you're also encouraging people to, you can actually probably do this at some point, but maybe it takes a bit of time to set people up for the fact that you're going to do this. Maybe you need to work at the company for a while, but in your thirties or forties, it sounds like try to find time to take three months. And is three months important? Is that what you find, that large of a block of time?

**Paul Millerd** (00:22:03):
I've found it takes six to eight weeks just to unwind.

**Lenny** (00:22:09):
Yeah, that's exactly what I found.

**Paul Millerd** (00:22:11):
I think for me, there was the initial unwinding after six to eight weeks, and then a deeper unwinding after probably two to three years, where you start to trust yourself a little more, if you stay on the uncertain path that is. But yeah.

**Lenny** (00:22:28):
If founders are listening to this and feeling like, "Shit, why would I give people sabbaticals? They're going to leave, start their own companies, find some other catalyst path. I want them on my default path." Is there anything you could say to a founder thinking about offering sabbatical?

**Paul Millerd** (00:22:43):
I would say if that's their reaction, it sounds like they have an insecurity around work. So I would interrogate that first. What is the implicit story they have about how much people are supposed to work and such?

**Paul Millerd** (00:23:00):
Yeah, I don't know if it's a good employer strategy. I think a decent amount of people would leave. I know Intel, I have friends that have done the sabbatical at Intel. You get six weeks after seven years. Maybe after seven years, they're a bit burnt out that they don't have enough time in those six weeks to unwind. 

**Paul Millerd** (00:23:22):
But I think getting creative, especially now that remote work is so much more common about these opportunities, to let people become the people they want to be. People leave companies because they don't see a path to be the person they want to be. 

**Lenny** (00:23:40):
Okay, so you take a sabbatical, or you take an afternoon, or you take a walk. You talked about be mindful for what comes up. What are you feeling about work? What is a thing you want to do? Do you want to go play basketball? Do you want to go draw? What else do you encourage people to do, to try to discover a potential new path?

**Paul Millerd** (00:24:00):
I think meeting others. So in exercise, I'll have people do if they're curious about this... And for the most part, I don't want to convert people that like what they're doing and like traditional jobs. But a lot of people are curious, and I say have a path expert conversation. Reach out to somebody, sort of like a podcast, that's ahead of you on a similar path, and just send them a message and say, really thoughtful message. Say, "Hey, you're on a path a few years ahead of me. I'm really curious about this. I don't have people in my life that have done things like this. Can I just pick your brain? If we can't jump on a call, can I send you a list of questions?"

**Paul Millerd** (00:24:42):
Most people will agree to that, especially the latter if they're a writer, because writing just enables them to come up with new ideas. So I'll always agree to do the written questions. I don't do the open calendar anymore now that I have a daughter. She wins my time over random stranger's booking. But if people want to send me questions, I'll always answer them in text form.

**Lenny** (00:25:07):
And again, this path doesn't have to lead to creator, artist, writer person. It could lead to starting a new business. It could probably lead to a new career. It could shift in careers. Is there anything else, again, of just where this could lead to people so they're like, "Oh, wow, that's interesting."

**Paul Millerd** (00:25:23):
Somebody sent me an article today about this guy. I think he was a performing artist. He became a therapist. I forget his name. But I think just the possibilities for reinventing yourself and taking different paths, working online, working flexibly, it's way more possible than 25 years ago. It's also going to continue to be more possible. All the tools and technology to enable these kinds of lives are just getting better and easier. And especially this week, ChatGPT just released their new GPT. I was playing with that today and I'm like, "Oh my gosh."

**Lenny** (00:26:04):
**Paul Millerd** (00:27:39):
I think it's easier to make money in a sustainable, long-term way doing stuff you actually like doing. That sounds so simple, but it actually would've been really hard for me to stay on my previous path. 

**Paul Millerd** (00:27:53):
Now, in my case, it was not until my fifth year that I came close to the salary I left. For the first three years, I really optimized for exploration, creativity, just getting to know myself again. I made 50 grand the first year, because I was freelancing. Then I made 30 grand, 24 grand, and then 30 grand. So I was really optimizing for getting to know myself. I dramatically lowered my cost of living, and that is one path. 

**Paul Millerd** (00:28:26):
But this year, I'll make more than I ever made. And that is mind-blowing to me, because every single day of this year has been absolutely delightful. I've spent abundant time with my wife and my daughter. And it's so crazy.

**Paul Millerd** (00:28:44):
Now, if I had stayed in my previous path, I'd be making a lot more than I make now. But that path was not viable for me for becoming... I'd be so frustrated right now if I had to go back to work. An eight-month-old, I know you have a four-month-old. Wait till eight months old. They're so fun to hang out with.

**Lenny** (00:29:12):
I can't wait. You talked about this lower spend, lower expense life. What other tips and tricks do you have for people to create this space where they can continue living and paying the rent, while exploring, and wandering, and exploring these things? Is it cut down on expenses? Is there anything else that one can do? 

**Paul Millerd** (00:29:33):
I've talked to so many people at this point. I've seen all sorts of things. I've seen people move abroad. I've seen families with kids and a mortgage sell their house and decide to live in an RV. I've seen people dip into their retirement. I've seen people apply for grants and get those. I've seen people apply for loans.

**Paul Millerd** (00:29:55):
A big move that a lot of people do is turn their current job into a contract job, which a lot of employers are a lot more open than people would think. Because a contractor's very easy to fire. You can fire a contractor in a day. So if the company's struggling, boom, you're gone, right? 

**Paul Millerd** (00:30:14):
And so there is more risk, but if you're known in the company, it can actually be a somewhat stable path to create more space in your life. You say, "Hey, I want to work three days a week. I want to be a contractor. Here's exactly what I want to do. Are you open to this?"

**Paul Millerd** (00:30:30):
And as soon as you're a contractor, they can't tell you where to work. You can develop a relationship and they can ask you to work in a certain place, but they don't have control over where you work. 

**Lenny** (00:30:42):
A trick that I found really useful actually for helping me feel comfortable about taking time off, I ended up taking six months off, and then it ended up being a year off because I kept trying to figure out what is the thing I wanted to do. The way that I felt good about that is I set a budget of, "Here's the runway that I'm going to give myself. Here's how much it's going to cost to do this for six months. Here's the runway I'm going to give myself. I'm just going to burn through this money, just with the bet that it'll lead to something interesting." And that made me and my wife also just feel like, okay, we were going to lose all that money probably, but the bet is it's going to lead to something really great.

**Paul Millerd** (00:31:15):
Yeah, I love this. I think this is something I've been thinking about a lot lately, and I've actually been trying to write something around this, which is that naming what you're spending money on or coming up with agreements like that, you're sort of saying, "This is money I'm investing in my life MBA." Because if somebody says, "I'm going to Stanford Business School," generally you'll receive positive praise. "Oh, that's awesome." But what they're really doing is not working for two years and spending 150 to $200,000, and not earning a salary.

**Paul Millerd** (00:31:55):
And then to me, it was really interesting to look back at my path. Now, the first three years of my path, I broke even. But compared to being in business school, people thought business school was way better of a path for me. People were judgmental in my path, critical of my path, insulted me, projected their insecurities on me. "How could you do this? This is so crazy. What's your plan?" So coming up with these reframes is super powerful. 

**Paul Millerd** (00:32:26):
One powerful one that worked for me was consider it a gift from your former self. So on the consulting path, I did like it for a while, but at the end I didn't like it. I was sort of just grinding through, going through the motions. I was good at it, but I really didn't want to be doing it if I had choice. And so I earned a decent income doing it. So would I gift that to my future self to be happier? Yeah. So now that I'm in the present, receive that gift and be like, "Thank you former self for working that job."

**Lenny** (00:33:08):
It's interesting. I could also flip it from the other way of your future self is returning to, "Hey, here's some money to spend to help become who I've become."

**Paul Millerd** (00:33:17):
Yeah, exactly. 

**Lenny** (00:33:19):
So I imagine not everyone ends up on a beautiful, amazing new life. They go down this route, they spend a bunch of money, and then they're like, "God damn, I don't have anything to show for it. I've spent all this cash." Imagine there are stories of that. Is there anything you could share around those stories and how to maybe either avoid them or be okay with them? 

**Paul Millerd** (00:33:38):
I think there are surprisingly few stories of that. I think that is people's fear of what might happen. What I've seen in reality, as soon as people are without an income or without a job, they spur into action. People, we're far more creative than we give ourselves credit for. Having a child, we have no idea what we're doing when they come out.

**Paul Millerd** (00:34:03):
But it makes perfect sense that you're going to figure everything out, because you have to. You have no choice. And so the ingenuity and creativity of people as soon as they bet on themselves and go off into the wilderness, is far more than people expect. 

**Paul Millerd** (00:34:24):
And it also has to do with regrets. People do not regret the things they do. They regret the things they didn't do. And the reason for this is if you've made a mistake, you can actually take action to correct it. But if you didn't do the thing that you're regretting, there's nothing you can do except do the thing. 

**Lenny** (00:34:46):
And it reminds me of a quote that you have in your book that I have here. The secret to doing good research, and I think it's related to this of finding a new path, a pathless path, is always to be a little underemployed. You waste years by not being able to waste hours.

**Paul Millerd** (00:35:00):
Yeah. And I wonder if you've found this too. Sometimes, the best way for me to write is to go for a walk, or to take a couple days off and just sort of reset. Creative work can't be forced a lot of time.

**Paul Millerd** (00:35:20):
And increasingly, a lot of work is creative work. Your work at Airbnb was ultimately creative work. You're creating new products and offerings, in a whole new conception of an industry. You're making stuff up. A lot of times, I think people get fried in these companies because they're not actually given the schedules and the support systems around what actually enables creativity. 

**Lenny** (00:35:53):
Yeah, absolutely. Although I find with writing also, there's the benefit of the opposite of, "I'm just going to sit here and write, and I'm not going to give myself a chance to go walk around. I'm just going to keep writing, even if it's terrible, because it'll maybe lead to something."

**Paul Millerd** (00:36:07):
Yeah. And even that though, a lot of times, what ends up on the page surprises you. Right? So you do need a certain sense of openness to let that emerge.

**Lenny** (00:36:20):
So kind of along the same lines, another important concept that you talk about in your book for finding this pathless path is just this idea that it's not ever like this all or nothing. I'm just going to leap into this new thing. It's kind of this, the way you put it is people quit jobs after years of awakening and safely testing changes, kind of eliminating risks along the way. 

**Paul Millerd** (00:36:40):
So years before I left, and I'm curious if you had a similar experience, I was starting to read personal development books. I was reading Tim Ferriss. I was doing these small experiments like coaching on the side, helping people with their resumes, volunteering, helping people with careers. 

**Paul Millerd** (00:37:00):
And so I was writing too. I was writing for fun on Quora with no goals. And all these things make perfect sense now. And even looking back further, I was always tinkering on the internet, and all these things fit my story perfectly now.

**Paul Millerd** (00:37:16):
But I didn't know why I was doing them at the time. But each one gave me the confidence to be like, "Okay, I don't love my day job, but all these random things I'm doing on the side, like writing an article and posting it on Medium and LinkedIn, and the people I'm meeting, this is really interesting and energizing. I'm going to pay attention to that energy. Something is there."

**Paul Millerd** (00:37:41):
And when I quit my job, I didn't really have a plan for how to deal with that, but I had experienced enough of this positive energy. I was like, "I want to chase that. I want to go after that."

**Lenny** (00:37:53):
That's exactly what I found. So I'll tell my story briefly on this. Some advice I got when I went on my sabbatical that ended up being incredibly powerful is essentially what you just said, which is when you're doing stuff during some period of time off, pay really close attention to what gives you energy after you do the thing. Say you have a call. Did that give you energy or did that sap you of energy? Do you feel more energized or you feel like, "I'm tired now"?

**Lenny** (00:38:19):
So it's like after calls you make, after things you do with friends, after some kind of hobby you're trying to do, after you write some stuff, just pay really close attention to what energizes you, what saps you energy. And then my whole strategy was just do more of the things that energize me and do less of the things that de-energize me. 

So in my case, I thought I'd want to do some advising or consulting. I found after every advising call, I was de-energized. I was just like, "No, I do not enjoy this as much as I thought." But after writing and putting a piece out, I was like, "Wow, this is really cool." Even though writing's very hard and there's a lot of de-energized moments, broadly it's like, "Wow, this is cool. People seem to really value this." So I started doing that more. I thought I wanted to start a company, but that kept sucking me of energy as I was working on ideas. So that alone was really, really powerful. And it sounds like really simple advice, but it's really [inaudible 00:39:10].

**Paul Millerd** (00:39:10):
It's hard too. I think the pull to create a company when you leave a big tech company is so powerful. And what you're saying is sort of crazy. You're saying, "I just feel good writing. I'm going to follow that." 

**Lenny** (00:39:29):
It's not a popular path amongst my friends and family. 

**Paul Millerd** (00:39:32):
And I think the root of that is you're triggering insecurities in them. You're doing something they weren't allowed to do at your age. 

**Lenny** (00:39:41):
The thing I found really helpful there, another friend gave me this advice, just tell people you're tinkering. When they ask you, "What are you working on?" "I'm just tinkering. I'm tinkering with some writing." Because something about that word makes it sound like, "Okay, cool, it's delightful and cool. Tinker wave." 

**Paul Millerd** (00:39:57):
I feel like that did not work with my parents. But yeah, trying different things. I always tell people you need a boomer compatible story for what you're up to, as just give them something. Just say, "I'm an entrepreneur," or, "I'm a business owner."

**Lenny** (00:40:18):
That totally resonates. I'd be excited about that if I was a boomer. In the book, you also talk about taming fears. So we talked about a few of these things, and just the power of taming some of these fears that you have. There's success, the fear of not being successful, of money, of belonging, of loneliness, and of health. Can you just talk about either all of those or any of those, just why it's important to tame those fears, and then how one goes about taming these fears?

**Paul Millerd** (00:40:45):
Yeah. So a big source of inspiration around this is Tim Ferriss' fear setting, and he basically forces you to write down what are your fears, how could you mitigate these. But more powerfully, the second part is... And you're framing them around action. And so he reframes, what is the cost of inaction? And that was really powerful for me, and it sort of exposed a lot of the costs in the current state of what I was doing. 

**Paul Millerd** (00:41:16):
And so actually, I want to thank you. It's funny, you messaged me as I was listening to a podcast you were on. I think it was the one with David Perell. 

**Lenny** (00:41:26):
Yeah, I slid into your DMs.

**Paul Millerd** (00:41:31):
But I was listening to your podcast and you were talking about hiring a community manager. And this is actually something I've done in the past few weeks. And I think I was scared to commit to the community because I didn't want to create a job for myself.

**Paul Millerd** (00:41:48):
And one thing I've realized is that I'm scared of creating a job for myself, but I sort of reframed the cost of inaction. What's the cost of inaction is if I don't actually hire someone, I'm going to drain all my creative energy, and that's an existential risk to this path. And so that's one example of I'm always thinking about these things, and that enabled me to take very quick action on that. 

**Paul Millerd** (00:42:17):
But I think it was helpful to hear from you. You were like, "I'm not a community manager." And this is a big aha for me, because I launched my community at the beginning of this year. I suck at community management. I'm not good at it, but I found somebody that actually was good at it and I was like, "There are people that like this and are good at it." So that's one thing. I think more broadly though is some fears don't disappear. So that's a very specific project-based fear.

**Paul Millerd** (00:42:47):
Existential fears around health, death, importance, money, they don't really go away. I think the great thing about this path for me is that you can't pretend like they don't exist. They sort of just punch you in the face. You'll wake up one day and you'll have an existential breakdown of, "What the heck am I doing? Is this sustainable? This is so silly. Am I going to run out of money? Next year, are my book sales going to tank?" And so the longer I've been on this path, those big worries turn into these small little daily things that pop up. And I'll sort of have a conversation with my fear and I'll say, "We're worrying about money today. Okay, I see you. Yeah, that's real. Yeah, I don't know if we can solve that, but yeah, six and a half years, let's keep going. Let's see if it works."

Yeah, that's the thing that makes me feel better every time something like that comes up is, it's worked this long. It's probably going to work for a lot longer. There's this concept of [inaudible 00:43:56], of the time something is going to last is usually as long as it's already lasted. And so that always makes me feel better. The main thing I think about, is am I going to run out of stuff with a newsletter to write about? And it's been four years now. I'm like, "Nah, it's probably going to keep going for at least four more years."

**Paul Millerd** (00:44:12):
It's very important to dance with your fears and really get in with them. If I'm afraid of not making money, it's very reasonable that book sales will fall. And so I don't know if we can sustain our lifestyle on what I have set up two, three years down the road. But taking that fear and saying, "Okay, I'm going to solve that and make that fear go away by getting a job," is off the table. So I have no choice but to actually just be like, "Yeah, that fear's going to be here. It's going to be part of my life, and we're going to have to just deal with it."

**Lenny** (00:44:52):
Along those lines, is there a path you took that was a big failure or didn't work out, something that you thought was going to be a big opportunity and wasn't?

**Paul Millerd** (00:44:59):
The first 10 years of my career, I just kept jumping from job to job. I think I was looking for my current path in job shaped containers and I couldn't find it. And I was just so desperate to find a really good situation.

**Paul Millerd** (00:45:15):
And there were all sorts of circumstances, like bosses who hired me, kept quitting immediately after I would join. Layoffs, all sorts of random things that happened that were very weird. And I just sort of kept searching. 

**Lenny** (00:45:33):
So I've been comfortable with trying things, and starting new things, and experimenting for a long time. And so one frame I have, I call it ship, quit, and learn, which is what is the quickest way I can ship something designed to quit, but as soon as I ship it, I learn about what to do next?

**Paul Millerd** (00:45:57):
And so this is how I started my podcast. I just said, "I'm going to do five episodes." I stole this from Tim Ferriss as well. I'm going to do five episodes. I'm going to see how it feels. And this is one of these things, super energizing. I love how I feel after podcast conversations. I'm going to keep doing it. I wasn't aiming at success, but it was like, "I know I can keep doing the podcast and my newsletter." I had that experience, that feeling from it, but there are things I've tried that I'm like, "Yeah, not again." A couple consulting and advisory type things early on in my path, it was like, "Whoa, I need to build in protectors such that I don't take a gig like this again."

**Lenny** (00:46:39):
I connect to something you said earlier, which I super resonate with, which is you want to avoid creating jobs for yourself that you don't enjoy with this path. There's so many things you could be doing and so many pulls that often, for me, it's like writing a book is always this thing that's out there. Actually, starting a podcast with one of these for a long time, "I don't want to start a podcast. Life is good. I got this awesome newsletter. Things are going great. Why would I want more work?"

**Lenny** (00:47:05):
Eventually I crumbled, and I did it, and here we are, and I'm happy I did. But there's all these other things that are always like, "I should do these things." But I think it's really important to pay attention to what do you not enjoy and don't do that. It's easy to create bad jobs for yourself.

**Lenny** (00:47:19):
A really clear example of that is finding a niche that you don't enjoy, spending time on in this life of writing about something you don't actually care about, or podcasting about something you don't care about. You just created a job for yourself you hate. Why would you do that? And so it comes back to paying attention to what gives you energy. 

**Paul Millerd** (00:47:37):
So I've created a lot of slack in my life. So I'd say 95% of my days, I cannot work. So I don't do meetings. I don't really have employees or anything like that. I have contractors, but I hire contractors for very specific roles. And I create systems such that we can do it asynchronously. And of course, I'll have conversations with them if they want to jump on a call. But I optimize for people that want asynchronous and work on those specific things. So I'm just very conscious of that.

**Paul Millerd** (00:48:15):
I think one challenge I have now is I've created so many things that I'm doing a few things really well, and then sort of ignoring a lot of them. So I actually feel like I'm in this evolution right now of trying to figure out what comes next. 

**Paul Millerd** (00:48:35):
So we haven't even talked about this, but I started this business strategy early on in my path because I wanted to productize my consulting. And one of the consulting projects I loved early on was training people on consulting skills. I did a training program for a consulting firm in Boston, and I was like, "Ooh, I could turn this into an online course." And that has slowly built and evolved, and I do workshops now with companies. And that made most of my money from years two to five when I started moving away from project-based consulting.

**Paul Millerd** (00:49:13):
And so the game I was playing was make money from that, don't focus on it too much, spend minimal time, don't try to maximize for success. Create a self-paced course, because I am not interested in making more money in a cohort-based course, because I just don't want to spend the time. And then use all the abundant time to write and explore, create podcasts, spend time with my wife, and do all the non-work experiments, see how I feel and write about it.

**Paul Millerd** (00:49:44):
Now I'm making money from the work I love, which is very weird. I'm going to make, I'll hit soon about $200,000 made for my book, which is mind-blowing. I published a book completely on my terms about what I love and loved the process of it. It's so crazy. 

**Lenny** (00:50:05):
That's amazing.

**Paul Millerd** (00:50:06):
And so now I'm building a community around that. That's really fun. I'm doing the podcast. I have some sponsors around that. And so that's sort of taking over. I still have this StrategyU though. 

**Paul Millerd** (00:50:19):
So now I'm trying to figure out how to unwind some of these things. I'm actually exploring trying to find somebody that might want to start their own pathless path, like a strategy consultant that wants to leave that world, that wants to be an operator on this business. So if you're listening, I've recently come to terms with this might be the path forward. 

**Paul Millerd** (00:50:38):
But yeah, it's a constant journey of protecting your time, creating that space, going down projects you want to execute, but then stepping back and like, "Okay, I have all this maintenance I'm doing. How do I outsource this, eliminate it, restart, recreate?" And I think this path is really just a commitment to constant reinvention, which is really, really hard. And you shouldn't do it unless you get some satisfaction out of personal reflection and that journey.

**Lenny** (00:51:09):
For someone that may want to help you with that program, what's the best way to reach out to you if they're just like, "Oh shit, this is a cool opportunity"?

**Paul Millerd** (00:51:14):
Yeah, Twitter, paul@strategyu.co, or I'm very easy to find. My email is all over the place. But yeah.

**Lenny** (00:51:22):
We'll link to it in the show notes too. Just a couple more questions. I feel like one criticism of this path is, is there anyone left to actually do work at companies and build things and scale if everyone ends up being on this pathless path, creating content, starting their own companies? Do you have any thoughts on that side of things? 

**Paul Millerd** (00:51:42):
I don't buy that, because I've met most people and most people are like, "Hell no," when they hear about my life.

**Paul Millerd** (00:51:51):
I think it's an interesting critique. I also think there's a more secular trend of gigification of work. All the growth in the economy from 2005 to 2015 in the labor market came from alternative work arrangements. So if you search David Deming's work on this, it's pretty compelling. Right now, we don't really count non-traditional work that well, so it's really hard to get good data on this. But even the way companies are treating their internal talent, it's much more project-based. People are shifting around, moving to different roles a lot quicker. And I think that's going to continue. 

**Paul Millerd** (00:52:29):
So you could make an argument that people will actually be able to slot into companies more easily in the future. Right now, companies under exploit the creator economy and the freelance economy, because they're so tied to you have to hire somebody through a full-time job. 

**Paul Millerd** (00:52:47):
So I think there's two sides to that, is one, most people would hate my life. And two, the world is becoming more giggified. So it could go back the other way actually. 

**Lenny** (00:53:02):
I really like that advice. Paul, is there anything else you want to leave listeners with to maybe start down this pathless path or any other piece of advice before we get to very exciting lightning round?

**Paul Millerd** (00:53:14):
I think the key thing that doesn't get talked about enough is it might be hard and it might suck, but it might be worth it. And I think that's a hard reframe for people, because people will say, "Well, I'm worried about not knowing what I'll do or not making money and all these things." And it's like, yeah, I felt like after quitting my job. 

**Paul Millerd** (00:53:44):
But man, I'm so glad I did it, because it enabled me to now know that I don't have regrets about trying this and figuring it out. And a lot of people that do go back to their jobs are so much happier, because they know I tested that, I found my boundaries, I need more stability. It's not this quit your job and get rich pitch. It's very much like if you're somebody that has a sense that there's something more, there probably is, and it might be worth exploring. 

**Lenny** (00:54:17):
What's the next step you recommend someone take to start exploring this pathless path? What's something they could do today or tomorrow or in the next-

**Paul Millerd** (00:54:24):
Read my book.

**Lenny** (00:54:26):
Perfect. 

**Paul Millerd** (00:54:28):
So I'm very committed to creating resources for people around this. My podcast is all conversations of people on an unconventional path, and sort of the inner game of work. And I don't talk about tactics and outcomes as much as really just, how does it feel? How'd you deal with that? Things like that. And so I do that in my newsletter, my podcast, etc. But just find people that are on interesting pasts and ask them about their lives. 

**Paul Millerd** (00:54:59):
One interesting thing I've had happen to me over the past few years is I've just met a much more wider diversity of people. I'm friends with people that work at restaurants, and work part time, and work weird schedules, and work nine months of the year and take three months off. And now it just feels so much more normal what I'm doing, because before all I knew was full-time workers. I was working all the time, and that's all you're surrounded by. So yeah, try to find the weirdos. 

**Lenny** (00:55:30):
Awesome. And for folks that want to check out your book, should I just Google The Pathless Path? 

**Paul Millerd** (00:55:34):
Pathlesspath.com. I just moved over everything last month. 

**Lenny** (00:55:39):
Okay, great. And then we'll link to all of these things in the show notes. With that Paul, we've reached our very exciting lightning round. Are you ready? 

**Paul Millerd** (00:55:46):
I am ready. 

**Lenny** (00:55:48):
What are two or three books that you've recommended most to other people?

**Paul Millerd** (00:55:52):
Yeah, one is called The Great Work of Your Life. Sounds like a cheesy title, but that's actually a good resource for people that want to hear about people from history. Over the past several hundred years, different eras of people that really did design their life around work. It was really interesting, and that was a great book.

**Paul Millerd** (00:56:16):
A second book I'd recommend, I actually really like Luke Burgis' book Wanting. That was another great personal story/deep dive into a nerdy topic. That's my favorite kind of book. That's the kind of book I wrote, which was personal memoir plus nerdy deep dive. And Luke Burgis' is really good too, more from a tech perspective, because he went down the startup path as well. Tut that's a great book. That was my favorite read of the year. 

**Lenny** (00:56:44):
What is a favorite recent movie or TV show? 

**Paul Millerd** (00:56:47):
I struggle to answer this, because I'm not watching much TV. I did watch the Anthony Bourdain documentary. That was excellent. Talk about a pathless path, and the ups and downs, and the struggles, and the dark side of it. Man, that person was bringing forth what is inside of him and grappling with his demons at the same time. That was a powerful story worth watching.

**Lenny** (00:57:18):
Do you have a favorite interview question that you like to ask when you interview, say, contractors or anyone else you work with or hire? 

**Paul Millerd** (00:57:25):
I'm always curious about, what makes you come alive? I want to work with people that are alive, and connected, and inspired. So the two people I'm working with right now, one's a podcast producer in Poland, but he's doing a bunch of other stuff around video. And he's super energized, used to be a lawyer, reinventing himself. The other person is also a former finance person in India, and she's two years into this self-employment journey. She's writing and exploring all these ideas. So yeah, I'm always looking for that energy first and skills second.

**Lenny** (00:58:03):
Is there a favorite product you've recently discovered that you love?

**Paul Millerd** (00:58:07):
I really love the Nuna travel stroller. Super convenient for traveling.

**Lenny** (00:58:15):
We don't have the travel stroller, but we have the Nuna car seat.

**Paul Millerd** (00:58:17):
Yeah, yeah, we have that one too. It fits. So we've brought that around the world. That's been super convenient. And then more on the tech side, I just got into the esim game. That was amazing. And then ChatGPT, I just created my own GPT to do podcast show notes automatically for me today. Took me an hour to train it, and it is incredible, so that's amazing. 

**Lenny** (00:58:44):
That's awesome. I don't know if folks know, but there's a lennybot.com site that uses all of my podcast transcripts and newsletter to have a little bot that you could ask questions to. That's working actually, shockingly well. We're going to try using the new GPT thing that they just launched, where you can kind of train your own GPT and that'll be fun. And actually, a podcast listener reached out to me and offered to help build this thing, so that's a huge success story from this podcast. 

**Lenny** (00:59:12):
Next question, two more questions. Do you have a favorite life motto that you find yourself coming back to, sharing with friends, finding really useful in work or in life?

**Paul Millerd** (00:59:22):
One, coming alive over getting ahead. That's something I keep coming back to. I'm default skeptical of chasing achievement, and I use this to remind myself that it is about that personal energy versus extrinsic outcomes. 

**Paul Millerd** (00:59:43):
I'm very convinced from my own life experience that the extrinsic outcomes aren't going to do a ton for me. Sure, I need to make enough money. But when I'm in extended states of feeling alive and connected to everything I'm doing in my life, that's it. And I basically repeated this mantra to myself right before rejecting the book deal. It was like I did not feel good in the conversation with the people. They talked down to me, they told me that I probably wouldn't succeed, and it was like coming alive over getting ahead. Don't need their prestige. 

**Lenny** (01:00:21):
Final question. You've been podcasting, I think, for six years. What's your best piece of advice for someone that wants to start podcasting, has maybe already been doing podcasting like myself, or being successful or anything along those lines?

**Paul Millerd** (01:00:36):
Yeah. I think if you want to podcast to make money, it's probably not something you should get into. Even if you have an audience, it's probably not the best way. I think if you have a massive audience, it can work, but it takes a really long time. Podcast is the ultimate long game, so you need to find some intrinsic connection to what you're actually doing. If you don't love the conversations or the format you're doing, don't do it. 

**Paul Millerd** (01:01:05):
But yeah, I would recommend more people start podcasts. I'm against... The New York Times says there's too many podcasts, but I take the opposing view. I don't think there's that many podcasts. If you ask people in their personal life out of tech bubbles, "How many people in your life have a podcast?" Now in Austin, a lot of people have podcasts, but yeah, most people don't have a podcast. Even if you do something like interview your parents or anything, it's such a cool, creative thing. It's free. It's free, and you can send it to everyone in the world. Podcasts and newsletters are incredible innovations. Let it rip. You had to get permission to do these things 10, 15 years ago. It's so great to be alive in today's world. 

**Lenny** (01:01:52):
I feel like when people say there's too much of say newsletters, too many podcasts, my answer is always there's always room for better newsletters and better podcasts. If you can deliver more useful, valuable, interesting stuff, people are going to pay attention. The bar just keeps rising is the challenge.

**Paul Millerd** (01:02:08):
Yeah. It's also like do it for the sake of itself. Do it for the creative act. The creative act can be super meaningful in and of itself. I've lost money in my podcast over the lifetime of it. Love it. I don't care. I'm going to keep doing it. 

**Lenny** (01:02:27):
And also, the best stuff often comes from just doing it for yourself and then realizing, "Wow, other people might find this interesting."

**Paul Millerd** (01:02:33):
Yeah. I didn't start getting podcast feedback until the last two years when it started growing a lot more. I was sort of just doing it into the void. 

**Lenny** (01:02:43):
Speaking of that, Paul, we've been on our own pathless path. I feel like we're going to send a number of folks on their pathless path. Two final questions. Where can folks find you online if they want to reach out and learn more about what you're sharing in your journey, and how can listeners be useful to you? 

**Paul Millerd** (01:03:01):
Yeah, so I've been compiling a lot of my more recent stuff under pathlesspath.com, that will link you to my podcast, newsletter, community, and book. And I'm always willing to gift my book to anyone in the world who wants it. Just email me. I'll even send you a printed copy, if you don't have the money to do it. And I'm always happy to send bulk orders to people that want to gift it and do book clubs or things like that. And happy to send it at the author rate, which is about $4 per book.

**Paul Millerd** (01:03:34):
And yeah, I am starting to explore the potential of selling my StrategyU business or finding an owner operator who might want to get some sort of profit sharing or something like that. It'd be interesting if there are former consultants that might be interested in something like that. 

**Paul Millerd** (01:03:54):
I don't know. I'm so bad at asking for help. I think if you want to share my book, that would be cool, because it is pretty neat to make money doing something from something I'm really proud of. 

**Lenny** (01:04:08):
Go buy The Pathless Path, available all online bookstores, I imagine. Paul, thank you so much for being here. 

**Paul Millerd** (01:04:15):
Amazing. Keep going on your path too. I'm really inspired by how you're approaching your path and sharing your reflections too. 

**Lenny** (01:04:23):
I appreciate that. Bye everyone.

**Paul Millerd** (01:04:25):
Adios.

**Lenny** (01:04:28):
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.

---

## [13/24] Billion dollar failures, and billion dollar success | Tom Conrad (Quibi, Pandora, Pets.com, Snap, Zero)

**Tom Conrad** (00:00:00):
There's this belief that everybody needs to be a founder. I think, in some ways, our industry would be much better off if there were fewer founders. There's an entire category of smart, creative, hardworking, talented, borderline visionary people who can raise that $2 million seed and go off and build some stupid company that's never going to go anywhere. That would be so much better off finding a team that needs their skillset and working on a problem that has a mathematical formula that's going to win on any metric. Whatever metric you care about. You want the acclaim of your peers, you want financial reward, you want outside impact on culture, whatever the thing is that gets you out of bed every morning, you can achieve that in collaboration with others. You don't have to be the person that raises the seed round.

**Speaker 1** (00:00:52):
Today, my guest is Tom Conrad. Tom was an engineer at Apple, CTO of Pandora, which he helped take from zero to 80 million users. He's also VP of product at Snap, where he was the right-hand man to Evan Spiegel for two years. He's been on the Board of Sonos for over seven years. He was also part of two infamous product failures, Quibi, where he was chief product officer, which raised over $2 billion and died less than a year after launch.

**Speaker 1** (00:03:17):
You fell in love with building products for a reason, but sometimes the day-to-day reality is a little different than you imagined. Instead of dreaming up big ideas, talking to customers and crafting a strategy, you're drowning in spreadsheets and roadmap updates, and you're spending your days basically putting out fires. A better way is possible. Introducing Jira Product Discovery, the new prioritization and road mapping tool built for product teams by Atlassian.

**Speaker 1** (00:03:44):
With Jira Product Discovery, you can gather all your product ideas and insights in one place and prioritize confidently, finally replacing those endless spreadsheets. Create and share custom product roadmaps with any stakeholder in seconds. It's all built on Jira where your engineering team's already working. True collaboration is finally possible. Great products are built by great teams, not just engineers. Sales support, leadership, even Greg from Finance.

**Speaker 1** (00:04:12):
Anyone that you want can contribute ideas, feedback, and insights in Jira Product Discovery for free. No catch. It's only $10 a month for you. Say goodbye to your spreadsheets and the never ending alignment efforts. The old way of doing product management is over. Rediscover what's possible with Jira product discovery. Try it for free at atlassian.com/lenny. That's atlassian.com/lenny.

**Lenny** (00:04:40):
Tom, thank you so much for being here and welcome to the podcast.

**Tom Conrad** (00:04:44):
Thank you. It's so fun that I get to be a part of this.

**Lenny** (00:04:46):
I thought it'd be fun to start with a story about your time at Apple and you building this now very ubiquitous feature of dragging and dropping something into a folder. Which I saw you tweet about or talk about at a talk and the fact that it's still around. Can you just share that story and maybe a lesson from that experience that you've taken away?

**Tom Conrad** (00:05:05):
Sure. Let's see. I was 15 years old when the Macintosh came out. I remember really clearly my entire teenage years. All I wanted to do was to move from Columbus, Ohio to Cupertino and work for Apple. My heroes were that team of people that had written their signatures on the inside of the Macintosh. We cracked open the first Macintosh case. You would find the signatures of the 20 people or so who worked on the Mac. That was my only ambition, truly.

**Tom Conrad** (00:05:40):
This was a period where no one wanted to work for Apple. That wasn't a thing. It seems like maybe a little obvious today, but it wasn't an obvious ambition at all back then. Anyway, I went to college. It's all I wanted to do. Studied computer engineering at University of Michigan, and as we talk about my career, it is just over and over and over. I'm going to say an incredibly lucky thing happened. The first incredibly lucky thing that happened for me in my career probably was that University of Michigan happened to be a place that Apple recruited from.

**Tom Conrad** (00:06:08):
I didn't know that when I chose the school, but it made it reasonably easy to connect to a hiring manager at Apple. I wrote an actual letter and put it in an actual envelope and put it in the mail and got an internship and drove out in my dad's Pontiac from the Midwest to California. Spent a summer interning and my last day of the internship, I was thinking about really what I wanted to do when I came back. Hopefully came back to Apple after I graduated.

**Tom Conrad** (00:06:39):
I had worked on a product that became shipped. It was called the QuickDraw GX. It was earlier second generation rendering system for the Mac. I'd been that team's intern for the summer. But what I really wanted to do is I wanted to work on the Finder. This is the only thing in the whole world I really wanted to do. I went and found Ron Lichty, who is the manager of the Finder team and said, "I graduate in 10 months. I'd love to be a part of your team."

**Tom Conrad** (00:07:06):
I think he was like, why are you coming and talking to me now? You're literally going back to Michigan tomorrow. I go back to Michigan in May, the phone rings and Ron says, "The college recruiting department just told me that I have a college hiring rep and if I don't use it by tomorrow, I lose it." He's like, "I can't even interview you, you can't meet the team, but you're basically a freebie for me. Do you want this job?"

**Tom Conrad** (00:07:38):
Just insanely lucky moment, got this job. I get to Apple in the summer of 1992 and I have a laundry list of things that I would like to do to make the Finder more usable. I remember sitting in Ron's office and saying, "At the grocery store, when you're carrying bags of groceries out, the door's automatically open for you? I think the Finder should do the same thing. When you're dragging an icon around and you want to put it in a folder, you should be able to hover maybe over the folder icons and drill down into the file system to get to where you're going.

**Tom Conrad** (00:08:20):
Then when you drop the file, all of the folders that opened up between you and your source and your destination would close for you." Ron thought that was a fine idea, so that was the way Apple worked in those days. I just went off and started coding that up. I got to the point late one night, two in the morning at Apple, no one else was there, where I needed some kind of animation to indicate that the folder was about to open.

**Tom Conrad** (00:08:48):
I'm certainly not an animator and I certainly wasn't going to do anything thoughtful in the middle of the night. I just wrote some code that blinked the folder, like selected unselected, selected unselected five times and thought, oh, I'll email one of the really talented visual designers to do something much more interesting. Long story short, apple finally shipped that feature four years later. Sat in the source code repository forever while we did other things.

**Tom Conrad** (00:09:21):
When it shipped four years later, it blinked five times. Roll the clock forward six or seven years, Mac plus 10 comes out, entirely new Finder rewritten from scratch. No spring-loaded folders anywhere to be seen. People complained about it. It got re-implemented. All of the code, brand new. Folder blinks five times when you hover over it. Roll the clock forward another decade, IOS comes along and they added folders. When you drag an icon around, it blinks a few times.

**Tom Conrad** (00:09:51):
I'm not sure what the point of this story is other than maybe it's something about, I think we all do this as designers and product people. We take these shortcuts that we think that we'll go back later and clean up. Sometimes, it's literally been 30 years that little design detail lingers three implementations later and now it's just a part of the way that these Apple products work. Pretty bizarre.

**Lenny** (00:10:16):
As you were talking, I'm on a Mac right now recording this and I just did it just to make sure it's still there and it is indeed still there. I think it blinks three times and then just opens up for you.

**Tom Conrad** (00:10:25):
There you go.

**Lenny** (00:10:26):
Full engineers got royalties on features they build that continue to live on in our product.

**Tom Conrad** (00:10:30):
Okay, I'll tell you just one other little thing to center you in time about what the Finder was like in 1992. We didn't get royalties, but our names were in the About box. You would go to About the Finder and the seven of us, there were seven engineers at Apple that worked on The Finder. Our names would scroll by the Finder, copyright 1992, yada, yada, yada, one name after another. Totally different era.

**Lenny** (00:10:55):
It feels like you got what you wanted with the name scribbled on the motherboard.

**Tom Conrad** (00:10:59):
For sure. I've gotten a lot of the things I wanted as a kid.

**Lenny** (00:11:05):
Along the same lines, I want to talk a bit about picking where to go work. Clearly you had a sense you wanted to go work at Apple. Over your career, you've landed at a lot of really successful places. You've also landed at a lot of very famous failures that we're going to talk about. What advice would you give people for helping them pick where to go work based on your experience?

**Tom Conrad** (00:11:25):
When I was a kid, my ambition to work at Apple was entirely about the product, so probably that version of me would say, find a product that you're passionate about and go spend your time and energy on that thing. Pretty quickly you learn that an awful lot of your development and day-to-day satisfaction really comes from the people that you get to collaborate with. Can you learn from them? Do you like them? Do they challenge you in the right ways?

**Tom Conrad** (00:11:53):
Do they give you latitude in the right ways? It's so much about not just what, but who. For a very long time, my advice would've been entirely in the category of life, find something that you love with people that you think are amazing and the rest will take care of itself. Interestingly, I have been lucky enough to have some things that were successful on the metrics, get talked about the most, big audiences, big financial return, et cetera, et cetera. I've also worked on some things that were really notable disasters. When I look back on my career and think about the things that I've done, my professional satisfaction is not well correlated with those external metrics and very, very coordinated with do I love the thing we were building and do I love the people I was working with?

**Lenny** (00:12:43):
Following the thread of the people. I think one of the hardest things is really knowing what the people are like until you join. I think as a chief product officer joining or VP of product, you have a lot of time that you spend with the team. Most people don't. They have an interview and then they're like, all right, I got to make a decision. Do you have any advice for how to help people get a sense if the people are the kind of people they want to work with?

**Tom Conrad** (00:13:03):
I think people are really, really good at this. Every single time I've taken a job where it turned out that I was working with people who had a different set of values or working styles than I had, I knew. You tell yourself that, at least in my case, I tell myself a story about why the thing I suspect might be the case isn't the case. But you do this in your personal life all the time. You meet people out at dinner, so you get seated next to them at some industry event or something, and sometimes you come home and say to your partner, oh my gosh, the person next to me was just the worst. Then sometimes you're like, I think I made a permanent lifelong connection with this total stranger who just happened to sit next to me.

**Lenny** (00:13:55):
It's a very simple piece of advice that I think people don't fully appreciate is just trust your instinct, trust your gut. Just pay attention to what comes up when you're around people at a certain company. Okay, you brought up this phrase of notable disasters, and I want to talk about that. You've worked at two of the most famous notable disasters of product companies, pets.com and Quibi. I think it's really rare someone sees the inside of so much hype and then such a fall at a company. I just want to spend some time in these two areas. Maybe the way to set it up is, what's a lesson you took away from each of these two experiences that you've taken with you to future work and maybe advice you share with people?

**Tom Conrad** (00:14:37):
Probably the biggest lesson, it's not really about the specifics of the business. The biggest lesson really is these things make you better. In some instances, actually, I think in both instances they became dominoes that opened doors for me in my own ambition and my own professional life that maybe just wouldn't have opened at all if I hadn't gone to those companies and learned those things and had those experiences. Frankly, even in the case of pets.com, even the high profile nature of it.

**Tom Conrad** (00:15:09):
I could have worked at one of a thousand E-commerce websites in 1999. When I went on to some subsequent job interview or something and talked about my experience, they were like, I never heard of the thing that you worked on. But everybody certainly heard about pets.com. It's a pretty funny example too, of how some struggles are timeless. That was 23, 24 years ago now. While as a leadership team, we made I'm sure all kinds of mistakes.

**Tom Conrad** (00:15:39):
One of the things that happened was that there were three overfunded pet E-commerce sites. We all raised in excess of $50 million, which is a tremendous amount of money now. It was a tremendous amount of money then. We all thought it was a zero-sum game. That as one player started to spend on promotion or to spend irrationally on national broadcast television advertising, we all did. It became this unwinnable arms race. There is, I think, a fundamental lesson about having an excess of investment can be its own albatross. Or lead you to make decisions that maybe would be unwise. Then of course, it's just like timing is really important. Chewy is a online pet store worth $9 billion today. They were a private company and bought by PetSmart and then spun back out. But when they were bought by PetSmart, they were acquired for three billion dollars. Biggest E-commerce acquisition of all time. Well, I think it's probably unfair to compare Chewy who executed exceptionally well over a decade, grew their business brick by brick and turned it into something really remarkable.

**Tom Conrad** (00:17:07):
To pets.com, which was in a very, very different moment in time and tried to go to market in a really different way. The critique that is often leveled at pets.com, or at least at the time, was like, this is just a stupid business. They're shipping dog food around. You could never make that work. That's just wrong. You absolutely can make it work. Probably can't make it work when 80% of the country on the internet is still on dial up. It was really, really early.

**Lenny** (00:17:33):
I saw a stat, I think you shared somewhere, that you took pets.com from nothing to a public company to completely out of business in 19 months.

**Tom Conrad** (00:17:40):
Yeah, I think that's about right. The other thing that's forgotten in the tale is that we actually didn't go bankrupt. We shut the company down and returned the remaining balance to the investors, which no public company had ever done before. The leadership team just reached the conclusion that given the way market conditions had evolved, there was just no way we were going to be able to get more capital into the company. It was a company that required additional investment to get to profitability. It was better to wind down early, take the money that we had in the bank and get it back to investors than to just spend every last penny on what was a fruitless attempt to salvage it.

**Lenny** (00:18:29):
Did not know that. Let's talk about Quibi. What went wrong there? Do you think there was a path to Quibi having worked out? Any big lessons that you took away from that experience that you bring with you?

**Tom Conrad** (00:18:40):
The miraculous thing about Quibi for me was it re-lit my enthusiasm for the industry for doing this work. I had left in, I think it was December of 2018, and I thought that maybe I was just done making software. I had done it for a really long time, for 25 years or something. I had changed a lot. The industry had changed a lot. I thought maybe I just didn't have the same passion for it that I had a decade before. It also seemed like maybe it'd be fun to have another chapter of my life that was just completely different.

**Tom Conrad** (00:19:23):
I had a whole list of things that I thought I might want to do. They're ridiculous. It's like maybe I want to be a pastry chef. Maybe I want to be a landscape photographer. Maybe I want to learn to make bad music to put up on SoundCloud or something. Really the only thing they had in common were they all things that I knew nothing about. People would be like, "Oh, you think you might want to be a pastry chef? Do you like to bake?"

**Tom Conrad** (00:19:42):
I'd be like, "No, I don't know anything about baking." "Oh, you like landscape photography. Do you take photos?" "No, I don't take photos." But I was committed to the bit, actually to the point where when Techwrench interviewed me about my departure from Snapchat, I was like, I'm out. I'm going to do something else entirely. That story is very much out there. But a few months after my last day at Snap, I got a call from Meg Whitman and Jeffrey Katzenberg who were starting up, it was for New TV at the time.

**Tom Conrad** (00:20:15):
The pitch was, we're going to try to take the best of mobile and Silicon Valley and consumer tech and weld it to the best of Hollywood style content production. To build something completely bespoke and purpose made for consumption on the phone. They were looking for both technology leadership and product leadership and wanted to know if I was interested in one or both. I took the meeting, even though I wasn't really taking these kinds of calls from anybody, it just seemed like who's going to pass up the opportunity to have lunch with the two of them?

**Tom Conrad** (00:20:50):
I listened to the pitch and politely declined and told them that I was going to be a pastry chef or something. We kept doing that every couple of months for seven months. We'd go to lunch, they would give me an update on the progress they were making, and I would decline the invitation to get involved somehow. Then late in that year, I went to lunch one more time, and Meg explained that they brought on someone to lead technology and they brought another person to lead product.

**Tom Conrad** (00:21:26):
Both of them really truly for reasons that are completely disconnected from Quibi itself. Both of them had left after about six weeks. Meg's like, "We've raised all this money and we told the world that we're shipping this product in about a year. We got an awful lot to do, and I really could use some help. I would consider it a personal favor if you were to come and spend just a couple of days a week helping." She's like, "I'll continue to look for someone who actually wants the job, but it'd be great if you could help me get this off the ground." My wife is a freelance writer, marketing strategist, and loves her life as a freelance contributor. She's like, "You should do this. Why not? It's two days a week. It's just a few months. What's the worst thing that could happen? Maybe you'll like it?" I'm like, "No. Here's the thing that will happen. I won't do it two days a week. It will immediately be three days, then four days, then five days, then six days. I just know myself."

**Tom Conrad** (00:22:27):
She's like, "No." She's like, "Just on Wednesday night at six o'clock, close your Quibi laptop and be like, all they're paying me for is for Tuesday and Wednesday and then open it back up on Tuesday morning. That's all you've got to do." Well, she's right about most things and she's wrong about this. I fell deeply into it right away. It was just so fun to get to build a team from scratch and to design and build a product from scratch.

**Tom Conrad** (00:22:58):
To take advantage of all of the modern software architecture stuff that had come into being over the course of the 15 years since we had started Pandora. I'm embarrassed about some of what happened with Quibi for sure, but I'm super grateful for the experience. I just really fell in love with the industry again, and was reminded of just how rewarding it can be to build something and to try to put it out there even if you stumble pretty mightily along the way.

**Lenny** (00:23:35):
Is there something that you took away from that experience that taught you what to try to avoid? What to try to pull towards?

**Tom Conrad** (00:23:43):
I think I misunderstood or misjudged companies sometimes by thinking about them really focused on the product execution. If you find an interesting problem that people care about and you solve that problem in a really beautiful, elegant, delightful way, that's 10 times better than anything else that they can get in that same space, they'll tell their friends and all the rest will take care of itself. That was always my ambition.

**Tom Conrad** (00:24:16):
Find a thing that I cared about building, do a great job building it really delightful way. Go really deep on listening to people and their feedback and iterate your way to success and breaking through that membrane that we all strive to get across. The really great word of mouth. But I think the thing I've come to better appreciate is that companies are also like a math problem that describes how you take investment and pour them into the equation and out the other side comes returns on some time horizon.

**Tom Conrad** (00:24:54):
Yes, there are variables in that equation that are influenced by the product that you build and all of the little details and decisions that you make about making that product great. But if the equation is fundamentally broken or a big swing in and of itself, no amount of iteration and execution can get you out of the failed outputs of the broken equation. I think Quibi made a bet that you could build an entirely bespoke content library that was sufficiently scaled to get people to subscribe and retain for a couple billion dollars. It was a huge amount of money. But we made 70 shows in 18 months, which is more content than all of the major broadcast networks combined made in a single year. It was a pretty major accomplishment. We made a bet that we would augment those sort of-

**Tom Conrad** (00:26:00):
And we made a bet that we would augment those sort of episodic and serialized or Hollywood style shows with a bunch of daily content that we produce at the level of network television, nightly news, and so forth, that would be an alternative to some of the sort of daily content that you might otherwise get on YouTube. And that was going to be about a third of the content spend.

**Tom Conrad** (00:26:26):
One super interesting thing that no one talks about is that all of that content was designed to be made day of or day before it aired, so there was no back catalog of it. And it was all designed to be shot in these professional studios that we built out. It was really expensive, like I said, it was like a third of the investment we were going to making content, almost half the investment we were going to be making content.

**Tom Conrad** (00:26:51):
And we launched two weeks into Covid and we couldn't make any of that content, except literally in the garages of the host's homes. And so we had this thing that was supposed to seem really set apart from YouTube, that literally now was being made exactly YouTube content, which is sort of like self-produced at home with very little sort of the support infrastructure of Hollywood. Now, you can argue, I think the content on YouTube is really, really exceptional in this category, and maybe we were never going to do better than that.

**Tom Conrad** (00:27:26):
But I think what was really fundamentally broken with Quibi was that the actual foundational equation of can you make enough premium content that's totally bespoke and made for the service and takes advantage of the nature of the phone, it is enough content to get people to sign up and retain, and can you do that for a couple billion dollars? And I think the answer is no. The library has to be much, much bigger, and you have to have, like any company, you have to have sufficient time and energy to iterate on the content format itself, because our roadmap really wanted to innovate on the content format.

**Tom Conrad** (00:28:06):
And so I think part of what happened is pretty quickly it became clear that the math was just wrong. It wasn't going to take 2 billion, it was going to take 6 or 8 or 10 billion. And the risk reward profile of betting 10 billion on the format was just more than anyone could stomach.

**Lenny** (00:28:27):
Wow. I really like this metaphor and this mental model of the math formula of the entire business and thinking of it that way. I knew Covid changed the way people consumed content and that hurt. Quibi I think it was meant to be on the go, not sitting at home where you could watch anything you want. But also the fact that the content couldn't be made as well, as you were hoping to make.

**Tom Conrad** (00:28:46):
Yeah, for sure.

**Lenny** (00:28:49):
As a CPO, one of the biggest challenges is pushing back, trying to convince the founders of their mistakes, of doing what they want and just powering through it and dealing with it sometimes I guess is there anything you think you could have done looking back, or was the math formula set up for failure from the beginning and it's probably just not going to work out almost no matter what you did?

**Tom Conrad** (00:29:10):
One of the bets was that we weren't going to just use the apparatus of Hollywood to make the content. In part, we are going to use the apparatus of Hollywood to market the content. So Jeffrey had recruited this incredible Rolodex of literally the world's most famous celebrities to make shows for Quibi. We kind of had everyone either made something for launch or was going to make something.

**Tom Conrad** (00:29:42):
And part of what they're going to do is turn up in culture and talk about their shows. We've heard a lot in the last six months about how hard it's to market movies because the stars can't go out and talk about the movies during the strike.

**Tom Conrad** (00:29:54):
There was this theory that you could apply the marketing technique of Hollywood to get 20, 30 million people into the theater on opening weekend for Quibi. And that was always a very, very audacious take, I thought. Uber has all the money in the world to experiment with paid user acquisition, and they're not consistently a top 10 most downloaded app in the app store.

**Tom Conrad** (00:30:26):
But the theory of Quibi, the math of Quibi, did require us to from day one land in the top 10 and stay there forever. The model would have worked if we could do that. And to the Hollywood marketing apparatus, the numbers that it takes to get there felt kind of small. If you can get 20 million people in to see Shrek on opening night new IP, surely you can get them to take their phone out of their pocket and download this thing and start a free trial.

**Tom Conrad** (00:30:54):
Now, those of us who have spent our life in Silicon Valley making software and really, really tried to get people to show up and download new IP in large numbers know just how hard that is.

**Tom Conrad** (00:31:09):
So maybe if I critique my own contribution to the math equation, maybe I should have beat the drum a little harder about just how unlikely it was that we were going to land the kind of distribution in month one that the model sort of required. If I had to go back and do it again, I think I would spend maybe more time investing and illuminating that aspect of the digital universe.

**Lenny** (00:31:42):
That is such a good takeaway of just showing the leaders, here's the data, here's the assumptions that we're all betting on, and do you believe this can happen? And they probably would've said, "Yes, this will happen. I'm so confident."

**Tom Conrad** (00:31:55):
What made it hard was, it wasn't structurally impossible. If you had to be bigger than any app that had ever been made, then you could probably make the case it's impossible. But since you only sort of had the land in the top 10, you couldn't quite say it was impossible, you could just say it was highly improbable.

**Tom Conrad** (00:32:18):
And maybe one of my mistakes was, I guess I imagined that we would launch, and when the likely thing happened that we got millions of people to download the app, which we did, and then when we inevitably struggled to retain those users at high percentages, and we retained at what I think of as a good industry starting point, but we weren't setting any records on retention. I just imagined that what would happen next is the thing that happens in all young companies, you would iterate. You would grind on the funnel until a year later, two years later, six months later, whatever it is. You figured the formula out to get people in and get them to stay and get them to retain.

**Tom Conrad** (00:33:12):
And what I didn't appreciate was just how quickly you go back to the foundational math and then the math really says you just can't. You can't spend two years iterating your way on optimizing the funnels like you would in a startup that had a different cost structure. In a world where you have to spend a billion dollars a year of making content, you just can't afford to not be a hit.

**Lenny** (00:33:40):
I think it's also important to just remind us, it's okay for these things to happen. People take a bet, as you said, we're going to try this thing, here's our bet, here's our experiment. We're betting on this sort of format in this business. We're going to raise money from investors that know they might lose all their money. And it sometimes doesn't work out. It's part of the game.

**Tom Conrad** (00:33:56):
It's certainly painful to take money from investors even if they know what they're doing and to not get them a return. I feel a real responsibility to investors to do better than we did at Quibi.

**Tom Conrad** (00:34:08):
But yeah, I mean, there is a risk reward thing that goes along with these investments, and part of the reason they get all the riches on the upside is that they're going to bet on some Quibis along the way too.

**Lenny** (00:34:18):
So as you were talking, you said that it was called NewTV, and that sparked a memory, and I searched my email. And I actually got an email from a recruiter in 2018, we just kicked off a very special executive opportunity, the CPO at NewTV, a new venture in Los Angeles, with Jeffrey Katzenberg and Meg Whitman, raising a billion dollars, working with top talent. Are you interested in exploring this opportunity?

**Tom Conrad** (00:34:41):
Lenny, Lenny, Lenny. Your story could have been so much different.

**Lenny** (00:34:46):
This could have been Thomas podcast. Lenny, tell me about what happened at Quibi.

**Tom Conrad** (00:34:51):
I would take that free.

**Lenny** (00:34:54):
I don't know. There's pros and cons. They even sent this whole PDF, a TV in your pocket, NewTV. Amazing. All right. I'm going to read through this and see what they pitched back in the day.

**Lenny** (00:35:05):
Okay, let's move on to things that worked out really well, let's call it notable successes, other products you worked on that worked out great. So I'll list a few of them. And maybe what might be helpful is just we'll just go through each one and share what you took away from that experience, a lesson you learned from working on those products.

**Lenny** (00:35:23):
The ones that come to mind for me are Snap, Pandora, Apple if we want to go there. Also, you built, I don't know exactly what you did there, but you worked on You Don't Know Jack, this game that I loved. I think if you're an elder millennial, you're just going to like, "Oh my God, I love that game." I don't even remember it exactly, but I just remember the visceral feeling of playing that game and it was so much fun. So that's cool. I didn't know that you worked on that. And then there's also Sonos, which you're on the board.

**Lenny** (00:35:49):
So whatever order you think might be most interesting, just going through those and what did you learn from that experience?

**Tom Conrad** (00:35:56):
I worked at Apple in the interval where Steve was gone, John Skelly, that kind of period, so System 7, System 8, Power Macintosh, that whole era. And we were doing a lot. We shipped a bunch of great hardware. We transitioned the company from Motorola 68,000 CPUs to the Power PC architecture.

**Tom Conrad** (00:36:19):
But, particularly in that transition, we really struggled to ship consumer software features. I mentioned that I wrote three LAN folders and some other consumer features in my first six months at Apple, and they shipped four years later, actually after I'd left the company. I was a little surprised they were still in the software repository even, candidly.

**Tom Conrad** (00:36:40):
But I'll tell you that one of the things culturally about Apple in that moment was, at least I felt like, a person was really rewarded if they could make a kind of broad contribution across functions. So if you were a talented software engineer, but also a thoughtful product designer, and maybe also had interesting input on product marketing, that you could build a really great reputation inside the company by playing all of those positions a little bit day to day.

**Tom Conrad** (00:37:19):
And so when I left Apple after four years, I look back on my time, I didn't ship as much software as I had hoped, and I felt like a little bit like a professional gadfly. I was six miles wide and a centimeter deep.

**Tom Conrad** (00:37:36):
And I went to work for this company called Berkeley Systems. In addition to You Don't Know Jack, they made a flying toaster screensaver, if you remember. You remember the nineties?

**Lenny** (00:37:48):
How could you forget that?

**Tom Conrad** (00:37:50):
And when I met them, they were picking off this game development for this trivia game, and were looking for someone to lead the technical team. And so I joined as technical director for the You Don't Know Jack franchise, managed a team of engineers, and it was a completely different culture than what I was used to at Apple.

**Tom Conrad** (00:38:11):
It was certainly the case that I was welcome to weigh in on the game design or the marketing or some other aspect of the deliverables, but my job was to build the software on time with high quality, period. And if I did those things, I'd be rewarded. And if I didn't, I would not be successful. And no amount of insightful feedback on the gameplay or the packaging, or whatever else I might want to do, was going to benefit me and my career at all.

**Tom Conrad** (00:38:48):
And it was such a blessing to be forced to go deep on something, because I spent a lot of time developing chops as an engineering manager, but I also wrote a ton of software. And that's really honestly when I became a software engineer. My college education was insufficient to get me there, and the amount of software I wrote at Apple was insufficient to get me there. But I came out of my Berkeley Systems You Don't Know Jack experience feeling like I could really hold my own technically in a way that just wouldn't have happened.

**Tom Conrad** (00:39:20):
And so I do think that there's something to be said for a culture where there are swim lanes and people are encouraged to be really, really exceptional in their lane. And so I feel really lucky that I stumbled into You Don't Know Jack When I did.

**Tom Conrad** (00:39:36):
And it was also, I mean, it was the first thing that I worked on that had just huge cultural awareness for a couple of years. I mean, it's crazy, they're still making sequels. It has been nearly 30 years, and there are versions of You Don't Know Jack that are in all of the stores, in the PlayStation store, in the Xbox store, in the iOS store. You can play new versions of You Don't Know Jack to this day. It's crazy.

**Lenny** (00:40:07):
Did not know that. I see the website now and it's a little different, but basically the same.

**Tom Conrad** (00:40:13):
So I'd say my lesson from You Don't Know Jack was definitely, it really does pay to get good at something and not just be a generalist.

**Tom Conrad** (00:40:24):
And then, I mean Pandora, it wasn't quite the next thing that happened. After You Don't Know Jack was Pets.com, and then after Pets.com there was nuclear winter in the industry and I worked in enterprise software for a while.

**Tom Conrad** (00:40:37):
And after nuclear winter I had this idea that I was going to build a destination for music discovery on the web. And I've been doing enterprise software, the consumer intranet was non-existent for those years, early aughts.

**Tom Conrad** (00:40:54):
But around 2004, things started to thaw a little bit and you started to hear the first signs of the companies that we came to call Web 2.0, Flickr would've been one of the early examples. And one of the enterprise software things I did was a personalization recommendation engine that used a vector space. It's like a lot of the things that we're talking about now in AI, albeit 20 years ago.

And so I knew something about recommendation systems in the enterprise space, and I was super passionate about music. I'm not a musician, but I was that kid in college who would corner you and be like, oh, if you like this band, I got to play this for you and [inaudible 00:41:37] with stereo until you would beg to leave.

**Tom Conrad** (00:41:40):
And so I had this idea that maybe I can use the internet to do that at scale, not with just one person, but with hundreds of thousands of people or millions of people maybe. Introduce them to music that they would love but otherwise would miss out on.

**Tom Conrad** (00:41:53):
And I promised that I was going to tell stories about luck in my career, there's been a gazillion of them. But one really dramatic incidence of that is I was sort of biding my time to exit this enterprise software company. I was VP of engineering, a whole team that reported to me. I felt a lot of responsibility to exit in a responsible way. But I was really excited about this digital music company that I was going to start. But I wasn't telling anyone at all because I didn't want ti to get back to the team.

**Tom Conrad** (00:42:25):
So I flew down to Los Angeles to go out to Coachella in the spring of 2004, and completely randomly physically bumped into a guy that I had gone to high school with on the polo field, and hadn't seen him in a decade. And the thing that we had in common in high school was we loved music. And so I tell them the story of, I'm going to start this company to do personalized digital music on the internet. And he said, there's this woman I work with who just left our company to move to Oakland to work for this little company called Savage Beast that are also doing something in music recommendation. Do you want to talk to them? And I said, "Sure, why not?"

**Tom Conrad** (00:43:11):
So I got introduced to Tim Westergren, who was the founder of Savage Beast. Savage Beast was like a seven or eight full-time employees at that point. They made a music recommendation engine that they licensed to other companies to put in consumer products. So Savage Beast's customers were Best Buy, who put it in kiosks, and AOL, who used it on the AOL Music website. And they were looking for a VP of engineering. And I got the offer, thought about it a little bit. I declined because it was kind of this B2B2C thing and I really wanted to do something consumer and I had an idea about the app.

**Tom Conrad** (00:43:49):
And a month later, they called again and said, "We keep talking to people. We really think that you're the person." And interestingly, one of the reasons they thought that I was the person is they were really impressed by the fact that I had run engineering at Pets.com. So I mean, it's just one of those things where these things do pay dividends, even when they're a disaster.

**Tom Conrad** (00:44:07):
And honestly, what I would really say was almost like a lapse in judgment, I said yes, even though it wasn't the product that I wanted to build. And I won't bore you with all of the details, but 90 days later, after some typical early stage founder drama stuff, the founding head of technology and product had resigned completely unrelated to my arrival. And the company had a new CEO, Joe Kennedy, and Joe had this idea for what he called the 1-Click Personal Radio. And Joe is a product marketer and just the best CEO in the whole world. We spent 10 years together building Pandora.

**Tom Conrad** (00:44:51):
And he sort of gave me the keys and just said, "As long as it fits the brief for 1-Click Personal Radio, it's all yours." And I got to build the team and the culture, in collaboration with him and Tim the founder, over the course of the next 10 years, and just every good thing.

**Tom Conrad** (00:45:14):
So I mean, there's just a million billion lessons from Pandora, and everything I am as a product leader and then an engineering leader comes from things that happen at Pandora.

**Tom Conrad** (00:45:24):
But maybe the thing that I think of first is, I think we met our early audience in an incredibly genuine way. For example, when we launched the support@pandora.com was an alias for all@pandora.com. So if you sent a customer service request to Pandora, every single person in the company received it. And because we made a decision to have no customer support team in the first year, the expectation was that whoever sees the request first should respond to it.

**Tom Conrad** (00:46:01):
And so you would write to us and you would get the founder or you'd get me or you'd get the engineer who wrote the feature or you'd get the CEO. And there were no macros to respond to commonly asked question. There was no read the FAQ. And there were no rules about what you could and couldn't say. If the person's like, "I think this feature is stupid and broken," we would encourage people to say, "You know what? I think you're right and I'm really struggling to get our stupid head of product to agree with me. I'm going to CC Tom and maybe we can convince him that this was a bad decision."

**Tom Conrad** (00:46:35):
And we did all of that because we thought one of our superpowers as a young company was that we could just engage with our audience as real human beings, not as a shiny brand that was trying to be something that we could just never be. This period is where the iPod and iTunes are at the peak of their powers. And so there was no way we could sort of out-Apple Apple on the brand front.

**Tom Conrad** (00:47:02):
And so we were just ourselves, and I think it really, really was a catalyst for the word of mouth that developed around Pandora. And we never spent any money on paid user acquisition, literally no dollars in the entire time I was there, because people loved the product and they told their friends about it and that's how it grew.

**Lenny** (00:47:21):
I saw a stat that you grew Pandora from 0 to 80 million users, from 10 employees to 3000 employees, from 0 basically to a multi-billion dollar company.

**Tom Conrad** (00:47:31):
We did those things. We did.

**Tom Conrad** (00:47:34):
Also, I think my product stewardship in some ways set the scene for Spotify to walk through the digital streaming door and show us the exit. So Pandora is, again, such a privilege to be able to work on something that touched and continues to touch tens of millions of people's lives every month. But it's bittersweet from the standpoint that I think we had an opportunity that in some ways we misplayed.

**Lenny** (00:48:06):
My mom is still a huge fan of Pandora, uses it every day for whatever choice.

**Tom Conrad** (00:48:10):
I mean, it's still going. And the numbers are still tens of millions of people in the US listen every month. So it's a thing. But yeah, it's a little sad that it didn't have quite the staying power that some of these other things that have come along since have.

**Lenny** (00:48:25):
Just on that topic, do you think there's something that you could have done, someone could have done? Do you think there was an opportunity to become Spotify? Or is it the business model and the math formula was set up in such a way that it was near impossible?

**Tom Conrad** (00:48:37):
One of the things that was tough for Pandora was that when we started it, digital music was a category that no investor wanted to touch. It was lawsuits. There was no money to be made. There were relationships with the labels that were completely impossible to nurture. And there had been no big outcomes. I think the biggest exit in digital music when we got going was I think Yahoo had bought Musicmatch for like $400 million. And so that was seen as kind of the ceiling on the opportunity.

**Tom Conrad** (00:49:08):
And along the way we found investors who believed in our vision and invested ultimately hundreds of millions of dollars in the company over its pre-public years. But there was never investor enthusiasm for the company in the category that was anything like the investor enthusiasm that a company like Spotify enjoyed just six, seven years later, Snap enjoyed for its pre-public tenure.

**Tom Conrad** (00:49:35):
And I think part of what was different for Spotify is that the comps were not... Musicmatch was 400 million, they were Pandora at 8 billion, but even above that they were Netflix at 100 billion. And so investors just had this new sort of optimism about what you could do in subscription and in streaming, and Spotify really played that to their advantage in a way that we couldn't because we had gone public and the public market investors were still trying to figure us out. So we didn't have access to capital. It was very hard for us to take the same kind of risks that Spotify took.

**Tom Conrad** (00:50:17):
But then I think we just completely misjudged one really important thing, which is that we were really inspired by disrupting terrestrial radio. Terrestrial radio is the predominant form of music consumption in the country. People spend, I can't remember the exact stats, but by minutes consumed, it's something like 10 times more music minutes a month on radio in the aughts and early tens than on owned music. And the advertising supported sort of radio market was a $30 billion category, and recorded music was $8 billion.

**Tom Conrad** (00:50:57):
And so we had this idea that we're going to reinvent radio, and Spotify and Rdio and Apple Music and the 14 others, Rhapsody, which was Spotify before Spotify, they were all going to chase this smaller owned recorded music opportunity, and that we could be left relatively alone over here going after the less sexy but actually bigger market. And I think we just got it wrong. It should have been obvious that inevitably all of your music in any format was going to be delivered as a stream from the cloud. And that the record labels in particular, they were going to set the terms on what the structure was. And the structure that they preferred was the Spotify structure. And we operated under a different licensing...

**Tom Conrad** (00:52:01):
And we operated under a different licensing regime that they hated, that was a statutory license that we got from the government. And it would've been exceptionally risky for us to come out from under the statutory license and do direct deals with the labels, but it was a requirement to play in the world that they imagined as the future, and we should have imagined as the future, too. And eventually, the company got around to it, but it was too late.

**Lenny** (00:52:29):
It's interesting that so much of this was rooted in that original vision that you shared of Pandora of the radio, smart radio in your pocket, [inaudible 00:52:37] personal radio that you just stayed on that track, even though there was this other track. But I think it's important to point out, you said it was seven years later. And I feel like there's this interesting trend with the companies you've worked at, pets.com and Pandora, that it's too early, you just come too early at these ideas. And I feel like that tells me Quibi might still happen. There's a Quibi coming seven years from now.

**Tom Conrad** (00:52:59):
You know what's really funny about that? Just today, there's a headline about a Hollywood-produced show that's launching on Instagram Reels and TikTok that was shot vertical. And the headline is literally something like, "Is TikTok the new TV?" And it's pretty funny that literally, that's what Jeffrey and Meg called it when they were incubating the idea. I mean, I think it's pretty clear that purpose-built video for mobile looks a lot like TikTok. And I don't want to take anything away from all of the innovation in that space that they and the other players are driving that Quibi didn't capture in its initial product definition. But I mean, obviously, we stare at our phones consuming video of all kinds all day every day. So there there's definitely something there.

**Lenny** (00:53:53):
The PDF that I mentioned that I got from the recruiter, the first page again says, "You have a TV in your pocket." So it's exactly what they're pitching. That's amazing. All right. I think what I've learned, I need to bet all my money on this new Quibi clone because the timing might be right.

**Tom Conrad** (00:55:21):
At Pandora, I was the head of product and was head of engineering. And our CEO was brilliant, but he was a product marketer. I mean, Joe was all things. He was an engineer by education, and a great marketer, and a great finance person, and just such a utility player at a very, very high level across every discipline. But he was also really, really good at letting his team do their jobs. He really let me run product and engineering. And so not only did I have tremendous latitude to make good and bad decisions about product, I also really got a seat at the table to help lead the company. So rewarding, so gratifying. Best professional experience that one could have.

**Tom Conrad** (00:56:05):
So I leave Pandora after a decade. I take a year trying to figure out what I'm going to do next. But after about a year, I got introduced to Evan. And it's kind of a funny story. A mutual friend sent this introduction over. Evan immediately responded and said, "Why don't you come down to Los Angeles and have a coffee with me?" So I fly down. It's not clear if it's a job interview or what it is really. I mean, I was just lightly exploring things that were out there and was a big fan of what he was doing with Snapchat. So I spent 45 minutes with him, and then I spent 45 minutes with the head of engineering, and another 45 minutes with the head of legal, and then they tossed me into a conference room with a dozen product designers, all in their mid to late 20s, many of which had gone to school at Stanford with Evan.

**Tom Conrad** (00:57:01):
I would come to learn all really, really, really impressive super, super talented people, but it was just 10 of us sitting around a conference table. And it wasn't really clear that they knew why they were talking to me, but we had an hour long free ranging conversation. And so I left, and I thought it was a totally fascinating morning, but I wasn't sure what had happened, really. It was like "Well, with these interviews, it all seemed very ad hoc. Is there a job opening?" It was a little odd. And I went to lunch on Abbott Kinney and got a text from Evan's admin saying, "Can you come back to the office? Have you gotten on your plane yet?" I was like, "I was just ordering lunch. I'll just come back right away."

**Tom Conrad** (00:57:49):
So I go back. Now, it's one o'clock in the afternoon. This entire thing started at nine o'clock in the morning. I sit down in the conference room. Evan comes in with a manila envelope and says, " We loved you. We'd like for you to be our VP of product," and handed me a written offer, all the terms, the stock compensation, the whole thing. I'm gobsmacked. I'm flattered, that this is really playing to my ego. I can't believe that this company that feels like maybe the most interesting thing that's happening in consumer tech, that their notoriously brilliant and mercurial founder has taken enough of a shine to me that he wants to give at least some of the keys to the product kingdom over after such a short courtship.

**Tom Conrad** (00:58:34):
So I leave, and when some of that buzz wears off, I start to wonder if there's some red flags here maybe. So I tell Evan, "Listen, I'd like to come back and meet more of the leadership team and spend more time with you, go a little deeper on what this means." And so we extend our courtship by another week or so, and I'm super impressed by the rest of the leadership team and the product thinkers and the designers and things that I was going to get to work with on a daily basis. And so I take the job full knowing that it's going to be wildly different than Pandora, where I had all of this latitude to do whatever I might want to do, and in the context of Snapchat, at best, I was going to be Evan's right hand, a person that principally executed his vision.

**Tom Conrad** (00:59:29):
And that's certainly what it was. I mean, Evan and I ended up having a really great collaboration, but it was certainly most days, I was executing on his vision, both at a high level, and very much in the details. And Evan's truly brilliant, I mean, and he's also actually a really nice guy. I think in some ways, he gets a bad rep for... He has very high standards, but he's a very kind person, in my experiences with him. But it was a super exhausting job and not as soul satisfying as I wanted it to be. And after a couple of years, like I said, I thought maybe I just wanted to make croissants or something.

**Tom Conrad** (01:00:14):
But one really, really big important lesson that I learned at Snap is about risk taking. And when you have the financial support and the foundational relationship with your investors that Evan has, it really allowed him to take these really big swings, acquire a technology that he thought was game changing, build features speculatively that maybe would be pruned in any other product roadmap planning process because the odds of them having an outsized impact were modest. And it just allowed him time after time to make bets that paid off, and we forget about the ones that don't work when there are so many home runs in those years. And we didn't have... Environmentally, we weren't set up for that at Pandora, but I think in some ways, I wasn't temperamentally inclined to those kinds of big swings. And I think I take bigger risks and encourage bigger swings now because of things I learned from Evan and Snap.

**Lenny** (01:01:18):
That is an awesome story. It resonates a lot with what Brian shared about how he thinks about product now and just telling people what to build versus very bottom up, "Tell us ideas you have." That impact, the way you run, we're going to talk a bit about you as CEO now, but I guess, do you have a place that you try to be of CEO as, "Here's what we're building"?

**Tom Conrad** (01:01:40):
As a product-oriented CEO, how much you should lean in to the details versus set direction and create an environment where great people can do great work, I suspect there's not one answer that applies to every company stage. When I was at Apple, one of the reasons that we struggled to ship things is that Apple did a great job of assembling incredibly, incredibly smart and talented people. Just everyone around me at that early stage in my career was so, so inspiring. But one of the side effects of that is we would get in a room and we would turn over some problem or opportunity, and we would talk ourselves out of every good solution because it wasn't perfect. I used to joke that Apple was the only place in the world where a vote of a thousand to one was a tie because that one person would be so thoughtful in their critique that the other thousand people would be like, "Hmm, that's right, that's right." And even though there's been this huge consensus of what the right answer was, we would talk ourselves out of making decisions.

**Lenny** (01:02:50):
That one wasn't Steve Jobs, necessarily? It could be somebody else?

**Tom Conrad** (01:02:53):
He wasn't there.

**Lenny** (01:02:55):
Wow.

**Tom Conrad** (01:02:56):
So I think what broke Apple out of that mode was Steve came back and they didn't vote anymore. Steve was just making the call. And so I have some sympathy for Brian and Evan, who have these big, thousands of people working for them. And as they delegate, they grow frustrated that there's not progress at the pace that they're looking for, and that there's indecision, and the people on the teams report that there's just churn and no progress, and there's fiefdoms and politics and all the rest, and that as the CEO, as a brilliant product-oriented CEO, they are uniquely situated to come in and cut through all of that garbage and get the trains running on time again.

**Tom Conrad** (01:03:49):
Having said all of that, I also think that it can be a mistake to be that kind of leader in a smaller org because part of the opportunity in a small org is to assemble a group of people that are incredibly talented that believe in your mission and where who you can easily influence with a much lighter touch and set them up to build a culture in an organization that can execute. And so I see my job as CEO is to try to surf that edge of I'm really in the details. So I deeply understand the business and the product decisions that we're making and the processes that we're using to run the business, but not overplay my hand with respect to dictating outcomes.

**Tom Conrad** (01:04:40):
The one thing you'll always have as CEO is, no matter how much you tell the team that when I swing by their virtual desk and say, "I've been thinking about this little detail that's not important right now, but what do you think?" It's like nine out of 10 times, that person is going to go and start working on that thing. And so you do have to be just really careful about the way you engage in some of those details, I think.

**Lenny** (01:05:06):
There's a really good episode I had with Lane Shackleton from Coda, and he shared this framework called flash tags that they use at Coda, and I think it comes from HubSpot, of you tell people, "Here's what the subpoena is. Is it an FYI? Is it a suggestion? Is it a do this?" There's four of them and one's like, "I will die on this hill. You need to do this."

**Tom Conrad** (01:05:27):
I try to do a lot of that. I wish I could say that in my experience that that pays off. I spend an awful lot of time, even the stuff I say very clearly, just one person's opinion, focus group of one, "Don't change your priorities to go work on this," it has more of an outsized impact on people's behavior than I intended.

**Lenny** (01:05:49):
Yeah. Easier said than done. Coming back to your journey, we've talked through the story up until getting to Quibi, but two years ago, you went in a whole new direction, and you're now the CEO of a company called Zero. What is it like to move from just being a product leader or engi leader at a company to being the CEO for the first time? Why did you choose Zero as that role? And what have you learned as CEO that you wish you knew as a product leader or engi leader at a company that listeners might find useful?

**Tom Conrad** (01:06:19):
It's been a really, really incredible couple of years. In the aftermath of Quibi, I spent a lot of time, as we all do, soul-searching about what I learned and what I might want to do next. And as I thought about it, I realized that I really wanted to move on to something where I can have a direct impact on the culture and values of the company that I was involved in. I really got that opportunity at Pandora in a big way. And I had spent the five years of Snapchat and Quibi working for Evan and Meg and Jeffrey who are all incredible business leaders, but have their own very specific style and approach, and that leaves a mark on the culture that's unique to the founder.

**Tom Conrad** (01:07:04):
And then as we've discussed, I'm always really interested in building things that are near and dear to me, and I was particularly thinking about what can I do that could have a really positive impact on the world in my next chapter. I've built an awful lot of media stuff through the years, video games and streaming services and so forth, and it seemed like maybe there was something that had a little bit more weight to it that I could spend my time on. And so my first thought was I would start something, a company idea I was quietly workshopping for some months. And completely independent from all of that, it's eight months into the pandemic, and my own personal health was at an all time low. I was 50 or 60 pounds overweight, my cholesterol was in the red zone. I mean, I was out of breath climbing stairs, which is something that I had never encountered in my life before.

**Tom Conrad** (01:07:59):
I'm a bit of a yo-yo dieter and I'm always critical of looking in the mirror, but I was never ever really worried about my health, my longevity, and suddenly, I was. And so my solution to that was to go really deep on metabolic health, just thousands of hours of podcasts and videos and glucose monitoring patches and Oura Rings and digital fitness gear and just to try to understand the things that impact health and longevity. And as much as I would like to report that what I learned is that there's some magic pill that you can take, maybe some off label rapamycin or something, the truth is, is that to live a longer and healthier life, you really have to attack what I would call metabolic disease, which will manifest in overweight and obesity and pre-diabetes and diabetes and high cholesterol and all of these things that impact your long-term health.

**Tom Conrad** (01:08:59):
And so I found Zero in this path and was using it to help with my own health journey. And Mike Maser founded the company four and a half years ago, and he and I were talking in this interval about my own experience with the product. I was just giving him product feedback and so forth, and he was telling me a little bit about his own entrepreneurial journey. And somewhere in the conversation, Mike said, "My intention is to step up into the executive chair role and to find a CEO for the company." So again, in my story, just over and over and over, this incredibly fortuitous thing happened. I just knew immediately that it ticked all the boxes, "Here's a chance to lead something that already had some momentum to impact the culture and values in a really direct way and was really, really close to my own personal journey."

**Tom Conrad** (01:09:50):
And so we know we've got a great little company and 27 people, we've got more than a million users on the platform every month. Over a hundred thousand of them pay us with tens of millions of dollars of revenue through the years, and have had double-digit growth even coming out of the pandemic when lots of health and fitness companies saw retreats. And most importantly, it actually works. 75% of the people who use the platform lose weight. People lose, on average, five to 10% of their body weight in the first 60 days. And because of the success that people have, we grow just completely organically. We have no paid user acquisition at all. It's really a word of mouth business.

**Tom Conrad** (01:10:31):
But that's not to say that it's not challenging. All startups are challenging. And what we've really focused on for the last couple of years is we've been really focused on unit economics, really trying to understand how much value can we derive and deliver for every person who downloads and installs the app, how do we convert them through all of the funnels efficiently and get them engaged with the product and get them to retain and drive that up in a really systematic way. And with my whole career, I'm definitely a person who started off thinking software development was mostly an art form, you find brilliant visionaries who have a deep understanding of human behavior, and they craft solutions for problems that other people don't see, and they make them delightful, and they get all the little details right. And when you found product market fit for the art, then you optimize them through a really quantitative take.

**Tom Conrad** (01:11:34):
And so I'm definitely a person that sees both sides of that left brain and right brain equation that's important in software. But here's the thing my eyes have really opened to in the last two years. While companies are definitely the software that they make and the products that they deliver and that there is an art and science to that, as I described, there is also, if you step back, there is an equation that describes the business. It talks about how you turn investment into returns. And I suppose if I had come up with finance and been a business major that maybe that's the way that I would've conceived of companies to begin with. So maybe it's a little embarrassing that I had to be 53 years old before, I think, the scales fell through my eyes and I was like, "Oh, companies are equations."

**Tom Conrad** (01:12:24):
And so when we first started talking about lifetime value and customer acquisition costs and getting those two things balanced and just the thinking about the unit economics of the business, my natural instinct was to go immediately to the leaf nodes of the equation like, "Oh, what percentage of people do we convert from install to registered and from registered to trial," and these very way down at the bottom of all the funnels and to ask the product team like, "Let's try to optimize these." And in the process though of trying to understand where we could take the business as we optimize those various dimensions and trying to understand too which of the dimensions had the most leverage, I started building these ever more sophisticated models that describe the whole business.

**Tom Conrad** (01:13:16):
I mean, in startups, you get to wear a lot of hats. And definitely a hat that I'm wearing that I didn't anticipate at all is I'm the full-time FP&A guy for Zero. And so I built this spreadsheet that aggregates data from all of our business intelligence tools and raw data from our subscription transactions and looks at all of our historical results and all of our expenses and spend and then could use that to predict future scenarios by manipulating all of these variables. And it's just not at all the way I ever thought about products before. And I know that you've got lots of listeners like, "This guy's an idiot. This is a fundamental way to contemplate product work."

**Tom Conrad** (01:14:05):
But if there's anybody out there like me who thought of it as art first and then optimization in the details, it is really, really powerful to spend the time to create the model that describes the whole thing so you can identify what are the high leverage points to focus on. So been doing a lot of that at the company in the last two years and it's really starting to deliver incredible results. Like everything in life, I mean, you sign up for things so you can learn, and that's the big one for me in the last year.

**Lenny** (01:14:36):
I really love that takeaway of as a CEO coming back to share, here's what you should be thinking about that the CEO is probably thinking about, as a product leader, you may not be, of trying to actually spend the time to think about the business model and understand it deeply because your founders are thinking about it all the time. And so if you're not, you're missing out on here's a way to influence them, here's a way to...

**Tom Conrad** (01:14:57):
It's so funny too because it's a thing I suddenly understand something that mystified me through my entire career, which was I'd go to board meetings and the investors would ask these probing questions, but they were really never about the product and what the product did and what the product roadmap was and what the features were and what this... It all seemed to operate at this level that was almost completely independent of the details of the "what is the solution you put into the world", which as a product-oriented thinker, was just completely baffling to me. And I now realize that they were tilling the soil that I'm talking about, they were tilling.

**Tom Conrad** (01:15:39):
It doesn't really matter what the screens are and what the features are. I mean, it certainly matters, but that there's another higher order way to look at a company, which is really about the optimization of this equation. And I think particularly, if you sit on 25 boards, it's probably a much more efficient way to evaluate how your companies are doing and where to spend your time and how to help by thinking about them abstracted up at that layer. So I will never stop thinking about software development as being an art form and I will never stop enjoying the days when I get to lean in on the details, but it's been pretty eyeopening.

**Lenny** (01:16:18):
The other thing that stands out here, one is I think this is especially true for consumer subscription apps, which I've done some research on. And basically, they never work. There's Duolingo, there's Zero, which I didn't know how much scale you guys reached. My math here real quick. So you have a million users, a hundred thousand paying users. You charge at 10 bucks a month. I know there's a discount for an annual plan, but basically, you're making somewhere around a million dollars a month, which you don't have to confirm or deny it, but that's the math I just did, and that's crazy. So congrats. That's a rare successful consumer subscription app. It never happens.

**Tom Conrad** (01:16:53):
And like I said, every startup is hard, and I never stop being surprised at the new hard things that pop up every day. But we're on a really great run. We've had a tremendous year, and I'm just so, so proud of the team we've assembled. They're incredible for the last.

**Lenny** (01:17:08):
Part of the reason you're so successful is exactly what you said. There's a huge focus on LTV/CAC, the math formula, because for these sorts of businesses, the crux of it is can you acquire people for less money than you need to spend?

**Tom Conrad** (01:17:21):
One thing that's really fortunate for Zero is Mike Maser, who founded the company, and I have both been around the block long enough and enough times that we remember 2008, we remember 2000. And so in these moments in the pandemic, there were companies in our category that were raising hundreds of billions of dollars with the intention of throwing it at paid user acquisition. And we made a conscious decision to optimize the value of the organic traffic that we were getting and to drive our growth through LTV expansion rather than top of funnel expansion, which was candidly not in fashion in 2021, 2022.

**Tom Conrad** (01:18:00):
... in 2021, 2022. It turns out it's much more in fashion these days as companies are called upon to be much more capital efficient than they were during the pandemic era. I guess I feel somewhat fortunate that my natural inclination as an entrepreneur is more in sync with the expectations of the market than it was for a while.

**Lenny** (01:18:27):
Okay. So you've probably had the longest career arc of anyone I've had on this podcast. You've worked at all of these different companies in a lot of different phases. You're still at it. And I'm curious what you've learned about how to maintain your mental health and avoid burnout essentially through this journey. You mentioned you take some time off. Is there anything else you found or is that a trick of just how to not burnout?

**Tom Conrad** (01:18:51):
Do you know this Japanese concept called Ikigai?

**Lenny** (01:18:55):
Mm-hmm. Yeah, but share it. Share it for folks that may not be familiar.

**Tom Conrad** (01:18:59):
So the idea is it's a Venn diagram and there are four spheres. There's a sphere that's labeled what you love. There's a sphere labeled what you're good at. There's a sphere labeled what the world needs, and there's a sphere called what you can be paid for, and where they all intersect is this Japanese idea, Ikigai. It's the intersection of what you're good at, what you love, what the world needs, and what you can be paid for. If you find that, it's Ikigai. And interestingly, your listeners should go and find this because there are interesting ways to label the other intersections, the intersections where all four don't come together. And what's really interesting is that the ones that are three but not four, I think because they're the ones that are close but not quite to this really satisfying thing. And so it's like when you find those, it's really easy to choose a job or to choose a path where you have three but not four, which is a really great recipe if you're feeling like there's something just out of your reach that's really important.

**Tom Conrad** (01:20:09):
Anyway, it's a great framework to think about your life and your career. So to start, I'm incredibly lucky that it's all Ikigai for me. What I'm good at, what I love, what the world needs, what I get paid for, they have always overlapped. And a big part of it is just what I love is this world. I love software, I love building software, I love writing software, I love using software. People are like, "What are your hobbies?" I don't think I have any hobbies and I think about, "Well, what kinds of things do I do on the weekend for fun?" And it's like I'm teaching myself After Effects or something, which I will immediately forget, but it's just fun to go really deep on some piece of interesting software.

**Tom Conrad** (01:21:02):
So I'm very lucky. And so I think that has been super sustaining for me. One of the reasons I've been able to do it as long as I have without really burning out is that just, it's what I do. And in some ways it's why I come back to it. It's easy to say, "I'm going to become a pastry chef," but left to my own devices, I use software, I make software. It's my hobby, it's my passion, it's all the things.

But a couple of thoughts about how one engages with their work. One thing is I'm really not a #hustling kind of leader. There was a woman that I worked with on the Finder just out of college that left a really big mark on me. My own style of work then, I think I mentioned my memory of flashing, blinking the folder animation was a 2: 00 AM kind of thing. I was 23 years old. I woke up at 11 o'clock in the morning. I went to the office, I screwed around and played video games in the Apple Arcade and went to a couple of meetings and had lunch and stood at the whiteboard and pontificated about some nonsense. And then about four o'clock every day I would start writing software and I would write software until 2:00 or 3:00 in the morning and then I would go out to dinner with people from the team in the middle of it and whatever.

And so it kind of looked like I spent 14 hours a day, six or seven days a week at Apple, and I was celebrated for this. There was lots of nights where I would work clear through the night and my boss would come in the next morning, he'd be like, "Are you still here?" And I'm like, "I'm still here. Look at this cool thing I did." And I got a lot of attention for that. And then there's this woman on the team who showed up every single morning at 8:30, sat at her desk, wrote a ton of great software, and every night packed her stuff up and left. And she contributed more than I ever did. And I don't think she got the same kind of recognition that I got because of the way she did the work.

**Tom Conrad** (01:23:11):
And when we were building the team and culture at Pandora, I thought about her a lot and really made a point of saying that I just wasn't interested in performative contribution, that it's the work that matters and what I want to celebrate is if you can show up and do it and go home and have other things in your life, because I think that's a recipe for being able to do it on a sustained basis rather than burning yourself out.

**Tom Conrad** (01:23:38):
I think there's some nuance in this. I think 22 year old me was always going to want to work through the night. And so I think creating space that that's okay too is important. And I think maybe in some ways at Pandora it was almost like that wasn't okay. It was like, "You should be taking more breaks. Why are you going this hard?" But I do try to create environments where people have a reasonable balance between their regular life and their technology life or room for that if they choose it. And I do think that that has through the years, has helped me keep at it, but I still work a lot of nights and weekends because I love it. It's what I do.

**Tom Conrad** (01:24:16):
Here's the other thing. I got very, very lucky with the Pandora experience and got this outsized, probably inappropriate financial reward for being a part of it and gave me options that I never imagined that I would have. And so after 10 years I left and I didn't know what I would do, but I did really need a break. It was a really hard job and that was definitely a moment where I needed some time to recover. But I think if you had asked me on that first day, I would say, "I don't know why these people find success and then start another company right away. Why? There's so many things you could do in the world, why would you start another company? It's so hard."

**Tom Conrad** (01:25:02):
And I was particularly in love with the idea that I had access to experience. I didn't really care about things, I didn't want a fancy watch or whatever, a car, but I wanted to see the world. And so I thought, "I'm going to just go and I'm going to live in London for three months, then I come back to San Francisco for a month. I'm going to go live in Mexico City for three months and I'm going to just have this life where I'm soaking up experiences." And after doing that for six months, the thing that I came to realize is that what I care about way more than experiences is relationships. If you're the person who is constantly on a plane seeking out some new experience, it's really hard to form and maintain intimate, satisfying relationships.

**Tom Conrad** (01:25:47):
So I went back to San Francisco, I'm like, "I can't be all over the world if I want to be engaged with friends and like-minded people." And you know what people do on Monday morning? They go to work. And so if you want to be engaged with humanity, where they are on Monday morning is at work. And so more than I had the itch to build things, which I do very much have, I had the itch to collaborate, to be in the game with other people. So that was what took me to Snapchat, took me out of chasing experiences and took me back to building again. And then as we've already described, at a point I thought, "Well, I care about this collaboration, but maybe it doesn't need to be software that I'm creating in the world." And Quibi gave me a chance to fall back in love with that process again. And here we are, more software.

**Lenny** (01:26:48):
Plus being on a board of a hardware company. What you just shared reminds me of Mark Manson's book, The Subtle Art of Not Giving a Fuck. Have you read this book?

**Tom Conrad** (01:26:58):
I have not.

**Lenny** (01:26:59):
Okay. It sold a bazillion copies, and the core of it is that we get joy out of solving problems and we think we'll be happy when we have freedom to do nothing. But it turns out freedom is only helpful to help us discover the problems we just want to keep solving.

**Tom Conrad** (01:27:16):
Yeah, totally. I think that's exactly right. Yeah.

**Lenny** (01:27:20):
It sounds like that's the experience you went on. Last question, this new segment, I'm going to call Contrarian Corner. And the question is, is there something that you have a contrarian opinion about, something that you believe that most other people don't?

**Tom Conrad** (01:27:35):
There's a segment in our industry that believes this very intensely, which is there's this belief that everybody needs to be a founder. And I think in some ways our industry would be much better off if there were fewer founders. I use an entire category of smart, creative, hardworking, talented, borderline visionary people who can raise that $2 million seed and go off and build some stupid company that's never going to go anywhere, that would be so much better off finding a team that needs their skillset and working on a problem that has, as I described, the mathematical formula that's going to win, that has the market opportunity that's the right size, that has the 10X thinking that can really... And I'm a little biased here because while I am a CEO for the first time now, I've never been a founder and I've been lucky enough to find a bunch of young teams that could benefit from my skills and enthusiasms, and sometimes to some success and sometimes to some embarrassment, but always really, really interesting.

Yeah. If you're out there and you think that the only possible way you can be successful in this industry on any metric, whatever metric you care about: you want the acclaim of your peers, you want financial reward, you want any of the things that people aspire to, outside impact on culture, whatever the thing is that gets you out of bed every morning, you can achieve that in collaboration with others. You don't have to be the person that raises the seed round.

**Lenny** (01:29:24):
I 100% agree with that. I'm always telling people, "Don't start a company. It's super painful, very rarely works out. It's so hard." I don't know what's harder, being a product manager or being a founder, probably being a founder. They're both very hard.

**Tom Conrad** (01:29:37):
Yeah, it is quite hard too. Yeah. Yeah. And just to be perfectly clear, there's something really special about founders. At both Pandora and now at Zero, the actual founders have from time to time said, "Well, you're like a founder." And I'm like, "I'm nothing like a founder. You took all the risk. When I showed up, there was a team and there was momentum and there was money in the bank. I appreciate your desire to say complimentary things, but 'You're like a founder' is not one that I'll take."

**Lenny** (01:30:08):
With that, we've reached our very exciting lightning round. Are you ready?

**Tom Conrad** (01:30:11):
I am ready.

**Lenny** (01:30:13):
What are two or three books that you've recommended most to other people?

**Tom Conrad** (01:30:17):
I really love Elad Gil's High Growth Handbook. It's organized into chapters about foundational company building, building a leadership team, building a board, and in addition to the thoughtful synthesis on that topic from Elad, he has an interview of someone that he does relevant to that section on each of the chapters. Really, really great read and super actionable if you're a leader in a young company. In a completely different end of the spectrum, I love big, complicated science fiction and there's a lot of garbage science fiction out there to be sure, but when you find something special, it's the best. So probably through the years in that category, there's a book called Hyperion by Dan Simmons. That's just a total classic. Everybody should read it.

**Lenny** (01:31:08):
I read that. I think I read the first couple in the first one.

**Tom Conrad** (01:31:11):
Yeah. There is a sequel that's exceptional as well. And it's probably worth warning your readers that Hyperion is quite long and has an absolute cliffhanger.

**Lenny** (01:31:21):
**Tom Conrad** (01:31:29):
Oh, that's so good too.

**Lenny** (01:31:31):
Okay. That's also very complicated, but incredible.

**Tom Conrad** (01:31:34):
Yeah, I had completely forgotten about that. That's a very special book. There's a couple in that series too.

**Lenny** (01:31:40):
Yeah, I think I only read the first one. Also, Three-Body Problem is the other one that I always think about. It's come up a couple of times on this podcast. Let's move on to the next question. Do you have a favorite recent movie or a TV show?

**Tom Conrad** (01:31:53):
I consume a lot of video content, both stuff that I'm very proud to talk about and stuff that I'm less proud to talk about, but I really liked the new Damon Lindelof show that's on Peacock called Mrs. Davis. So Lindelof, of course, from Lost and the new Watchmen on HBO, and Mrs. Davis is about an AI that you wear in your ear, like the HER AI and a nun that is hell-bent on the AI's destruction, and it reads like an early Coen brothers movie. It's super darkly funny and really, really thoughtful and unlike too much streaming, I think it's seven episodes, and it is a perfectly encapsulated story that has a beginning, middle, and an end and doesn't need to ever have another episode. It's amazing. Get yourself a Peacock subscription for at least a month to watch Mrs. Davis.

**Lenny** (01:32:56):
Favorite interview question you like to ask candidates that you're interviewing?

**Tom Conrad** (01:32:59):
There are two things about interviews. The first is I always encourage people when they're thinking about their interview questions to take any question that they're tempted to pull from their own current experience with the goal of trying to, how would this person solve this thing that I'm working through right now? Because just causing the other person to speculate and oftentimes about your own business, I think you know really well that they don't actually know anything about, it creates this imbalance between the interviewer and the interviewee that feels out of sync with how I think about the collaborative nature of a great interview. So I tell people that almost every interview question should start with, "Tell me about a time in your career when..." to give them permission or to set their expectation that I'm asking them to tell me about something they've actually done that is relevant to the topic that I'm probing.

**Tom Conrad** (01:33:59):
So that's just a structural thing that I try to do. And then usually towards the end of the interview, I ask almost everybody, "Imagine that you had a really great day at work. What was it that you did on that day?" Because what I'm trying to figure out is left to their own devices, what do they go to naturally because it rewards them? Because I think it's really important to find the highest best use of everyone you hire. And sometimes you can get a little bit to the bottom of what's the highest best use if you understand the things where there's a natural reward mechanism because it's like, "Well, I had this great day. I'm going to do more of that tomorrow." "What was the thing?" And it's just pretty illuminating.

**Lenny** (01:34:45):
Is there a favorite product you've recently discovered that you really love?

**Tom Conrad** (01:34:49):
I have bought every pair of headphones on the planet, in part because Apple's headphones do not stay in my ears. I've sneezed one across the room, I've lost one down a drainpipe. They don't stay, none of them, the wired ones, the not wired ones, the in-ear ones, and it's left me feeling honestly like I am some kind of anatomical freak. I look at other people wearing them, I'm like, "What is going on with their ear that it's just staying there perfect?" It seems inconceivable to me. Nonetheless, I have a pair of AirPods Pro's that I want to love and put up with the fact that I'm going to drop them, lose them, sneeze them across the room.

**Tom Conrad** (01:35:32):
But recently I came across this product from a company called Eartune that they're replacement tips and they just have the littlest bit of compression foam on them. They don't make the AirPods so big that they won't fit in the recharging case or anything, and they work. Miraculously, they stay in my ear. And Apple has this feature called Size Fit or something, go in settings, find your AirPods, scroll all the way down in the settings, and you can run this test where they play some audio and they tell you how good the seal is. And that revealed that my right ear is weirder than my left ear. So I actually have to use different tips in either sizes. Suddenly this sounds like a vaguely disgusting conversation that we're having. Anyway, I'm just really thrilled about my ability to wear Apple's AirPods after all these years.

**Lenny** (01:36:32):
I think what we're learning is you are a mutant, your ears are different. Cool. We'll link to that product in the show notes.

**Tom Conrad** (01:36:40):
Okay.

**Lenny** (01:36:41):
Do you have a favorite life motto that you often come back to or share with friends, either in work or in life that you find useful?

**Tom Conrad** (01:36:48):
You can't be a product person without having an eye rolly Charles Eames quote that's at the center of your existence. And for me, the Charles Eames quote is, "The details are not the details. They make the design." And I just really absolutely believe that, that the devil is in the details when you're a product designer and be uninterested in nuance at your peril.

**Lenny** (01:37:14):
Final question. You worked with the creator of the GIF format. How does he pronounce, giff or jiff?

**Tom Conrad** (01:37:22):
Yeah. So before all of this, I worked at a company called CompuServe when I was in high school.

**Lenny** (01:37:29):
CompuServe, I used CompuServe. I didn't know that. That's amazing.

**Tom Conrad** (01:37:33):
There was a guy on the team named Steve Wilhite who invented Graphics Interchange Format, GIF, and he was a straight out of central casting, 1960s neck beard programmer type, and the first I had ever encountered and very prickly. And it's crazy, but at the time, Steve would take all comers in the fight that it was pronounced jiff. Now he's obviously wrong. It's obviously pronounced giff. It's crazy to me now 35 years later, this is still a topic that pops up on the internet every once in a while. It's somehow like Zelig, I cross paths with the guy who created Graphics Interchange Format and I know his opinion on the topic even though it's an unpopular one.

**Lenny** (01:38:35):
Got it. So he likes jiff, but you agree it's giff?

**Tom Conrad** (01:38:38):
It's definitely giff. It's obviously giff.

**Lenny** (01:38:40):
Okay, great. We're on the same page. We've decided. Let it be known.

**Tom Conrad** (01:38:44):
Let it be known.

**Lenny** (01:38:45):
Tom, we've talked about successes, we've talked about failures, mental health, general health, all kinds of awesome stories. Two final questions. Where can folks find you online if they want to reach out and maybe ask some other questions that I didn't ask, and how can listeners be useful to you?

**Tom Conrad** (01:39:00):
I'm @tconrad on all the socials, from Twitter to Threads to Instagram. My DMs are open everywhere, and I would absolutely be delighted to hear from any of your listeners on any topic that they choose. And what can you do for me? I would love for folks to download Zero and give it a try and send me some feedback about what we're doing right and what we're doing wrong, and we'd love to have our little product be part of your life.

**Lenny** (01:39:32):
Awesome. Tom, thank you so much for being here.

**Tom Conrad** (01:39:35):
Thank you.

**Lenny** (01:39:36):
Bye everyone. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.

---

## [14/24] Interview Q Compilation

**Lenny** (00:00:03):
Welcome to a very special episode of the podcast. Ever since I started this podcast, one of people's favorite segments continues to be the lightning round, and in particular, a question I ask guests around their favorite interview question that they like to ask candidates and what they look for in a good answer. What we've done is we've picked my favorite interview questions that guests have shared. Out of over a hundred guests on the podcast, we've got 17 of my favorite interview questions all combined in this one episode. You can use this episode anytime you are preparing to interview candidates, if you want to improve your existing interview questions, or if you're about to get interviewed and you want to prepare for the kinds of questions that you might get in the interview process.

**Lenny** (00:00:47):
Before we dive in, let me tell you about our product called Sendbird. The all-in-one communications API platform designed for both web and mobile apps. In a world saturated with multi-channel communication, product teams are discovering the effectiveness of in-app communication. With Sendbird, businesses can elevate their in-app experience with decluttered and branded communication featuring AI powered chatbots, one-way messages, chat, video calls and livestream capabilities, all tailored for commerce, marketing and top-tier support. Forward-thinking companies such as Hinge, Patreon, Yahoo, Accolade, and more use Sendbird to build in-app communication experiences that drive engagement, conversion and retention. In-app communication has the highest conversion, highest engagement and highest satisfaction of any communication channel. And when it comes to investing in this channel, trust Sendbird to take your in-app communication experience to the next level. Start today with Sendbird's free plan, and as a listener of Lenny's Podcast, you'll get an additional two months of unlimited usage and access to all premium features, including creating your very own generative AI chatbot. Visit sendbird.com/lenny to begin your free journey. That's sendbird.com/lenny.

**Lenny** (00:02:04):
This episode is brought to you by ePO. ePO is a next generation AB testing and feature management platform built by alums of Airbnb and Snowflake for modern growth teams. Companies like Twitch, Miro, ClickUp and DraftKings rely on ePO to power their experiments. Experimentation is increasingly essential for driving growth and for understanding the performance of new features, and ePO helps you increase experimentation velocity while unlocking rigorous deep analysis in a way that no other commercial tool does. When I was at Airbnb, one of the things that I loved most was our experimentation platform where I could set up experiments easily, troubleshoot issues and analyze performance all on my own. ePO does all that and more with advanced statistical methods that can help you shave weeks off experiment time, an accessible UI for diving deeper into performance, and out-of-the-box reporting that helps you avoid annoying, prolonged analytic cycles. ePO also makes it easy for you to share experiment insights with your team, sparking new ideas for the AB testing flywheel. ePO powers experimentation across every use case, including product, growth, machine learning, monetization and email marketing. Check out ePO at getepo.com/lenny and 10 x your experiment velocity. That's getepo.com/lenny.

**Lenny** (00:03:22):
First up, we've got Eeke De Miliano. Eeke was head of product at Retool. She was also a PM at Stripe. Currently, she's actually starting her own company. Here's Eeke sharing her favorite interview question.

**Eeke De Miliano** (00:03:36):
"To what do you attribute your success?" And you can't say "luck". Because I think humble people will always say "luck" in some way, and I always kind of want to know, how self-aware are you, basically, and how curious are you? I think people have really sort of gone back and reflected on why are they where they are today really says a lot about how they think about the world.

**Lenny** (00:03:58):
Next up, we've got Geoff Charles, Head of Product at Ramp, and also just happens to be one of the most popular episodes of the podcast.

**Geoff Charles** (00:04:06):
I ask, "What's the hardest thing you've ever done?" I ask that because working at Ramp is hard, and 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 difficulty to them and how much work they put into overcoming that.

**Lenny** (00:04:31):
Next up we've got Shishir Mehrotra CEO, and Co-founder of Coda. Funny enough, we posted this exact clip to TikTok and Instagram Reels, and it blew up. It's one of the most popular clips we've ever put on our channels. By the way, did you know I have a TikTok and an Instagram channel? Just look up Lenny's Podcast on TikTok or Instagram. Anyway, with that, here's Shishir Mehrotra sharing his favorite interview question.

**Shishir Mehrotra** (00:04:56):
It's a very simple question, and it's a coded Eigenquestion test. The question is, "A group of scientists have invented a teleportation device. They've hired you, Lenny, to be their business counterpart, bring this to market, product [inaudible 00:05:14]." This question will actually work well for any role. But say, "You could be a product manager for this thing, bring it to market. What do you do?" That's the whole question.

**Shishir Mehrotra** (00:05:23):
Usually people will start asking a bunch of questions and say, "Well, tell me more about this device. What does it do? How does it work? Is it big? Is it small? Is it vast? Does it disintegrate things or not? Does it need a receiver and a sender? Is it safe?" All these different questions come out.

**Shishir Mehrotra** (00:05:39):
I'll just let those questions come out, and at some point I'll say, "Okay, nice job generating all the questions. Turns out these scientists, they hate talking to people and they're kind of annoyed by all your questions. And so they've decided that they will answer only two of your questions, and after that they expect a plan. What two questions do you ask?"

**Shishir Mehrotra** (00:05:59):
Interestingly, all of a sudden the sharp product managers, engineers, basically every role, they very quickly find what are the one or two Eigenquestions on this topic. There's no right answer, but I'll tell you one of my favorite ones, because the product manager said, "Okay, if I had to ask two questions, the two questions I would ask, one, is it safe enough for humans or not?" That was a very crisp way to get to just safety. How reliable is it? They didn't ask how reliable it is, how many bits in the middle of this. "Just tell me, is it safe enough for humans or not?"

**Shishir Mehrotra** (00:06:31):
The second one is, "Is it more expensive CapEx or OpEx? Is it more expensive to buy them or to run them?"

**Shishir Mehrotra** (00:06:37):
And then he took those two questions, and he said, "Just with those two questions, I can form these quadrants." You can say, "Oh, it's safe enough for humans and they're very cheap to buy, but expensive to run." Then you probably run them like human fax machines. You put them everywhere you can and you say, "Hey, look, it's expensive to use, but you all have the ability to teleport anywhere you want and this is how we're going to run it."

**Shishir Mehrotra** (00:06:59):
On the other hand, they're very expensive to buy, but cheap to run, you'd probably have to place them very strategically, in which case what you'd probably do is replace airports. Because airports are pretty strategically placed in places where people are trying to get around places.

If it's not safe enough for humans, then you've got a whole different class of use cases where you go value what goods are transported in very costly ways? And people come up with, "Do you do the most expensive things? Is teleporting people's replacement [inaudible 00:07:29], is that a really demanding thing?"

**Shishir Mehrotra** (00:07:32):
But these two questions kind of get to the heart of it. The question is totally made up. No teleportation device exists, at least not yet. I find that people's ability to learn the method is significantly higher if it's low stakes.

**Shishir Mehrotra** (00:07:45):
That question, by the way, if you ask a kid that question, the new teleportation device, you get to ask two questions, almost every kid will quickly get to two pretty good Eigenquestions. Again, kids are incredibly good at simplifying these things down. It's actually a skill we remove from ourselves. A lot of your candidates tell me things like, "I guess I would ask them what size it is." I'm like, "Why would you ask them? What decision is that going to allow you to make, to know what size it is?" Sometimes they can explain it, but sometimes not. They don't get hired.

**Shishir Mehrotra** (00:08:16):
But then, actually, the thing I'd say about it is, there are Eigenquestion kind of everywhere. You could take any product out there. I'll do it with my kids a lot. I was just riding with with my younger daughter, and she said, "How come there's three gas stations in the same corner? Why do people do that?" That's a really insightful observation. What's the Eigenquestion? How do you place a gas station? You can almost take anything and say, "What is the question that really drives this answer?"

**Lenny** (00:08:45):
This next interview question comes from Yuhki Yamashita, Chief Product Officer at Figma, also a former Head of Design at Uber.

**Yuhki Yamashita** (00:08:53):
"Describe to me a time when you were part of a controversial product decision. What did you do?" All those things. I think it's really revealing, because if they can set up this conflict and understand why this problem was really important and represent both sides and such that you can understand why that conflict existed in the first place, and they can do it in this kind of even-keeled way where you realize that they can take on these different perspectives, you start to learn a lot about that person, I think.

**Yuhki Yamashita** (00:09:25):
Or sometimes I just ask them for basic things like, "Okay, talk about a big problem that you worked on." The thought experiment for me is always, coming out of that, do I feel compelled to work on that problem? Right? No matter how boring it sounds on the surface, I think a really great product manager kind of casts something. It's like, "Well, this is why it's so existential and this is why it's so interesting, and really rallied the troops up. That's kind of one big thing of storytelling and communication, because at the end of the day, so much of our job is around that.

**Lenny** (00:09:57):
Next you'll hear from Katie Dill, Head of Design at Stripe; Karri Saarine, CEO of Linear; and Camille Hearst, Product Leader at Spotify, former Product Leader at Patreon; who all share the same favorite interview question.

**Katie Dill** (00:10:12):
"Tell me what work you are most proud of?" The reason I ask that is because, well, it helps me understand their taste and their judgment, what motivates them, what work they view as good and as a good outcome. It also helps me understand a little bit about what they like to do and where their gravity pulls them.

**Karri Saarinen** (00:10:36):
I think usually I like to ask what is the candidate most proud of and why on their professional life or otherwise. What they're most proud of and why? But I think it's gives you a little bit of indication of what the person values and how they think about things. Also, I think it's always nice that people can share something they think they did really well, and we can spend time on it, versus just asking something more negative things.

**Camille Hearst** (00:11:04):
I like to ask people to tell me about something they're really proud of that they accomplished, 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** (00:11:29):
Next is JZ, Head of Product at Webflow, former Airbnb colleague, sharing her favorite interview question.

**Jiaona Zhang** (00:11:35):
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?

**Jiaona Zhang** (00:11:44):
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. 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.

**Jiaona Zhang** (00:12:05):
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** (00:12:44):
Next up is Noah Weiss, Chief Product Officer at Slack.

**Noah Weiss** (00:12:49):
"What unfair secrets have you learned to improve the velocity and energy level of a product team?" When I say "unfair" or "secret", I usually mean not something that you probably read on a media [inaudible 00:13:02]. "What did you learn? How did you learn it? How does it work, and how do you apply it?" You also just get amazing, interesting bits of inspiration from asking that.

**Lenny** (00:13:11):
This next question comes from the very sultry voice of Ben Williams, former VP of Product at Snyk and now an advisor to product-led growth startups.

**Ben Williams** (00:13:22):
"Fast forward three years, what's different about you then?" A lot of people will default to telling you where they aspire to be in terms of role or title, but what I'm really looking for is signals of humility, of self-awareness, around areas of personal and professional growth. People who can be open about where they think they need to work on to grow themselves as people. I love that.

**Ben Williams** (00:13:49):
Also, just generally throughout interviews, I'm looking for curiosity. Day-to-day, good PMs will be asking "why" as much as my six-year-old son does, which is a lot, so I'll try and discern that through the course of the conversation. It's not really a question, but something I'm looking for.

**Ben Williams** (00:14:08):
And then maybe I want to flip it, because building on something that Adam Fishman was saying, his theme of evaluating the people dimension of folks you are potentially going to work with when you're interviewing with a company. This was a question I got asked myself recently by a candidate, which I just thought was brilliant, and that was, "Tell me about the diversity, equity, inclusion and belonging initiatives that you've recently personally been involved with?" It just felt like a really great way for them to be able to test alignment of their personal values with those of someone they'd be working with really closely, so I love that.

**Lenny** (00:14:42):
Next up is Meltem Kuran Berkowitz, Head of Growth and a very early employee at Deel.

**Meltem Kuran Berkowitz** (00:14:48):
"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** (00:15:00):
What do you look for in their answer that gives you a sign that they're a good candidate or not?

**Meltem Kuran Berkowitz** (00:15:05):
I look for sincerity and self-awareness. Your siblings are never ... I mean, I love my sister, but she'll call me. She'll talk to me a lot. 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** (00:15:30):
Next is Paige Costello, Co-Head of Product Management, and also Head of AI at Asana.

**Paige Costello** (00:15:36):
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 at, 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. Evaluating people's mindset, the way they talk about it, and the way they relate to evaluating the situation, I think it's a great question. It really tells you a lot about how people think and how they perceive themselves when things are not working well.

**Lenny** (00:16:15):
We are in the final stretch now. There's only five more interview questions to go. Next up is Nikhyl Singhal, VP of Product at Facebook, also one of the most popular episodes of the podcast.

**Nikhyl Singhal** (00:16:25):
"What's something that everyone takes for granted that you think is essentially hogwash or inaccurate?" Sometimes I'll ask a manager, "Look, you've managed hundreds of people in your career. What's conventional wisdom that you bet against, that you have found is actually inaccurate?" And you could do that for, "What do people think about AI that's inaccurate, that everyone believes?" You could do that for domains. You can do all kinds of things.

**Nikhyl Singhal** (00:16:53):
I'm always looking for people to break this sort of interview mindset. Everyone always prepares for interviews, and then their entire conversation is predicting what you think you want me to say. As a result, you can have high-quality people that you dismiss, because they weren't genuine.

**Nikhyl Singhal** (00:17:19):
There's no way to answer that question without being genuinely opinionated. Because it starts with, 'What is the thing that you think ...? I want to sit here and then tell me why it's inaccurate." When I break that wall, I'm testing, is this person authentic? Because sometimes I'm dismissing them because they told me nothing new. But I don't want the interview process to penalize them, and this was my save question.

**Lenny** (00:17:52):
This next question comes from Ayo Omojola, Chief Product Officer at Carbon Health, former Product Lead at Square, and also a former founder.

**Ayo Omojola** (00:18:01):
"Tell me something you did that worked out, but not for the reason that you thought it would work," or, "Tell me something you did that was a good decision that didn't work." A lot of my process is just teasing out introspection. It's just like, "Are you a person who is reflective about the decisions you've made, and why they worked and why they did not, and incorporating that into your model so you make different decisions next time?"

**Lenny** (00:18:21):
Next up is Scott Belsky, Chief Strategy Officer at Adobe, former Chief Product Officer of Adobe, also former Founder of Behance.

**Scott Belsky** (00:18:31):
I like asking about something people have learned about themselves that reveal the limitation in how they work. It's a way to test introspection, and once this person hits their limits or struggles, can they be open and introspective, or are they going to blame and point fingers? So I do ask that.

**Scott Belsky** (00:18:49):
I also like the question, "Do you consider yourself lucky?" I think it's a fascinating question, because some people who are super-insecure about where they are and how they got there and might decline admitting luck. Those who are comfortable should admit that they were lucky. I mean, I think the truth is, we're all very lucky and certainly privileged, and I just think that that's always an interesting conversation.

**Lenny** (00:19:18):
Our penultimate interview question comes from Lauryn Isford, Head of Growth at Notion, former Head of Growth at Airtable.

**Lauryn Isford** (00:19:26):
"Tell me about a time that you delivered something that was impactful." I'm looking for someone to help me understand how they define impact and what it means to them. I think a good answer for a growth practitioner is intrinsic motivation about having an impact on the business.

**Lenny** (00:19:46):
Our final interview question is actually advice for doing reference calls, which comes after finding someone great through your interview process. This comes from Paul Adams, Chief Product Officer at Intercom, with a killer Irish accent.

**Paul Adams** (00:20:00):
I have to do referral calls. You're interviewing someone, you want to give them the job, and they've got referees. Of course, the referees they have are the best people that they ever worked with and their favorite managers. This question is, "What feedback will I be giving this person in their first performance review?" It's an amazing question, because the person can't dodge it. There's an answer, and it's incredibly enlightening.

**Lenny** (00:20:23):
And it's a wrap. Thank you so much for listening. I hope you found this valuable. Leave a comment either on the newsletter post, or in the YouTube comments, or even on Twitter. Let me know what you think. If there's a great response, we'll continue to do this. If not, we'll never do this again. All right, thank you. Enjoy.

---

## [15/24] The future of AI in software development | Inbal Shani (CPO of GitHub)

**Inbal Shani** (00:00:00):
The user of the AI tools to develop software needs to form a different thinking. You need to start figuring out how are you using these AI tools to help you be successful. And it's no longer just the actual code writing, it's really evolving your thinking to the big picture, to the connected experience, to connected systems, which today we just find it more in the world of more senior developers and less and less in the junior developers.

**Inbal Shani** (00:00:24):
The junior developers, when they start, usually we expect them to be able to write simple code. But if now there is an AI system that is helping them writing code, they can spend more time from the get-go understanding the system, understanding the environment that they're building, or understanding that product that they're building, which today they don't have time because they're still learning how to code.

**Lenny** (00:00:46):
Today, my guest is Inbal Shani. Inal is Chief Product Officer at GitHub, formerly a general manager at AWS and at Microsoft, and also a senior software developer on Amazon Robotics.

**Lenny** (00:00:58):
In our conversation, we explore the end state of Copilot and AI-based tooling for software engineers, what the future of software development looks like with AI, what's underhyped and overhyped in AI and software development, what metrics the teams look at to understand if Copilot is doing its job, what mistakes teams and companies make jumping into AI, the design philosophy of Copilot, plus what's helped Inbal most become the leader she is today, and also where GitHub is heading as a product and an organization.

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And as a Lenny's Podcast listener, you can get a boosted plan with double the monthly usage. Head over to sanity.io/lenny to get started for free. That's sanity.io/lenny. Inbal, thank you so much for being here and welcome to the podcast.

**Inbal Shani** (00:04:22):
Awesome. Thank you for having me. I'm excited to be here.

**Lenny** (00:04:25):
I want to start with just a broad question about where software development is going. It feels like you're at the center of the storm of what is changing in software development. It almost feels like GitHub kicked off the storm with the launch of Copilot. So let me ask, what do you think is overhyped in terms of what is changing in software development and then what do you think is underhyped?

**Inbal Shani** (00:04:46):
So I joined GitHub as a CPO basically a year ago. Two days ago, I celebrated my first year. And for me, the initial approach is let's look at the platform, let's look at the software development lifecycle, and draw some conviction. And for me, the biggest conviction is that developer happiness and productivity strongly depends on their environment and dev tooling. And as such, AI is really critical to that mission.

**Inbal Shani** (00:05:11):
When we're looking into what's happening right now with AI, it really became table stakes on expectations among developers, and it's really central and critical for them to be able to do their job. We know that something like 92% of developers are already using AI tools. But in that landscape, some of the things that are overhyped is that generative AI will replace humans. I don't see that happening in the near future. The way I think about it, you always need that human in the loop because AI cannot replace innovation.

**Inbal Shani** (00:05:45):
That creative spark, that creative thinking that is the center of humanity, this will not be replaced by AI, at least not in the near future. If we think about what does that mean having an AI tool that is successful, you need data. In order to generate data, you need humans using tools, acting with tools, doing something, something. So I think the overhype that is happening right now is that generative AI will replace humanity. It's going to be the solution for everything, and I think it's a tool.

**Inbal Shani** (00:06:15):
If I'm drilling down to the things that are underhyped right now in the world of software development, I'm starting hearing a little bit more on AI driven testing, but there's not lots of mention on it. And if we're thinking about the world of AI where we're going to generate much code, much more productive, much more efficient, more lines of code, more application, then testing is becoming such a critical part of that journey of developing software.

**Inbal Shani** (00:06:43):
And I would like to hear more about that and what companies are thinking about how do they use AI to generate a larger suite of testing to be able to validate the work.

**Lenny** (00:06:53):
And by testing you mean like unit testing, integration testing, things like that?

**Inbal Shani** (00:06:57):
All of them, load testing, load testing, infrastructure testing, security testing, penetration testing. When you need a human to write all these testing capabilities, you need a lot of humans that needs to form different thinking. Can we leverage AI to really generate that testing suite that test everything that you need from unit testing and functional testing to load testing, to performance testing?

**Inbal Shani** (00:07:23):
There's a lot of testing that we do that we don't even consider them as testing, so we don't necessarily spend a lot of time in doing them. But if we're now saying software is in the center of everything, all companies will become a software company in some form or another, there is more code being generated. Hence, the importance of testing is becoming much more critical.

**Lenny** (00:07:43):
Let's follow that thread. You talked about how you don't see software engineers completely disappearing. What's your just general sense of how software development will be different in three to five years? What do you think is going to be different? And then also just how do you see the end state of all of this of Copilot and tools like this getting better and better and better? What do you think this ends?

**Inbal Shani** (00:08:02):
For me, and I keep on saying that again and again, Copilot is a copilot. It's not a pilot. You still need the human in the loop. But that means that now the software developer or the user of the AI tools to develop software needs to form a different thinking. One, you need to start thinking more systems, more architecture. You need to start figuring out how are you using these AI tools to help you be successful? And it's no longer just the actual code writing, it's really evolving your thinking to the big picture, to the connected experience, to connected systems.

**Inbal Shani** (00:08:36):
And what we will see in the fullness of time that developers, one, will adopt much more of that mindset, which today we find it in software development, don't get me wrong, we just find it more in the world of more senior developers and less and less in the junior developers. The junior developers, when they start, usually we expect them to be able to write simple code.

**Inbal Shani** (00:08:57):
But if now there is an AI assistant that is helping them writing code, they can spend more time from the get-go understanding the system and understanding the environment that they're building or understanding the product that they're building, which today they don't have time because they are still learning how to code. So I think that's one element. The second element that I expect to see changes is in the world of hardware development, because we know that AI has a big footprint and requires a lot of resources.

**Inbal Shani** (00:09:24):
And in order to be able to meet the scale, to meet the demand, we need to be able to improve our hardware, our CPUs, our GPUs, our compute and optimization of code. And that's another area that today it's a niche of people that are spending time and I think it'll become much more aligned across the software development lifecycle.

**Inbal Shani** (00:09:44):
Integration with AI is something that will definitely become something that is more normal for every developer, is today something that we start seeing that revolution, that acceptance, that AI tools, I need to figure out how to integrate with AI, I need to know how to use AI. It will become something that is more custom, and we will start seeing that shifts from very early on. When developers are start shaping their thinking, they will start understanding all these components.

**Lenny** (00:10:14):
I saw a stat that at Shopify over a million lines of code and their code base was written by Copilot, which I don't know if I can do the math, but I imagine that's more than one person would've written in their lifetime and probably many engineers write in their lifetime. And I think that number reminds us just how fast things are moving and how much is actually changing.

**Lenny** (00:10:35):
You also mentioned 92% of engineers are using AI tools already. Is there any other stats that you can share that might surprise people about the usage of Copilot, growth of Copilot, things along those lines?

**Inbal Shani** (00:10:46):
Yeah. Well, we have over 37,000 organization and more than 1.5 million developers that are using Copilot.

**Lenny** (00:10:54):
Wow.

**Inbal Shani** (00:10:54):
And they're writing code based on our surveys 55% faster. Imagine that you can give a software developer even few minutes, half an hour back in every given day, how much more productive they're becoming, and also as a result, how much happier they're becoming. So we know that in a survey that we have run through our users is 85% of that participants felt more confident in their code quality and also code reviews were completed 15% faster without Copilot. And we know that usually no one likes to do code reviews.

**Inbal Shani** (00:11:32):
So if we can help accelerate and make developers take their time in doing code reviews, and also if we think about removing frustration, then 88% felt less frustrated and more focused on their ability for coding. And that is just the beginning. We have different examples from our customers. I think Accenture is a recent one that we got where they had 88% of suggested code was retained. So we have a lot of these stats that are coming together to showcase the size and the impact of using Copilot and AI tools for software development.

**Lenny** (00:12:07):
Say companies hear these stats of like, oh, we're going to be 25% more efficient. Some people may think we need 25% less engineers. We're going to do all the same things. I imagine what you're actually finding is your engineers can do more. So it's not like you need to cut your people, it's that people can be faster and better.

**Inbal Shani** (00:12:23):
No, let me be very clear, you cannot cut your people. You have to have a human in the loop. Copilot is a copilot, it is not a pilot. And I keep on saying that sentence again and again. I think the second thing that what companies need to realize, and that's another developer experience survey that we have run recently, that throughout the years we have added so much tasks on a single software developer from writing code, writing testing, interacting with people, collaborating with 21 people on every given week, going to meetings, waiting on builds, digging into legacy code, all of that is added to the fact that they need to write code, which is their basic work.

**Inbal Shani** (00:13:03):
So most developers span less than 25, some say less than 20% of their time writing in code. So if we're able to give them half an hour back, one, they can write more code. Second, they can have a break and take a breath so we don't burn them out and they're more happy. Third, we give them more time for collaboration and creative thinking, so that sparks innovation. That is not something you want to cut back.

**Inbal Shani** (00:13:28):
This is something you want to be able to give as a gift to your developers so they're happy with you and you can retain them. They can do their job. They're productive. Hence, they're happy.

**Lenny** (00:13:38):
I've talked to a bunch of engineers that use Copilot. One thing that surprised me is the most amazing engineers love Copilot. You think this would be for junior engineers learning to code better and faster, but 10X engineers say that... Someone told me it made them 50% better and faster too, which is incredible. What mistakes do you see product teams and engineering teams make when they rush to start adopting AI, integrate AI into their workflows?

**Inbal Shani** (00:14:07):
I think there are a couple things. The first one is companies expect a change to happen magically. Here's a tool, go use it. And it's not always flying the same way across all companies. So investing time in really taking the company through a change management process. The second thing that I'm seeing is that since AI is so hyped right now, there is often the questions of, oh, what should we do with AI? So there is that sense that I have to do something with AI.

**Inbal Shani** (00:14:38):
Because if not, I'm not doing the right thing. Versus the question that for me is a big focus for my product team is, what is that problem that we're trying to solve and how can we leverage AI better to help solve the problem versus what do we do with AI? So it's really working backwards from the customer problem from what we're trying to solve, and then realize what are the best tools that we have in order to do that work better and think through that landscape versus, oh, AI is here, we have to use it. Because if not, we're not doing something right.

**Lenny** (00:15:11):
Is there an example of that that comes to mind of someone that did that incorrectly or wasted a lot of time?

**Inbal Shani** (00:15:17):
It's not necessarily examples, but I've been talking to some of our customers and they're coming to us. "We heard about AI. What do you think we should do with AI? And how should we adopt AI? And can we learn from your experience?" And I'm sharing our experience. When we started thinking about AI, it was with the idea to make developers much more productive. And what are some of the things that we've seen? That developers have multiple tasks on them and they don't have enough time to spend on coding.

**Inbal Shani** (00:15:45):
So how can we give them time to spend more on coding and what are some of the coding element that we can automate? And from that comes the need to, okay, let's incorporate OpenAI, let's incorporate ChatGPT, let's connect all of them to help create that tool that helps developer be more productive and is AI based. So I'm sharing how we went through that journey to think about how to use AI. I see a lot of the times light bulbs with the customers like, "Oh, we didn't think about it like that."

**Inbal Shani** (00:16:15):
It's more about we wanted to plaster AI on a lot of things versus I have this workflow and it requires a lot of manual work, or it requires a lot of configuration. Maybe I can think how to incorporate AI into that and really shorten the time or make it seamless or make it less friction for developers to adopt that tool and so on and so forth. So it's really sharing more how we are thinking about it and helping our customers to understand the same.

**Lenny** (00:16:42):
Along the same lines, you're talking about how you think about it with your teams. It feels like your product teams are probably living in the future of how other product teams will operate because you have access to stuff everyone else doesn't necessarily have access to. They probably adopt these tools a lot faster than the other teams would. What are some ways that your product teams operate that other teams may not yet be operating?

**Inbal Shani** (00:17:04):
In GitHub in general, it's not just the product team. GitHub is GitHub. I'll say we eat our own dog food, and that means that we are the first to try every feature, every capability that we're developing. And it's not just our engineering team, it spans across GitHub. So for example, GitHub is running on GitHub. There are several blog posts and talks. Even in the recent Universe, we had a specific talk in terms of how GitHub is using GitHub and adopting AI across software development lifecycle.

**Inbal Shani** (00:17:32):
And the biggest focus for us is if we're saying that GitHub is a developer platform and it's more than that, it's a software development platform, how are we making sure that all the persona that are taking part in the development of GitHub are also using GitHub? So for example, our finance team is using discussions and posts and PRs and reposts to communicate our AR numbers and so on and so forth. We have our legal team using, we have our HR team. If they like it or not, it's a different question.

**Inbal Shani** (00:18:02):
But the idea is that we're using GitHub to run GitHub, and the product team is one of the first early adopters along with our engineering team. So for example, when we've tested chat and we wanted to see the quantity or the recommendation, the search, this is something that the product team was one of the first users to go and figure it out. Is it giving me the right thing that I need to do that? Is it summarizing the PR the way I want to summarize? And so on and so forth.

**Inbal Shani** (00:18:27):
But we are really strong in advocating that we have to be the one testing our tools. If we cannot use them, our customers cannot use them for sure. So nothing is shipped before it spends enough months cooking inside GitHub, so we have to say this is working for us or not before we put it at the end of our customers.

**Lenny** (00:18:47):
One of the magical elements of Copilot is how it just fades into the background. You don't have to chat with it. You don't have to tell it anything. It just infers, here's what you're doing, here's the answer for you. If you want to use, it's cool. If you don't, it's fine. Is there anything you could share about just the design philosophy of Copilot?

**Inbal Shani** (00:19:05):
Yeah. The design philosophy for Copilot is very much aligned with the working backwards concept that I just mentioned. It's really putting yourself in the shoes of your customers and figuring out what is it that they need, how is that experience going to work for them? If it's an extra tool and if you need to ask for it and if you need to ask for it or if you need to wait for it, then developers will not adopt it.

**Inbal Shani** (00:19:27):
So because we developed it for ourselves first and we wanted to experiment with that, the design philosophy was put yourself in the shoes of a developer, how would you like that experience to be? In 2020, we had a group of GitHub engineers that were working with the design team and with OpenAI GPT to really figure out how we're going to build that and how it can work to help developers to do their job more efficiently, more productively, improve their collaboration and happiness, and so on and so forth.

**Inbal Shani** (00:19:57):
But the grounding principle was the developer needs to want to use this tool. And the more you add friction, the more you add churn, the more you add complexity, the developers will not want to use their tool. We just talked about all the things that the developer needs to do in every given day. Now add to that mix, I need to learn how to adopt AI, we knew that it will not fly. So it has to be a seamlessly integration. It needs to be something that is very intuitive for developer to use to be successful.

**Lenny** (00:20:24):
What are the success metrics for Copilot? It's such an interesting problem of measuring efficiency gains and productivity gains for engineers. What metrics do you focus on to tell you this is doing what we want it to be doing?

**Inbal Shani** (00:20:35):
We are in a world that there are no right metrics. There is no one metric to rule them all. It's a combination of the things that you're looking to measure out of adopting AI. You can think about measuring code quality using AI. Can you improve the code quality? Can you improve the security of your code by introducing, for example, our GitHub Advanced Security using AI?

**Inbal Shani** (00:21:00):
So there's a lot of different metrics that if you combine them together are providing you with that developer productivity, and then there's developer productivity, developer collaboration, time gain, that if you're bringing them together are yielding the developer happiness. The biggest area of focus for us right now is the definition of productivity because we have so many users that are coming to GitHub and they're looking for that productivity gain.

**Inbal Shani** (00:21:27):
But one of the things we're very conscious of as we continue evolving Copilot and AI across the software development lifecycle across all the tools, productivity is not the right metrics against each one of these components. When we're implementing AI to GitHub Advanced Security, writing more secure code is the right element. It's like how many secrets were we able to prevent from leaking? How many issues in the code we're able to detect and find and fix before you ship that?

**Inbal Shani** (00:21:51):
So I think that the world of the metrics for AI is really a big one. We are working a lot with our customers as they're asking the same questions and they're running their own experiments within their companies to figure out what is it that they want to measure. The most easiest one is time, but time is, it's funny what I'm going to say, but time is not quantifiable as a success metrics because you can write really bad code really fast.

**Inbal Shani** (00:22:18):
So it's really about how are we taking time and translating it to efficiency, to productivity, to something that are harder to measure, and then how does that lead to develop core happiness, which is another harder metrics to measure. So the combination of all these input metrics leading to eventually developer happiness is what we're focusing on.

**Lenny** (00:22:40):
Yeah, it's so interesting because engineers could end up spending more time coding because they're enjoying it more. They're getting more done. Also, more lines of code isn't a good metric because you don't want to know if those are good lines of code. That's a classic way to not measure engineers well. So to me, it feels like developer happiness is the ultimate metric. We had Nicole on the podcast who came up with this framework, DORA, that's an interesting way of just measuring developer experience, developer happiness.

**Inbal Shani** (00:23:05):
Right. I think one of the things that we're talking to customers and we're trying to figure out how we're articulate is instead of time, can we talk about time to value? So from the moment you put a developer on a task, how long did it take you until you realize the full potential or the full value of that, if it's generating revenue, if it's in adoption, if it's time to market? You can define your time to value in different ways.

**Inbal Shani** (00:23:28):
But eventually you're investing in AI tools to help your developer to be more productive, to be more efficient, to be more happy, and then is it impacting your time to value, which is something that's the business side that they're looking to measure.

**Lenny** (00:23:44):
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**Lenny** (00:24:43):
Sign up for HelpBar today. It's free and easy to set up in minutes. Check it out at helpbar.ai/lenny. That's helpbar.ai/lenny. Coming back to where this all goes, imagine you've seen all these demos of people like sketching a website, taking a picture, sending it to ChatGPT, and it builds the website for you?

**Inbal Shani** (00:25:04):
Yeah.

**Lenny** (00:25:05):
How do you see all of that sort of thing playing into this? Do you see CEOs being like, "Here's the iPad app I want," I'm going to sketch it for you, and then just run it through Copilot version 10 and it writes it for you? I know that you're saying engineers won't be cut and only increase and become more efficient, but I guess where do you see that version of it going of just like, here's a sketch, build it for me?

**Inbal Shani** (00:25:27):
I'm thinking about that as a better collaboration tool versus a production tool. Because right now, a lot of the time where we see challenges in articulating ideas is the communication. It's the clarity of thoughts. So if we can leverage AI to improve collaboration, and you basically put a drawing in front of Copilot and it helps tell the story of what is it that you're asking your developers to do, it shortened a lot of cycles and the back and forth. So what did you mean?

**Inbal Shani** (00:25:53):
Did you mean the button here, or did you wanted it pink, or did you want that application, or did you want that operating system? So if Copilot can help refine communication, and it's becoming likely the best collaboration tool that exists in the market, especially in the global world where we are where we see communication is ongoing challenges between different personas that are taking part in coming up with an idea and basically we see AI and in our view is Copilot becoming that next natural language conversation.

**Inbal Shani** (00:26:26):
It's that translator that helps bring everyone on the same page because it's creating that universal conversation language, the same that math used to be.

**Lenny** (00:26:37):
Reminds me, there's another conversation I was having with an engineer and he was saying how he loves writing those simple functions that Copilot is now doing for him and he's sad that it's doing it for him, but he doesn't turn that off. But he kind of is like, "That's what I really enjoy. These little things that I could just crack like sort function of some sort." I guess, is there anything you think we lose with so much of our code being written for us?

**Inbal Shani** (00:27:01):
I think each developer has their own part that they enjoy doing. And you don't have to use Copilot to write your simple code. You can use Copilot through a chat experience and use them as an AI assistant and brainstorm. We're giving you a set of tools, and we have a scenario in mind how you should use them. But what we're seeing is developers are using them very differently. Everyone is choosing their own flavor on how to use the tools. There is no right and wrong way to use it.

**Inbal Shani** (00:27:32):
It's a tool. It's a language. When I was learning how to code, I used to code in C, and then Java became a thing. I'm like, oh, but this is taking away my job because I used to write all these functions and all these libraries and now Java has it all. And then Python came, which is another abstraction layer. It's like, okay, so now I don't even need to think about that because Python can do all of that. So it's a matter of how you use the tools and what you use them to do what. There are areas that I will still go and write in C, even today.

**Inbal Shani** (00:28:04):
I don't trust someone inventing metrics for me in an efficient way if it needs to run on a very small CPU. So I'll do that myself. On the other hand, there is going to be an element that I'm going to delegate to a higher obstruction tool, and that's exactly the way I think about AI. You pick and choose how you want to use it. There is no global way that is the absolute truth that everyone has to follow. You need to think how you use your tools to do your job in a way that you're still keeping the things that make you happy.

**Inbal Shani** (00:28:34):
On the other hand, use AI to do the things that you less enjoy. Maybe you like writing functions, but you don't like writing, testing, so generate unit testing and so on and let AI do its job for you and you still focus on the things you enjoy.

**Lenny** (00:28:48):
Are you actually still finding time to code? Are you still writing some C on the side?

**Inbal Shani** (00:28:52):
A little bit now. Now I'm mainly playing with my older son, so he has more time to cook, but sometimes I enjoy spending time with him and brainstorming and talking about things and architecture. I think recently a few months back, he did a project on sensors and sensors integration, and he came across common filter, which was the thing that I used to do many, many years back.

**Inbal Shani** (00:29:16):
And he's like, okay, what is it and how is it done? And then we went through that and I helped him think about the structure and the sensors fusion and all of that. And then sometimes I'm like, "Okay, move aside, here you go. This is how you..."

**Lenny** (00:29:29):
Turn on Copilot. Just kidding.

**Inbal Shani** (00:29:29):
Mommy's Copilot.

**Lenny** (00:29:33):
That's so funny. That reminds me, I was watching a talk of yours and you were training tuning models and LMS way back in the day, before it was very cool. And so you've been in this space for a long time. Looking back, is there something that you see now of where things were going that you didn't see at the time?

**Inbal Shani** (00:29:51):
I grew up in a world of niche AI where you have to be an expert and you need to be trained for years understanding how to tune a model, what is the right output, and you needed to understand how to build a simulation to test it, how to ingest data, focus on optimization. I've seen the evolution of AI throughout the year with all the talking devices and conversational AI, and then it started as a single term. It came up as a multi-term.

**Inbal Shani** (00:30:22):
So I've started seeing that trend of more democratizing AI, but I didn't expect that boom of generative AI. Everyone that even doesn't even know what AI is, that they need to use AI. I think that was the thing that caught me by surprise because I was so trained that you have to be an expert to use AI. So for me that was aha moments, like hmm, this is interesting. So what's next?

**Lenny** (00:30:47):
Do you have an opinion on whether large language models are the end all and be all of where all this goes and just continue to add in compute and data? Or do you think there's another, I don't know, something on the horizon that's going to again completely transform the transformer model of AI?

**Inbal Shani** (00:31:06):
I think we've pivoted very hard towards a generative AI and generalized AI can solve everything. I believe that the future is going back to scale back a bit to the niche AI. So we will live in a hybrid world where you still have specific AI models that are solving very specific problem where the generative AI will have its limitation. It's a general purpose tool, so it can be as good as the data sets, but it also try to find some statistical recommendation. Is it good? Is it not good? So it's limited by the training set that it has and it's trying to be everything for everyone.

**Inbal Shani** (00:31:43):
There are going to be areas where you still need to train models. For example, I spend my time in the aerospace industry and in the automotive industry. I don't see self-driving car models that requires so much delicate, specific models, tuning, high safety regulation, all of that being developed on the ChatGPT. I might be wrong, but I think that eventually we will find ourself in the world of hybrid models and multi-models where there will be several LLM models coming together because each one of them will have their own benefit.

**Inbal Shani** (00:32:19):
And then there's going to be a niche AI or a more configurable customized model for specific use cases. So that's my prediction of the future. But in 10 years from now, we'll all be smarter.

**Lenny** (00:32:32):
Yeah, the future hard to predict.

**Inbal Shani** (00:32:34):
Yes.

**Lenny** (00:32:35):
I wanted to ask, so GitHub came up with this whole Copilot idea. We had Ryan on the podcast talking about how there's a researcher just experimenting with what can we do with a bunch of data. And then that essentially turned into, wow, this is actually working. Let's quickly scale this and launch it.

**Lenny** (00:32:54):
I guess is there anything you learned from that huge success within GitHub and Microsoft to find other big opportunities? Is there something you do about how you structure product teams or create space for people to experiment with things like this to find the next Copilot?

**Inbal Shani** (00:33:10):
It's a lot about that. It's a lot about creating that bandwidth for the team to innovate and experiment and carving that time out, but also being okay that not every experiment is going to be successful. So the shift to learn or to fail forward, these are the philosophies that I believe in. If you don't try, if you don't experiment, you will never innovate. And if you don't fail, you will never learn from your mistakes, you'll never learn from your experience, so you will not progress forward.

**Inbal Shani** (00:33:36):
So really creating that ability to experiment, the same that we've done with Copilot or we've done in GitHub Advanced Security or even the way GitHub was created, it's all that innovative thinking that the teams have that are thinking about what is that next generation use case? What is the future developer will need to be happy, to be more productive, to do their job? In a world that software development is changing so fast, you have to create that bandwidth for the next generation, the next innovation.

**Inbal Shani** (00:34:08):
And if you didn't have a chance to see that the two-day keynote in Universe, I highly recommend because we basically shared our next vision for Copilot with Copilot Workspace. We also had Satya Nadella on stage and he was very excited. He's like, "Oh my god, GitHub, if you build that, this is amazing." So you see that we keep on putting this vision forward again and again at least six months to a year before we even have something in the market because we're already thinking, we're already innovating, we're already on the next thing.

**Lenny** (00:34:38):
Is there something that you do to allow for that other than just these principles of ship to learn and it's okay to fail? Is there a way you structured teams or resource teams? Is it like you have a percentage of time to think about other ideas, or is it just generally we're okay failing, find time to work on other things?

**Inbal Shani** (00:34:55):
It's a couple things. One, it's spend time with customers and learn from your customers, because a lot of the innovative ideas are coming basically from conversation with customers because they're sharing with you their frustration, they're sharing with you what they would like to have, they're sharing with you what will be an amazing invention for them. So that's the first thing is creating that mechanisms. And we spend a lot of time talking to our customers and also talking to our community.

**Inbal Shani** (00:35:21):
We're fortunate to be the home for all developers and home for all open source. Large open source foundation and small open source foundation are running on top of GitHub. So that's another feedback cycle that we have to really gather those ideas and those asks to help us shape the future. And then the second thing is really about the teams pitching idea. It's like, "I have this idea. I've been doing some research. Here's a paper that describes what is it that I want to do," and then we figure out, okay, when can we fund it?

**Inbal Shani** (00:35:49):
How can we fund it? Can we allocate a specific bandwidth? Can we do a POC? Do we do that in that team? Do we do it as a V team? So we keep it flexible. And we also have a research team, which are GitHub vNext, that basically that's our day job is to think about the next big innovation. But in GitHub, innovation is coming from everywhere. It's coming from our field team that are talking to customers and are implementing different variations of GitHub for customers. And they'll come back with some feedback or an idea.

**Inbal Shani** (00:36:18):
It's coming from the product team. It's coming from the design team, from the engineering team. It comes from everywhere. So if you try to structure innovation, you're losing that organic spark that is humanity. Imagine that someone say you have 15 minutes a day to be creative. I don't think it's the pull. So it's encouraging that thinking more than structured.

**Lenny** (00:36:50):
Can you talk more about that team that you mentioned? What is it called? The vNext team?

**Inbal Shani** (00:36:50):
The GitHub Next. Yes.

**Lenny** (00:36:51):
Next team. Can you talk a bit more about what that team is and how that works?

**Inbal Shani** (00:36:53):
They're basically applied scientists, research scientists that are working together, and they're really thinking about three, five years horizon. They're not thinking about the right now. They're thinking about what is the future for software development is going to look like. They're writing papers. They're running experiments. They're doing POCs. Their job is to invent the future.

**Inbal Shani** (00:37:16):
 But again, it's really a synergy because they're talking to the product, to their engineering, so they're getting ideas from that. They're talking to customers, or we're sharing feedback. So that's our GitHub Next. It's basically our research team.

**Lenny** (00:37:28):
And that's where Copilot emerged out of, is that right?

**Inbal Shani** (00:37:28):
Right.

**Lenny** (00:37:32):
It's so interesting because, I think I talked about this with Ryan, there's so many companies with a team like that. Like Facebook had a famous one, New Product Experience team. Google had Google... Forget what it was called. But none of them have really been successful is my understanding and this one was. Is there anything you think you're doing differently? Is it more science-based and research versus just product managers trying a bunch of different apps? I don't know, is there anything you think is key to this team being successful?

**Inbal Shani** (00:37:59):
I think there are two elements for that. One is having the right people with the right mindset on the team, allowing them and giving them the bandwidth and freedom to innovate. And the second thing is that we're focusing on making things real. So we're not keeping them far or in disconnect from the product and engineering.

**Inbal Shani** (00:38:15):
There's a lot of synergy, there is a lot of discussion, because what happens in teams that are not successful, at least from what I've seen, one, that the team is becoming basically an university, they write papers, but nothing is coming out of that, so nothing finds its well to production. So if you don't introduce that, how do we take it to production from day zero when you're thinking about a new idea? It's rarely that it'll go through that hump cycle and itself in production. And the second thing that companies tend to use these teams is too much tactical.

**Inbal Shani** (00:38:47):
Here is that, "We need something in six month. Go invent it right now," and then they're basically creating another engineering or producting to think about the things that are now in horizon one. So I think in GitHub we found the right balance between having the right people, having the right mindset, but also creating that synergy between the future thinking to how we make it real, so we have a strong relationship, especially between the product team and GitHub Next, to make sure that this relationship are ongoing and ideas are flowing both ways.

**Lenny** (00:39:20):
Today, you're chief product officer at GitHub, which is I think a dream job for a lot of people. Early product managers, senior product managers want to figure out how to get to a place that you're at today. And I'm curious what you found most helped you build the skills that were necessary to be successful in this role? Was it mentors, exec coaches, just doing the job for a long time? Anything else along those lines?

**Inbal Shani** (00:39:47):
Combination. It's never one thing, because the role of the chief product officer is so broad. You're not just the head of products. And that's the mindset that is now evolving in the industry is that a chief product officer is more than just the head of product. They need to have a business thinking. They need to understand their go-to market strategy. They need to understand the sales play. They need to understand how engineering are building products. It's not just about let me write a set of requirements or think about the vision and the future.

**Inbal Shani** (00:40:16):
It's how all these components in the company are operating together to build that product. And some of that you learned from looking into the leaders that you work for and see how they're thinking. From my first boss in the aerospace industry, I learned how to think system. Not to think just on the problem that I'm solving right now, but how the problem that I'm in charge in solving that filter that I'm responsible in tuning is connected to their control system and the ignition system and all of that and how is it eventually being displayed.

**Inbal Shani** (00:40:47):
So that requires me to think from the get-go on the bigger solution, not just my component. So I think that's one. The second thing is really thinking about the people and change management and how you take people with you, because a product manager role is a very influential role and a lot of the things you do is influencing other people. Although everyone thinks that as a product manager you get to do things, you get to write papers, but you need to influence the engineering team to build a product that you want them to build.

**Inbal Shani** (00:41:17):
You need to influence the revenue team to go with a go to market and sell the product the way you envision it. So there's a lot of influencing happening. You need to understand how to do that and building that skillset as a product manager from the get-go is very critical. So for me, it was the fact that I was fortunate enough to do different roles in the industry and learn from different people, but also looking up, looking across, and looking down into the people that I manage and what are the things I could learn from them?

**Inbal Shani** (00:41:47):
What are some of the skills that they have that are not necessarily in my toolbox and how can I adopt them? What does success look like and what are some of the things that make people unhappy? And you don't necessarily want to have these tools in your toolbox. So it's a lot of what's yes and what's no in a combination.

**Lenny** (00:42:04):
Yeah, it's exactly like you said, it's all the things combined. I really like that last point of just identifying people that are good at something that you want to get better at and just learning from them, watching them, maybe asking them questions about how they're operating. I am trying a new segment of this podcast called Failure Corner, and my question to you is, what's the biggest career or product failure of your career and what did you learn from that experience?

**Inbal Shani** (00:42:30):
I'll call it the biggest learning because I'm not a believer in failure. I'm a believer in learnings. And every time you fail, it's a big learning and I prefer to look at that as opportunities. I think biggest one was likely early on when I started being a leader and the manager of a team, I'm a very go, go, go person and I have a lot of energy. And when I'm coming to something and I see all the issues that need to be fixed, it's like, okay, let's take the toolbox out. Let's go fix everything. And that includes driving change.

**Inbal Shani** (00:43:03):
And I've seen that when I started doing that without building that understanding of why we need to do a change or why this is a problem that we need to go and fix it, then you don't take people with you through that journey. So really analyzing that not everyone appreciate change the way you are, not everyone has that mindset of the go, go, go, let's go do it. And really figuring out, taking a step back and assessing what is happening so you can take the team with you on that journey of changing.

**Inbal Shani** (00:43:35):
That was for me, the biggest learning and likely a lot of the not supportive feedback I got from the team at that time was, "You're moving too fast. Slow down. Explain the why. Why are we doing that? How should we move forward?"

**Lenny** (00:43:52):
Where did this actually happen? Which company? Which role?

**Inbal Shani** (00:43:55):
In TomTom when I was leading the location-based services team. And I think for me it was one, it was the first time I was working in international company, so really figure out that my character not always fly with every culture that exists. So how am I adjusting to that? And the second thing is that they were very accustomed in working in a specific environment in a specific way. And yes, I was hired to drive change, but one, the team doesn't have to accept. That's your job to drive change.

**Inbal Shani** (00:44:31):
And also they're not necessarily on board with the fact that you're here to drive change. So how you take them with you through that journey was a big learning and being able to communicate in a general way of communicating to drive clarity, that was a big learning.

**Lenny** (00:44:48):
That's actually a recurring theme on Failure Corner of the failure stories I'm thinking about is just somebody starting at a company and trying to change too much too quickly.

**Inbal Shani** (00:44:55):
Right. It's very common because we are human beings. We think that if we're coming, we have our experience, we're coming to a new space, and you immediately see all the things that are not working or all the things that needs to be fixed. If you're working in the same space for a long time in the same team, you often don't see these gaps anymore because you got used to living with them.

**Inbal Shani** (00:45:15):
So as someone new, you're coming in, you immediately see all these holes and cracks. And it's like, okay, here's all the things I need to fix. But you have a team that has been there for what? So how you find that bridge to communicate between the things you see and the things that they think is fine. Like, "Why are you driving these changes? It's be working. Don't fix it."

**Lenny** (00:45:35):
Inbal, is there anything else you'd like to share before we get to our very exciting lightning round?

**Inbal Shani** (00:45:40):
For me, it's an exciting moment in time. I've been celebrating my first year in GitHub and my first GitHub Universe on stage last week. It was amazing experience for me to meet our customers, our partners and talk a lot about the importance of developer experience, our AI power platform, and how we're shaping the future. So I'm in a very exciting part of my journey with GitHub.

**Inbal Shani** (00:46:05):
You don't get here if you don't make some mistakes and you do some learnings and you have some successes and then you take the right turn and sometimes you take the wrong turn, but you find your way to a place that makes you happy and feel fulfilled as a product leader.

**Lenny** (00:46:19):
Awesome. We're going to link to that talk in the show notes that people want to watch it. With that, we've reached a very exciting lightning round. Are you ready?

**Inbal Shani** (00:46:26):
I'm ready.

**Lenny** (00:46:28):
What are two or three books that you've recommended most to other people?

**Inbal Shani** (00:46:32):
Failing Forward by John Maxwell, The Flywheel from Good to Great by Jim Collins, and a recent book that I read that is called Dare to Lead Like a Girl by Dalia Feldheim.

**Lenny** (00:46:45):
That's a new mention on the show. Awesome. What is a favorite recent movie or TV show that you really enjoyed?

**Inbal Shani** (00:46:51):
I like a lot of fantasy and I like a lot of history based movies and theories. There is a recent one that came up on Netflix, All the Light We Cannot See. Amazing. So well produced. Really tells an interesting part of the history of World War II.

**Lenny** (00:47:06):
Have you seen Wheel of Time on Amazon Prime if you like fantasy?

**Inbal Shani** (00:47:09):
Yeah. Yes., I love that. It's done. It's a good one.

**Lenny** (00:47:13):
Yeah, especially season two is like wow. It's a lot better. Next question, do you have a favorite interview question you like to ask candidates when you're interviewing them?

**Inbal Shani** (00:47:22):
I think the first question that I really like to ask is, what is the most innovative thing you have done and why do you think it's innovative? And it's really interesting that there are some people that think they need to answer about the biggest invention that they've done, and there are some people that are very vulnerable and they talk about something very personal that they have innovated.

**Inbal Shani** (00:47:41):
It shows a lot of their character. And I think the second question that I like to ask a lot is give me an example in a time where you had a disagreement with your manager, you're in the line with your manager, and then what did you do about it and how did you go? Because it showcase a lot about your character and are you willing to stand your ground and push up when you need to? And then what is that communication skills that you have, your influential skill that you have?

**Lenny** (00:48:09):
Do you have a favorite life motto that you like to share with people, often come back to either in work or in life that you find useful?

**Inbal Shani** (00:48:15):
I think it's, if you don't take risks, you cannot create a future. I forgot who said it. I think it's from one of the animation Monkey Luffy if I remember. But it basically summarized the life motto that you have to take risks, you have to experiment. If you feel comfortable, it's not a good thing. You always need to feel uncomfortable to stretch yourself to go to the next thing. So that's something that I've done. You just heard about my career story from applied scientist to chief product officer. Who knew?

**Lenny** (00:48:46):
I love that motto. lnbal, thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out and follow up on anything? And then how can listeners be useful to you?

**Inbal Shani** (00:48:57):
Lots of interesting sessions and talks from Universe. So if people want to learn more about what is it that we're doing, how we're thinking about AI, LinkedIn is likely the best social media platform to find me where I have a chance to talk to a lot of people. These are the best places.

**Lenny** (00:49:12):
And then how can listeners be useful to you?

**Inbal Shani** (00:49:16):
If you can share a similar experience or a story that you think will be helpful for me as I'm thinking about, what does that mean being chief product officer for GitHub, any tips and tricks on how you use GitHub, so maybe I can learn, or share your experience and story so I can learn from your experience as well.

**Lenny** (00:49:31):
Amazing. lnbal, thank you so much for being here.

**Inbal Shani** (00:49:35):
Thank you so much for having me.

**Lenny** (00:49:36):
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.

---

## [16/24] Crafting a compelling product vision | Ebi Atawodi (YouTube, Netflix, Uber)

**Ebi Atawodi** (00:00:00):
I do not believe in being liked. I believe in being loved, right? And that's a very, very different thing. When I said this once in a meeting, people were like... Yes, right? But it took me a while in reading a lot of books to come to a definition of love and love is the choice to extend yourself for the spiritual growth of oneself or another, right? It's very big, lofty and whatever, but you're literally extending yourself for somebody else or yourself, self-love, right? And that's love. And when you are extending yourself, you're not nice. It's not always nice or like, it sometimes is having hard conversations. It's knowing that, oh, there's a human, they know I care about them. So when the feedback is coming like raw, they know that it's in their best interest because I've shown enough times that I genuinely care about the person behind the role.

**Lenny** (00:01:00):
**Ebi Atawodi** (00:04:35):
Thank you for having me.

**Lenny** (00:04:36):
It's my pleasure. First, I just want to give a big thank you to Andre Albuquerque, who is the founder of One Month PM, who actually posted on LinkedIn about how much of a fan of yours he is and that I need to have you on this podcast. And so here we are. I want to start by talking about vision. Every product manager I've ever worked with and managed vision has always been this development area for every single one. It's always this like, "You need to get better at crafting a vision, telling your story." It's also this very powerful tool. The product managers have to align teams to be more successful in the products they're building. And you have a really neat way of thinking about a framework for developing a vision and then telling the story. What are elements of a good vision for a product or even a company?

**Ebi Atawodi** (00:05:22):
I think the first piece is that you absolutely need to have one, to start by saying that. Regardless of what level you are in the company. So people say, "Oh, I'm just a junior PM." Whatever level, there is some micro macro vision that you need to have. Because essentially if you got on a plane and the pilot was like, "I don't really know where we're going, but I'm a really good pilot. The company needs to fly 400 flights this year. So I'm trying to make that happen, but trust me, we'll get there. There might be turbulence, I'm not sure." You probably would be thinking twice about staying on that flight, right? What happens is you get on there, it's like, "Our destination is Miami." Maybe I'm dreaming of beaches, "And it's going to be 24 degrees when we get there." And he always paints or she paints this image of the destination.

**Ebi Atawodi** (00:06:13):
And that's the vision not to be confused with the mission, which is we want to fly people where they're going safe. That's not... It's like a picture. So that's the start. I want to just delineate between vision and everything else that people think vision is. So really I think there are a couple of key elements. The first one is it needs to be lofty. So it needs to be something that feels... It almost scares you in an exciting way, right? Like, oh, my God, this is something I can get up every morning. And if we did that, goddamn. But at the same time, it needs to be realistic and attainable, so it cannot feel so pie in the sky that it feels so out of reach, right? And of course, there are leaders and people who have really, really big visions and they see beyond the rest of us, but that's not most people. Most people, it needs to feel within reach.

And then I think the key thing is it needs to kind of be in a vacuum from the limitations of today because the whole point of going to the future and saying, [inaudible 00:07:15] time traveled five years out is to say, "Okay, I've come back to tell you what we need to fix in order to get there. Or I've come back to tell you what we need to put in place now so that we will get there, right?" And so you have this kind of three components and if those come together and they are grounded of course, in a problem that people are excited about, you've got your vision. And how that vision manifests really depends on what you want to do. There're simple ones you can do, they're big ones you can do. But those are the core pieces in my mind.

**Lenny** (00:07:46):
Can you just summarize them again and are some examples you can share if here's a really good vision that it hits on these, and then if you have another example of a bad vision, that would be really helpful?

**Ebi Atawodi** (00:07:57):
So four things. So it has to be lofty, it has to be realistic, it has to be devoid of any tech or limitations of today, and it has to be grounded in a very clear and potent problem. User problem.

**Lenny** (00:08:16):
Awesome. And then, yeah, are there any examples either from places you've worked or visions?

**Ebi Atawodi** (00:08:20):
Absolutely. What I particularly love, so a lot of my product thinking and my product chops and craft, I really owe to Uber. So when I think about things, there's something really magical there. And one of our values at the time was making magic. So I met the word magic all the time, but so mission, push a button, get a ride, transportation as reliable as running water. I used to be in Nigeria, that tagline did not scale because water was not that reliable in Nigeria. So they went for a slightly more inclusive version, which is reliable transport, sanitation everywhere and for everyone, right? So that's the mission. That doesn't really tell me what the image looks like when I get there, but that's like when I wake up every day, I'm like, "Why do I work in this company?" It's that make transportation reliable everywhere for everyone.

**Ebi Atawodi** (00:09:12):
And I'll talk maybe later about how that came to... We were able to use that to actually challenge the then CEO Travis Kalanick. The vision was a world where you get to this continuous trip so that you do not need parking. Because cities, 25% of the average city is parking spaces. You're in San Francisco, you'll see buildings, just floors just for parking, right? You'll have basements just for parking. In a world where we have housing problems, we have ridiculous prices for rents. Just imagine if you could free up all of those spaces for all kinds of things, right? Homes, restaurants, you name it. Parties, warehouse parties especially, they have the best. That was the vision. You could kind of see it, right? You're like, "Oh, I could see a world." I mean, I live in Amsterdam, I have a bicycle, I can see it every other day. They're getting rid of cars and actually converting the parking lots on the street into communal gardens, right?

**Ebi Atawodi** (00:10:16):
So it's not crazy. It's attainable. But now doing that for the whole world, what does that look like? And that's how things like Uber Pool came in where in a world where the average car has 1.5 people in it, we can maximize that and then we can get this connected trip where the car is just moving and then maybe the car is autonomous, so you don't actually have to drive that car, and so it just doesn't need to stop. I guess, it needs to charge at some point. But so that's it. I think that's a really good vision. I think one that's lofty and I dance between whether it's attainable or not, is Elon Musk saying, "We're going to get to Mars." He believes it. He believes it so much that sometimes I'm like, "I guess, we're going to Mars." But then there was the other one of, oh, we want a car that's electric and we want that car to be beautiful so that we will get to a car that's accessible to everyone. And that's kind of followed through. So yeah, I mean, the beautiful things about visions is that it helps you decide it. Is that a work... Do I care about this problem? Is it something I want to do? And then you can take it or leave it.

**Lenny** (00:11:22):
I think with the lofty slash attainable balance, I think that Elon Musk is an interesting example where it may feel impossible, but as an inspirational leader, you almost convince people that it is possible through your confidence and your being in the details, helping people see maybe there's a path. So I think there's an interesting opportunity there to be a leader.

**Ebi Atawodi** (00:11:42):
Yeah. Absolutely.

**Lenny** (00:11:44):
You've mentioned this kind of difference between mission and vision a couple of times. It'd be cool maybe just to... Can you summarize that again, just like what is the difference between vision and mission in your mind?

**Ebi Atawodi** (00:11:53):
I'll use it an analogy. Let's say we want to go hike. We want to go up to Mount Everest. The vision would be once we're up there, me describing the picture of what we're going to see, we're going to get there, we're going to look around, we'll be the Himalayas, be beautiful, we'll be above the clouds, probably out of breath. That's the vision. It's like I fast-forward into the future, I hold time and I'm in that place and I'm describing the picture, right? And so a city without parking, you can see that, right? And we've all watched sci-fi movies. You can see Mars, Red Planet. So that's the vision and then the mission is the purpose of why we're doing that. We're going to do this to demonstrate that we're able to do it and making sure that we both get there together. It's a very simplistic one, but I'm just giving... That's the purpose.

**Ebi Atawodi** (00:12:46):
We're doing it because we want to prove to ourselves that we can summit Mount Everest, which I will not be doing anytime soon, and we're doing it to prove to ourselves something that we can do it and we're capable, and we will do that by making sure that we look out for each other. Because you can get to Mount Everest and not have all the people with you, right? That's a team bonding challenge that I've done once upon a time. It's actually very, very, very intricate and interesting. So that's your vision. And then the mission is the purpose and some set of guiding principles as to what will allow you to achieve that vision.

**Lenny** (00:13:23):
That's really handy. So simple way to think about... I'm just taking notes as you're talking and I totally agree with this. The mission is essentially the why and why you exist and the purpose for your team slash company and the vision... The word vision almost tells you what it is. It's what it looks like when you get there. Awesome. So that's exactly how I think about it actually. I have this post that I'll link to in the show notes that talks through mission and vision strategy. I'll give a bunch more examples real quick. Just again, I pulled it up as you're chatting just for folks to have more examples. So a couple of mission examples real quick.

**Lenny** (00:13:55):
At Ted, their mission is to spread ideas. They're around to spread ideas. Stripe's mission increased the GDP of the internet. IKEA's mission created better everyday life for the many people. So I think that's exactly what you're talking about. They're like the purpose, why do we exist? And then visions. So Microsoft's vision, a computer on every desk and in every home. Very much like what does it look like when we've achieved it? Tesla create the most compelling car company of the 21st century. It's kind of in between, but I think that's close. Lyft, a world where cities feel small again, where transportation and tech bring people together instead of a apart. How sweet.

**Ebi Atawodi** (00:14:31):
So that's one where it's very warm and fuzzy and I love it. Maybe this is my Uber, but you can see a computer on every desk. That's what I mean by it has to be realistic.

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

**Ebi Atawodi** (00:14:44):
Yeah.

**Lenny** (00:14:45):
Yeah. Awesome. So what is a vision concretely as a document in your experience? So we've talked about vision so far, mostly as this tagline, like a sentence, is that usually all you need when you're thinking about a vision, your experience? Do you often suggest going further into dock-deck, storyboards along those lines?

**Ebi Atawodi** (00:15:07):
So I have a very simplistic framework. I actually don't know who put it together at Uber, but I see as well, one of the most powerful skills of a product manager is storytelling, right? Because you look at generation after generation after generation, what people pass on as stories, they're not numbers, they're not stats, it's stories. And actually when you blend stories with numbers, so if you do numbers alone or numbers with stories or stories alone, the gap is so wide in stories alone. So it's not metrics blended with stories. It's a story, just a pure story. This doesn't mean don't be analytical. So one of the very simplistic tools that I've used, and I use it as well right now at Google, when my team ships the product, I'll put the vision in there to remind what the vision was that they set out to do, right?

**Ebi Atawodi** (00:15:59):
And it's once upon a time, write the problem and then write something and then write something, and then one day something happened. And as a result, the state of the world where we're trying to be. It's very simplistic, but in its simplicity of the magic because you are like, "I'm a PM, I'm trying to solve problems." Once upon a time, where were we? Right? It's like what is the thing that we're trying to solve? So I'll give you a simplistic one. I know the team didn't do this for shorts, but the shorts team at YouTube. Once upon a time, YouTube was fun and people had cat videos and zoo and all of that. And then one day it became this really polished thing and a lot of people were producing really polished, very one hour content. And then because of that, a lot of people felt maybe I couldn't create because I can't tell a one-hour story.

**Ebi Atawodi** (00:16:57):
And because of that, people decided, okay, I'm just going to watch and consume and not create. And then one day, we launch shorts, 60 seconds, and because of that, anyone can now express themselves again and bring back the joy and magic of YouTube. So it's very simplistic. I'm just using that into the teams who built this. I know this is not your vision, I'm just giving it a story. But I remember this when we did it for Uber as well, we were talking about the loyalty for drivers and some would have this framework and I thought, holy cow, this is it. So that's a very simplistic version. You can go one step up. The one I like to do, and I know that Amazon does this a lot, but as I write... I write an article. I'll write in the headline because if the vision has come to pass, right? And it's gone well, someone's going to be writing hopefully some sexy headline about the thing that you've built.

So I go to the future and I write the headline I would see. And I write the subtitle, just that, and I'll actually use the... I'll [inaudible 00:18:01] it into the page of TechCrunch or [inaudible 00:18:04] or something just so it looks realistic. And I'll put that in the deck just to kind of like, this is where we want to be. And then if I really want to go deep, then I'll write the rest of the article, right? So that's a very simplistic one. Let's stick another version. One that I used, and I show that in a lot of my talks is, I was trying to tell a story when I was at Uber and I was like, "Okay, words are amazing, but a picture tells a thousand words, right?" So I wrote out the thing and I worked with my design partner at the time, and he literally took out a pencil and drew the future.

And the vision I was trying to show was this world where you could walk into any store, any Bodega, mom-and-pop shop, wherever you are in the world, and actually top up your Uber balance, right? So even if you don't have a credit card and you have cash, you can also experience this cashless, seamless Uber experience and that can scale all over the world. And he literally drew a Bodega or does it look like a kiosk, like the ones in Nigeria in my country, you have like a [inaudible 00:19:06]. And then he drew that and you had the person with cash and a receipt just showing your top-up was successful. And we built that product. Not exactly in that way, but we built that product. Sorry, for another day or maybe for later, but that's the story. It took four years to build it, but that image got people so excited about, oh, it's possible. I can see that.

**Lenny** (00:19:29):
This is awesome. So essentially these are three ways to communicate your vision. The first is this kind of Mad Libs approach, which is really simple. So the framework and is there something we can link people to you that where you talk further, kind of have this template? Okay, cool. Okay, cool. So in the show notes, you'll find a little template that you can plug and play here, but the idea is once upon a time, blank and then blank. And because of that blank and one day something happened, and that's essentially the vision is like what happened, the big change that you're going to create.

**Ebi Atawodi** (00:20:00):
And then as a result of the thing that happened, how did you leave people feeling? What did you change in the world? What's the dent in the universe that you made?

**Lenny** (00:20:09):
Can you just share this Mad Libs real quick again, just like what's the framework real quick?

**Ebi Atawodi** (00:20:14):
Once upon a time, the thing that happened, then one day... And you can actually put the date in 2026. And because of that and because of that... And I usually like to end it with, and finally, this was the last thing you left the world with.

**Lenny** (00:20:36):
Beautiful. It's interesting, it kind of follows the hero's journey a little bit where it's like, here's today's world and then here's a problem that you ran into and this challenge you had to overcome. And then here's how we've defeated the foe. And then here we are back in our default world again. Okay, so that's one path. The other path is to write, working backwards approach, write an article. I think the press release is... To me, it's dumb to write a press release. No one reads press releases anymore. So I like that you think of it as a TechCrunch article.

**Ebi Atawodi** (00:21:03):
Yes.

**Lenny** (00:21:04):
Is there something you remember where you did that actually with a product? Like you wrote an article of a product you were launching?

**Ebi Atawodi** (00:21:08):
At Uber, we were talking about cars, then it was like, well push a button, get a ride. It could be push a button, go anywhere. And so, one of the things I started talking about... And this was the beauty of Uber, it allowed you kind of challenge the status quo. I started pushing this idea of if we need to have this more multimodal trip where I could take a... Ride a bicycle or a scooter, then I get to the train station, buy my ticket, scan in. Then from there I go into an Uber maybe then I come out and the other end and I get a scooter, whatever that is. It's this connected single trip. And the reason I was doing that was I was a Platform PM and surprise surprise, I always say Platform PMs, you have to be an order of magnitude even more stronger I think at vision setting because you have to build the foundations of stuff you don't even know is coming.

**Ebi Atawodi** (00:22:03):
So I would do these exercises with my partner teams to figure out, even if they don't know it, force a vision out of them just to say, "Is this where we are going?" Because then as somebody building the commerce infrastructure for Uber, I need to know when I need to build if that is a scenario that's actually going to happen. And we were also thinking about this world where you could tap to pay with your Uber phone. So there were all these crazy ideas and I wrote a headline of Uber really wants to replace your... I put it as your clipper card in San Francisco. Because I wanted my San Francisco buddies to relate to what I was saying. So I was like, "Uber is now replacing your Clipper card. All you need is your phone and the app." And I wrote it out and we didn't go and build that product, but we built the payments and commerce infrastructure for the team that did. And we were very involved at the beginning when it was getting kicked off of how does this look in a world where you can use your Uber to pay for transport? You can do that today. So yeah, that's a real life example.

**Lenny** (00:23:05):
And that was an article that you ended up writing of what the announcement would look like or is that using this? Okay, awesome.

**Ebi Atawodi** (00:23:11):
It was the article framework. So it was truly the New York Times headline. Even had their logo and then I had the subtitle and later on over time I wrote the actual article, the whole thing. But I started first with that just to kind of provoke a response.

**Lenny** (00:23:29):
And what did you see as the impact of having that? What kind of benefits did you see having this article that you could pass around? Do you have any memories of like, wow, that was really helpful here?

**Ebi Atawodi** (00:23:37):
It's two things. So you'll hear me say product management is clarity and conviction. And in writing the headline, you have to focus. Headline is not like... It's not a PRD, right? It's a headline. So when I've done this, what is the impact of this going to be? What's the feeling [inaudible 00:23:56] people with? And it forces you to get to that clarity of, okay, we solved this problem. This is actually going to be the painkiller that we're solving. And then they translate that pain dealer into, they have a headache, they no longer have a headache. Do you know what I mean? So I think it breaks clarity. So for me, as the PM I'm like, this is why I'm saying this is important. Then you have the subtitled. So they'll usually have the headline and I'm like, sub bit. They've just launched a way to something something, and you have to write that as well.

**Ebi Atawodi** (00:24:22):
What is the thing we're launching and is that realistic? And then using that to kind of socialize the idea to say, "This actually could work, right?" And I didn't go off and build it. Somebody else went and did it, but we had already thought about it and bit that into our platform vision of we need to be able to support these different kinds of ways to pay. There's another interesting one that you're going to go to. The third one, which is write the story. Write the article that someone else will write or visualize it, right? And the visualize it, two things actually happened. One a year and a half ago, in a strategy session I was running at YouTube, i...

**Ebi Atawodi** (00:25:00):
The strategy session I was running at YouTube, I actually took a screenshot of the Google Play Store. I mean, I use an iPhone, but I worked at Google, so I was trying to be... So I took the Google Play Store and then I created rounded rectangles, just blank rectangles, four panels. And then I printed that out and I gave everyone a sheet and I said, "If we solve these problems, we solve all these problems that we've identified, what would be the screenshots?"

**Ebi Atawodi** (00:25:32):
You know when you go on the app store, it has the make money or express yourself, what are we trying to say and what is the mock, the hero mock, the marquee mock that we're showing? And then again, it forces people to, oh goodness, we can't show everything, so it's got to be three or four things that land the big rocks that will solve this problem. Right? So everyone did theirs and then we talked about it and what was interesting is you'll find two or three that everyone comes up with if you've done a good job of telling a story around the problems. And it actually quite beautiful to see. So that's a very simplistic visualization that's not like a beautiful sketch or video.

**Lenny** (00:26:12):
I really like that as just a reminder that when you're even the article approach of announcing the thing instead of the traditional press release or even a Tech Wrench article, it's where will people find out about the thing you've built, and then use that as a way to frame what you've done. So in your case, it's like the app store. They're going to see this update in the app store. Let's just see what that would look like as we announce it in the app store. Could end up being a tweet, could end up being podcasts. There's all these different channels. So I think that gives people more ways of telling the story. If it's not going to be a press release.

**Lenny** (00:26:41):
Then yeah, so you talked about this third approach of mocking up essentially the vision. I always feel like if you have a designer helping you craft your vision, it's such a unfair advantage. So definitely try to a rope a designer in to help you tell a story.

**Ebi Atawodi** (00:26:41):
Absolutely.

**Lenny** (00:26:56):
Because just one design is going to, like you said, worth a thousand words, as they say.

**Ebi Atawodi** (00:27:02):
The thing though is I feel like it's an easy cop out to be like, "Oh, but my design team doesn't have resources." So I'm like, "No, that's not an excuse. Start drawing it with your hands in the app store." Still tell the story because the story, you should be able to tell this. I'm obsessed with Steve Jobs. He would say, "Tell the story without slides." Right? So that mocking it up is just so you can actually bring that narrative and tell that story. And do an app store or sketch it out or use little rectangles to show low fidelity mocks. Do not use, I don't have a designer, to be the excuse for why you don't bring it to life.

**Lenny** (00:27:44):
And often the designer sees it and like, "This sucks. I'm going to make it better."

**Ebi Atawodi** (00:27:47):
Exactly. So that's exactly what I did. I sketched this thing once and I gave it to a designer. It was literally post-it notes and they were like, "Okay, I see where you're going and it's exciting. I have some cycles, I'll spin it up." They spun up a lo-fi one, loved it, and I'm like, "Actually, I'm just going to make it pretty." Then they made it pretty and we got there. I mean now I'm a director, so I have a bit more agency with resources, but I was like a L-four PM, not even a senior PM when I did my first vision exercise.

**Lenny** (00:28:16):
Okay, this is awesome because I think it's really vague, this idea of I need to develop a vision, and I think you've shared some incredibly tactical clear steps you can take. I also want to talk about how to actually develop the vision. I think you have kind of this step-by-step approach. Is that right?

**Ebi Atawodi** (00:28:31):
Mm-hmm.

**Lenny** (00:28:31):
Okay, awesome. So before we get to that, just again reminding people what we just talked about, which is just like here's all these ways of framing your vision, and there's a lot of ways to do it. It's not like you need to make a beautiful deck that you can just write it out. You could write a press release, you could write a tweet or you could get a designer help you mock it up or just mock it up yourself. Awesome. Okay, so let's talk about your suggestions of how to actually go about developing and figuring out the vision for your product.

**Ebi Atawodi** (00:28:59):
Yeah. There are three pieces if you think about it. So one is what I call empathize. The second is create. So we spend a lot of time talking about create, the middle piece. Another's evangelize. And so I empathize with the customer, the problem. I put myself in their shoes. I really get a visual understanding of what those problems are. I'll talk about it in a second the tactical way I have done that across Uber, Netflix, and Google in a way that scales. Then the create piece where it's okay, now we've solved this problem. What does the world look like? That's the vision we've just been talking about. And then finally, evangelize.

**Ebi Atawodi** (00:29:36):
So I find just especially as you get more senior, the life cycle of a product or a group of products gets wider and wider and wider. And so I set out a vision, for example at YouTube last year that was called Vision 2026. And only this year, a year and a half later, are we now at a stage where it's actually going into the planning cycle. We've actually finished all the things were already in progress. We're actually now funding some of the big rocks that get us there.

**Ebi Atawodi** (00:30:08):
So there's a bit of patience that comes with it. And I think some people just give up when they get to the stage because you're going to meet a lot of naysayers. That one person's like, "But there's no way the engineering is ever going to solve." There's always going to be those people which is why I said you need to come up with a vision that's in a vacuum of the technical limitations because the limitations of today might not be the limitations of tomorrow.

**Ebi Atawodi** (00:30:32):
So going back to the empathize, one of my peers at work uses this word, he says, "You need to do understand work." And what is understand work? It's crazy to me the number of PMs who never go through their products and go through the... unless of course you're the onboarding PM, but actually go through the onboarding flow. Because we're all in this state of using the product. But actually, that first step where I don't have the product, what does that look like? I have multiple variations of accounts on YouTube. I have multiple accounts on Instagram. I have multiple accounts on Tiktok where I'm just using the product just like how does it manifest? What do I like? What's going well? I had this thing with Uber. I had Uber, I had other partner apps, I would look at them and payment services, empathize comes very easily if you dog food and then cat food. Dog food, meaning using your own product, absolutely a must. Cat food using your competitors or other people in the landscape's products.

**Ebi Atawodi** (00:31:36):
So that's one piece. The other piece is obviously research, but research is an interesting one because I think you use research. I think research is rich when it's giving you foundational problems that are a couple of cycles out, obviously depending on the level of research you're doing. But your researcher, if you think about the product cycle, research is ahead, and then UX, and then you go into building, it's like in that phase.

**Ebi Atawodi** (00:32:06):
And so I find too many people lean into and, "Let's go test it, let's go do some research." It's like, dude, you're a human. Look at the products. Would you use that? You built some intuition from just exposing yourself to really good products. Every time you pick up your phone, what is it about the apps that you love? Do you think about that? Oh, I open up my phone. I love Spotify. I also love YouTube Music, but I really love Spotify for my music. I've used it for years and I'm like, okay, what is it about this new thing that just rolled that I love? And I try to articulate that.

**Ebi Atawodi** (00:32:44):
So there's that piece, but then the tactical thing that I almost make every PM on my team do I call it top 10 things you should know. It's a living document. So in my org right now I've got quite a number of PMs and for each of those PMs in this living Google Doc, it's like go slash studio problems, they literally put 10 things, like 10 problems you should know. And you revise it. Every quarter you update it and they're separate. So it's like a living set of problems. And they could be qualitative, they could be quantitative, they could be tech debt. They should be tech debt.

**Lenny** (00:33:27):
These are just known problems with the product that everyone was aware of?

**Ebi Atawodi** (00:33:27):
Correct.

**Lenny** (00:33:31):
Okay. Awesome.

**Ebi Atawodi** (00:33:33):
You kind of farm for the problems. So you keep that doc going. And so I first started this at Uber on the money team and I called it money problems, more money, more problems because I do fundamentally believe we should bring joy into everything we try to do, so have fun with it. So more money, more problems. And essentially, it was in partnership with my data scientist partners that he had a team of product analysts and data scientists and they would pair up with my PMs and we would have the UX team, the UXR team, the data team, and the product managers, and engineering get together and actually look at their problems.

**Ebi Atawodi** (00:34:09):
So that living document means that for me, if I go around at least my minus one, not just for me but my engineering partner's minus ones, and my design partner's minus ones, and we chat them and say, "What are the top five problems for studio?" They should all have the same answer. This says I've done my job because then we all know the problems. You can debate them. You can discuss them. You can have sessions where you revise and review them. But we do that and then we go into a room and for example at Uber, I literally printed them on cards and I put them on tables, scattered the groups and had people discuss and vote the ones that is the most painful because then you see the whole thing.

**Ebi Atawodi** (00:34:52):
So that's the empathize bit. I'm spending a lot of time on this because I can't tell you how many times the clarity of the problem, going back to clarity and conviction, is missing and that problem is kind of like the North star. Everything's going on, but there's a north star that doesn't move.

**Lenny** (00:35:10):
Before you move on, there's so much there I just want to touch on that are really interesting insights. One is just this point you're making of when you're trying to develop a vision or thinking about the next step, you should be way ahead of that. You have this doc that you've been working on and consistently update and it's there way ahead of time. It's not like cool, next year's coming up, let's start from scratch and figure out what the vision is long-term.

**Lenny** (00:35:32):
Two is there's this quote that I think Patrick Hollison tweeted that I always think about in these discussions where a lot of people think of user research. It's like user research, often people think of user research, you do user research and that tells you what to do. And he made this point, no, it should be user research updates your mental model of your customer and what they need and the problems they're having, the stock that you're writing, and then that mental model informs what to build.

**Lenny** (00:35:57):
And so I think that's a big difference and it connects with what you also said of you should trust your gut and judgment. A lot of people discount as a PM like I should have no opinions. I'm just going to listen to what data and research is telling me. I'm not going to try to bias the team, but something I've learned more and more over time is just you should really trust your gut and your instincts exactly like you said.

**Ebi Atawodi** (00:36:19):
If I could put all the research into Bard or ChatGPT and it could spit out a PRD, then you haven't done your job. So basically I maybe panicked my team. I came in, I'm like, gen AI, everybody's talking about all the stuff that you do with creating content, but what I want you to think about is what is the value add you bring that I can't just put into an AI right now and say, "Tell me the big thing based on this research that exists."

**Ebi Atawodi** (00:36:49):
So I've never heard that quote from Patrick Hollison, but I agree. It's spot on. And I think this is where when you think about the qualities of a product manager, I think there are four pillars, product sense, leadership, execution promise, and technical ability. And it's not product logic. It's product sense.. It's a feeling, right? It's a sense of what is right and that the exposure to products and the curiosity will refine that sense over time. And I think that's the thing that people undervalue a lot.

**Ebi Atawodi** (00:37:25):
It's like you start program managing and just spitting out what engineering said we can't do and UX said they could do and you become this. That's not the job. The job is clarity and bringing this kind of context really to the set of problems that are being solved and you're curing them together. That's the key there. It's like you're curating those problems together.

**Lenny** (00:37:48):
And one of the challenges I find as a PM is convincing people of your gut instinct of why this is right. But I think that loops back to the power of vision and helping everyone align, like here's why we exist and here's where we're going and here's what I'm sensing is probably an opportunity.

**Lenny** (00:38:04):
Okay, so just to summarize some of the tips you've shared on this empathize step. One is basically user research, but I think even more importantly, use it to inform your understanding of the problem the users are running into and their needs and things like that. What else did you talk about? Oh, use the product. Actually be a user of the product. In your case it'd be like upload YouTube videos. Yeah. Is there anything else? Okay, there's this doc that you shared. That's awesome. So just basically a running document of known problems our users have with our product.

**Ebi Atawodi** (00:38:38):
Correct. And when you start getting to the strategic lens, so you have a set of problems, what I sometimes will do is especially if you're, for example a platform PM, PMs generally have lots of stakeholders, there'll be a marketing team that's asking for something or an operations team that's like our market needs this. I'll sometimes bring them in at the beginning of the strategy session and give them a template, 10 things you should know. So you use my framework to give me 10 problems. Because if you say, "Come present," they'll do like 50 slides. No, that's just 10 things you should know and stack rank them. So I put the work on you now to give me some color.

**Ebi Atawodi** (00:39:14):
I hear from marketing, comm, support, research, content strategy. Actually had that in my last strategy session where it was the most mind-blowing 10 things you should know. One of them was like the average reading age of an American is 11 years old. And so you start to think of, oh my god, all the text we have, maybe we should use images or a video or whatever. So bringing this sort multifaceted view of the problems and then you do the work of sandpapering down to the core thing and then you have the final 10.

**Ebi Atawodi** (00:39:50):
So that would be the tactical if you want to take it to a more strategic lens. That's how I'd run the first day of my strategy session is usually insights. I'll usually do three days, insights, strategy, then big rocks. And the insights piece is this where we go deep into the problems and I use this template of 10 things you should know, and then we come out with the final list of 10 things you should know, like a consolidated list.

**Lenny** (00:40:14):
I really like this additional tip you just shared of as you're trying to develop a vision for a team is bring in stakeholders and use this framework to help them crystallize here's the most important things to me from the product and things that I think are big opportunities. And then essentially, now you've got buy-in from stakeholders of hey, at least they've heard me and they understand and then here's what they came up with. And then I could be like, "No, but what about this thing?" That at least gives you a way to bring everyone together and understand how the process is going. Okay, so this week of work you just shared, so can you just talk a bit more about this? Is this you leading the team through an exercise to develop a vision and a strategy?

**Ebi Atawodi** (00:40:54):
Correct. Correct.

**Lenny** (00:40:56):
Got it. And so you said the first three days are aligning and fully understanding and immersing yourself in insights?

**Ebi Atawodi** (00:41:02):
I usually have strategy sessions of three days. I've tried to do it in two days. That is the absolute limit because I think you need to create white space for just the magic to happen. But I usually use a framework that it's literally what I call the narrative structure. So when we get into the conviction part, the clarity is the problems to solve. The conviction is the narrative. The framing of that conviction is insights, strategy, big rocks.

**Ebi Atawodi** (00:41:29):
So the insights day is just focused on understand work, these five problems, actually using the app, doing teardowns of other apps. It's just like a day of understanding. So the Google design, they ask the experts. In a way I've given the experts a template, that's what I'm doing basically. And then the second day is where we now go into the strategy of all the problems we've seen, the 10, which are the ones we want to focus on in which order?

**Lenny** (00:41:58):
And who's in these meetings?

**Ebi Atawodi** (00:42:02):
I always have four folks. So it would be depending on the level of the strategy, it usually be product, my engineering partner, my design partner, and research.

**Lenny** (00:42:14):
Got it. So it's the leaders of the team.

**Ebi Atawodi** (00:42:16):
The leaders of the team. And depending on the org, I'll bring in data science because at Google we have a more shared data science resource. So I'll usually invite them as one of the partners. Come tell 10 things you should know. So they'll say, "We need to do more instrumentation," or whatever.

**Ebi Atawodi** (00:42:31):
But you hit on the fantastic point which I was going to connect later, which is when you get to the evangelized stage, humans love to know you heard them. So imagine it's like you did all the work of bringing them together to say, "Hey, tell me 10 things." You've asked the questions, you've come back and said, "Here's the strategy that we're going to focus on and here's the vision." And that last stage where you evangelize becomes so much easier because it's like how did you arrive at this vision? That goes away or like, but you guys didn't solve in that. It's like we heard you and then we parse them into these 10 and everybody agreed with these 10 and therefore that's why we came up with this solution.

**Lenny** (00:43:11):
So let's segue to the evangelize step, which I think I always talk about. I always think about the Seinfeld meme of when he is trying to get a car reservation where he shows up and they don't have his car and they're like, "We have your reservation, we just don't have your car." And he's like, "That's the most important part of the reservation. You take the reservation, but you don't keep the reservation. That's the most important part." So I think to me it's always like you have this vision, you have amazing roadmap strategy, but if no one even knows it or hears it, that's the most important part. So I think it's super important to understand this. So I'd love to hear your advice on just how to successfully evangelize and share this vision that you've come up with.

**Ebi Atawodi** (00:43:50):
In terms of evangelizing, I think about three concentric circles. So the core of your vision is your team. And I want to make sure my team understands the vision because I'm basically saying, "Get on this boat, we're sailing to the vision of the Bermuda or some island," and I describe this beautiful island. They kind of have to be bought in and have conviction that they want to get there to actually sail on that boat together.

**Ebi Atawodi** (00:44:20):
 And so the team is the biggest part and it's the whole team. It's not like just the PMs are the vision. We're just the designers are the vision. I will literally first start with each of the folks that were in the room. We will basically bring our teams together and present an app. So for example, the one we did last year, we presented to what we call studio leads, which are essentially the triads for each of the product team, PM, engineering, and design for each of the product teams, and just presented it out. And I had multiple.

**Ebi Atawodi** (00:44:50):
We had the first one. Then I had one in my PM weekly, presented it again then, "Hey folks, still any questions?" Because people are still... It's percolating. It's like the tea bag. It's oozing out. They're trying to understand it and they're trying to stress test it. And what I also do is I write the output of the workshop. So I'll always write the output. These are the insights we came out with. Here's the ones upon a time framework. Here's the strategy. Here are the big rocks and a vision is coming.

**Ebi Atawodi** (00:45:18):
And then we'll do the vision and say, "But this is the vision of where we're going if we do all these things." And that will be a living document, comments, open for comments, no edit, not view only, comments because you want anyone to leave comments in there and just feel they have a say. You don't have to respond to all of them. You don't have to resolve all of them, but just if you put rocks in a washing machine, they polish each other. I like this friction.

**Ebi Atawodi** (00:45:47):
I always like, I go into the forest, I cut a piece of wood, and our job together is to polish it down to the beautiful danish furniture. So it's okay to have that friction to do that for a bit. And then once the team has kind of gotten to a place, I'm not trying to get anyone to a hundred percent certainty, I'm trying to get you just on the ride. They will come, right?

**Ebi Atawodi** (00:46:05):
Then I kind of go to this next layer, which is the stakeholders, those people that came in and their teams and their managers go to them and sort of get them brought in to the vision as well. And they'll also bring perspectives, right? You're missing this piece. We have a lot of engineering. Support tickets will blow up if you do this thing. What does that look like? You guys haven't solved the thing we need to do today. You're talking about something five years out.

**Ebi Atawodi** (00:46:32):
You're going to get all the variations of feedback. That's okay. The core that people have bought into that story. And it's okay to have all the... And then finally, once you've got the feedback from stakeholders, you then go to leadership, and leadership really as high as possible. So when I was at Uber and I was like an L-five, L-six, I had visions going all the way. I mean I had a fantastic leader. He put me on stage at an all hands to present the vision. And we were like one wallet, all Uber experiences. And then we have this vision of a world where Uber Eats, it could be trains, it could be whatever and you have this one Uber wallet that can be used for all of them. And we had mocks of what that looked like.

**Ebi Atawodi** (00:47:13):
So go as big as possible. Go big. Let people tell you to pull back. Let your manager use lasso and pull you back. Go as much as possible. So I go to leadership and then I have leadership, I have to find that story as much as possible. So those are the three concentric circles. Core team, the people who will actually build this thing, stakeholders, the people that need to be bought in for this thing to be successful because they play a part, and adjacent teams because as we're building this thing, it might mean that we tell you no for one of your requests or something, and then finally leadership. It's hard.

**Lenny** (00:47:48):
It sounds like a lot of work and a lot of time. Do you do this for yearly planning? Do you do this for future 2026 vision? Do you do this for quarterly plans? What's kind of the scale of vision that you invest this time into?

**Ebi Atawodi** (00:48:05):
We go back to the four parts of the vision we [inaudible 00:48:10]. If a vision is something that's coming next year, write a newsletter. Write the newsletter, the headline article version or do the mock. When you are really getting into a vision, you're talking about something that almost feels attainable, but realistic, so it's a long-term thing.

**Ebi Atawodi** (00:48:26):
And so you do the work and you take that time because you know that the rewards when you get everyone rowing in the same direction will mean a lot more velocity. And the ripple, I talked about evangelizing within the company, it's everything. When I start talking to a candidate, I say, "Hey, my team's mission is expression meets connection, our vision is this." Then their eyes are like, you can see the twinkle. And so the ripple effect of this thing is just broad and big. My edge partner was just hiring for a role and in the job description, she opened it first with our team mission. And it was like we have these short links at Google, so it's like Google slash studio vision. People get excited just seeing it. So it's really this evergreen thing that is, we're talking four, five years. It's not the next six months. It's the next six months, do the tweet. Do the tweet.

**Lenny** (00:49:24):
Okay, awesome. I think that's very clarifying. And so is this something you encourage your PMs to do is just always be working on this vision for the next, say, five years? Invest this time kind of in the background as you're shipping things every day, every quarter, to make sure people understand where it's going long term. And then it's like this one-off exercise that maybe you repeat every year too.

**Ebi Atawodi** (00:49:45):
I think if you have to repeat the vision every year, you have not created a good vision. You haven't done the work. So I'll give you an example of the one at Uber. What we kept doing was we would bring more fidelity to actually parts of the vision. So we had a low fidelity mark, more higher, and higher. Then at one point-

**Ebi Atawodi** (00:50:00):
Right. We had a [inaudible 00:50:03] at Ohio. Then at one point we did a sizzle reel and actually had, if this thing is live. But we're not creating multiple visions. Remember all the things you read. A desk on every table. It's not like every year it's changing. Or going to Mars. It's not every year. It's something that it's you literally rinse and repeat. So the vision is something that is evergreen and lasts in my mind at least three years. However, and I'm talking about PMs from L4 all the way to L7 in my team, which is from a junior PM, senior PM all the way to GPMs in my org, all have a variation of a vision. That's a three-year thing. Now when they're going into a micro-visions that's like a macro-vision where maybe they're solving a small problem. Then they'll just do a mock of what that thing looks like next year and then in that mock, they'll present, "This is the mock of what we think it should look like." That is a vision. It's a micro-vision but it is a vision. So do that.

**Ebi Atawodi** (00:51:04):
And that's the thing they used to say, "Hey, leadership, this is the problem statement. Here's what we think how might we solve this big problem and here's what we think it looks like when we ship it." That's a mini-vision. What I'm talking about is this macro-vision, but you actually can have the micro ones along the way.

**Lenny** (00:51:24):
Awesome. That is really helpful. By the way, I really like that phrase, "How might we." I find that extremely useful in communicating. Almost a vision, basically, just how might we solve this problem? Just that phrase alone is a really... There's this concept one of the PMs I worked with used called fertile questions. When you ask someone a fertile question that leads to discussion and a really good way to create a fertile question is how might we get more people to engage with YouTube analytics? It leads to lot of good brainstorm ideas. So good micro tip right there that we can include.

**Ebi Atawodi** (00:53:28):
I'll give a 1.5. I think it's, number one, it baffles me, and I'm somebody who came into product. I don't have a product management career. I came into product. And I've done that now at Uber and Netflix and Google and it still baffles me the number of people where when I say, "Tell me the top problems that keep you up at night," and then rambling. I'm like, "What are we talking about? Why are we rambling?" This is literally the thing that you come to work. This is the thing that should excite you. So I cannot overemphasize this importance of top 10 things [inaudible 00:54:09] but you don't need to start with 10. I start with 10 and actually I always end up with top three. So in every deck, I'll have three things. Three numbers or four numbers. We just got a new chief product officer at YouTube because Neal Mohan is now the CEO, when I did my presentation to her, the opening sign is four things you should know. With these four numbers and four insights. So she walks away with that information now.

**Ebi Atawodi** (00:54:36):
So it needs to be visceral and crisp and clear. And then from that, just for yourself, have fun with it. Take out a post-it note and sketch, if you were to solve this problem, what it looks like. Just start there. Right? Just start there. And then if you can at least convince yourself, I don't so much care about the deck. The deck helps, absolutely. Or the pictures in the box. If you can tell the story of this is a problem and this is the world I see, imagine a world, that in itself is already you evangelizing the vision.

**Lenny** (00:55:11):
Amazing. That is so helpful. So essentially, make this list of the biggest problems that your users have with your product and I think you also include infrastructure, tech, debt issues, maybe internal problems too.

**Ebi Atawodi** (00:55:22):
Yeah.

**Lenny** (00:55:22):
Awesome. I just want to know this list for every company now. Just what are their biggest problems? I wonder what they're struggling with.

**Ebi Atawodi** (00:55:22):
Right?

**Lenny** (00:55:22):
Okay.

**Ebi Atawodi** (00:55:30):
By the way, the infrastructure piece, I know it's a nugget on the side but infrastructure is the product. Period. People are like, "Oh, tech debt." I'm like, "Yeah, it's a product debt." I cannot build a skyscraper on a shaky foundation. So it is your problem too. It's not for the engineer to be barging on the door and be like, "Oh, there's a problem." So that's the other one I'll just call out. That in itself is problem as well.

**Lenny** (00:55:57):
You're speaking to the heart of every engineer listening.

**Ebi Atawodi** (00:55:59):
I know.

**Lenny** (00:56:02):
Okay, and then the other tip was sketch the solution. Just do a post-it, draw it out, see how it feels. I think just people don't realize just the power of, "Oh, I have to actually think about what this will look like and not just paint this very fuzzy picture of what it might be." Amazing. I feel like this is the most tactical and practical segment of advice on how to get better at vision. I'm so excited to get this out and for folks to have things that they actually do to get better at vision. I feel like this could be the whole podcast but you have more awesome stuff to share so I want to keep going. We're going to keep you here, extract as much content as we can out of your brain.

**Lenny** (00:56:39):
So you touched on this phrase that you like to use for describing what is the craft of product management, succinctly describing the craft of product management. And I know there's many layers deep in this concept but just to start, what is this phrase and framework you think of to describe what is product management craft? What is the job of PM, basically?

**Ebi Atawodi** (00:57:00):
So I use, I want to say clarity and conviction. And that's what product management is. You bring clarity and you have conviction. So you find a lot of time, we've just talked about a number of things. All of those things, what they're doing is bringing clarity. And that clarity especially for the problem. So even when, I'll just give you a little tactical thing. I noticed there's some PMs who will send an email and I read the email, I'm like, "What do you want me to do? Is this an FYI? Are you saying there's a problem? Do you want me to help?" So just even something as simple as that. Because as PMs, we're constantly influencing by bringing clarity. So the clarity, all the stuff we just talked about, coming up with a list of problems, really trying to understand what customers care about. All you're doing is bringing clarity so that when you're in a room and someone is going off and doing [inaudible 00:58:07] actually we don't need that research. I feel like we all know that that's a problem. We don't need that research.

**Ebi Atawodi** (00:58:11):
Instead of doing foundational research, let's do UX validation when the time comes. That's the kind of clarity you can break that saves cycles. So that's the clarity piece. And if you think when you think about what clarity is, you define clarity. It's this transparency. It's the simplicity of understanding. That's what the word is. It's removing all, it's sifting out all the stuff that's polluting the core thing. That's how I think of clarity. And the tactical thing that I use to bring that clarity is the framework I talked about which is the narrative, insights, strategy, big rocks. It brings clarity to why we're doing what we're doing, how we're going to do it and what we're going to do. And I spend time talking and I can spend time talking about all this but we talked about the workshop to do that and I actually have, and one of my old EMs who you've actually had on the podcast talks about this a lot. People have fancy decks. That's great. Clarity comes when you write. So I made them write two-page documents.

**Ebi Atawodi** (00:59:20):
I'll let you go up to four, maybe. But two page documents with insights, your strategy or I use the word approach sometimes and then the big rocks. And the big rocks are not a laundry list of 20 things because if I asked you to make me a cocktail, you would put ice in first. Then you would pour the drink. You would not put the drink and then put the ice or it will splash and it's messy and that's how an endless roadmap looks to me. So it's like 3, 4, 5 things that anyone can remember that are the biggest things that if we land, this gets us closer to solving the problems. Then every other little thing is around. You can fill that around. That's the sand around the big rocks.

**Lenny** (00:59:59):
So let's just actually double click on this little framework that you're sharing of insight strategy, the big rocks. This is essentially what you ask your teams to share as their strategy, as their plan, essentially. The high level plan, it's not yet a roadmap strategy. Do you think of this just as vision and strategy as this document?

**Ebi Atawodi** (01:00:17):
This is not vision. This is not telling us what the world will look like if we solve the problem. That's the vision. This is actually bringing clarity to the narrative of why we exist. So if you were a company, and I always use these, I feel like we can solve a lot of problems in life if we found a parallel in the world. And the parallel I just look for is if this was a startup and you wanted to tell people why you exist and why they should invest in you, which is why you're doing this PM, what is the big problem you solve as a company? What's the strategy and what are the things you're going to deliver that would end up in the headlines that are coming in the future that you need money for? You're telling investors, "I'm going to build these things, I need money to do these things." That's what this is. It's just the narrative.

And I think one of the simplest things a PM can have is this narrative that when people come to you and be like, "Hey, you see all these emails, introduction, meet this person." And the PM [inaudible 01:01:16] are like, "Oh, I want to set up a time to understand what you do." I'm like, "Nope. Go to [inaudible 01:01:22] slash my narrative, read it. Then when we set up the time, let me know if you have questions." And guess what? A lot of calls will fall off just from that. Or when someone comes into the team and they're like, "hat are we about?" Onboarding, here's the narrative. So that's the narrative and that's the one that you refresh periodically so that you can refresh every quarter and refresh every six months because you're adjusting to what's happening in the world, what the problems are. That's a narrative.

**Lenny** (01:01:48):
One last question just so folks get a sense of where this fits into all their work. Does this come before defining the vision and then the roadmap? Where does this fit in terms of vision and roadmap in terms of the process?

**Ebi Atawodi** (01:02:00):
So the document is evergreen and updated. I'm a big fan of evergreen documents because you create this mental thing where everybody just knows, link whatever the short link is, whatever you use in your company, they remember it and that's the link and that's where I go or they know what the name is to search for the document. It's like how we all know good PM, bad PM. It's lived for the test of time. So I believe in evergreen documents. Update the existing document or do a versioning of the doc, like 2022 version, 2023 version, whatever that is. So typically the narrative will happen before as you go into planning. So just my team right now, we've just gone through a planning cycle. Now I already had a vision for the team, but basically each team, they took the overarching vision and said, "Okay, let's now bring that to life for our area." They had a set of problems, they had their strategy, approach we called it, and then they have the big rocks. And everyone wrote the two pager. So we wrote this two page document.

And then they circled around, the partners, the engineering teams and got feedback. And that's what they then used to then build out the roadmap. Then they built out the roadmap and said, "Okay, based on that, this is what the roadmap looks like of unpacking those big rocks a little bit more." And usually what the rule we gave was, if you have less than three engineers on a problem, consolidate. More than three, it needs [inaudible 01:03:30]. So then you have the roadmap, it's just a Google sheet with a list of things and the resources assigned to it, and that's when we start to see, okay, where are you blocked? You have enough UX, you have enough this, it's a bit more tactical. And then you have your roadmap. But then after you've done the inside strategy, the big rocks or the roadmap, you can in parallel or after say, "Okay, let's take a week off. Spend time in a room and shape the vision." Or "Let's take a day off." I've once done one a day, the sketches I talked about. We literally locked ourselves in a room.

**Ebi Atawodi** (01:04:06):
At Uber, we had no meeting Wednesday. Google and YouTube, we have no meeting Friday. And I said, just block your no meeting Friday. The next one we're going to get in the room, we're going to whiteboard. We literally posted notes and the designer of course was like, "This thing is ugly," and then made a pre. And that was the vision. The vision, I remember seeing so many docs at Uber with literally slides from my doc saying, " We agree with this vision and so therefore we're going to build this thing in our team to support it." And that's great. I feel influencing. And I'm seeing it right now at YouTube as well, where teams are like, "Oh, I've seen that vision," and they'll refer to it. "I saw your studio vision on slide five when you talked about this. This is what we did with it." So that's how I would do it.

**Lenny** (01:04:53):
Oh man, I feel like there's so many directions I want to go. You have so many nuggets of wisdom but I'm going to get back on track. So you have this framework of what a great PM is, clarity. Let's talk about conviction. What does that actually look like? We

**Ebi Atawodi** (01:05:05):
Already spoke about conviction. So conviction is the vision.

**Lenny** (01:05:08):
Mm. Where you basically very succinctly tell here's where we're going and here's why we're doing this.

**Ebi Atawodi** (01:05:15):
So definition of conviction is a feeling of what you think the way the world should be. It's a feeling. It is not certainty. It is not absolute. It is not perfect. But it's a feeling of, I feel like this is the right thing to do. And that's what we're seeing when we talk about product sense. It's building this feeling of what you think is right so you bring that to life. And so everything we just talked about is literally you converting the conviction from your head into something that people can consume. And that's the conviction, clarity, narrative, vision, conviction.

**Lenny** (01:05:50):
So this is specifically the craft or product management. If you want to get better at the craft of building great products, these are the two areas I imagine you point your PMs to get clear on things and then have more... Is it more conviction? Is it clear conviction? How do you think about the skill of getting better at conviction?

**Ebi Atawodi** (01:06:09):
If you have conviction and it's not clear, then you don't have conviction, quite frankly. If you're like, "I think maybe we should, there are five things we should solve." I'm like, "Then you don't have conviction." So I'll sometimes stress test. And I'm like, "What if I took away all your resources and you only had five, which is the one you're going to build?" I do all these Draconian things that just force clarity. So then the conviction will come out and it's like, "Yeah, but I'm uncomfortable." I'm like, "Okay, so the thing that's making your uncomfortable, go spend time, go spend your research, go spend your cycles on getting higher certainty on that conviction," rather than chasing four things because we're, I don't want to use the word lazy, but too scared to pick a lane. So don't peanut butter. Nobody does anything well by peanut buttering resources, spreading them thin. So that's the conviction. I'll sometimes have someone come to me and say, "We have these two scenarios," and there'll be a document and there'll usually be the typical pros and cons of the options.

**Ebi Atawodi** (01:07:12):
I'm like, "Let's say we weren't in the room as the leadership team," which is the one the team wants to get behind. Then you'll sometimes see the team hasn't even done the work between themselves talking. I'm like, "No, no, no, no, no. You need to go do the work." And if you have gotten to a point where you have conviction, but there is some risk, then let's talk about the risk that you need by help mitigating or help solving because that's too easy to come to me and be like, "Oh, here's A and B. You do the work and tell me which you one to pick." No way. No, that's not going to make you a better PM. Go figure out why you can't stand by A.

**Lenny** (01:07:47):
So the core to conviction is pick what you think is right. That seems like the core of it. Clarity is being very clear about what you've learned and where you think things are going and then conviction is pick your battle. Here's where we think we need to invest.

**Ebi Atawodi** (01:08:00):
Right. I like the word battle. Clarity is seeing that you are committed to actually fighting this war in the first place, right? There are lots of other things you can fight. This is the fight you're fighting in and why. And the conviction is how and the way you see the world if you win that battle.

**Lenny** (01:08:20):
Great. Okay, so you gave a talk on product culture and how the company culture informs and it changes the way the product is built. So you worked at three very different cultures that I'm aware of, Uber, Netflix, and Google. All very different companies. I guess maybe just as a broad question, what did you see about the culture of the company due to change the way product is built?

**Ebi Atawodi** (01:08:43):
You think about what Uber has done in the world and you think about where we are now where it's almost so natural to bring out your phone and the car turns up with someone you do not know that you get into and trust them to take you where you're going. If you fast forwarded to when my grandmother was alive, she would've thought you were crazy. So just think of all the pieces that had to come together for that to work. And it was a super hands-on, zoom out, zoom in. We say boardroom to streets. You could roll up your sleeves and go in the streets and then go to boardroom, operations team, that really went into the fabric of a city and tried to convert that mission into what the manifestation is in the city. And I started at Uber as a GM before I became a PM. So I firsthand experienced that. I got my job, there were seven cars on the road and I had to figure it out in a country where there's no reliable running water, we want to do reliable transport.

So what does that look like when drivers don't have a mobile phone? We didn't have [inaudible 01:09:49] So there's this big piece of the operations and what Uber basically did was we're going to work very hard to get the right people in seats. We're going to give them complete autonomy. And the magic that just came out of that is the reason that Uber exists and that infrastructure is very much what has allowed a lot of the gig economy actually thrive. Setting up these playbooks, trying things, learning, sharing with each other was a very big part of the culture. Now, over time, I call this the monolithic culture. There was a culture. And the culture of ever went back and said, "Hold on, let's revisit this. Does it still serve us? Has the context changed? What are the parts that we need to improve, evolve?" Because here's the thing, if you don't intentionally evolve the culture, it will evolve without you. So culture is always going to evolve. That's just the way humans are. And the culture are the norms and beliefs. And beliefs and norms change. That's how humans are.

**Ebi Atawodi** (01:10:53):
So I always say, "What are the good behaviors that you reward and the bad behaviors that you condone?" And if you're not going back to revisit that, then the culture just moves on and then the company's out playing catch-up or it moves on in the way you don't want it to. And then the world is like, "Oh my god, Uber. Delete Uber," which actually happened. I lived it. It's very sad to wake up and know that you're doing the right thing for the world and see that 400,000 people have deleted your app just because of a miscommunication, really. So this is a really big piece of Uber. The spin there on the autonomy was one of the cultural values was the principle of confrontation and toe stepping. And this is codified in the value system. It's like, forget about levels, step on toes if you believe it's the right thing for the business. And I talk all the time about the story of cash, where Travis Kalanick was against cash.

By the way, I think up until he left Uber, he was against cash. But he believed in data and he believed in principle confrontation. And he was like, "Go test it out." And we tested it out and it did well. And that's why cash exists on Uber. Because the culture enabled that. So I've talked about how it evolves and also the [inaudible 01:12:06] of Uber. You go to Netflix where it started as a monolithic culture. It came out of, "Oh, we went through this experience where we had to cut the org down and we left these sets of people and they were performing just as well and had the same output and the same joy. Hey, what did we do right here? Let's distill this down and distill it down into this no-rules rules framework of [inaudible 01:12:34] responsibility of highly aligned, loosely coupled a few of these tenants at Netflix.

**Ebi Atawodi** (01:12:42):
But I saw in my time, my very short time at Netflix when I left Netflix to go to YouTube, I saw the culture evolve in a very short space of time. There was a very high degree of intentionality to evolving the culture. What does it mean to entertain the world? Let's evolve, let's discuss, let's change. And so again, going into the product, when I joined Netflix, there was a whole value of the product would not ever be advertising video on demand. It's subscription video on demand because we believe if we, and it was a strong belief. It was a belief system. And then over time, there were debates and debates. I was a part of a lot of conversations around access. In a world where more people are on their mobile phone, do not have a TV screen, might not have a credit card, do we want to entertain the world or do we want to entertain some people in some places? Sounds familiar, right? This is what we also had at Uber. Do we want to offer Uber to the world or just some people in some places who have credit cards?

**Ebi Atawodi** (01:13:50):
So I saw that conversation go back and forth and the company allowed a structured way of having these debates. So you would typically be encouraged to write down things. Write your argument but ultimately it's Lenny's decision. And it's funny when the buck stops with you, how the whole thing flips on its head. You'd think it would be chaos. It's actually not. You actually saw people go a lot more methodically around, okay, I need to make sure. I remember when we talked about conviction earlier, we said, how do you get the firmness in your conviction? I saw people do that work. Be like, okay, I'm at 95%. Can I get to 99%? What would I need to do that? And because the buck stops with you, right? In a world where people can sign up to multimillion dollar deals. So without any approval, it's actually quite liberating but it's the liberation that's frightening.

**Ebi Atawodi** (01:14:47):
So you saw this and this intentionality involving the culture and now going back to subscription video on demand, because you would write things down and people kept debating and pushing and pushing, there's now advertising on Netflix. That's a culture that allows the product.

**Ebi Atawodi** (01:15:01):
... right? That's a culture that allows the product to sort of evolve and change tenets. And then you see Google where it's very much just this, I sort of use this story of two little fish swimming in the water and the old fish goes past them and says, "Hey, how's the water?" And they're like, "Good." And then they swim along and they go, "What's water?" That's a little bit of what you get and it's like, we have this respect the user, respect the opportunity, respect each other, and that's all you get. That's it. That's it.

**Ebi Atawodi** (01:15:41):
What is Googling? You know it when you see it, but what is Googling? And so it allows for when you have this, what I call, the microcultures, where the culture within YouTube is different from the culture within cloud is different from the one in photos, different from the one in maps. You actually hear people say, "Oh, they came from search because they have a culture in search, which if you say you're going to deliver two basis points, you're delivering two basis points, right? And there's a different culture and assistant where it's like, "Oh, experiment and try things and so on."

**Ebi Atawodi** (01:16:14):
So the culture almost becomes, it almost feels like a city, right? So I'm in Amsterdam and there's a culture in De Pijp and there's a culture in Amsterdam-Noord, where all the hipsters are, and there's a culture in West, right? It's the same in San Francisco. There's a culture if you're in the Mission and you're in all of those things. So essentially what you then end up with is these microcultures, but then there is this looser macro culture that allows the flex of the culture so it manifests in different ways.

**Ebi Atawodi** (01:16:45):
And what that means for the product is, you end up with a company like Google, where one side of the business is building something like cloud, another part's building something that's heavily data-centric, another part's building something very human. Give everyone a voice, show them the world. That's YouTube, right? And you were able to do that because the culture allows that flex.

**Lenny** (01:17:04):
When you think of Uber versus Lyft and then there's Airbnb versus there's this company Wimdu that was one of their main competitors. There's these German guys. It's interesting. In the case of Uber, they're very aggressive versus Lyft was nice brand. But in the case of Airbnb, Airbnb was the very nice culture and brand and Wimdu was extremely aggressive, just very hardcore. And it's interesting in some markets, maybe you win going really hard and aggressive and just like... Another Uber value, I think was, find your red line.

**Ebi Atawodi** (01:17:37):
Yeah, exactly.

**Lenny** (01:17:38):
Just find your limit and get there, and that's where you're going to work. And then in hospitality, maybe there's an advantage to being an Airbnb where it's more warm and fuzzy. So that's interesting, that depending on the market, maybe a different culture has a bigger opportunity to win. Never thought of it that way before.

**Ebi Atawodi** (01:17:53):
What I saw that was interesting about Uber was there was a core that was very monolithic about, this is the culture and you hired people from all walks of life that live and breathe that culture, but there was a lot of magic that came out of a culture that also had the city at the core.

**Ebi Atawodi** (01:18:14):
So celebrate cities was one of the core things, and customer obsessed was another value. So if you're customer obsessed and the culture says celebrate cities, then you know what? Maybe when we do ice cream in Nigeria, we're going to put this spin on it. We do Uber ice cream in San Francisco, we're going to put that spin on it.

**Ebi Atawodi** (01:18:33):
So there's also this element of like, I could... Nice isn't the word I would use, but it was very accessible to anyone because it met them where they were. The product met them where they were. And I think that opened the roads for... No other company has been able to create ride sharing at that kind of scale. It's very region by region and I think it's because of that.

**Lenny** (01:18:54):
I think one of the other interesting things about culture is every team also has its own culture and part of PM and a PM leader's job is to create that culture and create good vibes and be a recent guest, put it, you're the emotional center of the team. Is there anything you do on your teams to create that culture to make sure everyone's feeling good and excited and create good vibes?

**Ebi Atawodi** (01:19:16):
So I actually spent time with both my VP and my peers, my engineering and design partners, and we have a little acronym called BEM, because it's Brian, Ebi, Matilde. And I kind joke, I'm like, "BEM." So BEM got together and created a cult. We discussed the culture that we wanted to have on the team because indeed, it's how do you work? And by the way, just fun fact, the reason I ended up at Netflix and got obsessed about Netflix actually, was when I was at Uber and we started all this evolving beyond this what we call Uber 1.0... So I'm very Uber 1.0. I joined Uber as employee number 1024. It's a very different Uber. As the culture was going out and in a way, in my mind, losing a little bit of the conviction that the other one had and becoming kind of like a catchall.

**Ebi Atawodi** (01:20:11):
It's pivoted in the right way now, but it kind of swung the other way. I actually had my product marketing partner, his wife worked at Netflix and so he sends me the Netflix culture memo. To your point, I created a culture of Netflix within my team at Uber. And so the values that actually I have carried through, kind of go back to those. I do believe in this freedom or responsibility. I will give you freedom, but with that comes responsibility. That means the buck stops with you. We had a similar one at Uber, which was, owner, not a renter.

**Lenny** (01:20:45):
Speaking of Airbnb.

**Ebi Atawodi** (01:20:46):
Yeah. Owner, not a renter. How would you act if this house was yours versus when you rent, right? And so it's that buck stops with you, kind of mentality. Then there's this other one that I really think about which is, there's an informed captain. And so, I'm in too many conversations where I'm like, "Who is on the hook for this decision? Who cares if this decision is made?" It's not like six people with consensus. Who is the person?

And I'm very big on people on count [inaudible 01:21:14]. A lot of people are like, "Well, but there are five of us." And I'm like, "No, no, no. There's one person who owns this decision and that's the person that we're going to empower to get all the context, get all the input, to make the decision." Right? And it's like the rapid model where you end up with the decider.

**Ebi Atawodi** (01:21:29):
And then, I think one for me, and this is just something I'm very passionate about, I'm a Black woman. I think a lot about how I show up in the workspace. And for me, something that's so crucial is I say vulnerability is your strength, right? And so we're all human. We're all fantastically flawed in many ways.

**Ebi Atawodi** (01:21:51):
And so I really, really fundamentally believe in this whole, who's the human behind the role and how's that human doing? And I don't optimize for being liked to be very... And it sounds very harsh. I do not believe in being liked. That's Ebi. I believe in being loved, right? And that's a very, very different thing. And when I said this once in a meeting, people were like... Yes. Right? But it took me a while and reading a lot of books to come to a definition of love, and love is the choice to extend yourself for the spiritual growth of oneself or another. Right?

**Ebi Atawodi** (01:22:32):
It's very big and lofty and whatever, but you're literally extending yourself for somebody else or yourself, self-love. Right? And that's love. And when you're extending yourself, you're not nice. It's not always nice or like. It's sometimes is having hard conversations. It's knowing that, "Oh, there's a human." Matilde, my engineering partner or Brian, my engineering partner, whoever those are, they know I care about them.

**Ebi Atawodi** (01:22:59):
So when the feedback is coming like raw, they know that it's in their best interest because I've shown them enough times that I genuinely care about the person behind the role. I feel like that brings the most powerful thing a team has. You'll see teams just tactically, they'll write a PRD, they'll send the PRD outside to the world, right? To the other partners and I'm like, "Have you spoken to the other PMs on your team? Have they read it? Because actually, it might help you write a better PRD."

**Ebi Atawodi** (01:23:28):
And so in my team now, we have our email distro. Gmail allows you to do the plus thing, plus PRD, and just ship your PRD, even when it's getting date. And people will just help you shape it because we all care about each other. So it's a very, I know fuzzy and whatnot, but I do really believe in this thing of, if we get back to the core of humanity and there's a human behind the role and they have goals and aspirations, and if you care and love them, the rest of it will follow.

**Lenny** (01:23:58):
Wow. I love this. You shared a trick for getting a sense of, if you have a good relationship with your EM, kind of along these lines, can you share that? But this was before we started recording.

**Ebi Atawodi** (01:24:09):
I did, I did. And it came from when I first got into product management, I was a PM in training, called a PM trial. And my engineering manager was an associate EM, sort of EM in trial and we hated each other. We absolutely hated each other. And now, we love... There was love in the end and he... Still a very good friend of mine and it came down to first this... I asked this question.

**Ebi Atawodi** (01:24:36):
Do you know your engineering manager's birthday? It's the day they showed up in the world. It's the most important day for them. It's the day they showed up the world. Do you know their birthday? Do you know their work anniversary? Do you know why they're doing the job they're doing or what they want to be? Are they trying to be a VP? Are they trying to go grow a startup? What is it?

**Ebi Atawodi** (01:24:59):
And so, if you go to this sort of human element of trying to actually bond with the person. We'll do fun things where we'll just go to a show together or something or have lunch or dinner. Because if I'm spending half of my waking life at work, right? You sleep eight hours. The remaining time is 16 hours and you work, let's say, eight hours if you're lucky, right? You work eight hours. If I'm spending that time with someone, I kind of want to have fun while I'm doing it and you'll have fun when you like each other, you love each other, even better.

**Lenny** (01:25:33):
Ebi, I wish I got to work with you. You're awesome. By the way, this EM you're talking about is Gergely Orosz, who was on the podcast.

**Ebi Atawodi** (01:25:41):
Yeah.

**Lenny** (01:25:41):
He's the author of Pragmatic Engineer. People may be aware of him already. So how about that?

**Ebi Atawodi** (01:25:46):
And I knew he loved to write, so every time we would do a doc for example, to leadership, he would start. He would kick it off. Even though it was something product centric, he would start writing it. I'm like, "Great, you're an awesome writer."

**Lenny** (01:25:59):
Look at him now. [inaudible 01:26:02]. Maybe as just the last topic, I'd love to hear any cool stuff happening on YouTube. Stuff that you... I think you just launched some AI stuff, there's AB testing stuff that's coming out. Just like what should people know about new YouTube features, especially people like me that aren't publishing stuff on YouTube?

**Ebi Atawodi** (01:26:15):
Well, I'll go to one of the things we talked about, which is this once upon a time vision. One of the visions we have as a team is, if you go back to the core of YouTube which is, give everyone a voice, share it in the world, it's really this... YouTube is for creators big and small, who want to tell their story however they want to tell it, whether it's a podcast or live or video or short or post, and that we are the creative partner. Maybe that's another podcast for another day, but I fundamentally believe in when products take on some kind of persona. Right?

**Ebi Atawodi** (01:26:52):
And so we're like, "Okay, YouTube Studio..." Really, we're the creative partner. We're not making the thing. You're making the thing, but we are partnering it. We're the ones giving you insights. We're the ones helping you with testing things that might work and if we could make your life easier, then you could just go do the fun stuff of telling your stories, right? So there are a couple of exciting things coming.

**Ebi Atawodi** (01:27:16):
So one of them is AI inspiration, which we launched at Made on YouTube and when you talk to creators, and I always ask creators this question, "Tell me your creative process." There's always this big piece that's like the research, where they come up with an idea and they kind of flesh it out. In your case, maybe it's finding the person and it's reading about them. This is pre-work that they do and sometimes they'll do work by looking at tweets or watching other YouTube creators or listening to other things.

**Ebi Atawodi** (01:27:47):
And so imagine a world where we can actually use AI to generate ideas for you based on what we know your community of subscribers and viewers are watching, right? So that's what I'm very excited about in some future world where I'd love to see you using that. It's going to launch next year. There's already a version of it in YouTube Studio where you can just type in a word, you could be like vision. And then it will give you ideas and other videos and topics and keywords that are being searched. That's one exciting one.

Another really exciting one is we launched thumbnail Test and Compare. So creators spend a lot of time on thumbnails, a lot of time. And we've been working a lot with creators. We've been very systematic about just getting feedback and getting it out there. It's just rolled out even to a bigger set of creators yesterday, actually. By the time this comes out probably... You might have it in your hands, Lenny. And so you're able to basically put two thumbnails, up to three, two, three thumbnails, and the system will actually AB test them and see which one actually works versus you sort of designing a thumbnail and then [inaudible 01:29:01] it out. So that's another exciting area.

**Lenny** (01:29:04):
Dreams coming true. I can't wait to try that. It feels like it's like the edit button for Twitter where it's like, "Come on. Why don't we have this?" And here it is. That's awesome. Yeah, I've been trying to do some more testing on that stuff and there's all these clunky tools people have built that are hacky on top of YouTube to try to do this for you, so I'm really excited to try that. Before we get to a very exciting lightning round, is there anything else you want to leave listeners with? Anything else you wanted to touch on or share?

**Ebi Atawodi** (01:29:26):
I think one of the questions I get a lot of the time is, how can I be a PM? How can I convert into product management? And I just want to say, I'm this Nigerian girl. I don't have an MBA, I didn't work in consulting, and I'm here, right? And I genuinely think that some of the best product managers come from something else because you have empathy for being on the other side. And so, what I always say to people is, " There's a power of 10,000 hours," and you see a lot of the stuff I spoke about.

**Ebi Atawodi** (01:30:04):
There's a lot of this kind of immersing yourself. So already start product management, doing product management before you're a product manager. Open up your favorite apps. What are the top 10 problems you see? In your head, design what the world could look like if you fix them, right? And what you do by doing that is this constant training of your product sense. So when the opportunity comes, you don't get lucky, right? But you get, it's opportunity meets preparation. You're already prepared.

**Lenny** (01:30:31):
I love that. By the way, I think you're the third Nigerian guest on this podcast. There's something in the water in Nigeria that's creating a lot of great product leaders.

**Ebi Atawodi** (01:30:43):
[inaudible 01:30:43]. They say, "Get you a Nigerian friend. We keep it real."

**Lenny** (01:30:45):
Well. With that. We've reached a very exciting lightning round. Are you ready?

**Ebi Atawodi** (01:30:45):
I'm ready.

**Lenny** (01:30:49):
All right. What are two or three books you've recommended most to other people?

**Ebi Atawodi** (01:30:55):
I really, really love this book called, 48 Laws of Power. I know it sounds very Machiavellian. Beautiful book. Another book that is one of my absolute favorites, is The God of Small Things. It's a beautifully written, really wonderful book. And more recently, a book that keeps popping up in my mind is Outliers by Malcolm Gladwell. Such a beautiful book because it just goes back to what we talked about earlier, it helps you see that there are patterns in certain things, right? Yeah. It's been coming out maybe quite a lot. I'm a voracious reader, by the way. Find me on Goodreads. I read a lot.

**Lenny** (01:31:43):
Oh, that's amazing. We will find that. What is a favorite recent movie or TV show that you really enjoyed?

**Ebi Atawodi** (01:31:48):
Oh, my God, The Bear. Just The Bear. Go watch it. It feels like being a PM, honestly. The Bear is the show, I think it's on Star or Disney.

**Lenny** (01:31:58):
Hulu.

**Ebi Atawodi** (01:31:59):
Hulu. That's the one in the US. Yes. It's about a chef. It's so well done. Beautiful cinematography, but also, you feel the heat in that kitchen. You feel it.

**Lenny** (01:32:12):
It's very stressful to watch that show.

**Ebi Atawodi** (01:32:14):
Yeah.

**Lenny** (01:32:15):
Second season's less stressful, at least. In my-

**Ebi Atawodi** (01:32:18):
Wait. Do you know the season is less stressful because the restaurant is closed? That's beautiful cinematography. The pace goes down and it picks up when the restaurant's open again.

**Lenny** (01:32:29):
Oh, yeah, that last-

**Ebi Atawodi** (01:32:29):
Do you agree?

**Lenny** (01:32:31):
Yeah. Interestingly, The Bear has been the most recurring recommended show on this podcast recently.

**Ebi Atawodi** (01:32:36):
No [inaudible 01:32:37].

**Lenny** (01:32:37):
There's a phase of Last of Us, there's a phase of White Lotus and now it's The Bear. So we'll see what comes next.

**Ebi Atawodi** (01:32:43):
Damn it. I want to be contrary now. I'm trying to think of something else.

**Lenny** (01:32:47):
I've been a huge fan of this new show on HBO called, Scavengers Reign, if folks haven't seen that. It's incredible. It's animated and sci-fi ish and it's just like, "Wow." I can't wait to watch more. Anyway, that's my answer. It's not about me. Let's keep going. What's a favorite interview question that you'd like to ask candidates that you're interviewing?

**Ebi Atawodi** (01:33:06):
Two questions. If they're a people manager, what is your leadership philosophy? The amount of leaders who have never thought about that is quite scary. And if you're just pure product chops, tell me your favorite product, product you're most passionate about, and why. And I live for the storytelling. Do you start with a problem? I wake up in the morning. I'm always looking for the mood. Music is a backdrop to my life and I open up Spotify and it just finds exactly what I need to... I've just told you the problem and the solution, right? So I look for those kind of things. Then I'll ask, if you could improve it, what would you do?

**Lenny** (01:33:42):
I love it. That's an awesome one. What is a favorite product you've recently discovered that you love, whether it's physical or digital?

**Ebi Atawodi** (01:33:51):
There's a product I'm using a lot now, very simplistic. It's a product called Sleep Cycle. It basically allows you set an alarm but a progressive music alarm to wake you up because I don't want that jarring like [inaudible 01:34:07] in the morning. It kind of just gets me there, but it also tracks my sleep using the microphone. So it tells me whether I'm coughing or whether I woke up, or I'm snoring if I'm in the wrong position. It also shows stats. When I'm in Nigeria, I snore less than everybody. When I'm in certain countries, I snore more than everybody. So it's a really cool app.

**Lenny** (01:34:30):
It feels like... We have a Nana to watch our kid. It's like a camera that's watching him sleep all day and I feel like I need that for me because it tells you when he was woken up, how long he's been sleeping. That's awesome. It's called Sleep Cycle. Okay. We'll link to that in the show notes. Do you have a favorite life motto that you often come back to or share with friends or find useful just either in your day life or in work?

**Ebi Atawodi** (01:34:52):
I'm going to pull it up. It's a poem called, Invictus. And I love this quote because he was going through issues with his leg and was actually going to potentially lose it, and then wrote this quote. I want to read the last part. It's worth reading, looking up. It says, "It matters not how strait the gate, how charged with punishments the scroll, I am the master of my fate, I am the captain of my soul." And the last two lines that, "I am the master of my fate, I am the captain of my soul," is literally my Twitter thing, right? Or X. com, whatever we're calling it now. [inaudible 01:35:33]. It's such a powerful reminder of freedom or responsibility.

**Lenny** (01:35:38):
And also I think, I love... This touches on something you also shared earlier of just agency over your fate. You are responsible. Even though you may not be responsible for what happened, you're responsible for what you're going to do about it. And I think that for being a great PM, that's such an important thing. It's so easy just to complain and like, "Oh, we don't have our resources. We keep changing plans. We're losing engineers." But the more you feel like you are in control and you're responsible for what's going on, the better things end up going.

**Ebi Atawodi** (01:36:07):
Absolutely.

**Lenny** (01:36:08):
And that's a beautiful way of putting it. Amazing. And we'll link to that poem. Final question. Before we started recording, you told me you'd do DJing on the side or I don't know, maybe full-time. I don't know. I guess, one, where can folks find your DJ sets if you put them out? And then two, I guess, any advice for someone that wants to start getting into DJ Ness, what could they do to start going down that path to learn how to do it?

**Ebi Atawodi** (01:36:30):
It goes back to this, "I'm the master of my fate, I'm a captain of my soul." One thing I love and one of the things that's brought me to YouTube is just a power of what you can learn and learning through YouTube. And so I used to DJ initially, 15 years ago when it was still vinyl and then I quit because I was like, it's either I do design at the time, because I started as an engineer, then I was a designer. Either I do design or I do DJing, and I stopped.

**Ebi Atawodi** (01:36:58):
And then a year ago, my Burning Man Camp was like, we need a DJ. So I needed to go DJ at Burning Man. And so I went on YouTube and I just followed all these DJ creators. The game has changed, I will say that. And so I have my mixtapes on YouTube. So if you look for my name, Ebi Atawodi. My handles, it's always Ebi Atawodi, my name and my surname. You'll see all kinds of videos, but you'll also see my mixtapes and I name each mixtape after a sauce. So one's called Sriracha, the last one was called Mango Chutney, and there's one coming up soon that I'm calling Jerk.

**Lenny** (01:37:39):
Amazing. And then, yeah, I guess is your advice. Then just watch YouTube. Go look for people teaching you how to DJ on YouTube and...

**Ebi Atawodi** (01:37:46):
Go watch people and I cannot underestimate the power of those 10,000 hours to become an expert. So just DJ. I got this really cheap controller. It costs me 300 bucks, but you can actually do it on an iPad. And even when I'm on flights, I'll do a full mix on my iPad with the app. I use this app called DJ Pro AI, and it's like, I don't know, 30 bucks or something. And I just DJ because I'm training, right? I'm just training and it's for me. Then I'll come home and I'll do it with the actual controller and record it, and put it on YouTube for fun.

**Lenny** (01:38:24):
So cool. Ebi, I'm in the Ebi fan club. Thank you so much for being here. Two final questions. Where can folks find you online if they want to follow up on anything and how can listeners be useful to you?

**Ebi Atawodi** (01:38:35):
I'm on pretty much every social platform. My handle is Ebi Atawodi, my name. Work stuff, LinkedIn, Twitter, Instagram, all of it. And this is maybe a bigger one. I think we will all be more useful to ourselves if we actually spend a lot more time being a bit more present and mindful. The world will be a better place if people just went into themselves and were a bit more mindful. I'm very big into meditation, so I think that's why I ask for everyone, be more mindful.

**Lenny** (01:39:13):
You're reminding me to breathe. Amazing. What a beautiful way to end it. Ebi, thank you so much for being here.

**Ebi Atawodi** (01:39:19):
Thank you.

**Lenny** (01:39:23):
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.

---

## [17/24] The full-stack PM | Anuj Rathi (Swiggy, Jupiter Money, Flipkart)

**Anuj Rathi** (00:00:00):
There are only three reasons why things do not happen the way you want them to happen as a leader. You can look at a person, and you would say either that person can't do, which is a capability issue, or they won't do, which is a motivation or an alignment issue, or they were not set up to do, which is really your problem that you didn't set up the ways of working now design properly. So, as a leader, do you have the right people in terms of capability? If not, is the right answer for us to coach them or to really put them... or mentor them and so on, or move them to some other place because maybe their capability is suited elsewhere? If they won't do, why won't they? Are they not aligned to you? Do they not agree with your vision? Do they not just have enough time? So on and so forth. So you need to really go deeper there. Why won't they do?

**Lenny** (00:00:50):
Today, my guest is Anuj Rathi. I've been looking to get more India-based product leaders on the podcast because this podcast has a large audience in India. When I put out a call on Twitter and LinkedIn asking people who I should have on, Anuj was the single most requested person. Anuj is Chief Product and Marketing Officer at Jupiter Money. Previously, he was Senior Vice President of Revenue and Growth at Swiggy where he spent seven years. He was also VP of Product at Snapdeal, a Senior PM at Walmart Labs, and the very first Product Manager at Flipkart where he led the buyer experience team.

**Anuj Rathi** (00:04:34):
Thank you so much, Lenny. Thank you for having me.

**Lenny** (00:04:37):
It's my pleasure. I haven't told you this, but when I put a call out on Twitter and LinkedIn for people's favorite India-based product leaders, you are the single most recommended person, and so I just wanted to start with how does it feel to be the most loved India-based product leader at least according to my Twitter followers and LinkedIn followers?

**Anuj Rathi** (00:04:58):
Well, it feels really good, and I really feel it's come together because I've been doing product management for the longest time. In 2010, when I started the product management journey with Flipkart. I think that that was a time when there were not a lot of products being built for India. So I think one part is just the tenure, and B, I think it's just a lot of people have known the work.

**Lenny** (00:05:20):
Awesome. You're very modest. I wanted to start with a question about product in India, and I'm just curious just how is product management and product building in general just most different in India?

**Anuj Rathi** (00:05:33):
Yeah. I think that's a very interesting question, and I think about this all the time. When I look at product management in India, and I do have a lot of friends comparing product management versus in US or even in Europe versus even in China, Southeast Asia, et cetera. I think India has had a very interesting journey of products in general and hence, product management also. I think till about 2010-ish, there were not really many products built for the Indian consumers in the first place. There were a lot of products being built, a lot of technology being built, but largely, because it was a back office, so you had a lot of great engineers working in companies which would build products for the American customer or even for the European customer and so on. So once these startups started coming in, which were thinking about building for the Indian consumers, I think we did not really have that talent which we could directly tap into. We're trained into product building. Forget product management as a field in the first place. There were no colleges which were teaching anything about this. There was no playbooks, and so on, and so forth. We would go to the internet, and look at YouTube, and look at SVPG and all of that, but what we would understand would not... you could not put directly to the Indian startups.

**Anuj Rathi** (00:06:48):
The way that they shaped up I think also shaped up the way product management field would evolve in India. So it's taken a bunch of iterations, and I think there are two or three different waves that have come in, and we are way closer to how good product management should be done in India. We still have a little bit way to go compared to, say, US. I also think of it along... For example, in US, the product building culture probably started in 1970s, the modern software product building culture, and you didn't only have product manager, but the entire ecosystem... If you think about a company, who is the VP of business, and who is the VP of supply, and sales, and ops, and technology, and all of that? That group knew how to work with each other to build software products. They understood how that would be built and what to expect.

**Anuj Rathi** (00:07:37):
I think in India, when we were in 2010, et cetera, even those different people who needed to come together to build, say, e-commerce, they would come from, say, FMCG, or they would come from manufacturing and so on. What they would have seen in their journeys in terms of what we expect is a very request response kind of understanding which is, "Here's machinery. If I give this X resources, I expect, with a little bit of variability, why predictable output will come," and that mentality also moved on to what I expect from product managers or product building journeys and so on. So I think over a period of time, a lot of those cycles have happened, and a lot more other leaders in companies have now seen those cycles and understood, "All right. Now, I understand software is not machinery. Consumers are not predictable as much as we thought." That has led to, now, finally, I think, product management coming of age.

**Lenny** (00:08:34):
You said that, I guess, in the Bay Area, things started 1970s, something like that. When would you say things started to really ramp up in modern product thinking in India?

**Anuj Rathi** (00:08:43):
I think 2010 was when it started because... Look, there were a few products that were built before that also, and I think somebody said this clearly that usually, when modern consumer internet starts coming in countries, it usually starts with travel, so you do have... Basically, any country, we would start with, usually, the first travel company. So I think India started with some companies like MakeMyTrip and so on way earlier. There were a few very interesting products being built in India which were solving uniquely for the Indian consumers that were in the matrimony side which is Shaadi.com, and Bharmatrimony.com, and so on. We're like, "What do you think about Tinder?" India is famous for arranged marriages, so a product that would really understand that, "Hey, if you're a parent, if you want to get your kid up for matrimony, how would you solve for them?" and that marketplace of matchmaking, et cetera started.

**Anuj Rathi** (00:09:34):
So a few blips here and there which was following uniquely for India. I think 2010 was a decade or time when I can very clearly imagine that's where a lot of people started building for India. So I think, again, Flipkart started that kind of journey, but in a couple of years, then they were like, say, Ola which was, in a way, similar to Uber, what they were doing elsewhere, and then a whole bunch of other startups that started coming in. So, for example, in food delivery, when I was working at Swiggy, that came in like, say, 2015, 2014, in that timeframe. Now, you see a whole bunch of startups which are trying to do not only things which are... what could an Uber for India look like or what could a DoorDash for India look like. Very different and also, very innovative. So I think now is the time when you see a lot more product building around that area.

**Lenny** (00:10:24):
Where are some numbers of just like companies in India, people in India's money spent in India? I don't know. Things that would be like, "Wow, that is a much bigger opportunity than I thought."

**Anuj Rathi** (00:10:33):
Okay. This is a very wide question, so I'll tell you. Before the opportunity in India, I think I'll talk about the complexity in India which I think a lot of people don't understand. India has what? 1.4 billion people. So there were three waves, really, that happened in India, but also, in the globe. I think first wave was from desktop to mobile, and then even from mobile to smartphones. From smartphones, there was what we call the Jio revolution. There's an Indian company called Reliance Jio that basically got internet at the cheapest prices for smartphones. So because of this, a whole population came onto the internet which was hungry for newer products, newer content, completely different ways of interacting with each other, and using internet for all sorts of different things. That was one of the waves.

**Anuj Rathi** (00:11:24):
The other part is really what the Indian government really enabled which is... especially in digitization of a bunch of absolute core fundamental citizen-related machinery which is either through digital payments, which is a whole bunch of Indians now started having a bank account by default, and something called UPI. So even if you do not have a bank account or that bank account is linked to your mobile phone number, but now everybody would pay through that, and that brought in a very different kind of revolution. So even if 5 rupees, that is basically 10 cents or less than that, that would be paid through UPI, and people started moving away from cash and so on. There's something called the India Stack that is all of these things coming together, which is social security, identity, payments, and so on, that a whole bunch of other apps can now use to build their own layers on top of that. So many interesting cases started coming about. So that's one which is just a number and the infrastructure.

**Anuj Rathi** (00:12:25):
Now, the other thing to look at is India is very diverse, so the number of languages spoken here, even the official languages is so high, and they say... There's an elders' quote in India like, "Every 15 miles, the language will change, and the people and the culture will change, and it's a huge country of so many people." So your traditional ways of thinking about products also, the "Who I'm building for?" is very different. "Are you building for this person or that?" Et cetera. So a bunch of frameworks break down because it's not even that the same language will apply. While English is a language that is used by the people at least who have the money and who have the dollar to even give to you, but you have to think way more widely.

**Anuj Rathi** (00:13:06):
The other thing about India that is interesting is the price that people are willing to pay. Generally, it does look at the per capita money that people have. It is very low. It's in the two, two and a half thousand dollar range compared to US which is maybe 30 times more and so on. So while there's a lot of people who are going to give you traffic, and engagement, and so on, but the craft of actually choosing the right kind of paying customer who will actually come, and engage, and give you money is at a premium. So a lot harder work needs to be done. If you're running e-commerce, who are the people who will pay me delivery fee? Who are the people who will actually buy this expensive stuff? So a whole bunch of different ways of thinking has evolved in this country, and that's why it's so vibrant and so different than any other global products.

**Lenny** (00:14:01):
Wow. Fascinating. I could keep going, but I want to talk product. I've collected a bunch of questions from people that know you or people that have worked with you about a bunch of different stuff, so I'm just going to go a little bit all over the place. The first area I wanted to talk about is the user experience. Apparently, you have a interesting insight and a different approach of thinking about new users and new user experiences.

**Anuj Rathi** (00:14:24):
One of the things that I realized once we started working with the products is that product managers and generally, companies are too engrossed in thinking about... because they are very close to the product. It's close to their heart, and they're looking at it all the time. They're looking at a lot of minor nuances in terms of how this works and feels, and almost inherent into this is the bias that everybody is thinking about this product all day, all the time, and so on, and so forth. Whereas the reality is most consumers in the country or in your target market, they don't care, and they may have sometime heard about your product. The word of mouth is not ever so strong, even if you're the strongest brand, and so on, and so forth, but that is the customer that you've got to bring in, and then serve.

**Anuj Rathi** (00:15:07):
So there's very interesting insight that I heard from Scott Belsky from Adobe, and then now, he's doing very interesting stuff, and that stayed with me which was you have to think about users on modern internet consumers having three attributes. So they are lazy, they are vain, and they're selfish. So lazy meaning, "I don't have time for this, so blow my mind away. Otherwise, I'm not going to pay attention." Vain which means, "I have a habit. I'm solving this problem in a particular way, and here, you come with your two-pack product and ask me to change my habit. Do you really expect me to do that?" That's second. That's their inherent attribute. The third one is that they're selfish like, "Show me what's in it for me."

**Anuj Rathi** (00:15:52):
Once you start thinking about users in that vein, and if these users are not even using your product, suddenly, you realize, "Oh my god, it's quite difficult even... How do I attract this kind of customer, and if my marketing team has done a good job at bringing this user to my product, how do I actually now empathize with this lazy, selfish, and vain customer, and build my product in a way so that I can make this appear on your site like this is the thing that you have to use, the way you write your copy, the way you build your onboarding, the way you do your first warm welcome?" It's going to make the biggest amount of change in terms of a product success, then your core product features that you're going to build for your loyal consumers.

**Anuj Rathi** (00:16:37):
So that one insight, and I've seen and applied that multiple times not only the companies that I worked with, the companies I've consulted and spoken with. Most neglect it. Well, they get user onboarding is important, but just how important is that is one, and B, the craft of thinking like a user who's lazy, vain, and selfish, and basically, rejecting all your products, but this does not work for this kind of customer. It's extremely hard. It's very hard, but it's totally worth it if you put that lens on.

**Lenny** (00:17:06):
Is there an example of you using this framework on a product you worked on where you're just like, "Here's a thing we really did..." I don't know, had a big impact or really surprised everyone?

**Anuj Rathi** (00:17:16):
So we used it in two different areas. So one is, of course, products I worked on. So I worked in Swiggy for the last seven years, and really, when we started working towards this user, instead of thinking about everybody as, "This is what our onboarding experience looks like, and this is what our product is." So, essentially, we used, basically, say, a key that it's... "We are a food delivery app. We are a grocery delivery app, and we have these bunch of things." Instead of that, we just started reframing it from the point of view of, "What would you want, and how could you use us? What is it in it for you?" and we started connecting all our marketing messages along with the onboarding. So even going out market and thinking, "Where do you actually find us? How did you know about us? It's a reasonably large brand. Why have you not already downloaded us and used us? Have you used us and rejected us in the past?" So building that entire mental model and looking at a user from the point of view of, "Let's assume that you have heard about us 20 times. What was that exact situation that brought you to download this app?"

**Anuj Rathi** (00:18:20):
So right from the entire journey of you hearing us, what was the trigger, and what was the marketing message, and what was the promotion that we were running? How do we continue that journey on your onboarding from your splash, that 200 rupees of... X rupees if you buy from us, continuing that entire journey in the language that they understand and with the user experience that is continuation from the marketing to product, other thing that we started focusing on a lot more, and it instantly started showing us results. But while I'm talking about just a very simple example and everybody should be doing it, that is true even when you have a particular app which has multiple products and many product lines. It's the same principle that applies there, and that's where I think the largest amount of delta that happens that people don't know really why are we not able to cross-pollinate or cross-sell, and so on, and so forth.

**Anuj Rathi** (00:19:14):
Right now, I'm working with a company called Jupiter which is a financial services app, and it's a neobank. So we care for personal finance, and it has a bunch of offerings. There's a personal account or savings account. There's a credit card. There's mutual funds. There is investments in, say, gold, and FD, and so on, and so forth. It's a bunch of things. But when people think about why using us only for one service and just go away, actually, the key is to recognize that this user has found value in... They are not interested in all the other things that you talked about, so be able to empathize with that user, and now thinking about the behavioral science aspects in terms of, "How do I convert this user from one to the other?" That I think is extremely important.

**Lenny** (00:20:00):
So a couple things I'm hearing here. One is the importance of focusing on not people currently using your product, but this idea of maybe the marginal user or the adjacent user, the next state of users is who you should be thinking about when you're trying to optimize onboarding the user experience, and then two is... Something that sounds like you've had a lot of success with is picking one value prop, maybe one positioning statement, and then following that through their entire journey versus like, "Here's all the things we do." Is that right?

**Anuj Rathi** (00:20:31):
That's absolutely right. Let me give an example of this one. One of the reasons why I really feel product managers must, if not better, but equally understand, category consumers which are not in market or which are not really buying your products just yet. As good as the marketer or the brand expert in your team does... because they really are tasked with, "What is that one message that I can say that will make the user take attention or get to like, 'Oh, this is interesting,' and direct attention towards your product?" If the product managers are able to do that, then they will choose that positioning and essentially, understand, "What is my hope product, and what is the hope that..." At least get them to try my app or any of those things, right? So if they understand it as well as the marketer, and then understand, "Over a period of time, what is the right time when I introduce them to this other one rather than being very greedy about letting the new user try everything?" So that's one.

**Anuj Rathi** (00:21:37):
The other thing that I feel a lot of product managers don't do right is... "Forget about everything. Here's my app. Go figure," is how most of the products are designed unfortunately. Automatically, these things will happen without any intervention. I have created something which is so beautiful, and once you tap that icon, everyone can say, "That is my product that is so working perfectly," but they don't really think about, "At what moment do I actually get this user here, and will they use it?" Well, this user is lazy, vain, and selfish.

**Lenny** (00:22:09):
That phrase reminds me of something I always think about. Marc Andreessen had this great quote that your user's time is already allocated. They're not looking for more apps to download. They already have a plan for the day. Basically, they have things to do. They're not like, "Hmm, what's another iPhone app I'm going to check out right now?" So somehow you have to convince them, "This is worth your time," and I like this framework. Is there an example of a phrase you found really effective either at Swiggy, or Jupiter, or Flipkart, or anything just like, "Here's a really quick example of something that had a big impact on either simplifying the value prop," or if you don't have an example top of mind, what was the impact you saw from implementing some of these ideas?

**Anuj Rathi** (00:22:48):
I'll talk about a phrase that I now use with product managers a lot to simplify how they should be thinking. I think one thing is... and that's not only for the consumers, but even how we operate. We are product managers, and we are in the business of influence. Users are doing something, and now we want them to do something else. Our engineers are doing something, and now we want to influence them into building something fast. Really, leadership has some plans. We'll influence them to, essentially, look at a plan, and basically, sign off, and do something else. We are in the business of influence, and you are doing this all the time internally. Otherwise, you're not successful even in shipping. Now, we have to extend this to our users and really think about it from that point of view. So you are a full-stack influencer and not only an external influencer. So we've got to think more like sales, more like marketing, more like influencers.

**Lenny** (00:23:42):
One of the most important skills for a product manager is influencing people on team, and I like the point that you're also trying to influence your user. That's interesting. Just more reason to get really good at influence, so. I actually have a newsletter about how to get better influence based on Frodo Baggins and Lord of the Rings. We'll link to that in the show notes. Okay. Let's shift to a different topic. You have a really concrete way of actually implementing the working backwards process. We had one of the authors of the book Working Backwards on recently, and I'm excited to just hear what you've learned about how to actually put this into practice. It's easy to hear about, "Let's work backwards," but doing it is a different beast, and so I'd love to hear what you've learned there.

**Anuj Rathi** (00:24:20):
So I think the people who invented working backwards is clearly Amazon. I think they started this entire process which are like, "Hey, why don't you write a press release, and with that press release, we'll work backwards from that one?" I thought that was a very cool idea, and I was trying to dig down into like, "Hey, why does it work?" My insight or at least the way that I thought about this one is it's not working backwards only from a customer value proposition. "Will our customers love it, and will they pay for it? Is it noteworthy, and is it something that we should even be working?" While that is one of the most important things that the Working Backwards framework teaches us, but essentially, what you're working backwards from is an entire machinery at a particular day that is working for... For the date of GTM, what do we need to do from here till that particular day so that the GTM is successful, but also, what will be the machinery we would have created so that this product is successful?

**Anuj Rathi** (00:25:20):
Now, because you're already talking about GTM, you're already thinking about, "How will users love it? What is the money that we'll spend? What are the alternatives that we will... routes that we have explored that finally we have zeroed in on and all of those?" So they are all going to be a part of a PR review. If I take a slightly open stance on this one, what is a press release? A press release is you have a one-pager which talks about what are we building, what is a particular date, what is the exact value proposition, what will consumers say, what will the business manager say, how will they respond, how will they use it. But the one thing that comes out from this framework is that you can use it for a whole bunch of other things. You can use it for negotiation, for example, because you start with a date, and then you say, "This is the one-pager that I need to ship, and I want the consumers to see that." You can use it to now go to our VP Engineering and say, "By this date, can we build all of this?" Now, they do not have all the PRDs and everything, but they can give you a sense that this is too aggressive or this is not and so on.

**Anuj Rathi** (00:26:18):
We can also use the quotes here to actually find alliances or find people who are going to actually derail this. So you actually use the customer quote to basically say, "I want my customers to say this. From marketing and from my pricing team, can we actually ship this so that consumers will say that?" Then, from the business owner's quote, you actually say, "This is what we are shipping, but what are your goals? Can you say that within three months, we would have achieved this much?" So using that to build one entire picture is one way that I found it really powerful because if you find disagreements here, then say, "I can't ship it," then you change the date, and then you change the goals because all of these things are changing together. So instead of one, you find the other set of all the things that need to come together for that press release to go live is the real value.

**Anuj Rathi** (00:27:07):
The other part that I found interesting here is that I really truly believe in the power of three. So I actually ask my teams to write three press releases, alternative and divergent like, "What if we..." Suppose you're launching a membership program. So, instead of two tiers, let's do three tiers, or for example, let's take another one which is instead of building a membership, let's build up tiering pricing program with membership points. Instead of this segment, let's use another segment. Let's say within these three, and they all need to be fully thought-through, and that helps the leadership choose.

**Anuj Rathi** (00:27:44):
So the two things that work here. When you are in the product discovery phase, you would have heard from a lot of folks. Finally, if you show them just one roadmap, it feels like, "Hey, this person didn't..." They listened to my interesting point which was valuable, but didn't include it. But when you're doing this three PR FAQs, I considered this, and this added up to a story that eventually is valuable, this alternative route. I considered your point of view, and I created a story, but unfortunately, it is not adding up so we rejected it. So, now, people can compare and contrast, and that's a very powerful leadership tool. That, actually, is a very powerful tool even for CXOs. When they say, "Let's build this," you'll say, "Here are three ways we can build this, and here's the reason why I'm not building what you said because you would like these two more."

**Lenny** (00:28:36):
That's a really cool idea of just using the PR FAQ and working backwards process to think very differently partly to make sure you've explored all the options, partly to just think through things that are in the back of people's minds and see if there's something there before committing to the one direction.

**Anuj Rathi** (00:28:51):
So the FAQs also are very important to set processes in the system. For example, now, at Jupiter, we have a financial services app. So every FAQ will mandatorily have, "How are you going to make sure that it is fully compliant? Have you gotten sign-off from A, B, C people? Have you actually thought about legal aspects, and so on, and so forth?" So, for example, you can use the FAQs very effectively here. Whereas, for example, when it was Swiggy, and it's a three-way marketplace, you have consumers, delivery executives, and restaurant partners. Now, any small change that you do on, say, delivery partners, for example, if you're working on optimizing their earnings per hour which will lead to some changes in cost per delivery, but that may have a completely different impact on delivery fee.

**Anuj Rathi** (00:29:31):
I'm just making this up, but now, because of so many moving parts in your FAQs, you're explicitly asking, "Have you thought about what are the implications on restaurant partners? Have you thought about what are implications on delivery partners?" We, in fact, also have that PR FAQ in terms of we write down the different segments of delivery partners, and sometimes it will have extremely weird correlations because those product managers on one side of the equation have started thinking or at least consulting the other part of the marketplace, "What could this mean for you?" It gets everybody together to create very crisp products that work for all sides of the marketplace.

**Lenny** (00:30:10):
One thread I'm pulling out of a few of your stories so far is you often come back to this full-stack approach to many models. So you talked about how PM is like an influencer, but also, they're influencing users. That's a cool way of thinking about it. With this working backwards process, you can use it to think about the full stack of launch, not just what features you're going to build. I know you also have some strong opinions about product managers, and they should be much more full-stack than most PMs. Does that ring a bell, and if so, can you talk about that?

**Anuj Rathi** (00:30:39):
Yes. No, I think it is the same thread that is connecting the first and the second. I think product managers have to own outcomes and not only features and parts of the problem. Well, they will own some parts of the problem fully, but if they need to work with everybody to make sure that eventual product that they launch is successful and not only successful from the point of view of, "Hey, we launched something that works for users," et cetera, that's not the definition of success. Did it work in the way that it really changed the behavior of the kind of user that we wanted to achieve a business outcome that will build a capability that is important for us? All of those things combined will not happen if the product manager is only thinking about their part. So they have to think about external users, they have to think about competition, they have to think about other product managers and product leaders about engineering, about marketing, and so on because it's such a diverse field.

**Anuj Rathi** (00:31:36):
Unless you really... and I'm not saying you need to be an authority of that. Either you are very, very good at that, or you have built partnerships, and have run your ideas or product through those people and gotten weighted from them, and finally made a decision around that part, I don't think you'll be very successful. So, in my opinion, the full-stack product managers are the ones who are going to be more successful rather than product managers who are doing very good at one particular area only. So there's one book which is Range, right? I'm sure you may have heard about it, right? Even the first chapter, what they talk about is... They take two examples. One is the example of Federer, Roger Federer. So, with Roger Federer, for example, I think I'll just continue that, that till 18, he played a bunch of racket sports, and this wasn't even tennis. But then, you bring in ideas from one racket sport to the other, and second to the third, and so on, and so forth, and now you have such a range of ideas that you can connect a lot more dots and actually ship it. I think that's a better playbook for being more successful in product.

**Lenny** (00:32:41):
I was just watching a documentary on... I think it was called Greatness and had Wayne Gretzky. He had exactly the same experience actually. When he was young, he played hockey just during the winter times, and during summer, he played other sports. Hockey was just like one sport he played, and then eventually started to focus on it, and they talked about how people that played different sports in their childhood actually ended up being much better at that one sport that they chose. So a lot of parallels. I know you also have a lot of interesting ways of thinking about coming up with a roadmap ideas, and ideating and building a roadmap backlog. So you already talked about this idea of going in very divergent directions and seeing if that leads anywhere. There's a couple more someone shared. One is you have this idea of show don't tell. What is that?

**Anuj Rathi** (00:33:27):
Actually, show don't tell is an idea which is an extension of what we are talking about from what backwards. When we're talking about working backwards, one is a PR FAQ which is a written documentation of what we are trying to achieve. Show don't tell is essentially a way in where the product manager starts ideating with the entire experience, and they actually create all the collaterals together of a user they need to begin with if you're working on a single-play product which is a single-user product. Then, you actually start bringing together your marketers and others in terms of, "What is literally the first screen, and how is my user getting here?" It's not as simple as he imagines somebody who will be doing this and reaching here. We try to recreate an exact situation.

There's a concept of person, not personas. So we'll talk about personas, but we try to go to, "All right. No. Don't think about agentic user. Let's say Lenny, 30 years old, doing A, B, C things, earning this much, et cetera, et cetera. His relationship with this category of food delivery is X. These are the things that he has done in the last month. In the last three days, there were the needs, desires, aspirations, fears, frustrations, et cetera, et cetera." We say, "Okay. It's 11:00. What's happened? Why is this user open, or what triggered this particular app, and then what happened?" So you literally start from there, and I think 50% of my product reviews are on that part, and then when we say, "All right. Then, this app got open. Do we have the right kind of way forward for Lenny to actually achieve what he came here for?" Literally, each pixel, and each copy, and each word is going to be in service of that part.

**Anuj Rathi** (00:35:08):
So that's showing the entire journey rather than just staying and assuming. So that is something that I've found really powerful with respect to even designing products or even thinking about why are we building something. What it also helps is when we are building complex products, especially in marketplaces because once you are building this for the user, simultaneously, something is happening on the other part if it is simultaneous, if it's a real-time marketplace, or something like that. So you're building something for the user and saying, "All right. If this guy ordered, now there's a 30 minutes time when our delivery executors will come to the user with food. What is happening? What's the emotional state of the user, and let's plot out the 30 minutes time, and let's create various scenarios. Is it like, 'Hey, maybe he went to the restaurant, and the food is delayed,' or the dude on a bike, his bike got punctured, et cetera. Now, what is the consumer thinking at this time?" So you show all of those things in real time, and that cuts out a whole bunch of random ways in which the product could have looked like if you're creating even a chatbot. So just having that showcase of all journeys coming together helps a lot in building your products in the right way.

**Lenny** (00:36:19):
So, essentially, just getting very detailed and very concrete with the product experience that you're building thinking about the user experience. Sounds like a lot of work. I can't imagine you do this often. Is the advice here to do this once a year or once and just keep it updated? It sounds like you did this at Swiggy, and that was a really impactful way of building the product.

**Anuj Rathi** (00:36:41):
Yeah. I think there's not only one way actually. I think I recommend this every product manager to do a show don't tell version of their current version. At the same time, there's a new version all the time. So they can compare and contrast, and very easily explain to everyone why they're doing something. In fact, that wall... So it's called a wall. It also becomes one common place where you can get all the stakeholders in because it becomes... Instead of just doing the elevator pitch, you can actually do detailed discussions on why I'm choosing this versus something else, and so on, and so forth. That's a product manager's version of doing this.

**Anuj Rathi** (00:37:10):
There's also a product leader's version of doing this thing which is recycle strategy on a page, and a lot of people call it like growth loops. Right? Don't show our user's journey. Now, let's see the entire strategy of the company together on one page. "All right. This is what the market looks like, and why will we get what kind of users? What is our activation budgets, and how many of them are we going to get to this next stage and get them to use it? How will we get them to cross-pollinate into different sections? Do we need a membership program? Are there any different levers which will press more or less and so on?" So that also is a show don't tell, and not only one, but usually, I like to create three of them as well like, "Why did we choose a strategy versus the other?" That, for example, is a very good way for our product leaders to get to one strategy that their CXOs align with and something that they can essentially tell the entire product and other teams, "This is what we're going to follow."

**Lenny** (00:38:09):
**Anuj Rathi** (00:39:34):
I think the largest impact that happens here is on alignment, so how CXOs are thinking if that is not very clear, and that can be a document, and so on, and so forth. But for a lot of people, it's not very clear on... I can see one part of the funnel. I can understand... The marketing team can understand the best why we are acquiring those users, but they don't fully see the picture of, "If I attract this kind of users, why will these users become loyal, and what does that entire thing look like or, say, some other team which is building a part of the product? Where do I come in and so on?" So I think the largest impact that the show don't tell has is on, basically, getting the entire company together on the same page and them being able to understand why I'm doing, and which part of the entire picture I am working on, and why others are working on so that I can actually work with them to solve that part. That's one.

**Anuj Rathi** (00:40:30):
The other thing that it helps, Lenny, is it also helps in choosing directions, like I said, because we are not doing one, but three of them. I'm choosing one alternative versus the other, and sometimes these strategic discussions, they can get going all sorts of different ways, and maybe you will talk about one particular unique point and go deeper rather than look at the entire picture together and say, "This is good because of all of these five points that we presented in page one versus the other one."

**Lenny** (00:41:01):
I think the other benefit, just one of the benefits of working backwards in Amazon's whole written-down memo approach is it forces you to crystallize ideas and not stay superficial because there's so many good ideas in theory. But then, when you have to get really concrete, that's actually a terrible idea. Basically, it's the same benefit in a lot of ways of get very concrete. What are you actually going to do? That will help you identify, "Okay. This isn't going to work. What are we even thinking?" So I like that. Awesome. Okay. Another framework that you have is something that you call the four BB framework for product strategy. Can you talk about what that's all about?

**Anuj Rathi** (00:41:36):
We essentially saw that if a startup actually usually wants to do a bunch of things across the border, there's always like, "Hey, I should be investing in tech debt or building core platforms. That would really help my product in the long term. That's super important," and that's my engineering managers and largely, people asking for that bandwidth. Then, there is the product manager themselves who's basically saying, "I want to do feature enhancement, bug fixes, my version twos, a few areas, experiments, and so on, and so forth." That's a regular product backlog that would work on screen by screen, and there's this leadership which will say, "You know what? Now, we have a suite of products. Now, I want to take a large delta bit that may work. It may not work, but we need to make sure that it works, but I need work across teams, and it's not only one person that needs to do it. I need contribution from four or five of you that come together and deliver that," or there are places where a company is just reimagining their identity, or they're pivoting which is like, "All right. We were doing X. Now, we are doing X plus Y. That's how we want to be known," or, "We were doing X. Now, we want to do very little of X because current consumers, okay, we will take care of them, but now we want to pivot into Y."

**Anuj Rathi** (00:42:55):
So it usually is in four of these buckets, and what really happens is it gets down to product managers eventually prioritizing between these four. So I don't think it's a tactical prioritization product manager call. It really is a product strategy call, and the conversation that needs to happen is between, say, the head of product and the CEO or even the leadership. If I gave you a hundred focus points, how much will you put in each of these buckets, and what are those four buckets? Those are the four BB buckets, so what are the ones? We call them... First BB is Brilliant Basics. The reason why we call it BB, Brilliant Basic, you need to brand... You cannot brand it as tech debt, so it feels like very off because these are brilliant, these are important. That's what the company's built on, and the company needs to invest in that. So that's one.

**Anuj Rathi** (00:43:46):
The second one is Bread and Butter. So that's your backlogs. If the product managers had no big ideas, and they just were left on their own, what would they come up with in terms of just improving that line of business that they're given? Then, there are Big Bets. Now, that's where your larger ideas that have come together, but how many big bets should we take, or is this big bet even a big one? That's where you're working backwards or PR FAQs start becoming even more important because those are the kind of bets that cannot be taken without everybody basically signing up, working backwards, and saying, "We will all make this successful."

**Anuj Rathi** (00:44:26):
Breaking Bad essentially is a different world altogether. That's where you want to redefine your company. For example, in Swiggy, if we were doing food delivery, now we want to do grocery delivery as well. It's like these are two companies working together, or from a food delivery company, we wanted to become a convenience company. So that's almost breaking bad. Again, like I said, we got cheesy, but the good thing that happens is now what you can do is, along with your leadership, take stock, and the head of product essentially can say, "You know what? In the next year, I can invest a lot less on my brilliant basics, and we should as a company focus a lot on this breaking back because that is existential." But then, we should not look back and say, "Why were tech systems a little bit broken this time? We had a little bit more down times."

**Anuj Rathi** (00:45:17):
You can basically blow it out and almost showcase what to expect. For example, if we are just working on a whole bunch of bread and butters, so you'll start seeing a lot fewer bugs, customers will be a little happier. You worked a lot more... drill in basics. Tech systems are nice, but you didn't create any differentiators. Well, none of your bets went out, and your competitors are catching up. So does that sound like a better future? These are hard questions, and these privatization questions... I don't think of product management questions so much as product strategy questions, but in a lot of cases, executors don't know what they're trading off against.

**Anuj Rathi** (00:45:53):
So if you are able to create the conversation around which buckets do we want to put in and create three alternatives... I have tried to do that a bunch of times. Let's look at strategy A, and we see how to be divergent. Suppose we were putting a lot fewer focus points in brilliant basics and a lot more on, for example, big bets, then there will be a risk that they will be like, "We won't have any experiments or very less experiments. Bugs will stay bugs, but we will get a shot at changing the game." Is that a future that sounds better or something else which is like because you're pained also by a lot of bugs and constant down times, which is more secure, but we won't build something amazing, so which sounds better? Because you are able to drive that, now the clarity to the product managers is way clearer in terms of what will they do. Also, they would know that if they have been signed up for a big bet, then they will need to contribute to the PR FAQ. They will need to contribute to the actual working on that irrespective of what their product was, but now they're part of something bigger.

**Lenny** (00:47:03):
Awesome. I love it. Okay. So just to summarize so people can have just a very short definition of this framework. Brilliant Basics is essentially tech debt and things that you just have to do like hygiene almost. Bread and Butter is essentially optimizing the product, existing product. Big Bets are big bets, and Breaking Bad are just future big rocket like moon shots just transform the way the business works?

**Anuj Rathi** (00:47:29):
That's right.

**Lenny** (00:47:30):
I love it. It's also interesting. Another thread that comes up again and again in your advice is exploring all the options before committing to one like you always... I think it sounds like you always try to recommend three. I guess let me say what I always find is important there is I think it's important for the product manager to recommend one along with that. It's not just like, "Here's three. You tell me which one you do." It's like, "Here's three. Here's my recommendation why." Is that your advice too, or do you see something-

**Anuj Rathi** (00:47:53):
100%, 100%. So when you have explored the three, you essentially have done the work one like, "I have covered all bases and also crystallized them into a concrete option. Now, I'm choosing one on the company's behalf on the basis of whatever I know about the market, about the company, about our strategy, and about how we will make it successful." Now, if I miss something, it's also a time where you can actually work with leadership and other product managers to essentially get that knowledge complete, or if you're 80% right, you can actually use elements of strategy two and strategy three to bring into one. So that's always the way that your thing that... one very concrete option, but because you have these other tools so that you're not missing and bringing it together. But ultimately, you're the one who is going to champion this, and that's where the other leadership element of Amazon comes in which is disagree and commit. But once we have aligned on this one, we'll all commit to launching this, and then the leadership should not go back and forth on that part.

**Lenny** (00:48:59):
Awesome. I want to go in a completely different direction. It feels like you have a lot of contrarian opinions about how to build product, and how to build teams, and build companies, and things like that, so I just want to start broad. What are some things you have contrarian opinions about, things you believe that a lot of other people maybe don't believe or seek differently?

**Anuj Rathi** (00:49:19):
So one, for example, excellence and speed. There's always a question around that. "Hey, would you rather ship faster, or would you rather ship better?" In my opinion, when you have to make a choice, think more and ship better. Most experiments should be thought experiments. They should not even be tried out because they're obviously going to fail which is contrary to, "Let's try it out, and then let's see." I think that wastes a lot of company time. If you had smart people who could do metathinking, a lot of experiments would just not even be like... It's not a rule, but it's a preference. I think speed and excellence are two different axes. Ideally, you should be better at both, but if you had to choose one, choose excellence.

**Anuj Rathi** (00:50:04):
There's another contrarian opinion which is... I think most product managers, and again, I'm probably talking a little bit of the kind of people that I work with and have interacted with in product. Most product managers should not even be product managers. They should think a little bit more around whether this is actually the right field for them because I think a lot of people from other areas have entered the field without fully realizing what it takes. So there is definitely a way in which you can coach yourself, and then work your way upwards of that one, but it can make you quite miserable if it's not right for you.

**Lenny** (00:50:49):
Is there something folks should look for there that will tell them you probably shouldn't be a product manager? Either motivation, or skill set, or background, or anything?

**Anuj Rathi** (00:50:55):
No. I don't think about particular domains that you come from. I have, again, a simple framework of three. I think the first thing is essentially raw sharps, and that can manifest itself into problem identification and problem solving. That's one, and also, higher-order thinking and all of that. I think that is super important. The second one is what I call drive or grit. I think with that comes a whole bunch of qualities around curiosity, learnability, never giving up, consumer-backward thinking, "I really want to solve this," and all of that that comes with that. Third, which is a little difference, we talked about that, is influence. You're in the business of influence, and if you can see yourself that, "I'm built this way," or, "I want to really get better at these," that's when I think this field is going to serve you well.

**Lenny** (00:51:45):
I love that everything is three. How handy.

**Anuj Rathi** (00:51:48):
Only the BBs are four. I wish I could compress them three.

**Lenny** (00:51:51):
Yeah. There's too many things to do there. Essentially, these are maybe your perspective on the most important PM skills. A good way to think about it. Influence, grit, and just being smart.

**Anuj Rathi** (00:52:02):
Mm-hmm.

**Lenny** (00:52:03):
I think what you said here is not like you have to be amazing at these to get into product and do well. It's you need to be excited about getting better at these skills.

**Anuj Rathi** (00:52:10):
Yes. That's right.

**Lenny** (00:52:12):
Awesome.

**Anuj Rathi** (00:52:12):
Well, I think it's not as if that everybody is born with a lot of influence. Of course, you can get better at it, but it's a prospect of that, "Hey, I will need to be influential to succeed at this job." That should excite you and not scare you away. You should not think like, "Hey, you know what? I can get away from this and still be very successful product manager," because most likely, you will not.

**Lenny** (00:52:34):
Maybe spending a little more time here. So, smart, you're probably not going to be able to do a lot about. In terms of grit or influence, is there anything you can share about what you've seen most helps people develop at these skills other than just doing the job for a while, and then starting to get better at this?

**Anuj Rathi** (00:52:49):
Yeah. I think even smartness, I think 80% of that smartness, I think, is something that's very achievable. You don't need to be outstanding on that. Domain knowledge, for example, is something just like... An average smart person with no domain knowledge versus you armed with a lot of knowledge around domain and so on can already take you there, but you can take better decisions. I think first one is more about decision-making, problem identification, problem solving, and all of that. So I think that really can be developed at least to a level where you are very effective. Drive, I think, is probably the hardest to coach, probably the hardest. I've not seen people with less drive actually eventually turning out with a lot of drive, et cetera, but they can be inspired. I think you need to be a person who can think about it that way, but the third one, influences, I think, there's no negotiation there. You need to really think that, "I have to be good at this one."

**Anuj Rathi** (00:53:46):
There's another framework that, Lenny, I wanted to talk about. When I look at product leadership in general and how do you think about different people and so on. When is it a product manager problem, or your problem, or a company problem? There are only three reasons, again, why things do not happen the way you want them to happen as a leader. You can look at a person, and you would say either that person can't do, which is a capability issue, or they won't do, which is a motivation or an alignment issue, or they were not set up to do, which is really your problem, that you didn't set up the ways of working now design properly, or we are okay as such and such, and so on, and so forth.

**Anuj Rathi** (00:54:26):
So, as a leader, it's almost the opposite of what we talked about, great influence and raw sharps. Do you have the right people in terms of capability? If not, is the right answer for us to coach them or to really put them... or mentor them and so on, or move them to some other place because maybe their capability is suited elsewhere? If they won't do, why won't they? Are they not aligned to you? Do they not agree with your vision? Do they not just have enough time? So on and so forth. So you need to really go deeper there. Why won't they do?

**Anuj Rathi** (00:55:05):
There are different answers for that, but if it's a setup issue, and at least I've realized that apart from what product managers can do, almost 70%, 80% of problems why things don't happen are a setup issue. Product leaders or other leaders have not thought through what OKRs are doing to my company, not really fully thought through around org design. If you've read the book called TEEN Topologies, that's one interesting book which starts with Conway's law and essentially saying, "Show me an engineering architecture, and I will actually tell you what the org design of this company is," but that also manifests itself in products that you can basically look at a product. In most cases, you will be able to say what was org design that led to this kind of product.

**Lenny** (00:55:51):
I have heard that book mentioned a couple of times recently. I got to check it out just to the three you just shared, which is another three. I love it. Can do, won't do. What was the third one again, didn't do?

**Anuj Rathi** (00:56:01):
Not set up to do.

**Lenny** (00:56:03):
Not set up to do. That one is long. That's a long one. I think what's cool about these are they're essentially ways to measure performance. Maybe if you're a product manager, like performance reviews, it's like, "Did you have the skills to do this? Did you have the motivation to do this, or is it something not set up for you?" You weren't set up for success, basically?

**Anuj Rathi** (00:56:20):
Mm-hmm.

**Lenny** (00:56:21):
Okay. Let's go to AI corner, something I'm trying to do with every guest. Is there anything you've learned about working with AI that you think might be helpful to listeners?

**Anuj Rathi** (00:56:31):
Yeah. I think a couple of things. I think working with AI, many, many teams and companies get too excited about AI, and the possibilities, and so on, and it's almost like a solution ready to find a problem within their companies, which also is fine because now you're thinking about possibilities on what this particular technology can do for my company. So it's a good way to start, but many people don't actually use it in the best way possible and force fit it. Instead of that, you can think about, "How do I get AI to work with HI?" Again, it's connecting back with... and this is something that Swiggy CEO, Sriharsha, invented this term called HI just to make sure that everybody understands.

**Anuj Rathi** (00:57:13):
Artificial intelligence is important as much as human intelligence. If you're not humanly intelligent, you're not going to be artificially intelligent or AI really help your company a lot. So, literally, any product that you're building, even when it is technologically quite interesting, and exciting, and so on, it needs to be balanced out and work together along with a great UX, along with behavioral science. The combination of those two will actually make sure that you're getting the best outcome of that, unless you are building something which is completely backed and with no human interventions. We're talking about consumer products largely.

**Lenny** (00:57:51):
You've helped build some of the most successful marketplaces in India and in the world. I'm curious just what may be a lesson or two about building a successful marketplace?

**Anuj Rathi** (00:58:02):
One thing that I would definitely want to talk about is when you're thinking marketplaces, it's not as a one plus one equals two, it multiplies. We're thinking about three-way marketplaces. You almost not need to think like it's a two-dimensional plane going into three-dimension. It becomes that amount of complexity, and your regular product management and leadership principles start failing. So a bunch of usual suspects will not work. Let me give an example. OKRs will not work. Why not? So, fundamentally, OKRs are a way to think about objectives and key results, but the fundamental assumption here is that it is solving for a kind of user, and that kind of user, you can divide and conquer. Of course, there will be a little bit of tussle between different teams, but you can get them to work with each other. But if it is working for three different kinds of users, then all the goals will all the time be in conflict with each other.

**Lenny** (00:59:00):
What are examples of the three users? There's like the delivery person, the restaurant-

**Anuj Rathi** (00:59:04):
The end user. So if you have... I'll give you an example of. On the consumer side, we need to collect more delivery fee. What does that really mean for those other two? On the restaurant side, hey, we need to get more commissions because profitability is a goal. On the delivery partner side, it means pay them less or optimize a little bit more. But once you start moving one lever, those two are already stretched towards the other directions. They're not independent levers in the first place, and the way to even model them out... How will it work? What if we choose X versus what... Ys will change. Y on Z. Z will change. It's almost impossible to do that.

**Anuj Rathi** (00:59:43):
So I've seen OKRs fail multiple times when you're running this kind of a marketplace. Big bets work much better. That's when you say, "Hey, we want to take this bit," but it's all going to be... It's all going to come together as... If we pull this lever, then something else will change. So here's the entire story of, "Let's go make this profitable by making delivery fee higher, but maybe not touching earnings per hour, or maybe not touching restaurant commissions." Things like that. So I've at least found that's a better way to choose strategically which direction we have to go.

**Anuj Rathi** (01:00:18):
The other thing is managing multiple empathies together that's not straightforward. So, again, Swiggy being a real-time, hyper-local marketplace, and we discussed about that, right? As soon as the order comes, what happens between when user does this and when delivery executor is doing something else, and what are absolute different kind of scenarios that are going to be faced by the delivery executor? At the same time, how will I really work with the user to manage their emotions? So you need to manage a whole bunch of these things together, and product management here, you cannot have... The delivery executive product manager only care about that side. They also need to be a champion on the consumer side and vice versa.

**Lenny** (01:01:03):
Yeah. I find with marketplaces... Uber went through this, Lyft went through this where the supply often just gets squeezed because they need to deliver for the customer. So drivers end up getting housed. Airbnb hosts get pushed to do things they may not want to do. Imagine delivery people, same thing.

**Anuj Rathi** (01:01:18):
Now that you mentioned Uber, for example, one of the things that companies which were running taxi businesses. If you have just one limited pool of money, for example, and you want to get the marketplace humming with respect to number of orders per day, how do you decide, "Should I incentivize my users, for example, for the first ride, first 10 rides, and so on, or put zero money in there, but incentivize my drivers?" You need to come here, so you have to think about liquidity also in very different ways, and sometimes you need to pull the lever completely towards the other side. So the experiments also. A/B experiments also don't work, and that's a very unique thing about marketplaces. I mean, not work the way that you would expect them to work because there are network effects all over. So if you have to run A/B experiments on your drivers side, if you put half drivers on A versus half on B, but there is a network effect between the both of them.

**Lenny** (01:02:19):
When you're trying to decide which side of the marketplace to focus on and prioritize, do you have any lessons or rules of thumb of just focus on the customer and index towards their happiness versus the supply versus, say, the delivery person?

**Anuj Rathi** (01:02:32):
There's one thing that I think marketplaces need to realize is that, A, you need to be operating in a stable marketplace. So all sides need to be stable enough so that they're not going to go away. So I think that's a starting point, and that's an important point because once we have established that, then after a stable marketplace, then we say, "Which are the kind of customer that we are in the service for? Which are the customer that we will really focus on?" For example, Amazon is very, very clearly a customer-centric company. If they have to make a choice, they won't because they need to have a stable marketplace. So sellers also are very... as important, but slightly more important than the customer.

**Anuj Rathi** (01:03:10):
For example, if you looked at, say, Taobao or in Alibaba, their way of thinking is their aim in life is to create life-changing experience for 10 million Chinese sellers, and they will create a marketplace from the point of view of sellers which can actually sell. Again, they will have the same consumer app, and a seller work, and so on. They are in the service of sellers, so you really need to derive from the company's vision. I think the way we had thought about it at Swiggy that we had to clarify in our values that the first value is... Initially, it used to be customer comes first, but that was very confusing because everybody is a customer. Even a restaurant is a selling customer and so on. We had to clarify that consumer comes first, the end consumer which is actually eating food because we are a convenience company that delivers to the end consumer, and when you're thinking about restaurants or delivery partners, we work with them because we both are... When you're talking with the delivery partner, Swiggy and the delivery partner, we both are in the service of the customer. So you'll build that app also from that perspective and even the restaurant side also from that perspective that we both are together in the service of the end customer.

**Lenny** (01:04:25):
I feel like you have probably a hundred more frameworks, and processes, and acronyms we can talk about, but I know you got to go. Is there anything else you wanted to touch on, or is there anything else you want to leave listeners with before we get to our very exciting lightning round?

**Anuj Rathi** (01:04:38):
Just last few words that I want to revise. Work backwards from an amazing future. So first thing is creatively imagine a future, and then work backwards from that, and essentially, think what will make that successful, and be paranoid about... that everything is going to go wrong. Hence, I need to just make sure that it all comes together.

**Lenny** (01:04:59):
Only the paranoids survive. Great advice to leave people with. We've reached our very exciting lightning round. I've got six questions for you. Are you ready?

**Anuj Rathi** (01:05:07):
Yeah.

**Lenny** (01:05:07):
What are two or three books that you've recommended most to other people?

**Anuj Rathi** (01:05:12):
One book is Working Backwards. We covered that. The other one that has shaped my beliefs a lot is called How Brands Grow by a professor called Byron Sharp. There are two paths to it, How Brands Grow 1 and 2, that's both very good. The other book which I really love is... and recently, Kunal Shah, who's the founder of Cred, an Indian startup, suggested is The Luxury Strategy. The reason why I love that book is because it gets into the depth of the human psychology behind hierarchies, and how lords, and kings, and those kind of social hierarchies have shaped how people think about aspirational products and so on. So highly recommend it.

**Lenny** (01:05:52):
What's a favorite recent movie or TV show that you've really enjoyed?

**Anuj Rathi** (01:05:57):
I really like to do reruns of The Office. I was trying to think about this as, "What is a recent movie that I watched?" I'm like, "No." I keep on going back to The Office and some other episode. Like today, I have a lot of stories from Michael Scott.

**Lenny** (01:06:13):
Okay. The US one, not the British one, or do you watch both?

**Anuj Rathi** (01:06:16):
No. I watch both, but the US one has a lot more seasons.

**Lenny** (01:06:21):
Do you have a favorite interview question that you like to ask candidates when you're interviewing product-manager-specific?

**Anuj Rathi** (01:06:27):
"Which are the products where you decide speed is more important versus which are the products where you have to say excellence is what's important?" I think that gives me a good understanding of their frameworks and why they're just saying what, and then we go back into concrete examples where they chose one versus the other, and then take it from there.

**Lenny** (01:06:46):
Then, what do you look for In a good answer to that question?

**Anuj Rathi** (01:06:49):
I look for, essentially, their assessment of risk, their assessment of how important or how well have they assessed the market and the competition or the competitive products in that market. If their answer is, "Let's ship something, and we'll find out, and so on," that also gives me, basically, a point of view that they really don't understand that this product, what they're talking about with the shipping speed, is not really... The V part of the MVP is not viable or is not... I don't know. How do you call the MLP or whatever? But it's not differentiated enough that it can be marketed. It is not worth enough where we can take it to user. It's not going to work for a lazy win and selfish user, and maybe that's not the answer towards speed versus excellence versus, for example, there's some products which are... There's a very clear competitive differentiation that we can find. There was a clear market gap. I want to launch something even if it is half-baked. No problem. I want to go, take it out, get user feedback, I trade, and so on. So understanding of the market, A, but B, also understanding of the core orientation.

**Lenny** (01:08:00):
It comes back to your ongoing advice of being full-stack in a lot of ways, and in this case, being a full-stack PM thinking about marketing, launch, and adoption, all those things. Next question, what is a favorite product you've recently discovered that you really like?

**Anuj Rathi** (01:08:15):
The very recent product that I like is called RISE. It's a sleep track app because I am half insomniac, and for the longest time, I was thinking about, "How can I track this? What am I doing, and how can I actually get better at this?" So I really like the way that they actually help the end user. It's just been a week since I've started using it, but recommend it.

**Lenny** (01:08:42):
Has that helped your sleep yet or too soon to say?

**Anuj Rathi** (01:08:45):
It's helped me track my sleep, so it's... Now, it's getting into the zone where it is actionable, but I like it.

**Lenny** (01:08:51):
Okay, okay. We'll see.

**Anuj Rathi** (01:08:52):
We'll see.

**Lenny** (01:08:53):
Do you have a favorite life motto that you often come back to, share with people, think about in either work or life?

**Anuj Rathi** (01:09:01):
I would call it a life motto as much, but one of the things that I keep telling my people who work with me, alongside me, and so on is, "Stop externalizing." That's one, which also means the more artistic way to say that is you are the reason for your own misery. So that's something that I keep using a lot more in a fun way. But if things go wrong, if that leadership meeting didn't happen in that way, if my product bombed, and so on, go back and let's ask ourselves what could we have done better, what I could have done better, and so on. Of course, because I'm also a poker player, so in a way, I understand there is half luck involved and half skill. But over a long period of time, if it's only luck and you're failing, and failing, and failing, you have to go and look back at your skill. So, yeah. You are the reason for your own misery.

**Lenny** (01:09:50):
I love that advice. Be very empowering, and be responsible. Final question. I was stalking your LinkedIn. You host an event called The Secret Soiree, which is not that secret because you post about it, but I'm curious, just what is that all about, and what got you to do these sorts of events?

**Anuj Rathi** (01:10:07):
So we just started, me and an ex-colleague of mine, Shivangi. So we essentially wanted to meet cool people around. So that's how it started. Interesting people without agenda who can come together and discuss interesting stuff about entrepreneurship, about startups, about products, about connections, and so on, and so forth. So it just started like that, and now we are onto many, many more interesting things that we are bringing in terms of cohorts which will be team-based. So it could be around product management, around marketing, around growth, and so on. We are strictly keeping it not-for-profit for at least the next year, but long way to go.

**Lenny** (01:10:51):
Amazing, and so for listeners, is this something they could join? Who should look into this? Who is this for?

**Anuj Rathi** (01:10:57):
Absolutely. At that time, probably, we'll not call it The Secret Soiree once we have probably expanded.

**Lenny** (01:11:02):
No longer secret. Okay. Cool, and then I guess they just follow you on LinkedIn, right? That's how they can keep up to date with these sorts of events. Okay. Cool.

**Anuj Rathi** (01:11:11):
Yes, on LinkedIn as well as on Twitter.

**Lenny** (01:11:12):
Awesome. Anuj, we've gone through so many topics. We've talked about breaking bad and full-stack product management, full-stack thinking, working backwards, bread and butter, rule of threes. I don't know. So many things. Two final questions. Where can folks find you online if they want to reach out and follow up on anything we've talked about, and how can listeners be useful to you?

**Anuj Rathi** (01:11:33):
Yes. So I'm on Twitter, so on twitter.com/anujrathi, and LinkedIn, you can just search my name. I'm pretty active on both of them. I do a bunch of... not podcasts all the time like you host, Lenny, but a bunch of other events as well as talks, so. I keep on posting on Twitter. They can find me there.

**Lenny** (01:11:55):
Amazing. Anuj, thank you so much for being here.

**Anuj Rathi** (01:11:59):
Thank you so much, Lenny, for hosting.

**Lenny** (01:12:01):
It's my pleasure. Bye, everyone.

**Lenny** (01:12:05):
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.

---

## [18/24] Radical Candor: From theory to practice with author Kim Scott

**Kim Scott** (00:00:00):
If you say, "Do you have any feedback for me?" You're wasting your breath. The other person's going to say, "Oh no, everything's fine." The question that I like to ask is, "What could I do or stop doing that would make it easier to work with me?" Do not write down my question because if you sound like Kim Scott and not like yourself, then other people are not going to believe you want the answer. It needs to sound authentic to you, and if everybody can write down their question, who they're going to ask it of and then pop it into their calendar right now, this will be one of the most productive podcasts in all of podcast land.

**Lenny** (00:00:33):
Today my guest is Kim Scott. Kim is the author of Radical Candor, which is the single most referenced book on this podcast. The book has sold over 1 million copies, has been translated into twenty-three languages. It was such an honor to have Kim on the podcast. Prior to this book, Kim was a CO coach at Dropbox, Qualtrics, Twitter and many other tech companies. She was a member of the faculty at Apple University. Before that, she led AdSense, YouTube and DoubleClick teams at Google. Prior to that, Kim managed a pediatric clinic in Kosovo and started a diamond cutting factory in Moscow. She's also working on a new book that you can pre-order now called Radical Respect. In our conversation, we get very practical and very tactical about practicing radical candor. Kim briefly describes the core idea, shares, language and phrases and words you can use to get better at practicing radical candor.

**Kim Scott** (00:03:17):
Thank you for having me. I'm excited for our conversation.

**Lenny** (00:03:20):
Your book, Radical Candor is the single most recommended book on this podcast. I don't know if you know this podcast well, but at the end of the podcast, I ask every guest, "What are two or three books you recommend most to other people?" And your book has come up the most of any book mentioned on the podcast.

**Kim Scott** (00:03:37):
Amazing. Well, tell your listeners I love them and I'm grateful to them.

**Lenny** (00:03:45):
Okay, they'll hear this. So I'm really excited to have you on chat about all the things that you teach and your book. For people that have heard the term Radical Candor, have maybe skimmed the book, maybe even read the book a while ago, but don't truly remember or understand the concept. Could you just spend just a few minutes giving a high level overview of the concept of Radical Candor?

**Kim Scott** (00:04:04):
Absolutely. Radical Candor is just what happens when you care personally and challenge directly at the same time. And I think it's probably best understood by what it's not because we all fail on one of those two dimensions or both of them multiple times a day. So you can think about it as a two by two framework. On the vertical axis is care personally, the horizontal axis is challenge directly. What happens when we remember to challenge directly, but we forget to show that we care personally. That is what I call obnoxious aggression, and it's really important to distinguish between radical candor and obnoxious aggression. I think one of the mistakes that people often make about, and I've gotten a lot, you write a book about feedback, you're going to get a lot of it, and I've heard a lot of feedback that sometimes teams will be rolling out the idea of Radical Candor and someone will charge into the room and say, "In the spirit of Radical Candor," and then they act like a garden variety jerk.

**Kim Scott** (00:05:00):
And that is not the spirit of Radical Candor. That's the spirit of obnoxious aggression. And obnoxious aggression is a big problem. It's a problem because it hurts other people. It's also a problem because it's inefficient. If I'm a jerk to you Lenny, then I'm going to send you into fight or flight mode and then you literally cannot hear what I'm saying, so I'm wasting my breath. But I don't know if this is true for you, but for me, there's a third problem. And the third problem is that when I realize I've acted like a jerk, when I realize I've landed in obnoxious aggression, it's not actually my instinct to go the right way on care personally. Instead, it's my instinct to go the wrong way on challenge directly and to pretend that I agree when I disagree, and then I wind up in the worst place of all, manipulative insincerity.

**Kim Scott** (00:05:48):
And it's kind of fun to tell stories about obnoxious aggression and manipulative insincerity. If you watch The Office or any show about problems at work or problems in any kind of relationship really, you're going to see a lot of episodes about obnoxious aggression and manipulative insincerity. But I think the real rub comes and the fact that these, even though this is what we like to talk about, these two problems are what we like to talk about, these are not the most common problem. By far and away the most common problem occurs when we do remember to show that we care personally because you know what? Most people try to be nice people. So we do remember to show that we care personally, but we're so worried about not hurting someone's feelings or not offending them, that we fail to tell them something they'd be better off knowing in the long run. And that is what I call ruinous empathy. So that is Radical Candor in a nutshell. That's the TLDR. But please do read.

**Lenny** (00:06:40):
Amazing and we'll link to a diagram of this two by two for people that aren't visual thinkers and want to actually see it. So just to make it super clear, if you're challenging directly, basically being very candid with feedback, but it's not clear you care deeply about the person, you call that obnoxious aggression.

**Kim Scott** (00:06:40):
Yes.

**Lenny** (00:06:57):
And if you make it clear, you care a lot about the person but aren't actually giving them direct candid feedback, you call that ruinous empathy.

**Kim Scott** (00:07:05):
Yes, exactly.

**Lenny** (00:07:06):
Which of these buckets do you find most people fall into? Is there a percentage of people or companies?

**Kim Scott** (00:07:11):
Yeah, I mean, I would say 90% of us make 90% of our mistakes in that ruinous empathy bucket. It's by far and away the most common problem. But I think all of us make mistakes in the other quadrants as well. And very often we kind of, I think one of, if I'm going to offer some self-criticism of this framework, it's much easier to notice when one has been ruinously empathetic. It's almost like, give yourself some critical feedback. "I work too hard." But it's much harder to notice when we've been manipulatively insincere and obnoxiously aggressive. And maybe I could have named those things because very often manipulative insincerity is sort of self-protective insincerity. Very often obnoxious aggression is just extreme frustration. So I want people to use this framework not to judge themselves or other people harshly, but like a compass to guide specific conversations with specific people to a better place and to help us understand when we're going in the wrong direction, which we are all bound to do on a daily basis.

**Lenny** (00:08:26):
I want to talk about all those things and also how to get better at these things. But before we do that, it's very hard to change. And it's also hard just to challenge directly innately, it's hard for people to be candid, just to give people a little motivation to invest in this skill. What sort of impact do you see when people develop the skill of being better at radical candor?

**Kim Scott** (00:08:48):
When we get better at radical candor? I mean, I'll tell you a story in fact about the impact it had on my life, some radical candor, but the sort of abstract answer to your question is we build better relationships and we do better work and we're more successful and we're happier. You ready for a story? Let's do it. Love stories. Okay. So shortly after I joined Google, this was now a very long time ago, 2004, I had to give a presentation to the founders and the CEO about how the AdSense business was doing. And I walked into the room and there in one corner of the room was one of the founders on an elliptical trainer wearing toe shoes and a bright blue spandex unitard, super tight, not what I was expecting or frankly wanting to see in the room. And there in the other corner of the room was the CEO doing his emails like his brain had been plugged into the machine.

**Kim Scott** (00:09:49):
So probably like you in such a situation, I felt a little bit nervous. How was I supposed to get these people's attention? Luckily for me, the AdSense business was on fire. And when I said how many new customers we had added, the CEO almost fell off his chair. "What did you say? This is incredible. Do you need more engineers? Do you need more marketing dollars?" So I'm thinking the meeting's going all right. In fact, I now believe that I am a genius. And I walked out of the room, I walked past my boss and I was expecting a high five a pat on the back. And instead she said to me, "Why don't you walk back to my office with me?" And I thought, Oh gosh, I screwed something up in there and I'm sure I'm about to hear about it. And she began not by telling me what I had done wrong, but what had gone well in the meeting, not in the feedback sandwich.

**Kim Scott** (00:10:37):
I think there's a less polite term for that. I'm not sure how you feel about cussing on your podcast.

**Lenny** (00:10:37):
It's acceptable, fully acceptable.

**Kim Scott** (00:10:43):
Not in the shit sandwich since the word, but really seeming to mean what she said. But of course, all I wanted to do was hear about what I had done wrong. And eventually she said to me, "You said um a lot in there, were you aware of it?" And with this, I braved a huge sigh of relief if that was all I had done wrong who really cared. And I kind of made this brush off gesture with my hand. I said, "Yeah, I know, it's a verbal tech. It's no big deal, really." And then she said to me, "I know this great speech coach. I bet Google would pay for it. Would you like an introduction?" And once again, I made this brush off gesture with my hand.

**Kim Scott** (00:11:14):
I said, "Oh, I'm busy. I don't have time for a speech coach. Didn't you hear about all these new customers?" And then she said to me, "I can tell when you do that thing with your hand, then I'm going to have to be a lot more direct with you. When you say um every third word, it makes you sound stupid." Now she's got my full attention. And some people might say it was mean of her to say I sounded stupid, but in fact, it was the kindest thing that she could have done for me at that moment in my career because she knew me well enough to know that if she didn't use just those words with me, and by the way, this is a really important point, she never would've used those words with other people on her team who were perhaps a better listener than I was.

**Kim Scott** (00:11:56):
But she knew me well enough. She cared personally enough to know that if she didn't use those words with me, I never would've gone to visit the speech coach and I wouldn't have learned that she was not exaggerating. And this was news to me because I had raised millions of dollars for two different startups giving presentations. I thought I was pretty good at it. And it really got me to thinking sort of why had no one told me. It was almost like I suddenly realized I'd been marching through my whole career with a giant hunk of spinach in between my teeth and nobody had had the common courtesy to tell me it was there. So why had no one else told me. But what was it about her leadership style that made it so seemingly easy for her to tell me? And as I thought about that, I realized it really came down to those two things.

**Kim Scott** (00:12:41):
She cared personally and she challenged directly. She cared about me not just as an employee but as a human being. For example, when my father was diagnosed with late stage cancer, I was devastated and she could tell that I was devastated. And she said, "Kim, look, you go to the airport, fly home to Memphis, you need to be with your family. Your team and I will sit down and write your coverage plan." That's what great teams do for one another. And those were the kinds of things, that was the kind of thing that she did. She couldn't do, of course, for all 5,000 people in her organization, no matter how talented you are, relationships don't scale. But she did do those things for her direct reports and the people who she worked most closely with, all of us.

**Kim Scott** (00:13:27):
And when a leader treats their team, the people who they interact with on a day-to-day basis with that kind of real care, then it's much more likely that their direct reports in turn are going to treat their teams with real care. And that creates a culture of caring. And even though relationships don't scale, culture does scale. So that was part of it. But of course there's also this challenge directly part which is equally as important. And I learned very quickly beyond a shadow of a doubt that if I screwed up, she was going to tell me and she was going to keep telling me until it penetrated my sometimes thick skull.

**Lenny** (00:14:07):
I had a manager that was also very good at this. He was very good at just giving me very direct feedback, and I knew that he was only doing it because he cared about my future. To kind of follow this thread and get a little tactical, is there language or phrases or ways of communicating that you recommend people use to either challenge directly and avoid people getting defensive or make it clear you care deeply?

**Kim Scott** (00:14:31):
People always want me to give them a script. And the problem with the script is that if I write it, you're going to sound like Kim Scott and not like yourself. And then people won't really think you mean what you're saying. But I do think there are some important things to consider when having these conversations. I think you want to go into the conversation, and by the way, everything I'm about to say applies to praise as much as it does to criticism. And I want to pause for a moment. That story is helpful because that's the kind of thing that has happened to so many of us, that's not unique to me. However, praise is even more important than criticism in terms of radical candor. Radical candor is not all about the boss giving the employee criticism. It should always start with soliciting feedback and it should include more praise and criticism, but anyway, way without offering up shit sandwiches.

**Kim Scott** (00:15:31):
So anyway, I think that the important thing for these conversations, these sort of two-minute impromptu moments of management, is to go into the conversation being humble. To me, I call it candor and not truth because if I march into a room and I say, "Lenny, I'm going to tell you the truth." I'm kind of implying I've got a pipeline to God and you don't know anything. And that's not what this is all about. This is a dialogue, not a monologue. So to me, candor implies here's how I understand the situation. I'm also curious to know how you understand the conversation. So you want to go in being humble, you might be wrong, and that's totally fine. Omniscience is not a requirement for radical candor, thank heavens. So you want to be humble. You want to state your intention to be helpful. You want to remember in your own head and you want to make it explicit to the other person that you're telling them this to help them.

**Kim Scott** (00:16:25):
You're not trying to be dominant or kick them in the shins or anything like that. You're telling them this because you care about them. So you want to state your intention to be helpful. You want to have these conversations right away, almost immediately. I mean, there's exceptions to everything I'm saying. None of this is absolute. But usually if I'm telling myself and Lenny, you can tell me if you have the same problem, but if I tell myself, Oh, I'm going to wait for a better moment to tell this person this thing, what I'm really saying is I'm never going to say. So if the purpose of praise is to tell people what to do more of, and the purpose of criticism is to tell them what to do less of, why wait. So you want to do it immediately unless you are so upset that you're going to say it in a terrible way or the other person is so upset that they can't hear you. But usually that's not the case.

**Kim Scott** (00:17:16):
You also want, and in the before times I used to say have these conversations in person. Now I say have these conversations synchronously and I'm going to recommend phone over video. There's a lot of evidence coming out of University of Chicago and probably other places, but that's the article I've read that there's more noise than signal in facial expressions and body language, especially if somebody is just a little square on a computer screen. But it also may be true in real life, like the phone actually may be one of our best communication innovations of all time because when you're talking to someone on the phone, you're listening to the words that they are saying to you, and that is really what you want to do in this moment. So make sure that you're having these conversations synchronously, because what you want to do next is gauge how it's landing.

**Kim Scott** (00:18:15):
So I'll talk about that in a minute. And you can't gauge how something is landing if you're sending an email or a text, and Slack is just a feedback train wreck waiting to happen. I once coached someone who kept giving feedback over Slack and I finally just quit coaching him. I was like, "If you keep making this mistake, I can't be your coach." So don't do that. Take a moment to pick up the phone and call the person. Go back to those old AT&T commercials when I was a kid. Reach out and touch someone. You want to show you care.

**Kim Scott** (00:18:52):
So let's review. You want to be humble, you want to be helpful, you want to do it immediately. You want to do it in person or at least synchronously. If you can't do it in person. You also want to praise in public and criticize in private, and you don't want to give people either praise or criticism about their personality. So if you want to remember all that, it's HHIIPPP, two H's, two I's, kind of three P's depending on how you count.

**Kim Scott** (00:19:21):
And so let's double-click though on this not about personality point. I think it's really important to remember that for both praise and criticism, you want to use sort of context, observation, result, next step. So context, in the meeting, observation, when you said um every third word, result, it made you sound stupid. Next step, go to the speech coach. Also is important for praise, in the meeting context, when you offered both sides of the argument, observation, result is it earned you credibility. Next step is do more of that. So you can call it CORE, you can think about that as CORE. I used to call it CORN, but I got some feedback that corn is like some shorthand for porn on TikTok. So I call it CORE instead, HIP CORE.

**Lenny** (00:20:16):
Wow, that is amazing. Thank you for sharing all that. So the E at the end stands for?

**Kim Scott** (00:20:20):
Next step, big E.

**Lenny** (00:20:21):
Oh, I see the E is the next, you skipped the N, clever.

**Kim Scott** (00:20:26):
Yes. I don't know, clever or ridiculous. Maybe I should just call it HIP CORN,

**Lenny** (00:20:31):
Right? No, I think either one's great. So you share this example of the speaking example. Maybe if we can do another example just to reinforce this framework.

**Kim Scott** (00:20:43):
Let's do a little ruinous empathy.

**Lenny** (00:20:47):
Okay, great. Let's do it.

**Kim Scott** (00:20:47):
How about that? That is the mistake. I think that I am really focused in the book Radical Candor and also in my next book Radical Respect. That's the mistake I really want to eliminate.

**Lenny** (00:21:00):
Let's do it.

**Kim Scott** (00:21:00):
Because ruinous empathy creates this false harmony, which is really bad. So here's my ruinous empathy story. I had just hired this guy, we'll call him Bob, and I liked Bob a lot. He was smart, he was charming, he was funny. He would do stuff like we're at a manager offsite playing one of those endless get to know you games. And everybody was getting more and more and more stressed out. So start up, we've got a lot going on. And Bob was the guy who had the courage to raise his hand and to say, "I can tell everyone is getting stressed. I want to get to know all of you. I've got an idea. It'll help us do that and it'll be really fast."

**Kim Scott** (00:21:41):
Whatever his idea was, if it was really fast, we were down with it. And Bob says, "Let's just go around the table and confess what candy our parents used when potty training us." Really weird but really fast. And then for the next 10 months, every time there was a tense moment in a meeting, Bob would whip out just the right piece of candy for the right person at the right moment. And we all remember that was the weirder thing. Like Hershey Kisses right here. That was what my parents used to potty train me.

**Kim Scott** (00:22:16):
And so Bob was quirky, but he brought a little levity to the office. Everybody kind of loved working with Bob. There was one problem with Bob. He was doing terrible work. He would hand stuff into me and there was shame in his eyes. He kind of knew it wasn't good enough. He was very creative, but riddled with sloppy mistakes. And I would say something to Bob along the lines of, "Oh Bob, this is such a great start. You're so awesome. We all love working with you. Maybe you can make it just a little bit better." So let's pause for a moment. Why did I say such a banal thing to Bob? I think part of the problem was that I liked Bob and I really didn't want to hurt his feelings.

**Kim Scott** (00:23:05):
So that was the ruinous empathy part of why I said that. But also part of the problem was something more insidious, a little bit of manipulative insincerity, because Bob was popular and Bob was also sensitive kind of. And there was part of me that was afraid if I told Bob in no uncertain terms that his work wasn't nearly good enough, he would get upset. He might even start to cry and then everybody would think I was a big, you know what? So the part of me that was worried about my reputation as a leader, that was the manipulative insincerity part, the part of me that was worried about Bob's feelings, that was the ruinous empathy part. And this went on for 10 months, 10 long months, and I was so puzzled the whole time I couldn't understand what was going on. I learned much later that one of the issues perhaps was that Bob was smoking pot in the bathroom three times a day, which maybe explained all that candy that he had at all times.

**Kim Scott** (00:24:11):
But I didn't know any of that at the time. All I knew is that Bob was consistently doing bad work, but I wasn't really dealing with it. And eventually the inevitable happened. I realized that if I didn't fire Bob, I was going to lose all my best performers because not only had it been unfair to Bob not to tell him, I also had been unfair to everyone on the team. And they were frustrated. Their deliverables were late because his deliverables were late. They weren't able to do their best work because they were having to spend so much time redoing his work.

**Kim Scott** (00:24:46):
And the people who were best at their jobs were going to quit because they wanted to be able to do their best work. They were going to go to a different company where they could do their best work. And so I sat down to have a conversation with Bob that I should have begun frankly 10 months previously. And when I finished explaining to him where things stood, he kind of pushed his chair back from the table. He looked me right in the eye and he said, "Why didn't you tell me?" And as that question was going around in my head with no good answer, he looked at me again and he said, "Why didn't anyone tell me? I thought you all cared about me." And now I realized that by not telling Bob, thinking I was being so nice, I'm having to fire him as a result. Not so nice after all. But it was too late to say Bob because at this point even he agreed he should go because his reputation on the team was just shot.

**Kim Scott** (00:25:46):
All I could do in the moment was make myself a very solemn promise that I would never make that mistake again, and that I would do everything in my power to help other people avoid making that mistake. It was so painful. It was painful for me. It was painful for Bob, much more painful for Bob actually, and it was bad for the whole team and it was bad for our investors. We weren't getting results because of my ruinous empathy and ruinous empathy slash manipulative insincerity. It's much harder to admit the manipulative insincerity part. And that is really why I'm here talking to you because I want all of your listeners to avoid making that mistake because it's the most painful and the most common mistake that I think leaders and not just leaders, I mean all of us make this mistake in all of our relationships.

**Lenny** (00:26:41):
I love that this also gives an example of the impact of getting better at this point of you'll lose not just the people that are not necessarily great, but also other high performers on the team because they're seeing people slip through the cracks that aren't amazing. And if you're not practicing this early, your team basically becomes not high performing.

**Kim Scott** (00:27:00):
Yeah, exactly. You're going to lose your top performers. And I think very often people are afraid to tell someone on their team when their work isn't good enough because they're afraid of losing them. But that's not a good reason. You should be helping this person to improve. This person deserves to have a job where they can excel and you either help them excel on this team or you help them find a different job where they can excel, because everyone can do great work somewhere. And Bob could have done great work. Maybe I would've helped him keep it to the weekends because he's very creative and very smart, but the floppy mistakes just got in the way of his ability to do his best work.

**Lenny** (00:27:50):
So following that thread, I imagine the reason you didn't tell him early, and most people don't do this well, is many people are, you can maybe call them people pleasers. I'm a recovering people pleaser, I'll say. It's just hard to give people hard feedback. You want people to like you. It's not a natural state for a lot of people. What do you find helps people get over this kind of need to be liked as a leader and helps them be more candid?

**Kim Scott** (00:28:15):
I think that one of the things that was helpful for me anyway, so you can tell me if it's helpful for you, was realizing that my job was not to be liked. My job was to care about other people and to get out of my own head and to become others focused is what helped me kind of let go of the need to be liked. I think that also as a woman, I think there was something extra, as my teenage children would say, there was something extra for me because the sort of likability- competence bias that a lot of women face pushed me, especially early in my career, in the wrong direction on challenge directly.

**Kim Scott** (00:29:04):
And it made it much harder for me to, because often I would say something and I would say it even more gently than my colleagues who were men, but people would say, "Ah, Kim is a real whatever." And they weren't saying, Kim is obnoxious. I was being unjustly accused of obnoxious aggression and it wasn't obnoxious or they were accusing me of being bossy or or abrasive or whatever. And it's really hard. I would also say when it comes to eliciting feedback, it's really important to be open to it and it's really important to separate the wheat from the chaff from the feedback you're getting.

**Lenny** (00:29:41):
So in this example of Bob, say you were to do it now, what would you do differently other than give him feedback earlier? Is there something you've learned about just how you would've phrased it or approached it?

**Kim Scott** (00:29:58):
I think probably what I would do, and I would love to hear what you would've said to Bob too, I certainly don't have all the answers, but probably what I would've said is let's go back to the first time Bob handed work into me with shame in his eyes. I would've said, "Bob, maybe I'm misinterpreting the expression on your face, but it looks to me like you are not happy with this. What's going on?" And so I would've asked him to diagnose it himself and I want to pause on that because that can be very risky. He might have said to me, "I think this is awesome. This is my best work," and now I've kind of made my job of giving him feedback a little bit harder. So it's not always the right thing to ask questions, but I would've tried to ask it before I had examined the work when I noticed that he looked uncomfortable himself.

**Kim Scott** (00:30:47):
And I think also another thing I've learned about noticing, I said earlier that there's a lot of evidence that we often misinterpret each other's facial expressions and body language. So I would've tried to say that with some humility, it seems like you're not, maybe I'm wrong, but you don't look to me like you're happy with this. And I would've given him an opportunity to say, "Yeah, maybe I need to do it again." Let's imagine though that he said, "Oh no, it's awesome. It's ready." So then I get it and I look at it. I would have not been shy about pointing out very specifically every problem that I saw in that piece of work, every single one. Sometimes it can be tempting when you're giving someone feedback to say, "Oh, there's a number of careless mistakes here. Can you go back and look at it again," and the person will notice a few of them and then you got to go, sometimes it's useful to show someone a pattern.

**Kim Scott** (00:31:53):
All of the careless mistakes, especially if someone is defensive or if you think they're likely to be defensive, if you think they're likely to do to you what I did to my boss, oh no, everything's fine. It's no big deal. You need to move out on the challenge directly dimension. You need to be prepared to keep going until you have communicated with a person. And that was really the problem with Bob. He probably would not have started to cry. I think my fear around his tears was probably more about my fear than what was actually likely to happen. But I think we do fear someone else getting upset more often than they actually get upset. We have kind of a negativity bias when it comes to part of the reason why we're reluctant to give feedback.

**Lenny** (00:32:42):
And I think to your point, that we want to be liked, like you said, that you should get over that. I think that's obviously very hard just to be like, "Nah, I'm not going to worry about that." But I think your point is really important that you'll be liked later if you don't do the hard thing now. It'll only get worse if you just let it continue happening.

**Kim Scott** (00:33:01):
And I think also for me to say to myself going into that conversation, it's more important for me to demonstrate care, that I care about Bob than it is for Bob to like me, and if I demonstrate that I care about Bob, then I'm going to do the right thing that will ultimately create the conditions for a good relationship with Bob. Me pulling my punches did not create the conditions for a good relationship with Bob.

**Lenny** (00:33:31):
I actually did that and I learned this from a manager of mine is just almost work backwards from ask them, what do you want to achieve in your career? Where do you want to go in this company and make sure they know you know what they want, and then basically work backwards from to get there. Here's the things you need to get, and here's the thing you did recently that isn't necessarily on the track and here's what we should be working on if you want to get to the skull that you have.

**Kim Scott** (00:33:57):
Yeah, I think one of the really important things that all managers can do for their direct reports to show that they care is to have real meaningful career conversations, where you talk about their life story, sort of their past, whatever part of it they're comfortable talking to you about so that you understand what motivates them at work. And I would have three separate 45 minute conversations, so one about their past, one about their future, their dreams for the future, and it's not just the next couple of years. It's like imagine at the height of your career you have everything you want. What does it look like? And give me three or four different pictures of that because very few of us know what we want to do when we grow up.

**Kim Scott** (00:34:40):
Then the third conversation is to sort of sit down with your director report and come up with a career action plan. So given what motivates you and where you want to go, what are the skills that it would be useful for you to develop so that you can get where you want to go and who can I introduce you to? What are the educational opportunities? Can we tweak your job so that you're gaining those skills so you're at least taking a step in the direction of your dreams, even if you're not there yet?

**Lenny** (00:35:11):
Awesome. I have a post about this. I'll link to in the show notes that gives people a guide to having these conversations, and there's a spreadsheet I share with people like, here's an action plan you can come up with your teammate and here's what you're going to work on these next six months.

**Kim Scott** (00:35:24):
Did you read the book When they Win, You Win by Russ Laraway?

**Lenny** (00:35:24):
No.

**Kim Scott** (00:35:29):
Oh, he has a hundred pages on career conversations and he's also built sort of some tools that help people. So check that out.

**Lenny** (00:35:39):
And it's called When You Win... When They Win, You Win.

**Kim Scott** (00:35:41):
When They Win, You Win.

**Lenny** (00:35:42):
Amazing.

**Kim Scott** (00:35:42):
Yes, by Russ Laraway, he and I worked together at Google and then we started a company together.

**Lenny** (00:35:48):
Oh wow. Okay, cool. We'll link to them in the show notes. Maybe I'll get him on the podcast too. Great.

**Kim Scott** (00:35:51):
Yeah, he'd be great.

**Lenny** (00:35:53):
Okay, so we've been chatting about ways individually to get better at some of these skills. Another area that I think people struggle with is the company culture often isn't welcoming of direct feedback. So there's a question, so you probably saw this on Twitter. I asked people, what should I ask you? And a lot of people came in with a lot of questions and there's one that came in from Pete, so I'm just going to read it along these lines. So this question is just how do you practice being radically candid in a culture? And most cultures are like this where people aren't ready for direct feedback. Since company culture is often closer to ruinous empathy and being radically candid is more of a long-term good than a short-term good. You could potentially risk retention with your employees if you're too direct with them. So how do you think about finding this balance of being candid but not pissing people off, or do you just hire people that are open and ready for direct feedback and that's kind of how you solve that problem?

**Kim Scott** (00:36:45):
I don't think you can only hire people who are open and ready for direct feedback because it's hard for all of us. I just want to acknowledge that, it's hard for me. I mean, I wrote the book, I believe in it to my core and sometimes it's still hard for me. It's hard for me to hear it and it's hard for me to deliver it. This is a really difficult thing to do. The good thing about that two by two is it makes it look easy, which is useful, but it's not easy. So anyway, I think there are, to answer Pete's question, I think there are a few things that can help. There's really an order of operations to radical candor, and if you begin with soliciting criticism, then you take the first and most important step to improving your relationship with that person enough that it becomes easier for you to give it as well as to get it.

**Kim Scott** (00:37:35):
So I want to leave folks with some sort of steps on how to solicit feedback, and this is true, especially if you're a boss, but it's true in all your relationships. You can use this at home as well. So if you say, "Do you have any feedback for me?" You're wasting your breath. The other person's going to say, "Oh no, everything's fine." Nobody in your life accepts your teenage children. If you have teenage children, they'd really want to give you some criticism, but nobody else in your life really wants to give you criticism. And so you want to think about how you're going to ask the person that's going to be most likely to elicit a response. The question that I like to ask is, "What could I do or stop doing that would make it easier to work with me?" But do not write down my question because if you sound like Kim Scott and not like yourself, then other people are not going to believe you want the answer. It needs to sound authentic to you.

**Kim Scott** (00:38:33):
I was working with Christa Quarles when she was CEO of OpenTable and she said, "Kim, I could never imagine those words coming out of my mouth." She said, "The way I like to ask is tell me why I'm wrong." Okay, that's fine too. It demands an answer to her question. But of course there were a couple of people on her team who felt that that was too aggressive, that shut them down, so she had to adjust her question. Being authentic does not mean ignoring the impact you're having on others. So you want to think about your question, you want to think about who you're going to ask that question of, and if everybody can write down their question, who they're going to ask it of and then pop it into their calendar right now, this will be one of the most productive podcasts in all of podcast land.

**Lenny** (00:39:22):
Let's spend more time on this actually. So what is it you recommend, that they pick? How many people would you recommend they pick, and ask feedback from?

**Kim Scott** (00:39:28):
Well, I think if you are a manager, you need to be soliciting every week feedback from each of your direct reports, and you need to sort of, I would budget five minutes at the end of your one-on-one to solicit feedback. So mostly a one-on-one should be your employees setting the agenda and your employee's time and don't by the way, save up when you have to give feedback. Don't save it up for your one-on-one and definitely don't save it up for a performance review. You want to give that in the moment. We can talk more about that in a second, but when you're soliciting feedback, save five minutes at the end of your one-on-one and ask that go-to question. And you also want to ask that go-to question of your cross-functional peers who you work most closely with and of your boss. And I think you don't want to ask the same question every single time. It'll start to sound like you don't really want the answer, but you want to make this part of your daily weekly routine with the people who you interact most closely with.

**Lenny** (00:40:34):
So you added to the end of this your one-on-one agenda, and two versions of this question are, what am I doing wrong? Which is that one I guess you iterated.

**Kim Scott** (00:40:43):
Tell me why I'm wrong or what am I doing wrong or what could I do or stop doing that would make it easier to work with me? Or what should I stop doing? What should I start doing? What should I continue doing? Those are some common ones. What do you like to ask Lenny?

**Lenny** (00:41:00):
I think it was something along the lines of like, what's one thing I could be doing better or what's one way I could be helping you be more successful?

**Kim Scott** (00:41:07):
That's a really good one. What's one way I could help you be more successful? Or Jason Rosoff, my co founder at Radical Candor likes to ask, "What could I have done this week?" So he time, he time bounds it. "What could I have done this week to better support you in your work?" In fact, Jason told me after we had worked together for about a month, he was like, "Kim, I really hate your go-to question." He said, "It's too open-ended for me. If you can tell me what you're working on and ask me at the end of a meeting specifically what I noticed then that is much better."

**Lenny** (00:41:48):
How often do you accept no answer? Just like, no everything's great.

**Kim Scott** (00:41:52):
Never,

**Lenny** (00:41:53):
Never,

**Kim Scott** (00:41:53):
Never. I mean, there are some people who really don't like to be put on the spot. So if I can tell that I'm inflicting a cruel and unusual punishment on the person, I'll say, "Look, you know I'm not perfect. I know I'm not perfect. Next time we meet, I want you to think of something, notice something. It's the thing that you can do that would help me more than anything else that you could do is to tell me when I'm wrong because I need to know that." In fact, Andy Grove, who was the CEO of Intel said he used to at the end of his one-on-ones say to people, "There's one more thing. And he explained to me that that was coded Intel for like this is the most important thing." I was working at Apple at the time and I said, "Oh, did you get that from Steve Jobs?"

**Kim Scott** (00:42:47):
That was always how he introduced, "Just one more thing, the iPad." And Andy got immediately very grumpy and very offended, and he said, "No, we both got it from Colombo. The detective show." You can get tips from anywhere. So you want to make sure that you're though letting the person know that you really do care about what they say and that it's really when they give you this critical feedback that you're going to reward it. But that's not the end. Asking that question is only the first step, the bad news about your question, no matter how hard you think about it, and no matter how good a question it is, the other person is still going to feel uncomfortable. There's no such thing as emotional Novocaine. That's why I don't believe in scripts. People believe if I just say the magic words like the door will open, that's not how it works. It's a give and take. So you want to sort of be prepared to embrace that discomfort. The only way out is through. Simplest way to embrace the discomfort is to close your mouth and count to six.

**Kim Scott** (00:43:59):
Only made it to three just there, and your eyes were popping out.

**Lenny** (00:44:03):
That is so long.

**Kim Scott** (00:44:04):
Six seconds is a really long time. Almost nobody can endure six full seconds of silence. So they'll probably tell you something. So now you've dragged this poor soul out on a conversational limb that they never wanted to go on. They're probably going to say something. The third step is to make sure that you listen with the intent to understand not to respond, because you're probably going to feel defensive and that's okay. It doesn't mean you're a lesser mortal or that you're shut down the feedback. All it means is that you're human. And that's all part of this. You want to figure out how to manage your natural defensive reaction to critical feedback, which you're probably going to have. The simplest tactic I can offer folks there is to think of some follow-up questions.

**Kim Scott** (00:44:56):
So at breakfast, my daughter not too long ago said to me, "Mom, I wish you weren't the Radical Candor lady." And immediately this wave of parental guilt washed over me and I thought, ah, I'm spending too much time at work. She wants more of my time. I shouldn't be traveling so much. But then I thought, well, I should ask her, make sure I understood. I'm jumping to conclusions here. I'm not listening with the intent to understand. So I asked a follow-up question. I said, "Well, who do you wish I were?" And she said, "I wish you were the lady who minded her own business," so I could go spend a little more time at work as far as she was concerned. So you want to make sure you really understand what a person is telling you. And once you feel certain that you really do understand and that you've been open to it, the last and most important step is to reward the candor.

**Kim Scott** (00:45:46):
A person takes a huge risk, especially if this person is your employee. A person takes a huge risk to give you critical feedback. And if you do not reward that risk richly, you're never going to get any feedback again. So if you agree with the feedback, fix the problem and make your listening tangible, be loud. So-and-so told me that the tea in the break room is terrible, and now we have thirty-five different kinds of tea. Thank you for telling me. And that can demonstrate to people that they're not wasting their breath to come to you. That if you become aware of a problem, you'll fix it. And you also want to, by the way, you want to ask for feedback after you fixed it. Did I over-correct or did I under-correct?

**Kim Scott** (00:46:31):
My boss at Google, the same boss from the um story also told me when she gave me some feedback that I tended to move too fast. And she said, "Kim, until people and giving you feedback that you're going too slow. You won't have corrected this problem." So you kind of want to shoot to over-correct if you get some critical feedback. I also want to though pause on what to do when you get some critical feedback that you disagree with because it can be easy to feel wedged here. And if all you do is say thank you for the feedback, the other person is going to hear something much less polite than a brush off or worse.

**Kim Scott** (00:47:10):
And so what you want to do is you want to look for that five or 10% of whatever the person said that you can agree with, and you want to give voice to that. And then what you want to do is you want to say, "As for the rest of it, I want to think about it and get back to you." And then you've got to get back to them. You got to offer a respectful explanation of why you disagree. And it's tempting to feel like a disagreement poses a risk to our relationships, but it's not disagreement that poses a risk to our relationships. It's unspoken disagreement. Many, I don't know about you Lenny, but a lot of my best professional relationships began with a good respectful disagreement.

**Lenny** (00:47:51):
Interesting. That reminds me of just watching Squid Games, the reality show on Netflix. Yeah. Have you seen this at all?

**Kim Scott** (00:47:56):
I haven't watched it, but it's on my list.

**Lenny** (00:47:59):
There's this guy who makes a huge bad decision on behalf of his whole team and they hate him in the show. And then on TikTok, he shared that they're best friends now, even though they called him a big idiot.

**Kim Scott** (00:48:09):
Yeah, no.

**Lenny** (00:48:09):
So funny.

**Kim Scott** (00:48:10):
It can happen for sure.

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**Lenny** (00:49:32):
So to recap the steps roughly for how to get feedback from people, it's ask your question like what's one thing I could have done this week to make you more successful? Wait six seconds potentially or try to, it's very hard. Ask a few follow-up questions to make sure you understand what they're saying and then find a way to reward them. Say thank you.

**Kim Scott** (00:49:53):
Do more than say thank you.

**Lenny** (00:49:55):
Especially if you disagree, which is a really interesting nuance of this. I had Jules Walter on the podcast. I always think of him when I think of getting feedback. He shared this advice. When you get feedback, just be so appreciative so that people keep giving me just like, "Thank you so much for that feedback." The way he phrases it. Even if you're melting inside and really hate this feedback, just like, "thank you, I really appreciate it." But I think your nuance there is really key is if you do disagree, I really like this tip of just like, let me think about this element of it and then actually follow up.

**Kim Scott** (00:50:25):
Even if you're melting inside, if you say thank you and you're melting inside, I mean maybe it's a terrible actor, but usually people know. And that's why I say it's not enough to say thank you. You got to fix the problem and then show what you did to fix the problem and get more feedback. Did I over-correct? Did I under-correct. And if you disagree, you got to say that you disagree, but you got to say, so respectfully.

**Lenny** (00:50:48):
As a leader, this sounds like a lot of work to be doing every week. If you have a one-on-one following up correcting things. Is there anything you'd recommend there? Or is it just, this is really important, you got to make time.

**Kim Scott** (00:50:58):
It's not as much work as failing to do this as we saw from the Bob story. So I think that the important thing that I have found is that this is part of why it's so important to do it immediately. It's important for the other person, but it's also important for you. If you're doing this in a one-on-one, which you should be having anyway. So you're saving some time in a one-on-one. So it's not adding time necessarily to your day. And when you hear about problems, you should fix them. Yes, it takes time, but that is your job. And when you disagree with something, you can disagree in your next regularly scheduled one-on-one. So I'm not talking about adding meetings to your calendar, so it doesn't actually take more time. I have found that in fact, it saves tremendous amounts of time, but it does take emotional discipline.

**Kim Scott** (00:51:52):
And I think it also requires you, especially when it comes to giving it, which we talked about before, where the humble, helpful, those are impromptu two-minute conversations, giving the feedback that you should be having in between your meetings. In the um story, walk to my meeting with me, it didn't take any extra time for my boss to give me that feedback. She had to walk to her meeting anyway, and I had to go in the same direction. So it didn't even take extra time from me. But it is, I think one of the most common reasons why people don't do this in addition to fear of retaliation and just sort of existential dread, which are both factors, which hopefully we've helped alleviate, but is that you're scheduled back to back to back and you don't have those two minutes in between meetings.

**Kim Scott** (00:52:42):
And that's why I think it's important either to schedule slack time in your calendar, make your 30 minute meetings, 25 minute meetings, make your hour-long meetings, 50 minute meetings, maybe give yourself a few breaks in the day. But if it's not possible, and often it was not possible for me in my career to sort of schedule my time that way, I just decided that these moments of management were more important than being on time to my next meeting. And so I was just late sometimes. So I wish I had a better answer than either control your time, which is really annoying advice because it's impossible to follow or be willing to be late to your next meeting. But those were the things that I tried to do.

**Lenny** (00:53:34):
That was super helpful. I think your point of just, if you're not making two minutes to do this thing now, it'll be a lot more time intensive later.

**Kim Scott** (00:53:40):
Oh yeah. It's stitch in time takes nine on all these two minute, and really it should be brushing and flossing. This is not like a root canal. These are like, this is relationship hygiene that you should be doing all the time.

**Lenny** (00:53:55):
I was just reading Charlie Munger's book and there's a quote that he references of just the classic, an ounce of prevention is worth a pound of cure.

**Kim Scott** (00:54:03):
Yes, absolutely.

**Lenny** (00:54:04):
Same idea. So we've talked about a leader getting feedback. What if you're the employee? Do you also recommend the same thing in the one-on-one, have an agenda item and ask this question? Or is there a different approach you'd recommend?

**Kim Scott** (00:54:16):
I think yes, if you're the employee, you should also be soliciting feedback on a regular basis from your boss. So there's sort of an order of operations you want to solicit at first, no matter who you are, it's the same up, down, and sideways, even though it feels very different, the order of operations is the same. So start by soliciting feedback. Then you want to give both praise and criticism. I think sometimes it feels like you're kissing up if you give your boss praise, but bosses need praise too. And if there are things that your boss does that you appreciate and you want your boss to do more of those things, praise is a better tool for that than criticism. When it comes time to offering your boss some critical feedback, you want to make sure, and by the way, this is also true when it comes time to give your employee critical feedback or your spouse or anybody else in your life, you want to be sure that you are prepared to gauge how it lands.

**Kim Scott** (00:55:09):
So you want to start in kind of a neutral place. You don't want to go to the outer edge of challenge directly because then you're going to wind up in obnoxious aggression. So if we go back to that story, my boss started, "You said um a lot, were you aware of it?" "Nah." That was my response. And then "I know this great speech coach, would you like an introduction?" "Nah," was my response. So she had to keep going out on that challenge directly. She didn't start out by saying, "When you say um I'm every third word, it makes you sound stupid." But she realized she had to go that far. So you want to keep going out if you think they're brushing you off. But if you find that your boss looks either sad or mad, that is your cue to move up on the care personally dimension.

**Kim Scott** (00:55:51):
And so to take a moment, and if you find your employee looks sad or mad, if they look sad, pause and say, "I feel like maybe I didn't say that in the best possible way. How could I have said it differently?" And so that means you're going up on the care personally, dimension, but you're not going the wrong way on challenge directly. I don't know about you Lenny, but if I say something to someone and they look sad, it's so tempting for me to try to pull the words back. "Oh no, it's no big deal. I didn't mean it," but it is a big deal, and I did mean it, that's why I just said it. And so if you go the wrong way on challenge directly, you wind up in ruinous empathy, and then you leave the person both sad and confused, so you make it worse.

**Kim Scott** (00:56:34):
So you want to take a beat to pay attention to the emotions in the moment, but not to go the wrong way on challenge directly. Same thing if they're mad, although if somebody's mad, that maybe is even harder. If somebody starts yelling at me, it's tempting for me either to start yelling back and wind up in obnoxious aggression or to crawl off to a self-protective, manipulative insincerity. And so instead, what I try to do is get curious, not furious, and why is this person so mad? So say like, Look, maybe I didn't say that in the right way, but this is an important issue and we need to resolve it.

**Lenny** (00:57:14):
This comes back to the point you made about when you're giving feedback to try to do it in person or on a phone call to do exactly what you're saying, to read them as you're giving this feedback and figure out which axis you want to go down.

**Kim Scott** (00:57:25):
Yeah, you want to gauge it. I mean, when we communicate with other people, we communicate on an emotional level and on an intellectual level at the same time. And if we ignore the emotional signals that are coming at us or say don't take it personally, then we're just not going to communicate very well.

**Lenny** (00:57:43):
Along these same lines, another question that came in is from a coach of yours that works I think for you or somehow with the program. She asked this question of many top leaders have very low self-awareness. They believe obnoxious aggression is the only way to give feedback, or they just ignore the problem and fire people with no feedback. Is there something you've learned about how to change their mind about this is the way to operate?

**Kim Scott** (00:58:05):
Yeah, I think the most important thing with leaders like that, that you can do is to explain to them the impact that they're having and to also show them that there is another way that is going to help them succeed. Very often the leaders who are low on the care personally dimension, they do care about their results and they do care about their own careers. And so when you sort of explain this to them in terms of enlightened self-interest, they tend to get better at it. And also, I mean there I can think of maybe one or two people I've worked with who are truly low on care, who truly don't care. Very often people are bad at showing they care, but they do actually care. And also sometimes there are leaders who think they're not supposed to care. And so unleashing that capacity that they innately have to care and telling them this is actually part of the job can make them a much better, more effective leader. But look, if someone is a psychopath and they truly don't care, they shouldn't be a manager. That's the solution.

**Lenny** (00:59:27):
I totally get that one. So I really like that takeaway. Just basically show them the impact they're having because to your point, they want the company to succeed. They want their team to succeed. And if they're not realizing there's downsides to the way they're operating.

**Kim Scott** (00:59:38):
And they want themselves to succeed. That's why I say part of the problem with obnoxious aggression is that you harm other people, but it's also inefficient because when you act like that, people can't hear what you're saying, so you're wasting your breath.

**Lenny** (00:59:56):
And the way you show them that impact. Do you recommend interviewing people, getting stories, seeing, I don't know, how do you collect this impact so that they're like, oh, wow, I didn't realize this.

**Kim Scott** (01:00:07):
I think that the best thing to do is, for me anyway, is I start by sharing stories from my career and stories when I was a jerk. I've acted like a jerk too, plenty of times, unfortunately. And I show the impact that I've had and then I ask them for a similar story. And usually sort of me holding up the mirror to myself is useful for them to be able to hold the mirror up to themselves to realize you want to help these people adopt a growth mindset around this stuff. I am not telling you that you're an asshole. I'm telling you that we all behave like assholes sometimes. And it's a big problem for us as well as for the people around us. And here's my story, when I acted like a jerk, what's yours? And people, that kind of self-awareness, sometimes people talk about inflicted insight like it's some kind of burden, but usually that kind of self-awareness makes people feel lighter. They're like, "Ah, now I know what's wrong and now I know what I can do about it."

**Lenny** (01:01:14):
Yeah, I've definitely noticed that about your stories. They always are you making the mistake, which I think is very disarming.

**Kim Scott** (01:01:20):
We all make mistakes.

**Lenny** (01:01:22):
Yeah. Maybe the extreme of this obnoxious aggressiveness is Bridgewater. Their whole approach is like theirs.

**Kim Scott** (01:01:31):
Oh my gosh. Did you read the book The Fund?

**Lenny** (01:01:34):
No, not yet.

**Kim Scott** (01:01:35):
You must read it. It's all about Bridgewater. I always thought it was problematic. I had no idea just how problematic it is. Put that book in the show notes one of the best business books I've read in the last decade.

**Lenny** (01:01:48):
Wow, that is high praise. Yes, I will read that. And so I guess for people that aren't familiar, like Bridgewater, they encourage, they have a system called Dots where they tell people, you must give hard critical feedback after every meeting, publicly.

**Kim Scott** (01:02:01):
Not after the meeting, in the meeting, publicly. And it's recorded on, it was, I think they changed it since, but it was recorded for posterity on video. And sometimes, in fact, true story, shortly after I left Google, I was approached to work at Bridgewater in a management capacity, not in an investment capacity. And so I called someone I knew who worked there and he said, "Let me give you an anecdote." He said, "The other day there was a meeting and there was a woman who in the meeting who had made a mistake and everybody just piled on. The criticism was very personal. There was no core about the criticism. It was like, these are your personality attributes that make you a useless human being. Kind of terrible feedback until she started to cry and the whole meeting was recorded and then they emailed a recording of the meeting out to the whole company, including all the people who were not in the meeting saying, this is an example of how to have..." So I would say that is deep, dark, obnoxious aggression. That is not radical candor. That is horrible.

**Lenny** (01:03:24):
So it's safe to say you're not a fan of that approach?

**Kim Scott** (01:03:26):
No. In fact, I did an analysis of Dalio's book Principles and it's like a, I don't know, 3 or 400 page book. And there were I think four or five pages about caring about people. There's very low care personally.

**Lenny** (01:03:44):
I imagine many people see that, they see Elon, they see Steve Jobs, and the perception is they're very challenge directly people, they're not clearly care about you people, but they're very successful. What do you say to people that are like, but it works. Why wouldn't I be that if that's the way I want to do it?

**Kim Scott** (01:04:00):
Well, first of all, I would not put Steve Jobs in the same category as Ray Dalio and Elon Musk. I mean, Steve Jobs could be obnoxiously aggressive, but mostly I would say he built such good relationships with his direct reports that when he got cancer, Tim Cook offered to give him half his liver. And I don't know of a word to describe that other than love. These were real human relationships. When I worked at Apple, you could see Steve and Johnny talking. You could tell these people cared about each other. Now, radical candor gets measured not at the speaker's mouth, but at the listener's ear. And I think that Steve had built a team around him of people who didn't mind rather what other people would consider obnoxious aggression. But I think in the context of their relationship, it was understood as care.

**Kim Scott** (01:05:03):
I'll give you an example of that from my own career, not that I am comparing myself to Steve Jobs, I think I'm a much gentler person, but sometimes I develop relationships with people. And part of that relationship is that we push each other pretty hard. So there was a person who I had worked with for a long time, for many years. He had followed me from one company to another, and we were localizing a product and he kept conflating Slovakia and Slovenia, and I corrected him once. I corrected him twice the third time, I was like, did Slovakia, not Slovenia dumb ass.

**Kim Scott** (01:05:44):
And he started laughing, and that was fine in the context of our relationship, but I realized that the people around me, I was silencing them. They were like, "Oh my gosh, I don't want to make a mistake. Kim's going to call me a dumb ass." So I had to pause and say, "Look, I respect this person enormously, and I like this person enormously. We work very well together." And so I think that sometimes people have relationships with others and they have those relationships in public and other people misinterpret those relationships.

**Kim Scott** (01:06:19):
Steve Jobs was not perfect. He made all kinds of mistakes, but he was no Ray Dalio or Elon Musk, who I would say make far more and worse and more egregious mistakes. And I think you're raising a really important point. You're raising a point, which is that there's this false dichotomy. In fact, the new biography of Elon Musk falls into this category. I like Walter Isaacson's work a lot, but he falls prey to this in his biography of Elon Musk, which is there's this notion that we have to choose between being a total jerk but really competent or really nice but incompetent. And those are not our two choices. That's the whole point of radical candor is that there's this other way that works better and doesn't hurt people.

**Lenny** (01:07:13):
I think that's the key takeaway there is you can be even more successful if you lean into the care deeply. In theory, they could have gotten more out of their people if they made it clear they really care about them.

**Kim Scott** (01:07:26):
And there's plenty of counter examples of incredibly successful people who are very caring leaders, and it's not as much fun to tell stories about that. And so we don't as often.

**Lenny** (01:07:40):
Along the same lines, there's someone that you worked with that suggested I ask you about investing in your authentic leadership style, Melissa Tan. I don't know if you remember her.

**Kim Scott** (01:07:50):
Yes.

**Lenny** (01:07:51):
Okay, great. And she was on the podcast in the past, and she just said how when she met you, she was a very people-pleasery person and just wanted to be like, and you helped her develop her natural leadership style. Can you just talk about what you suggest to people to figure this out and how to find that for yourself?

**Kim Scott** (01:08:06):
I mean, I wonder what Melissa would say, but my memory of conversations with her, and this is an issue that I talk about a lot because a people pleaser too. I grew up in the South and I'm a woman. I was not brought up to challenge directly. That was not part of the culture that I was brought up in. I was brought up to be polite but also brought up to be kind. And for me, the thing that is most important to hang on to is that fundamental kindness and to realize that it's actually unkind not to say the thing. And so that is part of the reason why I encourage people. I tell the Bob story so often and I encourage other leaders who I work with to think about what their Bob story is that you realize it's not nice in the long run.

**Kim Scott** (01:09:00):
It's unkind in the long run, not to tell someone if they're making a mistake. There's nothing nice about that in the long run. And so that I think at least for me, that's been helpful. And then another thing that is helpful is again, to get others focused, to focus not on pleasing people, but on doing the right thing for those people, on truly caring about those people more than you care about your own discomfort in the moment. And that is something that is easier for people to do than just to challenge directly. I think in many ways it's about what is getting in the way. That's why I call it ruinism. Empathy is a good thing, but sometimes empathy can paralyze at least me because I'm so acutely aware of how what I'm going to say might impact the other person, might hurt their feelings that I don't say it.

**Kim Scott** (01:10:01):
And so when I push myself to be, and you can call it compassionate candor if you like that better than radical candor. But when I push myself not to feel so acutely what I think the other person might feel, and by the way, I could be wrong about what I think the other person might often, they're like, it's no big deal. They're like, oh, thank you for letting me know. But when I can let go of that and think about the other person and what I care about and what they care about for their future, going back to your point, if you know that it's really important for someone to get promoted and they won't get promoted if they keep talking to people in a particular way, then you're focused on what they want. That is really helpful to move past that.

**Lenny** (01:10:47):
Just a few more questions before we wrap up. Your book sold something like half a million copies.

**Kim Scott** (01:10:47):
A million now.

**Lenny** (01:11:00):
A million copies.

**Kim Scott** (01:11:00):
Million copies. Million in 23 languages. Yes.

**Lenny** (01:11:00):
23 languages. I had a stat of 20 languages. Jesus Christ. So a lot of people have read it, a lot of people have been using it. What's something that people often just get wrong that super frustrates you about the system, the recommendations that you just wish people come on, here's what I really wanted to say, or here's what you should change.

**Kim Scott** (01:11:17):
There's two things. I mean, as I mentioned earlier, when you write about a book about feedback, you're going to get a lot of it. One is this, in the spirit of Radical Candor and then the person acts like a jerk. That is not the spirit of Radical Candor. That is the spirit of obnoxious aggression. But shortly after the book came out, I was giving a talk at a tech company in San Francisco and I got some feedback from the CEO of that company that was so impactful that it caused me to write my next book, which is called Radical Respect. And in many ways, Radical Respect is kind of the prequel to Radical Candor because if you don't respect the other person, it's impossible to care about them and you're not going to bother challenging them directly. So what happened in this meeting? I walked in, I was really excited to give this talk.

**Kim Scott** (01:12:04):
The CEO had been a colleague of mine for the better part of a decade. She's a person I like and respect enormously, and she's one of too few black women CEOs in tech or in any other sector. And when I finished giving the talk, she pulled me aside and she said, "Kim, I'm excited to roll out Radical Candor. I think it's really going to help me build the kind of career I want." But she said, "I got to tell you, it's much harder for me to roll it out than it is for you." And she went on to explain to me that as soon as she would offer folks even the most gentle, compassionate criticism, they would call her an angry black woman. And I knew this was true as soon as she said it, and I knew how unfair it was because she's like one of the most even keeled, cheerful people I've ever worked with.

**Kim Scott** (01:12:49):
And I realized a bunch of things at the same time when she told me that, the first was that I had not been the kind of colleague that I aspire to be, that I imagined myself to be. I had failed even to notice the extent to which she had to show up unfailingly, cheerful and pleasant in every meeting we had ever been in together even though she had what to be ticked off about as we all do at work. So I had failed to be an upstander, a good colleague. The second thing I realized was that I had also failed to acknowledge when I was experiencing different versions of bias, prejudice and bullying. And I think part of the reason it's kind of hard for the author of a book called Radical Candor to admit she was in denial. But I had been in denial about a bunch of experiences I had had in the workplace.

**Kim Scott** (01:13:41):
I had pretended that a whole host of things were not happening, that were in fact happening. And I think part of the reason why I did that was that I never wanted to think of myself as a victim, but even less than wanting to think of myself as a victim did I want to think of myself as the culprit. So I'd been even more deeply in denial about the times that I had said or done things that hurt other people who I worked with, said or done things that were biased or worse. I had bullied people before. And by the way, when you become a leader, you're much more prone to bullying even if you don't think of yourself as a bully, which I certainly don't think of myself as a bully, but that doesn't mean I never bullied anyone. And then the last thing I realized was that as a leader, I imagined that I was creating these BS free zones, but I had allowed all manner of BS to pass. So that was what prompted me to write the next book, Radical Respect, which you can pre-order right now and please do.

**Lenny** (01:14:41):
That was my next question. Talk more about this book. What is it about? Where people find it?

**Kim Scott** (01:14:46):
Radical Respect comes out in May. You can pre-order it now. Anywhere you buy books, at your local independent bookstore, I'm speaking at a conference of independent bookstore owners soon you can pre-order it on Amazon or Barnes Noble or anywhere else you buy buy books.

**Lenny** (01:15:05):
And who would you say it's most for?

**Kim Scott** (01:15:08):
So there are chapters in that book about things leaders can do. There are chapters in the book about things you can do if you're harmed by bias, prejudice, or bullying. There are chapters in the book about how to be a great upstander, how to be a better colleague, and there are chapters in the book about how to become part of the solution, not part of the problem when you're the culprit. And I think we all find ourselves in all four of those roles at different moments in time, and I don't think there's any one group who can solve this problem. Everyone is responsible for creating a more respectful work environment.

**Lenny** (01:15:48):
Awesome. We'll link to that in the show notes.

**Kim Scott** (01:15:50):
Amazing.

**Lenny** (01:15:51):
To leave people with a very tactical next step. What's one thing they could do this week today to get better at Radical Candor, to start building that muscle?

**Kim Scott** (01:16:00):
I would love it if everyone would write down their go-to question what are the words that will come out of your mouth and practice it. Practice it in front of the mirror and then practice it with a friend and refine it. Just figure out what, because it is uncomfortable to solicit feedback from others. They don't want to give it to you and you don't really want to hear it. So if everybody can write down their go-to question and then put five minutes in your calendar of someone you're going to ask that question of.

**Lenny** (01:16:31):
And that calendar entry, I was going to come back to it actually. So you do the one-on-one agenda, adding the question, the calendar entry is for people you don't have a one-on-one with, pick someone that you're going to ask that you're not meeting with regularly.

**Kim Scott** (01:16:42):
Absolutely. Or add it to the bottom of your next one-on-one agenda. That's fair too. Either one.

**Lenny** (01:16:44):
Amazing. Kim, is there anything else you want to leave folks with before we get to our very exciting lightning round?

**Kim Scott** (01:16:52):
I think just remember, you do not have to choose between being successful and being a jerk. You can be a successful kind person.

**Lenny** (01:17:00):
Oh, I love that. Amazing. Okay, well with that, we've reached a very exciting lightning round. Are you ready?

**Kim Scott** (01:17:07):
I'm ready.

**Lenny** (01:17:08):
What are two or three books you've recommended most to other people? You've already mentioned a few but what do you want to share?

**Kim Scott** (01:17:14):
Yes, I've mentioned a couple. Please do buy Radical Respect, I believe that the more novels people read, the better. People often ask me, what can I do to move up on the care personally dimension of Radical Candor and read more novels? This is the best way I know of to build compassion for other people, to understand the emotional signals that might be coming at you. I mean, some of my favorite novels are Middlemarch. I try to reread that all the time. Anything that Toni Morrison wrote, the Bluest Eye is one of my favorite, but also Song of Solomon. It just such a brilliant writer and will help you enter into the lives of people that you haven't entered into. I think that Orlando by Virginia Woolf is another one of my favorites. And Robertson Davies, the Deptford Trilogy is an incredible set of novels to read. I'm cheating now and giving you three.

**Lenny** (01:18:27):
The more the merrier.

**Kim Scott** (01:18:27):
Yes, Alice Walker, the Color Purple is another one of my very favorite books, so I recommend reading more novels.

**Lenny** (01:18:34):
I love this leaning into fiction that doesn't come up often on this podcast, so this is great. What is a favorite recent movie or TV show that you really enjoyed?

**Kim Scott** (01:18:47):
I watched all 19 seasons of Grey's Anatomy with my daughter during and after COVID. That was really fun.

**Lenny** (01:18:55):
Actually. I did the same thing with my wife. We didn't do all the seasons, but we watched a lot of Grey's Anatomy.

**Kim Scott** (01:18:59):
We watched every single one. It's still coming out.

**Lenny** (01:19:04):
Yeah, it's funny to see which characters continue and which I die off, leave.

**Kim Scott** (01:19:07):
Yeah, exactly.

**Lenny** (01:19:09):
Oh man. Okay. Funny

**Kim Scott** (01:19:10):
And Shonda Rhimes, I mean, watch her TED Talk, amazing person.

**Lenny** (01:19:14):
All right, we'll link to that in the show notes. Do you have a favorite interview question that you like to ask when you're interviewing people that might be helpful to folks interviewing?

**Kim Scott** (01:19:22):
The question that I like to ask is just tell me the story of your career. And I know that's kind of, maybe it's a hard, it seems like a softball, but it's actually can be unfairly hard or not. I don't know, unfairly hard, but I always learn a lot about people from how they tell the story of their life and their career. And then what I try to do is they'll say a couple of things that really interest me and I sort of double-click down into the details of a couple of aspects. I love people's life stories, so that makes it a more fun conversation for me. Often people like talking about themselves so it's not too painful for them, but you also learn all kinds of unexpected things.

**Lenny** (01:20:13):
And is there anything you're looking for in an answer that's like, this is a good person to hire or is it mostly information? I'm just gathering a lot of background.

**Kim Scott** (01:20:22):
I find that I learn how the person approaches setbacks from a story, from the way they tell a story. I learn whether a person is able to identify mistakes they made. I mean, if you say, "Tell me the story of your career," if there's not a couple of mistakes in there, I also find that when they talk about accomplishments and then I double click on it, I learn a lot about what a person really did. Sometimes a person will claim credit for something that just happened that they had very little to actually to do with, and I learn about very often. I find that a good way to learn about people's skills and depth of knowledge.

**Lenny** (01:21:10):
Is there a favorite product you've recently discovered that you really like?

**Kim Scott** (01:21:14):
Yes. I love my new it's called Attitude, and they're shampoo bars and conditioner bars, so it comes in cardboard, wrapped in paper. There's no plastic. It's much more environmentally friendly, and I have long hair. It gets very tingly and the conditioner works, so I recommend.

**Lenny** (01:21:35):
Very unique suggestion. Is there a favorite motto that you often repeat to yourself, share with people, find useful to come back to in work or in life?

**Kim Scott** (01:21:46):
"It's not mean. It's clear." This is something someone told me on the streets of Manhattan. It's actually the origin story of Radical Candor. I was walking my dog, almost got hit by a cab, and this man, a perfect stranger, looked at me and he said, "I can tell you love that dog." That was all he had to do to move up on the care personally dimension, but he says, "You're going to kill that dog if you don't teach her to sit." And he pointed at the ground this kind of harsh gesture. He said, "Sit." The dog sat, had no idea she even knew what that meant. And I kind of looked up at him in amazement and he said, "It's not mean. It's clear." And then the light changed and he walked off leaving me with words to live by. So I think about that stranger all the time.

**Lenny** (01:22:30):
Such a good story. Final question. I read online that you started a diamond cutting factory in Moscow at some point in your life. Can you please explain this part of your life?

**Kim Scott** (01:22:41):
Yes. So I studied Russian literature in college, very practical major. And then I moved to what was then the Soviet Union in 1990 when I graduated from college, and I wound up taking a job with, first of all, I was with an investment company and then they pulled out of Russia and put the money in China. And so I wanted to stay in Russia and through a friend of a friend, I got a job working for this diamond company called Lazare Kaplan, new York-based diamond company, and they were trying to figure out what they should do in Russia. And I found out there was an opportunity to start this diamond cutting factory. And it was actually my first management job because I had to hire these diamond cutters and I had to hire them away from these Russian diamond cutting factories and I knew nothing about management or business or anything.

**Kim Scott** (01:23:44):
I'd studied Russian literature. I knew a lot about Dostoyevsky, so I thought it was going to be easy though. I was like, well, the ruble is collapsing. I'm going to pay them in dollars. Of course they'll come work for me. But they didn't take the job right away. To my surprise, they wanted to have a picnic. And at the picnic we brought a bottle of vodka, and there's a rule in Russia, if you open a bottle, you got to finish the bottle.

**Kim Scott** (01:24:07):
So by the end of the bottle of vodka, I realized that what I could offer that the state could not offer them was to give a damn about them. They wanted to know that I would be a manager who would get them out of Russia if things went sideways there. And as you can imagine, I've been thinking a lot about, they were all men, about these men because I haven't been able to get them out. And I'm devastated by what Russia has done to Ukraine, but that was the moment when I realized that management really matters, and that to be good at it, you have to care about other people. And that was what made it interesting to me.

**Lenny** (01:24:53):
Man, that is a heavy first job as a manager.

**Kim Scott** (01:24:56):
Yeah. Yes, it was.

**Lenny** (01:24:58):
Wow, Kim, this was awesome. I think we're going to help a lot of people become better leaders. I think we're going to help a lot of companies change their culture. I'm so honored that you agreed to do this. Two final questions. Where can folks find you online if they want to follow up and learn more about your stuff? And then two, how can listeners be helpful to you?

**Kim Scott** (01:25:18):
Radicalcandor.com is our website, and I'm not much on Twitter slash X anymore, but you can find us. We do a lot of posting on LinkedIn. I think that the thing that people can help me do is to send us a note. You can also email us radicalcandor@radicalcandor.com and let us know what could we do in podcasts like this or in our materials? What could we do that would make it easier for you to put these ideas into practice? Because Radical Candor is, it's about behavior change, and it sounds easy, but it's really hard, and we're always trying to figure out how to help people walk the talk here.

**Lenny** (01:26:02):
I think doing this podcast is going to make a dent in that goal.

**Kim Scott** (01:26:05):
Oh, good.

**Lenny** (01:26:06):
Kim, thank you so much for being here.

**Kim Scott** (01:26:08):
Thank you. I really enjoyed it.

**Lenny** (01:26:11):
Same. Bye everyone.

**Kim Scott** (01:26:12):
Take care everyone.

**Lenny** (01:26:15):
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 lenny'spodcasts.com. See you in the next episode.

---

## [19/24] Failure

**Lenny** (00:00:02):
Today we've got another very special compilation episode. Something I've been pulling on more and more with the podcast and the newsletter, in case you've noticed, is failure. Normally I spend a lot of time researching how the best companies and the best product leaders operate, but you can learn a lot and often a lot more from failure. And so what we've done with this episode is we've looked at all of the past episodes we've done and pulled out all the most interesting and insightful stories of failure and turned it into this very focused episode on failure. I hope that you find this useful and interesting. Let us know what you think in the comments on YouTube or on lennysnewsletter.com, or just let me know on Twitter. If you like this, we'll keep doing this. If not, we'll, probably not. Either way, I hope you enjoy. Before we dive in, here is a short word from our wonderful sponsors.

**Katie Dill** (00:03:42):
I'm happy to talk about it because frankly, it was the biggest learning experience of my leadership career, or at least that happened in one moment, and it happened in my early days at Airbnb. So I was hired to take on the experience design organization, that's basically the product design team, which was 10 people at the time.

**Katie Dill** (00:04:02):
And so they had been reporting directly to one of the founders and they were going to start reporting to me. And during my interview process, I learned a lot about what was working and what wasn't working and some of the trials and tribulations with the design organization and its collaboration with others. So it seemed like there was room for improvement in how engineering and product management and design all work together. And there was also really low engagement scores in the design team.

And so I came in ready to go and excited to try to help make some change based on all the things that I had learned from various leaders and people across the company. And I came in swinging ready to go, and then about a month into my time there, I got a meeting on my calendar. Thursday 8:30 AM, was an hour and a half with half of the design team, so that was five people, and our HR partner.

**Lenny** (00:05:00):
Oh, no. That's never a good sign.

**Katie Dill** (00:05:01):
Usually it's [inaudible 00:05:01]. Yeah. And I remember this so vividly. I remember walking into the office and all the rooms in Airbnb's office are very unique spaces that look like Airbnbs, but of course this was the one room with all white walls and just a gray flat rectangle table. And I walked into the room and there were five of them seated around the table and they had a pack of papers in front of them, and they went on taking turns quietly reading from the papers all the things that they saw that I was doing wrong and all the things that they didn't like about me. And it was a really hard moment there. I went through all the usual stages of grief when one hears feedback, which is just immediate want to respond to be like, "Oh, well there was a good reason for that." And, "That's not how it actually was," and, "This is why I did that."

**Katie Dill** (00:05:59):
But luckily I had, thank goodness, I had the sense to just listen and not respond in that way. Clearly, what they were telling me is that that was one of the things that was missing. And so I heard them out and took it all in. And regardless of each individual thing, what was very clear was that the missing piece, the theme that was across all of that is that I hadn't earned their trust. So whether how right or how wrong what I was doing was is the key piece is that I wasn't bringing the team along with me. They had no idea that they could trust in what I was trying to build and what I was trying to shape and that I cared about them and that I had their best interest and shared goals at heart. And that was absolutely my fault.

**Katie Dill** (00:06:45):
And in retrospect, as hard as that was, I'm very grateful and very amazed that they could come together and share that with me. It can be hard to bring feedback forward like that.

**Katie Dill** (00:06:57):
And so it was an extremely valuable learning experience and I took from that to then immediately shift how I was operating. And really a key part in building trust was to listen, to hear out what the individuals on the team were setting out to do, what they cared about, what motivated them. And so I started to make pretty fast change and still moving in the direction that was necessary for the org to make the really large impact in how we were operating, but bringing folks along with me. You can inflict change on people, but if you want to do it with them, really trust is the key element there.

**Katie Dill** (00:07:37):
And then a couple of months later, we had the best engagement scores in the company. So it actually, it did objectively improve the situation and since then taken that on into next steps in other companies that I've joined and just think about instead of coming in swinging, come in listening, so that you can really set out to make change that actually has true positive impact on the folks around you and you bring along with you.

**Lenny** (00:08:04):
Next up, Paul Adams, chief product Officer at Intercom, sharing the nightmare experience of freezing on stage in front of thousands of people, having to walk off stage, and then people hearing him curse because the mic was still on, and then how he recovered. Plus a few stories of building some of Google's most infamous product failures.

**Paul Adams** (00:08:24):
Some things have happened in work, are very memorable at the time and they don't really scar you. This goes in the book that have scarred for life. Yeah, let's go long story short, I was at Facebook just over a decade ago, loved it at the time. I think it was a great place to be at the time. And basically San Francisco, I did a lot of talks for Facebook internally and externally. Facebook had a keynote slot, always have a keynote slot at Cannes, the world's biggest advertising festival. And the year prior, Zuck had been interviewed. He was the speaker, he'd been interviewed, gotten a hard time on privacy. It didn't go well, as well as they'd hoped.

**Paul Adams** (00:09:00):
So the next year they asked me to do it, maybe it was the Irish accent that made the offer come my way. And yeah, I got out into front the stage of the world's biggest advertising stage, and I'd say I was like three or four minutes into the talk, a talk I'd given, a very similar talk that I'd given lots of times.

**Paul Adams** (00:09:19):
And I just froze. I couldn't remember what I was supposed to say. It was the first ever time in my life I'd rehearsed a talk word for word. Usually, I have talking points and I'd ad lib and things get mixed around and it's kind of informal. This was media trained, do not say the wrong thing kind of talk. And I just could not remember what to say. I had some version of a panic attack, walked off stage, I was still mic'd up, cursed. I was laughing. I was like, "Geez, are they laughing at me. Oh my God, this is..." But I can manage to turn it around, I walked back out, I'd kind of been disarmed internally in my head, and the rest of it went well. And I was famous that night out in Cannes afterwards on whatever the seafront, it's just like rosé everywhere. I was famous and infamous for my performance.

**Lenny** (00:10:13):
I feel like you lived the worst nightmare that everybody has when they're thinking about giving a talk. And I think what's interesting is you survived, and I think that's a really interesting lesson is you could freeze in front of thousands of people, walk off stage, and then it works out okay.

**Paul Adams** (00:10:30):
And it all happened organically, I guess, or very naturally. But yeah, ever since then, every time I walk out onto a conference talk stage, still today, I ask myself, I have this tiny doubt in the back of my head. It's never happened since. But yeah, I think you have to go with it with these things. When life kind of throws you these whatever curve balls you have got to kind of adapt, and it's not that big a deal. None of these things are that big a deal. At the end of the day you kind of move on, live and learn. Yeah, but I still hope it doesn't happen again.

**Lenny** (00:11:02):
I also hate public speaking and I always fear this is exactly what's going to happen to me. And so I think this is nice to hear that even when the worst possible thing basically happens, things can survive.

**Paul Adams** (00:11:13):
You can turn it around. Yeah.

**Lenny** (00:11:15):
A second area I wanted to hear from is your time at Google and there's a couple products you worked on at Google. Both of them were not what you'd call big successes, and then there's kind of a transition to Facebook, which was also kind messy. Can you just share a couple stories from that time?

**Paul Adams** (00:11:31):
Yeah. Similar to the walking off stage thing, you live and learn, and I was at Google for four years. I was at Facebook for two and a half years or so. At Google I worked on a lot of failed social projects like you mentioned, Google Buzz, Google, and later Google+. I think a lot of the motivation for those projects came from a place of fear. It didn't come from a place of let's make a great product for people,.let's really understand the things people struggle with when communicating with family and friends. That's really, really try and create something wonderful. It came from a place of fear.

**Paul Adams** (00:12:10):
And so during those times I learned I think how not to lead in places. And by the way, I should say at the time in Google, there was other things happening that were amazing, like Google building Google Maps. Incredible product, one of my favorite products. I think one of the best products ever made. They were building Android. I was in the mobile team, in the mobile apps team at the time that Android came out. So incredibly good product. So I just happened to be in the social side, which wasn't as good.

**Paul Adams** (00:12:37):
And yeah, Google Buzz was kind of a privacy disaster, and Google+ similar. And so kind of halfway through I kind of published research about groups, and I've done a ton of research. An interesting kind of side note there is at the time I asked, I was working in the research, in the US team as a researcher, I was being asked to do a lot of tactical research, like usability study type stuff, like can people use these products? And I ended up doing a lot of formative research as well in the same session. So I'd kind of say to the team like, "Hey, I'll do the research, I'll answer your questions, but also I'm going to do this other thing, and I'm going to take 20 minutes doing that."

**Paul Adams** (00:13:16):
And so what we used to do is, what I used to do with people was map out their social network, all the people in it, their family, their friends, how they communicate. We'd map on all the channels, we'd talk about what worked well, what didn't. And we did this with dozens and dozens of people over the course of maybe 18 months. And the same pattern emerged every single time, which was people need way better ways to communicate with small groups of family and friends. And I kind of look back now and go like WhatsApp, or it maybe iMessage if everyone's on Apple, but really obvious in hindsight, but at the time, not obvious. And so we kind of tried to build a product around that called Google+, but again, it was kind of came from the wrong place. And so halfway through the research that I've done, all this research had been made public through a conference talk and Zuck and Facebook noticed, got in touch, one thing led to another and I left and joined Facebook, which was an amazing thing for me, personally.

**Paul Adams** (00:14:13):
Facebook was amazing, an amazing place at the time and exciting. And they were trying to do things for the other reasons, the kind of good reasons, like, "Hey, let's build an amazing product for people."

**Lenny** (00:14:22):
And this was during Google+ being built? You basically shifted.

**Paul Adams** (00:14:26):
Yeah, midway, I'm stressed to even telling you about it. The project hadn't been launched. It was still under wraps. It was highly confidential. Google had done a lot of things at the time that were the first for them. I don't know if they've done them since, but things like everyone worked in Google+ was sent to a different building. That building had a different key card. If you didn't work on Google+, you could not get in. All sorts of counter-cultural things at the time. And as a result, there was a lot of antagonism internally for Google+. And so when I left in the middle of the project, leaving with all of the plans in my head to the enemy, some people saw me as a traitor, understandably. Other people thought I was enlightened. It depends on who you talked to, but it was the right thing for me to do. But at the time it was a hard thing to do.

**Lenny** (00:15:17):
I know there's also a lot of scrutiny in what you took with you and the process.

**Paul Adams** (00:15:23):
When I left, Google kind of assumed that I was one of the spies. I was quarantined when I told them I was leaving. They forensically analyzed my laptop, all sorts of stuff like that. So it was pretty intense. Looking back, I can understand why that happened, but the root cause for me is that the project has been run from a place of fear, competitive fear, which I don't think leads to good things.

**Lenny** (00:15:53):
So one of the themes through the stories you just shared is, let's say failure is... I don't want to make it that harsh, but just things not working out. And I'm curious as a product leader, how important you think that is for people to go through if you think that's something that is almost a good thing. And I guess just is there anything there that you find helpful as a coach, as a mentor, as someone, to people that are trying to become basically you?

**Paul Adams** (00:16:19):
It very, very... It still is. It still is. I've personally failed so many times. There are two stories and the Google one is long deep tentacles. There are two stories. I've failed a ton of times like at Intercom. I remember when I was at Facebook, I was very happy and I knew I wanted to [inaudible 00:16:39] the co-founders of Intercom and they're trying to persuade me to join Intercom. It was like 10 person company at the time. But Owen said something to me at that time, which has stuck with me ever since. He said, "At Facebook you can design the product, but at Intercom you can design the company." And that was extremely appealing to me, a great pitch. He's like, "Just design the company with us that you want to work in."

**Paul Adams** (00:17:03):
And so part of that was a company that embraces failure that says it's okay to try things. I'm a big believer in big bets, higher risk, higher reward. I don't get as excited about incremental things. Now I haven't said that, there's of course a place for that too, especially as companies get bigger. But I get excited about big bets and if you make big bets, you're going to get a lot of it wrong. So a lot of the principles that we built here at Intercom, on building software, we have a principle called ship to learn, and we've actually changed it since, still on the wall here. Ship fast, ship early, ship often is what it says now. Used to say ship to learn. Ship fast, ship early, ship often. It's like in that idea is the idea of failure. It's not going to go right, and it's going to go wrong more often than not. But if you ship early and fast and learn fast, you can change fast, and you can improve fast. And that's the kind of culture that we as much as possible try to embrace and teach people. But it's much easier said than done.

**Lenny** (00:18:05):
Especially when you're in the moment. Like Go damn, it, everything's going to fall apart. I really messed this one up.

**Paul Adams** (00:18:09):
Yeah. And there's a trade-off with quality that people really struggle with. We've high standards of ourselves. A lot of Intercom comes from a design founder background. We value the craft a lot. We never want to be embarrassed by what we ship. So there's a real tension there, a real trade-off where people have these high standards, which we encourage and we encourage them to ship fast and learn and make mistakes. It's a constant kind of tension that we're navigating.

**Lenny** (00:18:38):
Next up, we have Tom Conrad, who is chief product officer at Quibi and engineering leader at Pets.com. Two of the most memorable failures in product history, sharing his lessons from those wild experiences. Tom is currently CEO of Zero Longevity Science, which is a killer business and an app in case you haven't come across it. I'd definitely check it out. Here's Tom.

**Lenny** (00:19:00):
You brought up this phrase of notable disasters and I want to talk about that. You've worked at two of the most famous notable disasters of product companies, Pets.com and Quibi. I think it's really rare someone sees the inside of so much hype and then such a fall at a company. And so I just want to spend some time in these two areas, and maybe the way to set it up is just what's a lesson you took away from each of these two experiences that you've taken with you to future work, and maybe advice you share with people?

**Tom Conrad** (00:19:30):
Probably the biggest lesson, it's not really about the specifics of the business. The biggest lesson really is these things make you better. In some instances, actually I think in both instances, they became kind of dominoes that opened doors for me in my own ambition and my own sort of professional life that maybe just wouldn't have opened at all if I hadn't gone to those companies and learned those things and had those experiences. And frankly, even in the case of Pets.com, like even the high profile nature of it, I could have worked at one of a thousand e-commerce websites in 1999. And when I went on to some subsequent job interview or something and talked about my experience, I had never heard of the thing that you worked on, but everybody certainly heard about Pets.com.

**Tom Conrad** (00:20:17):
It's a pretty funny example too of how some struggles are timeless. That was 23, 24 years ago now. And while as a leadership team, we made, I'm sure, all kinds of mistakes. One of the things that happened was that there were three kind of over-funded pet e-commerce sites, and we all raised in excess of $50 million, which is a tremendous amount of money now. It was a tremendous amount of money then, and we all thought it was a zero-sum game and that we as one player started to spend on promotion or to spend irrationally on national broadcast television advertising. We all did, and it became this kind of unwinnable arms race. So there is, I think a fundamental lesson about having an excess of investment can be its own albatross or lead you to make decisions that maybe would be unwise.

**Tom Conrad** (00:21:28):
And then of course, it's just like timing is really important. Chewy is a online pet store. It's worth $9 billion today. They were a private company and bought by PetSmart and then spun back out. But when they were bought by PetSmart, they were acquired for 3 billion, biggest e-commerce acquisition of all time. And while I think it's probably unfair to compare, Chewy who executed exceptionally well over a decade, grew their business brick by brick, and turned it into something really remarkable. To Pets.com, which was in a very, very different moment in time and tried to go to market in a really different way.

**Tom Conrad** (00:22:07):
The critique that is often leveled at Pets.com or at least at the time, was like, this is just a stupid business. They're shipping dog food around. You could never make that work, and that's just wrong. You absolutely can make it work. Probably can't make it work when 80% of the country on the internet is still on dial up. It's really, really early.

**Lenny** (00:22:25):
I saw a stat I think you shared somewhere that you took Pets.com from nothing, to a public company, to completely out of business in 19 months.

**Tom Conrad** (00:22:33):
Yeah, yeah, I think that's about right. The other thing that's forgotten in the tale is that we actually didn't go bankrupt. We shut the company down and returned the remaining balance to the investors, which no public company had ever done before. And the leadership team just reached the conclusion that given the way market conditions had evolved, there was just no way we were going to be able to get more capital into the company. And it was a company that required additional investment to get to profitability. And so it was better to wind down early, take the money that we had in the bank and get it back to investors than to just spend every last penny on what was sort of a fruitless attempt to salvage it.

**Lenny** (00:23:22):
Did not know that. Let's talk about Quibi. What went wrong there? Do you think there was a path to Quibi having worked out? Any big lessons that you took away from that experience that you bring with you?

**Tom Conrad** (00:23:33):
The kind of miraculous thing about Quibi for me was it relit my enthusiasm for the industry for doing this work. I had left in, I think it was December of 2018, and I thought that maybe I was just done making software. I had done it for a really long time, I had done it for twenty-five years or something. And I had changed a lot. The industry had changed a lot, and I thought maybe I just didn't have the same passion for it that I had a decade before. And it also seemed like maybe it'd be fun to have another chapter of my life that was just completely different. And I had a whole list of things that I thought I might want to do. They were really, they were kind of ridiculous. Maybe I want to be a pastry chef. Maybe I want to be a landscape photographer. Maybe I want to learn to make bad music to put up on SoundCloud or something. Really the only thing they had in common were they were all things that I knew nothing about. People would be like, "Oh, you think you might want to be a pastry chef? Do you like to bake?" And I'd be like, "No, I don't know anything about baking." "Oh, you might landscape photography. Do you take photos?" "No, I don't make photos."

**Tom Conrad** (00:24:41):
But I was kind of committed to the bit, actually to the point where when TechCrunch interviewed me about my departure from Snapchat, I was like, "I'm out. I'm going to do something else entirely." So that story is very much out there. But a few months after my last day at Snap, I got a call from Meg Whitman and Jeffrey Katzenberg who were starting up, it was called New TV at the time.

**Tom Conrad** (00:25:07):
And the pitch was, "We're going to try to take the best of mobile and Silicon Valley and Consumer Tech and sort of weld it to the best of Hollywood-style content production to build something completely bespoke and purpose-made for consumption on the phone." They were looking for both technology leadership and product leadership and wanted to know if I was interested in one or both. And I took the meeting, even though I wasn't really taking these kinds of calls from anybody. It just seemed like who's going to pass up the opportunity to have lunch with the two of them? So I listened to the pitch and politely declined and told them that I was going to be a pastry chef or something. And we kept doing that every couple of months for seven months. We'd go to lunch, they would give me an update on the progress they were making, and I would decline the invitation to get involved somehow.

**Tom Conrad** (00:26:05):
And then late in that year, I went to lunch one more time and Meg explained that they brought on someone to lead technology and they brought another person to lead product, and both of them really truly for reasons that are completely disconnected from Quibi itself, both of them had left after about six weeks. And Meg's like, "We've raised all this money, and we've told the world that we're shipping this product in about a year. We got an awful lot to do, and I really could use some help, and I would consider it a personal favor if you would come and spend just a couple of days a week helping." She's like, "I'll continue to look for someone who actually wants the job, but it'd be great if you could help me get this off the ground."

**Tom Conrad** (00:26:53):
And my wife is a freelance writer, marketing strategist and loves her life as a freelance contributor. And she's like, "You should do this. Why not? It's two days a week, it's just a few months. What's the worst thing that could happen? Maybe you'll like it." And I'm like, "No, no. Here's the thing that will happen. I won't do it two days a week. It will immediately be three days, then four days, then five days, then six days. I just know myself." And she's like, "No." She's like, "Just on Wednesday night at six o'clock, close your Quibi laptop and be like, all they're paying me for is for Tuesday and Wednesday and then open it back up on Tuesday morning. That's all you've got to do."

**Tom Conrad** (00:27:35):
Well, she's right about most things and she's wrong about this. I fell deeply into it right away, and it was just so fun to get to build a team from scratch and to design and build a product from scratch and to take advantage of all of the sort of modern software architecture stuff that had come into being over the course of the 15 years since we had started Pandora. And I'm embarrassed about some of the what happened with Quibi for sure, but I'm super grateful for the experience, because I just really fell in love with the industry again and was reminded of just how rewarding it can be to build something and to try to put it out there even if you stumble pretty mightily along the way.

**Lenny** (00:28:28):
Is there something that you took away from that experience that taught you what to try to avoid, to try to pull towards?

**Tom Conrad** (00:28:36):
I think I sort of misunderstood or misjudged companies sometimes by thinking about them really focused on the product execution. If you find an interesting problem that people care about and you solve that problem in a really beautiful, elegant, delightful way, that's 10 times better than anything else that they can get in that same space, they'll tell their friends and all the rest will take care of itself. And so that was always my ambition. Find a thing that I cared about building, do a great job building it in a delightful way, go really deep on listening to people and their feedback and iterate your way to success and breaking through that membrane that we all strive to get across, the really great word of mouth.

**Tom Conrad** (00:29:27):
But I think the thing I've come to better appreciate is that companies are also, they're kind of a math problem that describes how you take investment and pour them into the equation, and out the other side comes returns on some time horizon. And yes, there are variables in that equation that are influenced by the product that you build and all of the little details and decisions that you make about making that product great. But if the equation is fundamentally broken or a big swing in and of itself, no amount of iteration and execution can get you out of the failed outputs of the broken equation.

**Tom Conrad** (00:30:14):
And I think Quibi made a bet that you could build an entirely bespoke content library that was sufficiently scaled to get people to subscribe and retain for a couple billion dollars. It was a huge amount of money, but we made 70 shows in 18 months, which is more content than all of the major broadcast networks combined made in a single year. So it was a pretty major accomplishment. And we made a bet that we would augment those sort of episodic and serialized or Hollywood style shows with a bunch of daily content that we produce at the level of network television, nightly news, and so forth that would be an alternative to some of the sort of daily content that you might otherwise get on YouTube. And that was going to be about a third of the content spend.

**Tom Conrad** (00:31:19):
One super interesting thing that no one talks about is that all of that content was designed to be made day of or day before it aired. So there was no back catalog of it, and it was all designed to be shot in these professional studios that we built out, and it was really expensive. Like I said, it was a third of the investment we were going to make in content, almost half the investment we were going to be making content. And we launched two weeks into Covid, and we couldn't make any of that content except literally in the garages of the host's homes. And so we had this thing that was supposed to seem really set apart from YouTube that literally now was being made exactly YouTube content, which is sort of like self-produced at home with very little sort of the support infrastructure of Hollywood.

**Tom Conrad** (00:32:10):
Now you can argue, I think the content on YouTube is really, really exceptional in this category, and maybe we were never going to do better than that. But I think what was really fundamentally broken with Quibi was that the actual foundational equation of can you make enough premium content that's totally bespoke and made for the service and takes advantage of the nature of the phone, is that enough content to get people to sign up and retain, and can you do that for a couple billion dollars? And I think the answer is no. The library has to be much, much bigger and you have to have, like any company, you have to have sufficient time and energy to iterate on the content format itself. Our roadmap really wanted to innovate on the content format. And so I think part of what happened is pretty quickly it became clear that the math was just wrong. It wasn't going to take 2 billion, it was going to take six or eight or 10 billion. And the risk reward profile of betting 10 billion on the format was just more than anyone can stomach.

**Lenny** (00:33:20):
Next up, we've got Sri Batchu, former head of growth at Ramp who shares something that I've thought about ever since we had this conversation, which is this idea that when you fail, make sure you fail conclusively to make this failure an actual learning that you can build off of versus just a waste of time. Here's Sri.

**Sri Batchu** (00:33:38):
Growth experiments in my history are typically like 30%-ish success rate. So the vast majority of things that you try don't work. And so you want to create a culture where people aren't afraid to take risks and aren't afraid to fail. And for me, failure is not that you didn't drive revenue, failure is not learning. So it's really important that you learn when you fail. And so we celebrate failure as long as you're learning, and you can only learn if you've designed the right test and you failed conclusively, because otherwise I think many of us have been in situations where there's intuition that something might work and it doesn't work, and then you end up doing it over and over for years because every time a new executive or somebody else has the same idea, you try it again. And it's because you haven't been able to design the test to fail conclusively.

It's hard to do. But at the end of the day, there's only two ways to make an experiment successful. Either you have a very large M or you have a very significant treatment, which is what you're doing in the experiment itself. And in B2B, you don't usually have the luxury of large M, which you [inaudible 00:34:54] consumer.

Facebook can get [inaudible 00:34:56] in two hours. A B2B company could take two years to get to the same number of touch points. And so to counteract that, I recommend people just trying to maximize the treatment effect, which is like if you have a hypothesis that you're testing, just throw all of the possible tactics and resources that you think would move that needle because you can always cost rationalize later if it works.

**Sri Batchu** (00:35:22):
And so just maximize the treatment effect. And if with all of that it didn't work, then you can say, "Hey, we're not going to try this again because we literally did try everything that we could to test this hypothesis. And if it doesn't work in the best version, and it's expensive as it is, this is not worth spending more time on." But if it does work, great. Then you do another version of the test with half the tactics or whichever tactics you think work better or worse and you optimize over time.

**Lenny** (00:35:49):
Is there an example you could share when you did that?

**Sri Batchu** (00:35:53):
Account-based marketing is something that is very common in enterprise software where you've selected certain customers that you think are high priority and you're saying, "I want to touch them in as many nuanced ways possible to see if that drives conversion." And this is something I've seen tried many times where people do it, but they kind of do it halfway where they're like, okay, tried these three things. Conversion of the control group wasn't higher, and so we think it is not going to work. And then a new go-to-market executive comes and they have to do it again. They have to do it again. They have to do it again. It's like a very common one wherever this happens. And so when we did it at Ramp, we did exactly what I just described, which is like, let's really be thoughtful about the experiment design, both in terms of maximizing the number of people as well as maximizing the number of ways and types of ways that we're effectively touching these target customers to show the value one way or the other.

**Lenny** (00:37:03):
So what it sounds like is the hypothesis isn't like this email will have a big impact on conversion. It's like this strategy of coming after customers is what we're testing.

**Sri Batchu** (00:37:15):
That's the example there. And I think for example, if you had the... This kind of framework is more important for cross-functional, larger scale, bigger tests rather than an email modification. But we can even use it on a micro example like an email modification where you are like, "Okay, I think this particular email is underperforming because it's not talking to this part of the customer's pain point or journey or what have you." And you could just, the simplest test would be, okay, let me make some tweaks to the text and edit that, and that could be the end of that test. And if that doesn't work, you're like, "Oh, maybe those weren't the right text edits. Let me do a different text edits or whatever."

**Sri Batchu** (00:38:02):
And that's fine, that's low cost. It's not the end of the world and it's for you to be wrong there. But an alternative that you could do is like, "Oh, what are all of the things that I could change about this email in the same test?" Is it the trigger of the email? Is it the text content of the email? Is it additional personalization? Is it the design of the email? Trying to think of what are all of the various levers that you think could be wrong and put them all together to test your hypothesis of this touch point is wrong, and how do I improve that?

**Lenny** (00:38:34):
Well, obviously the downside of that is you, if it doesn't work, you don't know if it's like, oh, maybe it was this thing could have worked in the subject.

**Sri Batchu** (00:38:40):
Yeah, so there's always trade-offs on this, but what you're hoping is you've done a complete refresh where you did all the things that you thought were intuitive that should work. And if it doesn't work, then you're like, okay, maybe my hypothesis wrong. But you're right. There's always going to be a challenge if maybe the execution is wrong. And I did too many things potentially in that case.

**Lenny** (00:39:01):
Our next story is from JZ, who is a colleague of mine at Airbnb, head of product at Webflow when we recorded this episode, and this is her sharing the story of one of the biggest product misses at Airbnb.

**Lenny** (00:39:13):
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 (JZ)** (00:39:27):
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, something that you can see in your head that you want to build. And so that's the first thing I really want to like unteach in our course.

**Lenny** (00:39:50):
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 am 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** (00:40:25):
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 (JZ)** (00:40:34):
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.

**Lenny** (00:40:43):
 And this one does stand out to me. So we're working on this concept called Airbnb Plus. If you took a step back, what we're 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 we're 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 Saunders out there, and I think that as a company we're very much like, "Oh, look at this. What are we going to do in the world of managed marketplaces?"

**Lenny** (00:41:19):
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 there strategic strength? And what's in your wheelhouse? So for example, Airbnb, we weren't that strong in operations. We 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** (00:42:03):
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 (JZ)** (00:42:09):
You and I can tell it.

**Lenny** (00:42:10):
We could tell it. This could be Airbnb Plus the hidden, the 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. 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 get 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 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, and it was just not executed well?

**Jiaona Zhang (JZ)** (00:42:51):
I think there wasn't really a clear path. I think there was [inaudible 00:42:55]. Exactly. And it was more just like if you understood, again, this is my point around unit economics, there are things where I think you have magical thinking around unit economics. You're like, "Well, 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 the unit economics work right at the beginning. So that is definitely one lesson.

**Lenny** (00:43:14):
And I think the other thing is, and going back to the 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.

**Lenny** (00:43:32):
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 the, "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, right? 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 feat as opposed to doing inspection.

**Lenny** (00:44:04):
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? And so yeah, 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** (00:44:33):
Our second to last story is from Gina Gotthilf, who was an early growth leader at Duolingo. She's currently COO of Latitud, and this is her sharing a wide-ranging and important point about how everyone has both an A side and a B side to their career, and people often only share their A side. So this is Gina sharing her B side.

**Gina Gotthilf** (00:44:53):
We are very encouraged in our lives, especially professionally, to talk about our A side all the time because that's what impresses people. That's what opens doors, that's what allows us to keep growing, and it's so important. So it means that a lot of what you hear in podcasts and on stage ends up being the Instagramable version of someone or a company or a country's trajectory. It's just the highlights. And when I talk about my A side, it's very impressive. I did things like, we'll talk about, I met President Obama, I worked on the Mike Bloomberg presidential campaign. I helped Duolingo scale from three to 200 million users. I worked with Tumblr, helping them scale Latin America, Andreesen Horowitz invested in my company, etc.

**Gina Gotthilf** (00:45:34):
But between all of those highlights, there were so many B moments that get shoved under the rug because it's just easier for me and it's more impressive for others. But I really like to highlight those because I think that most of us have a lot of B moments every day, every week, every month, and every period of our lives. And it's easy to think that things aren't just not going to work out for us because we're in one of those B moments if we don't recognize them as moments.

**Lenny** (00:45:59):
I love this concept. We're going to talk as you expected about a lot of your A side stuff. Is there any example of a B side story of your life that would be interesting to share?

**Gina Gotthilf** (00:46:09):
Look, I think those are the most interesting because they're funny or ridiculous. I had a lot of B sides, and I still do. For example, I had no idea what I wanted to do. I actually wanted to be. I thought I wanted to be an actress. I either wanted to be that person in Sea World, who goes like this with a dolphin. This is before Sea World was canceled. Or I wanted to be an actress. I applied to schools. I didn't get into any Ivy League. I didn't get into any of the top schools I wanted to go to. When I got to college, I actually ended up dropping out because I got so depressed, incredibly depressed, couldn't get out of bed depressed. Ironically, I dropped out of Reed College, which is the same college that Steve Jobs dropped out of. So I was just destined for greatness. I knew it at that moment.

**Lenny** (00:46:53):
It all makes sense looking backwards, as he said.

**Gina Gotthilf** (00:46:55):
Totally. I was dropping out, being like, "Yes, this is exactly the path." No, I was miserable. I thought there was no path forward. And I finally went back and graduated. The college counselor looked at my curriculum and said, "What have you even done with your life? There's nothing to show for." And it was shocking because I was always the overachiever who wants to do the maximum curriculum and ace all of my classes and do whatever. I did three diplomas in high school, the international, the American, the Brazilian.

**Gina Gotthilf** (00:47:22):
And so that for me, I think my one learning there that has stuck with me, and I think it can work for other people too, is that it's not just about doing things that actually matter and learning. It's about being able to tell the story, and it's about understanding what other people perceive as valuable. I applied to a hundred companies. I didn't hear back from most of them. I finally got an internship at kind a tier B/C digital marketing agency in New York City because I wanted to live in New York so badly. And they forgot to apply for my visa on time. So I lost my visa and had to go back to Brazil, and then I ended up leaving that organization to go work for another one. And I won't even go into the details of the shadiness of that company that I worked for, but then they ended up laying me off. So I lost my visa again, had to go back home, found another opportunity, got fired that time. So there was just a lot of rockiness in my start that I don't think you would imagine when you see someone up on stage leading a conference for 5,000 people. That I think is important.

**Gina Gotthilf** (00:48:26):
And even when I started working for Tumblr, I was like, "This is it. I made it. This is a really interesting company. This is going to work out." That was super rocky because it was an early stage startup. So for example, they couldn't figure out how to wire money to Brazil. So I was not paid for six months. And at one point, me and my colleagues were trying to get money out of the teller to pay contractors because we had no money to pay them, and we borrowed money from people. And finally they also laid me off because they decided to sell to Yahoo.

**Gina Gotthilf** (00:48:54):
And then I had to figure out what am I going to do? No one's going to hire me. I've been fired and laid off so many times. So this is all before I started an agency to help US-based tech companies and startups grow in Latin America because I figured I was in this really great place to make that happen. And it eventually worked for, well-known companies such as Duolingo. At the time they weren't well-known. They were a tiny little startup. They didn't have an Android app. And that's how I started working with Duolingo because their head of marketing connected with someone they had worked with at Flickr and said, "I noticed Tumblr grew a lot in Brazil last year. Can you recommend a company or an agency to help?" And they said, "This girl." And I was twenty-six. And so that's how they connected me with Duolingo. And I started helping them grow in Brazil as a consultant. They were like, "This is great. Can you help us grow in Chile, Argentina?" And I was like, "Yes." They were like, "How about Mexico?" And I was like, "Yes." Did I know anything about these places, Lenny? Did I know people there? No, but you can figure it out.

**Gina Gotthilf** (00:49:51):
And then they ended up asking me to come on full time, do that across the world, Japan, China, Korea, Turkey, Spain, France, et cetera. And then to own growth, which ended up meaning communications, social media, government partnerships, anything to grow. And then eventually became an A/B testing growth engine with engineers and PMs and designers of which I knew nothing about.

**Gina Gotthilf** (00:50:15):
And even after that, I left Duolingo five years later, didn't know what to do with my life. You'd think, "Oh wow, you have it figured out now. You left Duolingo, you have the world in front of you." And I'm like, "Maybe I can finally go work for nonprofits," which is what I actually wanted to do in the first place. Tried a hand at that. Had a couple of experiences before going to work for the Mike Bloomberg campaign.

**Gina Gotthilf** (00:50:36):
Working for the Mike Bloomberg campaign is impressive. But you know what? Mike Bloomberg didn't win. He's not the president. So that was not a successful campaign if you really look at it. And yeah, Latitud seems like it's a really promising path, but there's A days and B days. So it's just a lot of that. And just staying resilient and believing in yourself and getting back on the horse when you fall on your face.

**Lenny** (00:51:00):
Amazing. That's such an important message. I think one of the threads from what you're describing, something that I think about a lot is people kind of underestimate how long their career is. There's just so much time to do stuff and for things to start to work. This going to sound really fancy, but I think Marcus Aurelius has this quote about how our life is actually very long. We just use it really badly and we just waste a lot of our time.

**Gina Gotthilf** (00:51:21):
I think you're so right, Lenny, and I love that because people are going around being like, "Life is short, life is short." But that's so true. We waste so much time. But also I think we don't recognize how much opportunity we have in front of us. And as a 26-year-old, I definitely thought my career was over. I was like, "I blew it." And looking back, it's funny.

**Lenny** (00:51:40):
Yeah, I know exactly what you mean. I spent nine years at my first job at a random company in San Diego in a startup. I was like, "What am I doing here so long?" And it turned out that was really useful for the thing I did next. And then eventually, wow, things started to really take off. So I think that's a really good lesson for people. It's just a long time. This is my fourth career. I've switched careers many times. I was an engineer then. I was a founder. Then I was a product manager, and whatever this is. Whatever you call this thing.

**Gina Gotthilf** (00:52:06):
I guess me, too. I was an operator. I was a consultant. Well, I was an employee. I was a consultant. Then I was an operator, which is a fancy way to say employee at a startup. And then now I'm a founder and a VC and an angel and whatever this is..

**Lenny** (00:52:22):
Awesome. Awesome. So I think that's a really important takeaways. Just there's a lot of time to do stuff and don't stress if things aren't moving as fast as you want. I'm curious, what's a mess-up or a big mistake maybe that you made or your teammate that was like, "Oh wow, that was a big waste of time."

**Gina Gotthilf** (00:52:38):
Yeah, look, a lot of things didn't work out. More than 50% of our A/B tests didn't work out. We made bets that didn't make sense. I will say though, that in the spirit of A and B sides, I, and I think in general, we are really good at forgetting the B stuff. I talk so much about all the stuff that worked that it's hard to remember all of those moments that didn't actually work. And the thing that I tend to talk about, which is this mistake that we made as the growth team is almost like one of those, when you get asked in an interview, what's your biggest weakness, and you're like, "I'm a perfectionist." It's like one of those things that actually makes you sound good because it's the story about how my team really wanted to implement badges. We spent a lot of time playing all the games that were popular at the time, trying to understand how those gamification growth hacks that we could find in those apps would potentially overlay onto Duolingo and how we would do that.

**Gina Gotthilf** (00:53:35):
And badges was just pervasive in all of the top games. And so it seemed like a no-brainer, but since we ranked all of our experiments in terms of ROI and return being like how many users we think we're going to get from this DAUs, and time investments, it never made sense to focus on this because we thought that the time sink would be too high. So I actually ended up not letting the team run this experiment for six months so that we focused on lower hanging fruit. So that's a mistake on my end.

**Gina Gotthilf** (00:54:04):
Then we decided to run this experiment in the most lean way possible. We're like, "You know what? There's MVEs. There's minimum viable experiments. We don't have to run a whole badges thing. We can just do something more simple and actually see if that leads to growth in an interesting way, and then we'll know."

**Gina Gotthilf** (00:54:20):
And we ran this very simple experiment that was like, you signed up and then you get a badge. And it was like this girl with a balloon. I don't know, she was happy or whatever. And of course in retrospect, it led to no results, because no one is proud of signing up. It's not an exciting moment, and you don't even have badges to collect. You can't show it to other people. None of the things that make badges compelling were there, but we were like, "Okay, well, we tested it didn't work." And then we moved on.

**Gina Gotthilf** (00:54:42):
So we moved on for another, I don't know, eight months and we didn't look back. And then when we did look back, first of all at that point we discovered that we hadn't been dogfooding, which also was embarrassing. Looking back, we hadn't been dogfooding in the growth team. We just come up with hypotheses. We were super careful about prioritizing them and making sure that we were doing the best possible write ups and all these things. But the dogfooding piece, I didn't come from a product background. I was a marketer and I didn't really understand the term dogfooding, but when we thought, we had a conversation, we were like, "You know what? If we had just tested that, we would've all known that this was a super lame badge." And I was like, "Why are we not testing our experiments?" And so that became part of our practice.

It's still relevant. I just had a conversation yesterday with engineers at Latitud. I haven't explained what we built yet, where we're building it. Maybe we'll get there, but I was talking yesterday, [inaudible 00:55:35] at Latitud, and they're awesome. In terms of product team, we have the number eight employee at NewBank. You might've heard of NewBank, but it's this massive banking fintech in Latin America. And we have people from other fintechs. And then we have this guy who was a lead PM at Twilio, and I was explaining to them why we should be dogfooding. And they were all like, "Oh yeah, we should dogfood." It's just easy to forget stuff like that.

**Gina Gotthilf** (00:55:58):
So that was a mistake that we could have probably gotten to the growth that we got to with badges much earlier on. And not only did we get to growth with badges, but it became this amazing treasure trove of opportunity because once you have badges and people want them, you can now ask people to do anything. Go find friends, go buy things, whatever it is. And so we impacted almost all metrics across the company positively, including some we hadn't expected, but it's easy to talk about a mistake that ended up being a win. So that's why I compared it to the interview thing in the beginning. But we tried making Duolingo a social app really early on and failed. It was called Dual Duels. Dual Duels. You could duel.

**Lenny** (00:56:42):
Very clever.

**Gina Gotthilf** (00:56:43):
Yeah, I know we were clever, but people didn't use it and we didn't figure out why. We tried making a Duolingo for schools platform. We couldn't get it to pick up. I went and watched dueling go in China and it got downloaded by a million people in the first day, and then the app got blocked because of the government, and then we couldn't figure out what to do. And then everyone rated the app like one star because it didn't work. And so then we had a lot of trouble actually recovering from that. We launched Duolingo in India and didn't realize because we couldn't have unless we went there, which we finally did, that most people set their phone UI in India to English, because typing in Hindi is hard. And of course there's a lot of languages throughout India, and we were making it so that when you downloaded Duolingo, whatever UI you open your app, your phone was set to, we offered not that language for you to learn. That was your base language. So we were telling people learn French, Spanish, German from English, and they were all trying to learn English, so they didn't find what they were looking for and they left. There were so many mistakes and luckily I think we were able to bounce back from most of them in terms of how Duolingo was doing today.

**Lenny** (00:57:53):
And our final story is from Maggie Crowley VP of product at Toast, and one of the most beloved episodes of the podcast. This is Maggie sharing something a little bit different, her favorite interview question about failure and what it tells you about the person you're interviewing. Plus a story of her own product failure. Here's Maggie.

**Maggie Crowley** (00:58:12):
A question I ask in every product interview is, what's the worst product you've ever shipped? And that's because I don't think you're a good PM if you haven't shipped something that's really shitty. You just haven't had enough reps, you haven't done it enough times. And it's not only that you've done it, but that you can admit it and which one it is. That's so important.

**Maggie Crowley** (00:58:34):
I remember... It was so dumb. I'm still so mad about this that we did this. I won't name which team, which company, I'm not going to call that out, but we decided we needed to do a rewrite red flag number one of existing product, and engineer who I'd worked with many times, we had a really good relationship and this person was like, "Yeah, yeah, it's going to take six months. No problem." Core part of the product, been around for forever. One of those things that the code is still the code written by the founders kind of thing.

**Maggie Crowley** (00:59:07):
It didn't take six months. It took two and a half years. It still wasn't done. It almost never... It went on for so much longer than it should have. It took us forever to get to feature parody. It was the worst project. So many people rotated in and out of it. Everyone thought it was dumb. Sunk cost fallacy, just the worst. And it's because, A, we got arrogant and we thought we could do it. B, we skipped discovery. We didn't really write a one pager. We just went for it. We didn't do enough technical and design research into what the requirements would actually have to be. And there you have it.

**Lenny** (00:59:46):
And did not work out, or was it a huge success in the end and it changed the trajectory of the business?

**Maggie Crowley** (00:59:50):
Absolutely not. But you know what? I didn't get fired, so it's fine.

**Lenny** (00:59:54):
I feel like I've gone through those experiences and then three, four years later, it's like another... Maybe this rewrite and redesign may work. We haven't updated this thing in a long time.

**Maggie Crowley** (01:00:04):
Just don't do it. Don't rewrite. If anyone ever tells you to do a rewrite, don't do it. A side-by-side rewrite, nope.

**Lenny** (01:00:11):
Yeah, I've never had... What I run into is once you get too far down a redesign slash rewrite, everyone's building in that new world, and then you launch, and experiment's negative, and then it's just like, "Oh, we just got to launch it. We're going to call it back. We're going to figure out how to get back to neutral someday."

**Maggie Crowley** (01:00:26):
Yeah yeah. Don't do that.

**Lenny** (01:00:28):
Good times.

**Lenny** (01:00:29):
And that is a wrap. I hope you enjoy these stories of failure. I want to give a huge special thank you to all of our amazing guests for being vulnerable and sharing these stories of failure in their career. I hope you leave this episode with a new perspective on how setbacks and challenges and failure can often be exactly what you need to get to the next step of your career or your life. If you've got a great story to tell about failure, I'd love to hear it. Leave a comment either on YouTube or on Lennysnewsletter.com or just DM me on Twitter. Or you could reach out at LennyRachitzky.com and click the big contact button. Thank you for listening. Bye, everyone.

---

## [20/24] How to tell better stories | Matthew Dicks (Storyworthy)

**Matthew Dicks** (00:00:00):
Everyone loves the word storytelling in business. It's a huge buzzword. They love to think of themselves as storytellers, but when they come to me, they don't really want to be storytellers. Because to be a storyteller means you have to separate yourself from the herd, and in their mind, that risks them getting picked off, right? Getting picked off by some predator. But the alternative is you're in the herd, which means you're forgettable. I mean, how many times have you gone to a conference, listened to someone speak, and by the time you're pulling into the driveway, you really can't remember anything that they said? Because that's what happens if we don't speak in story. Our minds are not designed to remember a pie chart or facts or statistics or platitudes or ideas that are not attached to imagery. So the risk you take if you're not telling stories is that you will be forgotten. 100%. You will be forgotten.

**Lenny** (00:00:54):
Today my guest is Matthew Dicks. Matthew is the author of my All-Time favorite book on storytelling Storyworthy, which a previous guest of the podcast recommended to me and I couldn't put it down. So I reached out to Matthew and got him on the podcast. Matthew is a 59-time Moth Story Slam winner, and nine-time Grand Slam champ. He's also the author of nine other books, including fictions, rock operas, even a comic book.

**Matthew Dicks** (00:04:31):
It's my pleasure. I'm excited to be here.

**Lenny** (00:04:33):
I'm even more excited to have you on. The way I found out about you is a previous guest mentioned your book as a book that really transformed the way they think about storytelling and even marketing. And I completely agree. It's the most tactical, practical, also just entertaining book on just how to tell better stories. And when I was reading, I was just like, "Hey, what if I reach out to the author of this book and see if he'd come on?" And here we are.

**Matthew Dicks** (00:04:55):
I'm thrilled to be here, and I appreciate what you had to say. I tried to make my book as actionable as possible. I think the only reason I'm successful in what I do is that I've been a teacher for 25 years and I'm a storyteller. So the two of those things come together pretty well for me.

**Lenny** (00:05:12):
Okay, so I thought it'd be fun to start with maybe the most mind-expanding takeaway I got from this book, is this idea that all good stories are rooted in this five second moment of someone's life. Can you just talk about this insight and maybe share an example or two to make this real?

**Matthew Dicks** (00:05:28):
Sure. Well, that is true what you just said, which is essentially every story is about a singular moment. I call it five seconds. It can be one second honestly. It's a moment of either transformation, meaning I'm telling you a story about how I once used to be one kind of person and now I'm a new kind of person. Or more common is realization. Which is I used to think something and then some stuff happened and now I think a new thing. And those changes they take place overtime. Or really what happens is it's an accumulation of events and feelings and thoughts that ultimately result in a singular moment where that flip actually happens. And I think that's true for almost everyone. It feels like it took a long time, but there really was one second when you thought one thing and then the next second when you thought the new thing.

**Matthew Dicks** (00:06:19):
And the purpose of a story is essentially to bring that moment to the greatest clarity possible to the audience. So that the audience can, in a way experience that flip that transformation or realization along with the storyteller. So 98% of the story is the context to bring that singular moment into fruition. And that is true for stories that we tell out loud, stories we tell on the page, novels that I write, movies that I watch, television shows that I watch, all of the stories of the world that are worth hearing and truly just about every story told that qualifies as a story has one of those moments.

**Lenny** (00:06:58):
That's a big statement. Is there an example too, you could share of either stories we know or just tell a short story, whatever is easier to give people like, oh wow, you're totally right?

**Matthew Dicks** (00:07:06):
Sure. Well, I'll tell you one that happened actually today. How about that?

**Lenny** (00:07:09):
Amazing.

**Matthew Dicks** (00:07:10):
So I'm teaching math today. I'm an elementary school teacher and I'm teaching math, and I have a student in my class, her name is Eileen, and she's one of those kids that I worry about a little bit because she's got some anxiety. So she's not the most confident person in the world. And in September I was aware of this. So I've been working really hard at building confidence with her. And so today we're doing some math and I'm calling kids to the board, and I'm looking at Eileen and wondering, is today the day? Am I going to call Eileen to the board? Because doing so, there's a risk, there's inherent risk that she could be upset, she could embarrass herself in front of the class in a way that means something to her.

**Matthew Dicks** (00:07:52):
And I just wasn't sure. So I didn't call her to the board. And so at the end of the math lesson, I wandered over to her desk and I said, "So Eileen, I was thinking about calling you to the board today, but I just wasn't sure if you're there yet. What do you think?" And she said to me, "First of all, I don't like that cheeky smile of yours." And that is all I needed to hear. That was my five-second moment. That was the moment of realization where I understood that Eileen trusted me, felt confident enough in my classroom that she could be herself, that she could fire off a quip at a teacher, sort of take a shot at me. I knew at that point that now I can call her to the board, that she's going to be okay. So essentially it is a very brief story that I could actually expand into something much more meaningful.

**Matthew Dicks** (00:08:39):
I could make that into a five or six minute story about my journey with this student. Which would include, in the longer version of it, the steps that I took to discover who she was, the steps I took to help her reach the point she's at now. I would probably pull in some backstory about students who I was not so successful with. Some of my failures before I learned how to be a better teacher. And then I'd bring it to the moment where she says, first of all, I don't like that cheeky smile, and that's all I need to hear. So that is essentially a five-second moment for me. That is the same though as any other five-second moment. If you think about a movie like Star Wars, the first Star Wars that came out that is a movie essentially about religion, which people don't always see, but it is true.

**Matthew Dicks** (00:09:23):
There's a boy on a planet and he wants to go to space someday and fly a spaceship and use blasters to defeat the Empire. And along the way, he meets a religious figure to Obi-Wan Kenobi, and he introduces him to a religion called The Force. And when the final moment comes for Luke Skywalker to defeat the Empire, his vision of using technology, a spaceship and a blaster to destroy the Empire, all of that goes away, and he turns off his technology in his spaceship. Instead, he uses The Force to guide his weapon to defeat the enemy.

**Matthew Dicks** (00:09:56):
And that is a story about a boy who once had no religion, and then some stuff happened and he had religion in the end. And that's why a story like that resonates with us in a way that another story might not, because we all understand what it's like to not believe in something and then find belief in something. Whether that is religious belief or I used to think cheeseburgers didn't taste good, and now I believe that they taste good. Either way, we understand that process and we can connect with Luke Skywalker in a meaningful way. So every story essentially has those moments, including, "I don't like that cheeky smile."

**Lenny** (00:10:29):
With this moment, what's also interesting is you talk about how knowing that moment of change also tells you how the story will end. So as a storyteller, you'll know how it ends based on knowing what this moment is, which then also tells you how it's going to start roughly. Can you just talk about that realization? Because, to me, every time I watch a movie now I'm like, wow, I know exactly how it's going to turn out just from the beginning.

**Matthew Dicks** (00:10:53):
So we start as storytellers at the end. Well, we start at the end if we are telling true stories about ourselves or our companies or our products, things that we know. I'm also a fiction writer. So when I start my novels, that's much more self-discovery. I really don't know the end of it. But in the storytelling that we're talking about, you have to know the end because you've lived the moment, and the end forms everything. So you know what you're going to say. You found a moment worth speaking to, that five-second moment. And then whatever that moment is, in my case, I discover that Eileen has more confidence than I realized and is ready to take a big step forward. What's the opposite of me realizing Eileen has confidence and is ready to step forward? It is, Eileen does not have confidence, and I need to help her find that confidence.

**Matthew Dicks** (00:11:39):
So that's the opposites that will work in a story. Essentially, a story is about these two moments in time, a beginning and an end, and they're operating in opposition to each other. Sometimes more so than others, sometimes exactly an opposition. But you're right. If you watch a movie and you'll pay attention to the first 10 to 15 minutes of a movie, you will ultimately know how that movie's going to end. You'll see a character, you'll discover what that character needs or their flaw or their desire, and you know that that's going to be at the end. The easiest one is a romantic comedy. Two people are not in love at the beginning of the movie. You know they're going to be in love at the end of the movie. Even knowing it doesn't mean the story's ruined. We can get there in a very entertaining way. When Harry Met Sally, that movie, when it begins, Harry and Sally actually say they hate each other at the very beginning of the movie, "I Hate You, Harry," right?

**Matthew Dicks** (00:12:32):
I hate that man so much. We know they're going to end up together, and the journey is well worth the fact that we know what's going to happen at the end. So it ruins a little bit of storytelling for people who think like me and go, "Oh, well, I know where this is going." But you have to do it in an entertaining way filled with all the other things we talk about in storytelling. But yeah, every story should be essentially a beginning and an end and opposition to each other, and you should start at the end, that guarantees that you have something important to say rather than what most people do, which is they simply report on their lives. They just tell you stuff that happened over the course of time in some chronological way that ultimately doesn't lead to anything. You want to always be saying something of import. So we start at the end with that moment of import.

**Lenny** (00:13:21):
It's funny, as I was thinking of when Harry met Sally exactly as you were talking as an example, my wife wants to watch that movie basically every night. It's like the one movie she could just watch a billion times.

**Matthew Dicks** (00:13:31):
Well, that's the power of story. I tell people this all the time. Why are we telling stories? You've never asked to see a PowerPoint presentation a second time. You've never gone to bed and dreamt about a PowerPoint presentation. You've never heard someone give a keynote and thought, I hope I get to watch that keynote again tomorrow. But movies, you'll watch a movie a hundred times, because it's a story, and our minds are wired to enjoy story over and over and over again. You have a small child, right? Eventually you're going to be reading to that child when your baby's old enough and you're going to discover kids want to read the same book 50 times. They're really no different than adults except kid books are so small, you can read them endlessly. A movie takes two hours, so you don't get to read it as often as you might want or watch it as often as you might want. But Harry Met Sally comes on and you're halfway through. You're probably in. Even though every scene you can probably do the dialogue. We're wired for story. That's why it's so important.

**Lenny** (00:14:28):
Why is something changing so important? Why is that so critical to a good story, someone having a change or transforming?

**Matthew Dicks** (00:14:35):
Well, I think that actual moment of transformation lends importance to the story and allows the audience to connect to it. If I report it on my day to you, my day teaching in a classroom, I am unlikely to connect with you unless you are also a teacher and you experienced things similar to me. My wife is a kindergarten teacher. I'm a fifth grade teacher. If both of us report on our day, oddly, we will not really connect very often. She is teaching them how to write the letter C, and I am teaching them how to use the standard algorithm in multiplication. They could not be further apart.

**Matthew Dicks** (00:15:11):
So reporting on the moments that you have experienced in the day is not a way to connect to people. But when we talk about change, change has a great universal appeal. So you might not be a teacher who's trying to teach someone to find confidence in their life, but you might be a person who once lacked confidence and then found confidence in the way Eileen did. Or you might be a parent or the boss of someone who is trying to bring confidence to your child or your employee, your salesperson, whatever it is. When we do change, when we're focused in on that change, we increase exponentially the universal appeal to the story and our ability to connect to an audience. Even though the content we're speaking about has nothing to do with them, the actual emotional appeal will cause people to connect to us.

**Lenny** (00:16:00):
Fascinating. So building on that same thread of change, you also have this kind of checklist for what makes a good story. What is a good story, and I think it's only a three point checklist. One is there's a change that happens. Can you talk about the other two? I think there's only other two.

**Matthew Dicks** (00:16:16):
Well, the dinner test is probably one that you're thinking of.

**Lenny** (00:16:19):
Yeah, that's right.

**Matthew Dicks** (00:16:20):
So the dinner test is the idea that when you're telling a story in a formal way, if you're performing on a stage or delivering a keynote or even delivering a pitch to entrepreneurs or a sales pitch, essentially the story that you're telling should be very closely related to the story you would tell someone if you were having dinner. So there should be no performance art included within your story or within your talk. So weird things that people do should not be done. Like opening a story with unattributed dialogue. So you're standing on stage and you open your story with, "Jim, it's time to come in for dinner." My wife said, that's just weird. We don't talk like that as regular people, so you should not speak like that ever. In the history of the world, you should never speak like that. But people do it all the time.

**Matthew Dicks** (00:17:12):
It's this weird appendage from childhood when bad writing teachers thought that this was a good idea, or you start with a sound, which is very popular in first grade. You teach kids to start with sound, mostly because teachers are not writers, so they don't understand what writing actually is. And so they open with stories, with things like, bang, the door opened. But if you and I were having dinner and you said, "Hey, how was your day, Matt?" And I said, "Well, let me tell you Lenny. Bang, the door opened." You would not have dinner with me again.

**Matthew Dicks** (00:17:41):
So you have to be thinking that this is a slightly elevated version of the dinner story. Meaning you're probably not going to be interrupted in the middle of your story. And you want to have a little more shape to it, and you want to avoid some of the verbal detritus that tends to fill our lives. You don't want to be saying, you know, and like I said, all of that nonsense should get pushed to the side, but essentially people should feel like you're kind of speaking in a very natural way. So the dinner test is pretty important in that regard.

**Lenny** (00:18:09):
Awesome. Yeah, so the lesson there is when you're telling a story, make it sure that it's something that you could potentially tell at a dinner party. Slightly elevated is the way you put it.

**Matthew Dicks** (00:18:18):
Slightly elevated. Exactly.

**Lenny** (00:18:19):
I think the third point you make is that it has to be your story. You can't be telling a story on behalf of someone else. Maybe chat about that briefly?

**Matthew Dicks** (00:18:25):
So if you're telling a story about someone else, essentially, you might as well be telling fiction. Because that person's not in the room, and to the audience, they don't really exist. If they can't see them, that person is just another human being who supposedly lives somewhere in the world or once lived in the world. And because of that, you are almost unable to express any vulnerability in your story. You can't reveal anything about yourself. And one of the key parts of storytelling is to be vulnerable with your audience. Meaning I'm going to say stuff in a meaningful way. I might say stuff that most people are unwilling to share in a public way, but I'm at least going to offer up a little bit of my heart and mind. If I offer up the heart and mind of someone else that doesn't really require any vulnerability.

**Matthew Dicks** (00:19:09):
The only vulnerability is I have to stand in front of people and talk, which I know is challenging for some people, but that doesn't mean anything to the audience. We don't care if you're having a hard time presenting, if it's making you nervous. That doesn't mean much to an audience. What we really want is someone to open up their hearts and minds. So stories have to be about you in some way. There's tricks where you can tell stories about other people by taking that story and centering on yourself.

**Matthew Dicks** (00:19:36):
One of the examples, I work with the children and grandchildren of Holocaust survivors, and in the past, what they would do is they would just tell the story of the Holocaust survivor who has often at this point passed away, and it really does feel like fiction. A long time ago in a place that wasn't this a terrible thing happened. And there's a certain level of empathy and sympathy that you might feel. But what I teach them to do is to tell stories about themselves. And then at some point in the story about themselves, they're going to talk about how the experience of their parent or grandparent during the Holocaust has informed or changed their own life too. So they get to dip into some history, but that history is relevant to the storyteller. So it's no longer history. It's now something changed in me because something terrible happened to my parent or grandparent.

**Lenny** (00:20:24):
Just as a tangent, you also have this funny, useful checklist for how to tell vacation stories?

**Matthew Dicks** (00:20:30):
Well, first try not to, right?

**Lenny** (00:20:32):
I think that's step one. Do not tell vacation stories.

**Matthew Dicks** (00:20:34):
Most vacation stories are just simply a recounting of your vacation at the expense of another person. So unless something happened on that vacation where you experienced one of these five second fundamental moments of change, nobody cares about your vacation. And if something did happen, only be talking about the moment when it happened. So if I had a moment of change that took place on a Thursday night at dinner, that story is now going to take place on the Thursday night at dinner, and it's irrelevant that I'm in Aruba.

**Matthew Dicks** (00:21:07):
The fact that I am on vacation is almost completely irrelevant to the story, other than I may want to offer my location. But I'm not going to talk about the beach the day before or the scuba diving or the plane. All of that goes away. We're telling moments in our lives, and it doesn't matter where they happen. If your location is paramount to your story because you want people to know you were in Aruba, then you have to understand, no one actually cares that you were in Aruba and you're just a terrible person for trying to dump that on someone and use up their time so you can relive your vacation and perhaps humble brag about how much fun you had.

**Lenny** (00:21:46):
This will be a good segment for people to send their friends if they want to tell them their vacation stories. And here's a tip for how to do this better.

**Matthew Dicks** (00:21:51):
Exactly.

**Lenny** (00:21:52):
And just understand why it needs to be on a Thursday in that dinner, is the advice there? Keep it very focused and small, unless there's some really essential reason to share the context around the dinner.

**Matthew Dicks** (00:22:03):
Yeah, exactly. The shortest version of every story is the best version of every story. Starting as close to the end of a story is always the best place to begin. So if I had a moment of realization during dessert in a restaurant in Aruba, I may never tell them I'm in Aruba. I might start my story with, the dessert hits the table, and my wife says something that causes me to begin thinking, and that would be the beginning of the story. The fact that I'm on an island in the Caribbean may never come up in the entire story because it doesn't turn out to be relevant to the story.

**Lenny** (00:22:39):
There's a lesson that another guest shared, West Cow about... She calls it, When The Bear Starts Eating Your Tent, or something like that. Jump to when the bear is eating your tent. Don't do this whole introduction to why or how you got to this tent. It's just like the bear is eating our tent. That's where the story should start.

**Matthew Dicks** (00:22:54):
Yes, Kurt Vonnegut said that. Kurt Vonnegut said, "Start as close to the end as possible." He was talking about short stories written on the page, but it is a true notion in oral storytelling too. And it is, of all the things I help people with their stories, the most frequent suggestion that I make for revision is you've started your story in the wrong place.

**Lenny** (00:23:16):
I want to shift to business context advice. But before we do that, there's another really important element of storytelling, which is having stakes and having important stakes. So could you just talk about what is a stake and why is it important to have stakes? And then just what are examples of adding stakes to your story to make them more encouraging?

**Matthew Dicks** (00:23:32):
Sure. So stakes are essentially what your audience should be worried about, what they should be wanting for you, what they should be concerned about, what they should be wondering about. If your audience isn't wondering what you're about to say, they're no longer listening to you. And you have to internalize that in a deep and fundamental way. When I work with people in business, they are constantly under this misconception that people want to hear what they have to say. Some vice president of marketing thinks that because they're a vice president of marketing and everyone is sitting in a chair and looking at them, that they automatically have that audience's attention. I assume all the time, 100% of the time, that no one wants to hear anything I have to say. And so I am relentless in my attempt to get the audience to be constantly wondering what the next sentence is.

**Matthew Dicks** (00:24:17):
And stakes are a big part of that. Stakes are, I wonder what's going to happen next. I'm worried about this guy. Will he get what he wants? Will he get his comeuppance? Because he seems like a kind of a jerk in this story. All of those things are stakes. What is at stake for the storyteller, the company, the product, whatever it is, and therefore what the audience is worried about as well.

**Matthew Dicks** (00:24:39):
It's why Star Wars opens with a big spaceship shooting at a small spaceship. We don't even know who's on it yet, but we're already on the small spaceship side. We're already worried that a small spaceship is being shot at by a big spaceship, right? That's why stories start this way. Alfred Hitchcock has a movie where it opens with a police officer is chasing a man across a roof. We don't know who to root for, but something is at stake here. And now we're wondering what's going to happen next. We have to do the same thing with our ordinary true life everyday stories. We have to put stakes into stories.

**Lenny** (00:25:12):
There's something that you teach around surprise and the power of surprise as a part of stakes. I forget exactly what that is, but does that ring a bell?

**Matthew Dicks** (00:25:19):
Well, I'll separate them really. So with stakes, there's lots of ways to insert stakes. I always say you should have, what I call an elephant at the beginning of the story, which is actually a big spaceship shooting at a little spaceship or a police officer chasing a guy across a roof. We have to immediately know that something is at stakes. We have to be worried about something. In my little Eileen story that I told you, I said, I'm teaching math and I've got this student and I'm worried about her, because I want to call her to the board, but I know she might lack some confidence. Right away, I have to make it clear what kind of story we're at. In a movie, you get a trailer. You don't often go to a movie and not have any awareness about what's about to happen. But when you open your mouth to begin telling a story, nobody knows what you're going to say. You need to land something immediately that...

**Matthew Dicks** (00:26:00):
Nobody knows what you're going to say. You need to land something immediately that causes an audience to go, "Oh, okay, well what's going to happen here?" So that's an elephant. That's like plant some big thing in the beginning of a story. It doesn't actually have to be what the story's about either. Sometimes it takes a little time to get to what the story's about, but you plant something there to at least get the audience to be worried, and then you can use some other tricks. I call something called a backpack, which is, you tell the audience what your plan is before you carry out your plan so that they sort of have your hopes and dreams packed up with them as well. If you watch an Ocean's 11 movie, you know what the plan is before they go into the casino. So as the plan goes awry, you can go, "Oh no," because you know what the plan is.

**Matthew Dicks** (00:26:42):
If you didn't know what the plan was, you would not be able to go, "Oh no." So that's loading your audience with your hopes and dreams so that they can feel those stakes. They can actually be hoping for you as well. There's things like breadcrumbs where you offer a little bit of what's going on, but not the complete idea, sort of drop a hint. The classic one is sort of the gun. There's a gun in the room, and there's a gun in the room, and it seems like it's not going to be relevant, but if you have a gun in the room, it's going to eventually go off. There's something going on there. That's like a bread crumb. Eventually we're going to get to that gun. Don't worry, it's going to happen. There's hourglasses, which is when you get to the moment where everyone is about to discover what's going to happen. That's the moment to slow time down.

**Matthew Dicks** (00:27:28):
You load your story with details because suddenly you know have the audience on the edge of their seat, and you want to leave them on the edge of their seat as long as possible. When I know my audience wants to hear the next sentence, that is when I prolong the arrival of the next sentence by I say turning over an hourglass and letting the sand run for a while, and making them wait for it. There's crystal balls where you can predict a future. You don't have to predict an accurate future. You can just predict any future. So I could have said something in the Eileen story like, "If I get this wrong, Eileen is going to begin to cry. She's going to cry in front of 22 kids, 22 kids who for the rest of the year will continue to stare at this girl, and remember the moment she cried." That's a crystal ball.

**Matthew Dicks** (00:28:10):
That's me predicting a terrible future. Because I put that terrible future in the audience's mind, now they're worried. So that is a stake. I have planted a false stake, a false future, but they're going to be worried about it because it's also a realistic future. So all of those things are used to continue to get the audience to wonder what's going to happen next, which is a little different than surprise. Surprise is just that beautiful, delightful, amazing moment where the audience didn't see something coming, and then it was almost like it was inevitable. Surprise happens, and they understand why it happened. I think it's the best thing you can ever offer an audience, is a moment of surprise. And every story has a surprise, at least one. Because whenever we suddenly realize something for the first time, I hate the word suddenly, but what happens is we used to not think something, and then we think a new thing, and that's often a surprise for us if we make it a surprise for the audience too, that's a delightful thing. So surprise is so powerful, and wonderful, and always ruined by storytellers.

**Lenny** (00:29:11):
I was just listening to an interview with, I think his name is David Mamet, and he made this point that endings of books and movies always has to be both inevitable, and also complete surprise.

**Matthew Dicks** (00:29:21):
Yes, both of those things. So inevitable means there has to be enough information placed earlier in the story so that when the surprise happens, the audience goes, "Yes." But also you have to be clever enough to plant that information in such a way that the audience doesn't see the surprise coming. You build information into the audience's mind that will allow the surprise to land in an inevitable and yet surprising way. That is the best surprise you can offer someone.

**Lenny** (00:29:51):
Easier said than done.

**Matthew Dicks** (00:29:52):
Yes, well, there's lots of tricks to do that as well, but it takes some time. But essentially what you end up doing is, you're hiding the information that they need to know in a multitude of ways so that when it lands, they go, "Oh my gosh, ABCD." They don't connect it until the surprise hits, and then they go, "Of course, ABCD." So you place ABCD in a story, but you don't place it in such a way that they can connect the dots until you want them to connect the dots.

**Lenny** (00:30:20):
I feel that's a whole other hour of podcast conversation to figure that out.

**Matthew Dicks** (00:30:23):
That's like ninja level next level storytelling, which is very teachable. Everything I say is very, very teachable and doable by anybody, but yes, it's a trickier thing to accomplish.

**Lenny** (00:30:35):
Okay, that'll be for a second podcast episode. Just to summarize, you shared I think five ways add stakes. Just to summarize; one is crystal ball. You basically predict the bad thing that'll happen if you don't do this thing. Hourglass, which is when something is about to happen slow time down. I think of Pulp Fiction and Tarantino in this often of just like, you know some violence is about to happen, and they go next door, and like, "Let's just eat a cheeseburger," instead for a while. And then this backpack idea of they know exactly what you're trying to do, and it's on you and the entire movie. Breadcrumbs where you give them a little bit of information along the way. I think maybe that's it. Maybe there's one more.

**Matthew Dicks** (00:31:12):
And then the elephant at the beginning.

**Lenny** (00:31:14):
Oh, the elephant, just like the big ol', here's the steak. I wish-

**Matthew Dicks** (00:31:16):
You got to have something.

**Lenny** (00:31:18):
I heard some advice in either your book, a different book about adding stakes is just drop a dead body. Every new dead body is additional stakes that are added to the story. I don't know how often people can do that in random stories.

**Matthew Dicks** (00:31:30):
But what you can take from that is, so often people load the front end of a story with all of the stakes because they're worried that the audience will not pay attention to them. So they think I'm going to throw everything right in front, and that'll hold an audience for the rest of the story, and that's a mistake. What we want is stakes continually to build throughout a story. So dropping a dead body really means, drop a new steak, don't load it all, don't front load it, give us something to wonder about, and then gauge when we need the next thing to wonder about, and spread out those stakes. We need most of the stakes to occur within the first half of a story. Ideally, the second half of the story is now the rollercoaster to the end. So we might drop one in there at an appropriate time, or just through plot. Sometimes they just happen to need to be in a place. But so often I hear people front load stakes because they're worried about audience attention.

**Lenny** (00:32:21):
Just to give people something concrete to think about when they're thinking about this area. Is there a story of yours that's online that we can point people to see an example of really good stakes in action?

**Matthew Dicks** (00:32:31):
So the one that I reference in my book, which you can go watch online is, Charity Thief. It needs a lot of stakes because two thirds of the story nothing really happens. Two thirds of the story is explaining how I end up on a porch. So that's not super entertaining unless I build in lots of stakes along the way. I'm not inventing anything, I'm just presenting the actual events in a way that makes you wonder what's going to happen next. So there's an elephant at the beginning of that story, which is actually not what the story's about because I say the elephant can change colors along the way, but I give you something to wonder about along the way. I know I use a backpack, and I use a breadcrumb, and an hourglass, and a crystal ball. I do it all in that story mostly because it's not super entertaining.

**Matthew Dicks** (00:33:19):
Some stories you don't have to worry so much about. I perform as a stripper in the break room of a McDonald's restaurant when I'm 19 years old for a bachelorette party. There are stakes in that story, but I don't need to put any of them in because everybody wants to know what's going to happen already. Sometimes you just have a story that the stakes are already pre-built because the ridiculousness of the moment. But most of our stories are not like that. Most of them are far more benign, and we have to jack up the stakes by using some tricks to get people to the point we want them to be in.

**Lenny** (00:33:50):
That stripper story I've also watched, and I'll point to it, and I love, it's connected to another piece of advice you always shared. People just say yes to stuff, at the power of yes. I don't want to get into it yet, I want to come back to that.

**Matthew Dicks** (00:34:00):
True.

**Lenny** (00:34:00):
We'll leave that breadcrumb but I love that point. Okay, so let's transition to helping people in business learn all these skills, and translate them to becoming better in their work. And maybe actually to add some stakes, what benefits do people get/what problems do they run into if they aren't great at storytelling versus if they learn the skill, and can implement it at work? What happens, what good things come out of that?

**Matthew Dicks** (00:34:25):
Well, if you don't tell stories as part of your business, whether you're looking for investment, or speaking to your people, or speaking to customers, or clients, anything, if you're not telling stories, the good news is, you're just like everybody else. The bad news is, you're mediocre just like everybody else. You're in a lane that everyone else is in, which means that you're going to be forgettable. I often say most communication in business is round white and flavorless intentionally so because a lot of people are afraid to stand out. When I try to get people to tell stories, everyone loves the word storytelling in business. It's a huge buzzword. They love to think of themselves as storytellers, but when they come to me, they don't really want to be storytellers because to be a storyteller means you have to separate yourself from the herd, and in their mind that risks them getting picked off, getting picked off by some predator.

**Matthew Dicks** (00:35:18):
But the alternative is, you're in the herd, which means you're forgettable. How many times have you gone to a conference, listened to someone speak, and by the time you're pulling into the driveway you really can't remember anything that they said? My wife and I actually attended an educational conference recently. She's a teacher, I'm a teacher. There was a bunch of speakers. The first person came out with his childhood lunchbox, put it on a table, and told a story about how his parents had nothing while he was growing up. And yet they somehow kept him in new shoes, and a new backpack every year, and sent him to school with a lunch every day, and how much it meant to him, and how as an educator today he thinks about every single kid in his class like he was, a kid who had nothing except for all of his parents' hopes and dreams.

**Matthew Dicks** (00:36:04):
I'll never forget that story. It was a story. It was a story of vulnerability, and humor and meaning. There was another person who spoke, a sort of executive we'll say, and he did a great job in terms of being fluent, and presenting ideas, and speaking well, and speaking confidently. And 15 minutes after the conference I said to my wife who is a teacher and understands storytelling because we do it together.

**Matthew Dicks** (00:36:27):
I said, "What'd you think?" She said, "Well, I'm never going to forget that guy with the lunchbox." I said, "I will not either." I said, "What'd you think about the other guy?" And she goes, "He was great." I said, "So what did he say?" Five teen minutes after, and she went, "I actually can't tell you a single thing he said." This is a woman who's a teacher, and invested in storytelling and communication. Her impression was, he was fluent, he was amusing, he said some numbers, he said some things that seemed to mean something. But it was all forgotten because that's what happens if we don't speak in story. Our minds are not designed to remember a pie chart, or facts, or statistics, or platitudes, or ideas that are not attached to imagery. So the risk you take if you're not telling stories is that you will be forgotten, 100% you will be forgotten.

**Lenny** (00:37:18):
When people hear this, they may think, "Oh man, there's this guy at work, and he's always telling stories." And we're like, "Shut up." Just tell me what we need to do to make it a little more real of just what does storytelling look like where it's not annoying. It's not like, "Okay, everyone, gather around. Let me tell you the story of our vision." What are some simpler ways, and maybe non-annoying ways to think about what storytelling looks like in the workplace that's not just like a public speaking like, "Hey, everyone, I'm going to give you."

**Matthew Dicks** (00:37:43):
Let me give a couple of examples. I have a storytelling book coming out next year on business. So there's a couple of heroes in that story. One of them is named Boris. His name's Boris Levin, he is a factory owner here in Connecticut. He's the one who convinced me I could start working with businesses. I thought it was just a storyteller who spoke about himself on a stage. Boris one day saw me for some fundraiser and said, "Listen, I want you to come and help me." I said, "I can't do that. I just tell. I'm using stories about myself." He said, "No, no, you can help me." And it turns out he was totally right. So Boris has done it the right way. Boris has decided to become a storyteller who will then translate his stories into his business.

**Matthew Dicks** (00:38:19):
So a great example was, one of Boris's early stories, he came to me, and he said, "My son was at bat in the Little League Championship game. The bases were loaded, if my son got a hit, the team was going to win the championship. And if my son struck out, the team would lose the championship." It's a three and two count. It is like the ultimate baseball moment, and his son strikes out. He watches his son drag that bat back to the dugout. He's devastated. His son's devastated and Boris is devastated. So he is trying to collect himself so he can figure out the right thing to say to a boy who's just lost the championship for his team. By the time he makes it onto the other side of the field to catch up with his son, he sees his son running up a hill with his friends, and they're already laughing.

**Matthew Dicks** (00:39:09):
They're heading to the cars so they can go to ice cream, and they can enjoy themselves. So Boris is falling apart. He's still devastated, but his son has already moved past the failure. Boris takes that story, and he crafts it as a beautiful story that he could tell on a stage, and perform and make, an audience laugh and cry. Once the story's done, he says to me, "So what are we going to do with it? How are we going to apply this to business?" And ultimately what happens is this, he's got a sales team. And quite often salespeople do not land the big account they're hoping to land, and Boris knows that when his salespeople fail to achieve what they want to achieve, they will often sulk for days. They'll wander around the office, and be useless because they're still trying to get past the fact that they just lost the million dollar contract.

**Matthew Dicks** (00:39:56):
So he tells the story about his son, and he says, "Listen, there's nothing wrong with being sad, being upset with failure, but we cannot allow it to slow us down as much as we are right now. We have to think about my son. My son dragged his bat back to the dugout. He sat down, he sighed, his buddies patted him on the back, he collected himself, and he moved on. That's what we need to do. When we fail we're going to take a moment to collect ourselves, to think about the mistakes we made, to decide what we're going to do differently, and then we're going to move on." That becomes a really important moment in his company.

**Matthew Dicks** (00:40:32):
It's much better than him standing up in front of his people and saying, "Listen, every time you guys fail to land a big sale, you wander around this office like you're dead, and you're wasting our time. It ends today. Today from now on when you fail, you're going to move on." The story becomes something meaningful to everyone because it reveals something about Boris. He's a father, he's a father who cares about his son. He's the kind of father that most of us are in life. He shares of himself with his people, and he creates a tangible vision of what the sales team can do. He does that all the time. He comes to me, and he's not looking to solve problems through story. He's looking to develop stories that he can then deploy into his business. So I compare it, I say, band-aids versus bricks. If you're building bricks, you're a storyteller that's capturing stories and building bricks, then you can eventually deploy into business. If you're a band-aid person, which is fine, that happens. "I have a problem, Matt, and I need a story to solve it."

**Matthew Dicks** (00:41:34):
Essentially what I'm doing there is I'm putting a band-aid over a problem, but you're not becoming a better storyteller. You're just using me as a consultant to help you generate a story that will solve a problem. That's fine, but you're going to need me the next time too. You're going to keep needing me because you're not really becoming a storyteller. Boris is building bricks. He is building a vault of stories that he can then deploy into his business. He understands how to tell them, and how to connect them to business. So that's something that you can do very easily.

**Matthew Dicks** (00:42:02):
Another example, the other star of my book is a woman named Marsha Rakofsky. She used to be the director of corporate communications at Slack, and now she's sort of doing work on her own. But when she was with Slack, she and I were working closely together, and she had to create the narrative that was going to compete against Microsoft Teams. Essentially, Microsoft came along and said, "Hey, we copied your product and it's free, and everybody already has it."

**Matthew Dicks** (00:42:25):
So Slack had to find a way to combat that, and Marsha was the one in charge of doing it. That's why we connected. She found me and said, "I need to tell a good story. Please help me tell a good story." So she crafted a brilliant narrative that worked fantastically. We worked really closely together, and it came out great. The way she came up with that narrative was a Tuesday night. She had broken up with her boyfriend, she was alone. She was feeling pretty lonely. It was in the midst of the pandemic. She had two glasses of wine in her, sitting alone on a Tuesday night, she suddenly had an inspiration. She wrote three words down on a napkin, and those three words become the story that we develop that allows Slack to compete against Microsoft.

**Matthew Dicks** (00:43:04):
When it comes time to her present that narrative, I say, "You're going to include the Tuesday night and the two glasses of wine, and all that, right?" And she's like, "No, I'm not. That's not what we do in the corporate world. We do not insert ourselves into our narratives." And to her credit, she didn't put it in, and it still worked brilliantly. She was fine. But about a month later, she was presenting that same narrative to a smaller group, lower stakes. I said, "Let's just put it in, just try it this time." And to her everlasting credit, she did. She put in a 30-second anecdote about Tuesday night, two glasses of wine, feeling lonely in the middle of a pandemic.

**Matthew Dicks** (00:43:42):
She said to me later, "I can't believe the difference that that 30 second anecdote meant to the narrative. Because suddenly when I reached the end of the narrative, people wanted to talk to me. People came up to me, and the first thing they said was," "Oh God, I remember I was feeling the same way during the pandemic."

**Matthew Dicks** (00:43:59):
People connected to her because instead of being a corporate monolith, sort of like Slack spokesperson without personality, which is what we tend to be in business, she was an actual human being who had an inspiration on the Tuesday night, and then was bringing it forth in a meaningful way to an audience. And from that point on, she always has been doing those things in storytelling. She's always looking for a way in her narratives to insert herself, or if she's working with a client, let's find a way that we can work the client into the story as well. Because people don't want to hear spokespeople present information. They want to hear human beings connect with you, and then offer you something that perhaps will have value.

**Lenny** (00:44:41):
That is a really interesting lesson. So is your advice just when you're telling stories in business, try to find a way to make it personal about you as the person telling the story?

**Matthew Dicks** (00:44:50):
Yeah. I have this tool I use with corporate folks called, a personal interest inventory. It is a list of all the things that you should be saying about yourself in clever and strategic ways that I teach. Each one of them has an addressable market. So how many people could this potentially hit? And then the intensity of the connection. So for example, if you're married, you should always make it clear to people you're married, especially if you're a man. Because if you're a man, and you're married, you're safer in the world because men are inherently just dangerous human beings. We just are. If you hear that there was a shooting, you never think, "Oh, I wonder if that was a twenty-three- year-old blonde woman." You know who did the shooting almost all the time. So if you're married, what you're essentially saying to people is, someone has agreed to spend theoretically their life with me.

**Matthew Dicks** (00:45:41):
It's like a validation that I have, at least hygiene and some decency. Most people are in a committed relationship so that means that a total addressable market is large. If I say I'm married, you're either married also, or you're in a committed relationship. So the connection is going to be large. The total addressable market is large. The possible connection, probably moderate. I say it's like, "It's okay." But weird ones are like runners. I'm not a runner, and there's not a lot of runners in the world. But if you're a marathoner, your total addressable market is very small. There's not that many marathoners. But if you happen to find a marathoner, the intensity of that connection is enormous. Marathoners are almost automatically friends upon meeting what I've discovered. If you're just, "Oh, you ran a marathon? I ran a marathon." They're best friends already.

**Matthew Dicks** (00:46:32):
So if you've run a marathon, and you're in a room and you discover someone else's run a marathon, you have to find a way to bring that out because the possibility of that connection is incredibly intense. So as a person in the corporate world, you should not be seeking to be round, white and flavorless. You should be seeking to be full of color, and full of edge, and full of flavor. You want to be an individual that people remember as opposed to what most people are trying to be, which is, I am just operating this corporate, or this business sphere, and I'm not trying to stand out, which is just a foolish thing to want to do.

**Lenny** (00:47:07):
I could see why people wouldn't naturally do this. If I'm a head of comms for a company, the last thing I want is to make it about me. And what you're saying is, you actually should, because people will find it a lot more interesting.

**Matthew Dicks** (00:47:20):
Yeah, you don't want to make it all about you, but there's just little tricks. The easiest trick is, if someone asks you, "How are you doing today?" If you say, " I'm doing great," you've just really screwed it up. That's the stupidest answer you can offer. If you ask me, "How am I doing today," I'm immediately going to think to myself, elementary school teacher is probably my best personal interest inventory item. Because if I'm an elementary school teacher, everyone loves me. They think I'm doing God's work, even though they don't want to pay me a dime to do it. So if you say, "How are you doing today?" I will say to you, "Pretty good. My fifth graders were actually decent human beings today. They didn't try to kill me."

**Matthew Dicks** (00:48:01):
So in that way, I'm going to slip in the fact that I'm an elementary school teacher by answering your question, I'm going to demonstrate a bit of amusing content in the process, and maybe a little self deprecation. But whenever I'm asked a question, I am trying to include an item of my personality, my life, something that might be of interest to people while also answering the question. You don't want to walk into a situation and say, "Hi, I'm a married elementary school teacher with two kids and two cats." But that's what I want to do because I know that that's going to make people feel connected to me. So I have to find strategic ways to work it in. I teach people to do it all the time. But it starts with understanding what about you might mean something to other people, and how can I get it in there without me sounding like I'm only talking about myself?

**Lenny** (00:48:48):
What else? So we're basically talking about ways to become a better communicator and storyteller in business. You've shared a few tidbits here. One is, think of this personal inventory about yourself that makes you relatable. Try to share it in stories you tell, and presentations, and things like that. What else can people do to become better storytellers in business? I know this is a big question, but let's see where it goes.

**Matthew Dicks** (00:49:07):
Let's go back to the idea that in business, you have to accept the fact that nobody wants to hear anything you have to say, that is not accepted by most people, even after I say it. So once you understand that, and once you truly believe it, there's essentially four ways to keep people listening to you in any story really, but especially in business, because really no one wants to listen to you in business. So the first is stakes, which we've really talked about already. You have to have stakes. In every good product story and every good PowerPoint... Everything, there are stakes, and they're set out and exactly the way I've described. All five of the stakes that I've described to you that I use in that story, Charity Thief can also be used in every business story, every PowerPoint deck, every entrepreneur pitch, everything. So stakes is one of them.

**Matthew Dicks** (00:49:52):
Another one we've talked about is, surprise. I should absolutely be surprised in every talk that you give. Steve Jobs was a master of it. We could look at one of his talks, and I could show you how he planned it perfectly. Some others include suspense. So keeping an audience in suspense, and often suspense leads to surprise. So mastering the ability to be suspenseful. And then humor, daring to be funny, which no one in corporate America can do. Everyone wants to be funny. Every person I've ever met, who I've worked with, every business person in some way wanted to be funny, but that's really not actually what they want. They want to have been funny, because being funny means you must take a risk. You must say something that you believe is funny, and you expect an audience to also feel it's funny, and if it doesn't happen, that hurts.

**Matthew Dicks** (00:50:43):
So people oftentimes tell me they want to be funny, but when I tell them how they need to be funny, they say, "Well, I can't say that." And then I say, "Well, that's the part that's funny." So I was working with a guy, sort of an executive at a company that you interact with every day. He was delivering a talk at the Javits Center, and he was going to be funny. We built in a talk, lots of jokes. He was ready to go. He went to the Javits Center, and four hours later he called me, and I said, "How'd it go?" He said, "I pulled out all the jokes." I said, "Why did you pull out all the jokes?" He said, "The first two speakers weren't funny at all. I felt like if I went on stage and I was funny, I was going to stick out like a sore thumb."

**Matthew Dicks** (00:51:27):
I said, "No, you were going to rise from the ashes like a phoenix that everyone has been waiting to hear all day." It's the best thing in the world to follow two terrible people, and then go out there and land some jokes. But again, he thought, I have to stay within the confines of the herd rather than doing something different. But humor is a brilliant, and beautiful, and simple way to differentiate yourself from other people, but you have to be willing to try to do it. It's a scary thing for people. But I say it stakes, it's surprise, it's suspense, and it's humor. Those are the ways that you're going to.

**Matthew Dicks** (00:52:00):
Stakes, it's surprise, it's suspense, and it's humor. Those are the ways that you're going to hold people and keep them listening. And if you're not engaged in one of those four things while you're speaking, people are not listening to you anymore.

**Lenny** (00:52:12):
**Matthew Dicks** (00:53:17):
Well, I have currently 26 strategies to be funny. Some are better for business than others. I will give you two that we can use in business all the time. The first one you can use is nostalgia, because nostalgia is always funny. The fact that the first VCR I had was 22 pounds and had a remote control attached by a cord that was thick enough that I could trip my brother as he walked through the living room is funny. The fact that I grew up and no one was allergic to anything and we all ate bread, packed with gluten and baked in asbestos factories and no one ever wore a helmet while they rode their bike. All of these things can be made to be funny. And it's so easy in business because oftentimes you are rolling out a new product or a new service or you're updating a product or service in a way that allows you to speak nostalgically about the past.

**Matthew Dicks** (00:54:09):
I was working with this company and they failed me. They did not listen to my advice which was a mistake. They're like an Indeed company. They're helping find employees for companies they're one of these people. And I wanted to start their narrative with the idea of in 1983, the primary source of employment was a 16-year- old kid riding on the back of a Schwinn, throwing newspapers at doors. And in that newspaper, which was like a paper version of the internet, you would turn to the back page and on that page there was the help wanted ads. And that was essentially all you had to find a job in 1983. Everything was geographically based, meaning you only could look into three or four towns around you to find a job. And it had to be in the paper and you had to own a phone connected to a wall so you could call a company within business hours and hope to get an interview.

**Matthew Dicks** (00:55:03):
All of the power lived with the employers in 1983 and a 16-year-old who was dropping a newspaper off at your porch every day. That's funny. Again, I didn't even try to be funny with it. I just stated the facts. We could have punched that up and made it really funny. And then we flip the script again, the opposites in story. In the beginning, employers had all the power. Today, employees have all the power. Because today you can work in Singapore or Chattanooga, while you're living in Orlando. And today you don't have to wait for a 16-year-old to deliver the paper with all of your job opportunities. Every single job opportunity on the planet is now accessible to you on the internet. And you can work basically anywhere from anywhere. So that's why we need companies like Indeed or the company I was working for, because they have to actually gain some power for the employers.

**Matthew Dicks** (00:55:57):
So that was the narrative we were going to tell, and the beginning would've been funny. And the CEO of the company said, "I don't like it." He said, "Nobody cares about the 1980s." Which was the dumbest thing he could have said because Stranger Things was the biggest television show on television at the time, which was nothing. But in 1980s. And if he just looked around, he would see that 1980s fashion is coming back. 1980s music is being popularized again. We're remaking 1980s music all the time. Taylor Swift put out an album called 1989. Whether or not the 1980s are relevant or not, it's relevant to talk about the past as a company to demonstrate your expertise in your field. To understand that we know the market backwards and forwards for the last 50 years. We have expertise and we can demonstrate it by telling a story. So that's the power of nostalgia and we can use that all the time in business to make people laugh.

**Matthew Dicks** (00:56:50):
The other one I'll give you, again, there's a whole bunch, but a simple one is a game they used to play on Sesame Street, which is one of these things that's not like the other. Essentially it's three things. Two of them are expected and one is unexpected, and the unexpected one will be funny. So you can say like, well, my competitor, they have this. My hardware competitor, the guy down the street, he does sell shovels just like I do. That's true. And he does offer a wide selection of nails just like I do. But there's a nameless, faceless machine at the front of the store that you have to swipe your own stuff through and your credit card, there's not actually a human being in the store. And we can make that funny by showing that the third one is unlike the other two. So it's essentially a simple game once I've told it to you, you'll see every comic do it all the time. They just say thing that's expected, thing that's expected, unexpected thing, and you make it funny. So it's a simple trick that we use in business all the time.

**Lenny** (00:57:52):
This is awesome. This list you're talking about, is this going to be in your new book that you're writing?

**Matthew Dicks** (00:57:58):
Not all 26 of them because some are not the best business ones in the world, but a large number of them. I think I maybe have the top 12 that work best in business in terms of humor. But you can just take a humor class. I teach humor all the time. I teach all 26 strategies. It's something that can be practiced. The beautiful thing is so often many of the strategies that I offer in business, if it doesn't end up being funny, you're still telling a story. It's not a ba-bum-bum-ching joke. We're not telling those jokes. We're telling humor in the confines of a story so that if this joke doesn't land we're still telling a story. And oftentimes people don't even realize we were trying to be funny.

**Lenny** (00:58:44):
I'm going to come back to where story can help you in your work. So obviously giving a public talk is the classic way to use this, maybe giving a PowerPoint deck in a meeting. Is there any other maybe non-obvious places that you think this skill can help you in that's not just like, "Hey everyone welcome to my..."

**Matthew Dicks** (00:59:02):
Well, I've worked with a lot of scientists in biotech and places like that. I worked with a biotech company. Five of their scientists were going to a conference. And essentially it's a company that sells tubes. All of their competitors sell a tube for experiments and you have to retrofit the tube to fit your needs. The company I was working with, they sell 12 different versions of the tube. Better sized so you don't have to retrofit it, much more expensive, but the reliability of your experiments are improved by using their properly sized tubes. So I prepare all the scientists and they all do a good job. They all tell stories of some sort and they go off to their conference.

**Matthew Dicks** (00:59:43):
One guy though doesn't present any data whatsoever. He just tells a story. He tells a story about going to the grocery store and when he goes to the grocery store, his family is really annoying when it comes to apples. Because everyone likes a different apple. So he's got to go and he is got to buy three Honeycrisp for his wife and two Gala for his daughter. And they're baking a pie this week so they got to get some McIntosh and he likes Red Delicious. He said, "It's a nightmare buying these apples." So he tells that story about the nightmare of buying apples, and then he says, "That's what my company does." There are companies that say, "We offer McIntosh, make do with it. You're going to make your pies, you're, you're going to eat it. All of the things that you want to do with an apple, all you get is McIntosh. Good luck. We believe you should have access to all the apples. We believe that you have particular needs and specific requirements, and we're going to make sure you have it. Just like my family gets all the apples they want.

**Matthew Dicks** (01:00:42):
It's all he said. A longer version of it, but that's it. No data. He got more leads at the conference than the other four scientists combined. Now the vice president of marketing was not happy about this at all when I met I met with her. Because she's a scientist. She's 50 years old. For her entire life, she's been sending scientists to conferences and presenting data. And she said to me, "So what am I going to do? Send scientists to conferences now and not present data?" And I said, "Well, I mean maybe because it worked" And she said, "Well, what about the data?" I said, "Now that he has the leads, you don't think they're going to want the data?" He's going to get on the phone and they're going to say, tell us about the data. But now they've established a connection.

**Matthew Dicks** (01:01:22):
And the best thing about that story, the thing she didn't even understand was, every single time someone at that conference goes into a grocery store now and they're looking at apples, they're going to think about that company. And it's a positive feeling that they're going to have about that company. If they have forgotten to call, but they meant to call, when they're picking out a Honeycrisp at the grocery store, they're going to make a note. Oh, right, I got to call that company and look into the tubes that they sell. We create positive connections with items in the world related to our company by telling stories, and that means we've built advertising into people's lives without them even being aware that we've done it. So there's a billion ways to add storytelling into business. It's just another one.

**Lenny** (01:02:07):
You touched on this two-way approach. One is, you have a problem. Let me think of a story to help me solve this problem, versus I'm going to become a storyteller, come up with this whole brick wall of stories and then I'll deploy them. You said that the first approach is not something you'd recommend. I imagine most people are probably going to be in that bucket like I don't want to be a storyteller. I just want to solve my problems and stories can sometimes help me there. So maybe in that bucket, do you have any advice for how to find a story that somehow helps you with that problem on demand, or is it just like that is not going to work? You're not going to think of a story every time you have some problem?

**Matthew Dicks** (01:02:40):
I think sometimes you will. I have a company that calls me metaphor man. They call me essentially and say-

**Lenny** (01:02:45):
I get that.

**Matthew Dicks** (01:02:46):
"... we've added a boring feature to our boring platform and we need to make people understand what it does. Will you give us the metaphor we need?" They don't understand that I'm not really generating metaphors. I am just taking stories from my life, pulling myself out of the story. And if you take yourself out of a story, often what's left is a metaphor, a simile, an example. And then I just offer that to them. And I tell them, if you just use some of my storytelling generating techniques, you could do the same thing. But they're a bandaid company. They just want me to fix things. And I understand that. If you're trying to do it, the best way to tell a story about something that you want people to understand is to do what I call speaking with adjacency, which means we're not going to match content to content. Instead, we're going to match theme, meaning or message.

**Matthew Dicks** (01:03:33):
So that scientist, for example, he wasn't talking about tubes. He was talking about how people deserve to get what they want in life. His family deserves to get the apples they want, and you as a business deserves to get the tubes that you want. But so often in business what people think is content to content, well, I got to find a way to talk about these tubes to make people understand how important they are. And I say, well, let's not talk about the tubes. Let's talk about something else instead, and then we're going to move what we were talking about over two tubes. We are going to snap it in place. That snap when someone realizes, you were telling me about apples, but really you were telling me about tubes. That snap is so powerful. I use it with students all the time.

**Matthew Dicks** (01:04:21):
A student acts like a fool, gets in trouble sitting at my desk. I'm not talking about their behavior. I'm telling a story that they have no idea why I am telling them the story. They're like, "I'm in trouble. Why is he telling me about his dog? Why is he telling me a story about his dog when he was 12?" Because I'm going to snap it into place. Because I'm not talking about content, theme, meaning or message. So when they come to me and they say, "Here's what we've got." I'm not thinking about the thing. I'm thinking about, what is the theme they want to convey or the meaning that they want to convey or the message they want to convey. And what story do I have that will match that or what story can I get out of them?

**Matthew Dicks** (01:04:58):
The scientist did not come to me with the apple story. The scientist came to me with the tubes and I said, "Well, it sounds like you're a company that wants to give people what they need. Let's find a story in your life about a time when you have to give people something that they need." And we brainstormed it. And when we landed on apples, I knew we had it. Because he was going to be able to talk about, I'm a father. I'm a husband. I'm the husband who takes apple orders from his family before going to the grocery store. I'm going to be able to be funny, because befuddled husbands in grocery stores are always funny. So it wasn't that he came to me with a story. I came to him with the idea of let's look at theme, meaning and message and then snap it over to the tubes. That's what we want to do when we're putting a band-aid on. We don't want to think about what we're talking about. We want to think about the feelings we want people to have about what we're talking about.

**Lenny** (01:05:52):
Amazing. Okay. So the advice here essentially is you're trying to find a story to tell about something, to help you convince someone of something. You want to think about what is the theme of this problem that I have? What is the meaning behind it and what is the message?

**Matthew Dicks** (01:06:05):
Yeah. Usually one of those. Yeah.

**Lenny** (01:06:07):
And then you also touched back on make something in the story relate to something personal about you so that people are like, oh, I'm a runner too. I got to pay attention to this guy. Or I'm shopping. I shop all the time for apples.

**Matthew Dicks** (01:06:18):
Yes. See, so we're stacking strategies, which is a really good thing to do. So we're pulling in all of the things I've talked about and it really makes for a powerful moment for people and a memorable moment. Because the most important thing is that we're becoming memorable. We are in a conference amongst other scientists and we're actually the one who's being remembered.

**Lenny** (01:06:37):
So that was the band-aid approach. Then there's the way you recommend it was just build a bank of stories. I imagine this is where the Homework for Life framework you recommend comes from. So maybe let's transition talk about that. Because I think that has a lot of benefits beyond even just coming up with a bunch of story ideas.

**Matthew Dicks** (01:06:53):
Yeah. It's the most important thing that I teach. Whether or not you're ever going to speak in your life. If you plan on being a hermit and going off into the woods and never speaking to someone again, you should be doing Homework for Life regardless. It's a process I came up with maybe 15 years ago now. Essentially when I began telling stories on stages, I fell in love with it immediately, and I got worried that I was going to run out of stories. I saw a lot of storytellers on stages performing, and they would tell the same 6, 7, 8 stories every time, and I didn't want to be that guy. I wanted to have a brand new story every time I took the stage.

**Matthew Dicks** (01:07:25):
So in a fit of panic, I decided to assign myself homework being an elementary school teacher, it's natural for me to have that inclination. So I just decided every day before I go to bed, I'm going to look back on the day and find one moment that would've been worth telling as a story. Even if it wasn't really worth telling, I was going to write it down. Now I don't write the whole thing down. That's crazy. It's not doable. What I do is I took an Excel spreadsheet, two columns, the date, and then I stretched the B column across. And in that B column, essentially the length of the computer screen, that's where I write my story.

**Matthew Dicks** (01:07:59):
My goal was I find one new moment per month. 12 new stories per year. That would be amazing. Instead, something far more amazing happens. I discovered that my life is filled with more stories than I will ever have time to tell. And I'm not a unicorn. Thousands of people all over the world are doing the same thing right now and discovering that their lives are filled with stories. Moments like Eileen, which 20 years ago, I would've forgotten that moment within days, and now I've held onto it because it's going to be a Homework for Life moment.

**Matthew Dicks** (01:08:29):
So I start writing those moments down, and I discovered that I'm developing a lens for storytelling. I see the moments that I did not see before. In fact, I just did some analysis for my new book. In the first year I did Homework for Life I found 1.8 moments per day. So you can find more than one. Eventually I started recording more than one. So 1.8 moments per day. I now find 7.6 moments per day. It's not because my life is more interesting. It's because I have a better lens and I understand what to look for, what to see, and what is worth remembering. So I've become a person who has an endless number of stories like Boris.

**Matthew Dicks** (01:09:07):
Boris does Homework for Life. It's why whenever we meet, he's got three new stories to tell me. And then we work on the stories and then figure out the business applications for them. So it's so important because what we do is we throw our lives away. People say that time flies and it doesn't. What happens is it goes by unaccounted. If you can only remember 89 days of 365 in a year, of course time flies. Because you had 365 and you only remember 89. It's going to feel like it went by quickly. It's not going by quickly, you're just failing to account for each day. And each day has something worth remembering. Homework for Life is the acknowledgement that every single day should have something.

**Matthew Dicks** (01:09:48):
The prompt that I actually use for myself is this. I say, if someone kidnapped my family and said, "You can't have them back until you stand on a stage and tell a story about something that happened today, what would you tell?" That was what I would think in my head every night, and then I would write it down. To be honest, nowadays, I'm not sitting down at the end of the day and writing them all down. I'm recording them as the day goes on. My laptop is around me, my phone is around me. When I hear something. My son says a bit of dialogue I can't believe he just said. I see something for the first time or the last time, or a stray thought enters my mind. I have a new thought that I had not occurred before, all of those become moments for Homework for Life.

**Matthew Dicks** (01:10:28):
Not everyone becomes a story. I did some analysis on this too. About 10% of the things that I write down ultimately either become a story or a part of a story, but the other 90% it's just as valuable. Because I'm holding onto my days. And the other amazing thing that happens is once you start doing this, you'll crack open. And all of the stories that you've left from the past, the ones you've forgotten, they'll start to rise up. They'll bubble up. And I include those in my Homework for Life too as memories. Because once you start looking through the lens of storytelling, you see something like you see Eileen find confidence, and suddenly your brain connects to other students or moments in your life or moments in your children's life, where confidence was an issue and you think, oh, that's right. It's just like that kid.

**Matthew Dicks** (01:11:11):
And now I have another moment that I've recovered from the past. A day has returned to me. It enters my Homework for Life, and suddenly I have more stories than I ever have time to tell. And it's not just me. Like I said, thousands of people all over the world, my own children and my students do Homework for Life. And all of them will tell you it's the most valuable thing that you can do.

**Lenny** (01:11:31):
And I think you touched on this. It's not just to collect a bunch of stories. There's a therapeutic element to this too, that you talk about.

**Matthew Dicks** (01:11:37):
Yeah. Absolutely. Many therapeutic elements. First is you're recovering your time and slowing time down, which is beautiful. My kids are 14 and 11. Thank goodness I started Homework for Life just about when Clara was first born. Because they feel 14 and 11 to me. They don't feel like they were just born yesterday, which for a lot of parents, they do. Lots of parents say things like, "Oh, my God, you're not going to believe what my kids said. I got to write it down." But nobody writes it down. You're not going to believe what my kid said is in Homework for Life for me. So I'm holding onto the moments, stretching out time. You also start to do things like you start to see patterns in your life that you don't realize, unless you really think about your life. And I think you should. Storytellers tend to be slightly self-centered in a positive way, meaning we afford ourselves time to think about ourselves.

**Matthew Dicks** (01:12:22):
You start to see patterns if you start doing this. So I think what I talk about in my book is I always tell people, my wife and I never fight. We've never raised our voices to each other. We really don't ever argue. But I noticed in my Homework for Life a moment when she had asked me to put in the air conditioners before I had central air in the house, and I hated it. I hated it because we agreed to never buy a house without central air. And every year the air conditioners somehow get heavier. I don't understand the physics behind it, but every year it's worse.

**Matthew Dicks** (01:12:50):
And she always asks on the 98 degree day, "Hey, can you put the air conditioners in?" And there was a day when I was like, "No, I'm not going to do it. It's really hot." And she was like, "Okay, no problem." And then 10 minutes later, I'm in the basement pulling them out, complaining, grumbling, arguing. Only to myself banging them on purpose so she can hear. She's like, "What's going on?" I'm like, "I'm putting in the air conditioners." So that becomes a Homework for Life moment.

**Matthew Dicks** (01:13:13):
And then a month later, she asks me to mow the lawn, on a 98 degree day. And I said, "I'm not going to mow the lawn. I'm busy and it's really hot." And she goes, "Okay, no problem. Maybe tomorrow." And then I sit for a while and I stew. And then I'm mowing the lawn, but I'm doing it aggressively. I'm running and just angrily mowing the lawn. And when I see these patterns, I suddenly go, "Oh, I do fight with my wife, on my own." I fight in a way that she's not aware I'm doing it. I yell at her through chores and she's not aware that it's even happening. That becomes a story that couples love. They think it's hilarious.

**Matthew Dicks** (01:13:48):
You also start to see stories that you would've never seen. So it was a day last May when the neighbors to my left and the neighbors to my right came over to the house and had a cookout, the first one of the year. And that was a day when I didn't find anything in the day. I had one moment, which is very unusual for me. And I remember thinking, "Really, all you got is you had a cookout with the neighbors, that's the best you got?" It's not even really a story. But it was the best I had so I wrote it down and I moved on. About four months later, the neighbors to our left announced they were getting divorced. It devastated us. Because they have two kids. We've got this big communal backyard with the three houses. Three boys to the right, two kids to the left, friends. Couldn't believe it that they're getting divorced. Known each other since high school. We just never saw it coming.

**Matthew Dicks** (01:14:33):
One day later, neighbors to the right announced they're getting divorced. Left and right within a day of each other. And it becomes a story about how you never understand what's going on in a marriage unless you're in that house. But I don't have that moment in May when there were three couples on a porch, one of them was happy. I thought all three were happy. I don't get that moment unless I'm doing Homework for Life, and I write it down, and now I see a trajectory of a story. I have the opposite. Now I actually have an opposite moment which is I'm serving hot dogs to people I think are happy, but they're only pretending to be happy for our sake. And then they're returning to their homes, to discord and eventually to disillusion of a marriage. So Homework for Life gives you all of that that you don't normally have in life because we tend to live day by day, and we leave that last day behind.

**Lenny** (01:15:27):
I got tingles listening to that story. For someone that's now motivated to try this. I know there's a template that we'll link to in the show notes where you give people, it's very simple, but I think seeing it will be helpful. But what's something someone could do tonight to start on this process and maybe set a habit to do? How do you actually go about doing this?

**Matthew Dicks** (01:15:44):
Well, they have to start Homework for Life. And I have a TED talk about it that I go on for 17 minutes about. So I suggest watching it because you'll just get more than what I just told you and I think that's important. And you have to decide to do it every single day, even on the day when the best you have is a cookout. If that's all you got, that's what you got, and you write it down. You have to have some faith too, that it's going to happen over time. Remember, I started with 1.8 and now I'm up to 7.6. And that's over more than 12 years it takes for me to make that jump.

**Matthew Dicks** (01:16:12):
So in the beginning, you're not going to be very good at it. You're not going to see the right things, and that's just the way it is. If I go back to my original Homework for Life, I see myself looking for stories. And you're not really looking for stories. You're just looking for moments that touch your heart, touch your mind. That's all you're really hoping for. And some of those will become stories. So you've got to start Homework for Life right away. And then if you can just find some people who are willing to listen and begin telling some stories, that's really helpful because most people are unwilling to listen. There's not a lot of good listeners in the world. Everyone says they're a great listener, but active listening is a skill that most people do not possess in any way whatsoever. But if you find people who are willing to listen, you got to start telling stories. You got to start practicing in meaningful ways. And your first stories aren't going to be great. But the good news is most people's stories are terrible. Most storytelling in the world is not very good. So if you put a little thought into what you're about to say, you're going to be better. Because storytelling is not about facility with the language or your vocabulary. It's all about decision-making. That's all it is.

**Matthew Dicks** (01:17:14):
Storytellers are people who think before they speak. They make strategical tactical decisions before they speak. And ultimately, they make enough good decisions to entertain people. Ultimately, no matter what you're doing, whether I am teaching a fifth grader how to behave better, or presenting a new product for a large company, or helping someone deliver an all hands, the first and most important thing you have to be is entertaining. You have to entertain or people will not listen to you. So you got to practice, you got to get reps.

**Lenny** (01:17:47):
I want to talk about public speaking skills, but just to close the loop on that. So if someone was trying to do this Homework for Life exercises, the idea, would you recommend at night before they go to sleep, open up Google Sheets on their phone and just add something? Is there something else you'd recommend?

**Matthew Dicks** (01:18:00):
No. Yeah. That's what I would do. Although ideally, as you go through...

**Matthew Dicks** (01:18:00):
No. Yeah, that's what I would do. Although ideally, as you go through the day, things get forgotten quickly. Your son says something hilarious and by the end of the night you can't remember what it was. So if you can start sort of tracking it through the day a little bit, maybe you make it a habit where at lunchtime you're going to ask yourself what happened that morning? And when you get home from work, you're going to say what happened in the afternoon? And then in the evening you're going to say what happened since then? And then sort of take a whole view of the day and then be open to those memories, allow them to come back. I record them in my Homework for Life as memory, sort of a capital M-E-M-O-R-Y. Because what happens is you start to build up so many homework for life memories that you get confused.

**Matthew Dicks** (01:18:39):
You're like, what? When did I see a deer? And then I go, oh, that's a story from when I was 14. But you get confused because it's sitting on when you're 38 years old. So you mark them as memories. You hold onto them, you put them into spreadsheets because eventually you're going to want to move that data around and keep track of it in some meaningful way. But yeah, get started today because if you don't, you will lose today. Every day that you don't do homework for life is a day that is going to be lost to you forever.

**Lenny** (01:19:06):
And just very practically, you recommend like Google Sheets, I imagine is what you use?

**Matthew Dicks** (01:19:09):
I actually use old-fashioned Excel, but yes, Google Sheets would work too, because I started so long ago, right, Excel was the thing I used, and Excel is the thing I still use. I mean, it's backed up in 19 places because it's the most precious thing I have other than my wife and children, cats. But yeah, that's what I would suggest to use.

**Lenny** (01:19:26):
Awesome. Okay. Just a couple more questions before our very exciting lightning round. In your book, you say that you've only been nervous twice on stage giving a story. Most people, I don't know, is that [inaudible 01:19:36].

**Matthew Dicks** (01:19:26):
Yeah, that's true. I'm like,-

**Lenny** (01:19:26):
Okay.

**Matthew Dicks** (01:19:37):
I can remember the two times. It was yeah, it was PTSD related and Seth Meyers cost of ticket related.

**Lenny** (01:19:44):
Oh, I remember that story.

**Matthew Dicks** (01:19:44):
Yeah.

**Lenny** (01:19:46):
Okay. So most people are not like you. Most people are nervous, including me, every single time I get on stage, tell a story. What advice do you give people to help them get better with the nerves of getting on stage and telling a story? Classically, it's the thing people fear most in life.

**Matthew Dicks** (01:20:00):
Well, the first thing you have to understand is that 98% of your nervousness is actually before you begin speaking. Once you begin speaking, almost all of your nervousness falls away, and that is the experience of most people. So what you're really suffering is from pre-talk nervousness. And when you find that out, that's kind of a relief because if you do it enough. Someone just spoke in the Netherlands, and today I'm waiting to find out how it went. He spoke it for the Florida State Legislature, same topic, and he was really nervous about going into today. He was also really nervous speaking to a bunch of scientists in the Netherlands. But I told him, I said, "After you began speaking in the Netherlands, once the talk began, how nervous were you?" And he said, "Oh, actually, when I began speaking, I was pretty okay. I was incredibly nervous before the talk." And I said, "Well, that makes sense."

**Matthew Dicks** (01:20:49):
So if you own the fact or you believe the fact that, oh, most of my nervousness comes before the talk, but once I start speaking, I'm pretty good. That's really relieving for a lot of people because what we imagine is that we're nervous while we're talking, which is often not the case, particularly if you're kind of prepared, if you know what you're talking about. So be aware that most of your nervousness happens before you speak, and that's a normal thing, and you're just going to have to accept that until some day when perhaps it starts to go away through repetition, through continued performance on a stage. For some people, they're always nervous. I was performing with, I won't say her name, but someone who you have watched on television before, and we were both backstage and I was chatting up the room and she finally said to me, this very famous person, "Would you stop talking? Because the rest of us are trying to keep information in our head and stay calm." I'm a terrible person backstage because I'm always calm, I never care.

**Matthew Dicks** (01:21:45):
So I have to sort of sequester myself from these people because I torture them. But once she began speaking, all of her nerves fell away. So that's a good thing to know. The other thing to know that's really great is everyone's nervous, except for me. I'm the only monster in the world. So if you're feeling nervous, you're just like everyone else, including a very famous person who you see on TV all the time. That person was nervous, you're nervous, you're in the same camp, right, you're in the same boat. And then preparation is going to reduce your level of nervousness. One of the things that I tell people to do that is most helpful is it's good to practice your talk or practice your pitch, whatever you're doing, but one of the best ways to prepare for it is to record it and listen to it.

**Matthew Dicks** (01:22:26):
Listen to it passively, listen to it while your grocery shopping, listen to it while you're folding laundry, doing the dishes. What happens is, I really believe this, as you start to listen to it over and over again, it just sort of seeps into your soul, and so it becomes part of you. I have done this technique. I've told a story a decade ago, haven't told it since. Someone hears it on YouTube and says, "Hey, can you tell that story at our event?" I say, "Yes". I can listen to it once and it comes right out again because I allowed it to sort of sink into my memory in the same way that When Harry Met Sally has sunk into your wife's memory. She can replay that movie in her mind probably perfectly. If you listen to your talk enough, you will get to the point where you can retell it with ease.

**Matthew Dicks** (01:23:09):
The other thing you can do is some active listening with it. Most people don't forget their talk. They forget the transitions in their talk. So I'm talking about this, but then I got to transition to this, then I got to transition to this. So when I'm listening to my stories or a talk that I'm going to give, I'm playing a game with myself.

**Matthew Dicks** (01:23:26):
So I'm listening and I go, oh, okay, this is closing out and the next thing I have to talk about is this, and then the next thing I have to talk about is this. And if I don't know what I'm going to, if I'm like, Ooh, what am I going to next? That's where I go, oh, I got to create a mnemonic there. I got to create a bit of memorization there to train myself for that transition. Once you're in a new section of a talk, even if you're following it up a little, you're going to be okay because you're like, oh, I got to talk about the data related to the this or the that. And if it doesn't come out perfectly, you still know what you're talking about.

**Matthew Dicks** (01:23:55):
But what happens when you're done with the data related to this or that, you go, ah damn, what am I supposed to do next? Right. So we're working on building those transitions. Before a talk or before a story let's say I will do something like I'm going to start in the car and then I'm going to get out into the store, and then I'm going to head out to the parking lot, and then I'm going to be in the park, and then it's three weeks later. I don't tell myself the story. I'm just bouncing between the scenes because once I know the scenes and I know, okay, there's seven scenes, and here they are, and here's the transitions. Again, if I follow up each scene, that's okay because I'm going to get the information out. It might not come out as perfectly as I hoped. You also, if you can avoid memorizing, that'll save you a ton of suffering because memorizers, they're the most tortured souls in the world. So avoid that if all possible. Remember your talk without memorizing your talk.

**Lenny** (01:24:43):
Reminds me, a friend of mine gave a TED Talk and he shared that they give you this advice that people are different kind of learners. Some are audio learners, some are visual. So if you're like an audio learner, listening to it is the most helpful. Some it's seeing the script.

**Matthew Dicks** (01:24:55):
Yes.

**Lenny** (01:24:55):
And looking at it,-

**Matthew Dicks** (01:24:56):
And I'm very much an auditory learner. The other thing though about listening to it is you just get sick of practicing. It gets so frustrating to practice. So at some point you don't want to say it anymore. So rather than saying it, you start to listen to it. You listen to yourself, tell a story about yourself to yourself, which is the most narcissistic thing you could probably do in the world. But even if you're a visual learner, because it's so annoying to practice eventually, I think listening to it can be really helpful.

**Lenny** (01:25:26):
Okay. Last question is I want to talk about, I mentioned I bring this up, is the power of saying yes, something that you recommend people say yes to stuff versus no. It reminds me, David Sedaris in a, I don't know, Dave Masterclass video or something, said the same thing. He's just like, "I just say yes to everything because it creates great stories."

**Matthew Dicks** (01:25:41):
Really?

**Lenny** (01:25:42):
Yeah, it's in his Masterclass talk,-

**Matthew Dicks** (01:25:44):
And I just finished Sedaris's Happy-Go-Lucky, which is a great book. I love him.

**Lenny** (01:25:48):
Yeah, yeah. So I'd love to hear your advice here for people just to give them a little bit of a final takeaway.

**Matthew Dicks** (01:25:53):
Sure. So I'm going to disagree with Sedaris a little bit. Nah, I won't disagree with him by saying, yes, you do end up with some great stories, but that's not the purpose of the yes. There's actually a book, a storytelling book in the world that I'm not going to mention, and it talks about how to find great stories and it says, go do crazy things and you'll have great stories. I disagree. Fundamentally first, that's a foolish way to live your life. And also some of the best stories I tell, I think the best stories I tell are about tiny moments in our lives where nothing extraordinary happens except everything in our head, right? Most stories that I tell, if you had actually witness the moment of transformation or realization, you would've never known it was happening because most things that happen to us happen in our heads.

**Matthew Dicks** (01:26:34):
It's not while we're hanging from a cliff, right, for our dear life that we suddenly have a revelation. It's usually like we're walking across a parking lot and suddenly something hits us that's been building up for three weeks, but now it's hit us walking across the parking lot. So the reason we say yes to everything is if you don't say yes, what you're essentially saying is, I am so presumptuous that I understand what's on the other side of that door already even though I've never set foot beyond that door. Right. I just know so much about the world that I know that what's behind that door is not for me. And I think that's foolish and arrogant and full of hubris that is not helping anyone in any way.

**Matthew Dicks** (01:27:19):
So I say when someone offers you an opportunity, as crazy as it is, as ridiculous, as much as you don't want to do it, which many times in my life, the yeses that I have said about something I did not want to do, but forced myself to do it because of my belief system have resulted in the best and most extraordinary opportunities of my life. A yes can always become a no, right? Yes, I will try that. I step through the door, I give it a try, I spend some time with it. I look around and I say, you know what? Not for me. I step back through and I close the door.

**Matthew Dicks** (01:27:54):
But so often in life, people don't step through the door. They're too afraid. They've already prejudged the opportunity in some way. They fail to see the benefits of it or the value because they can't see that because they haven't gone through the door. And then there's this ridiculous belief in the world that we're supposed to learn to say no so that we can sort of sequester our time and make it as meaningful as possible, which sounds really terrible to me. The problem is you're going to be 100 someday, and when you're 100, no one is going to be asking you to step through any more doors, and at that point, you're going to look into the past and you're going to say, there were a lot of doors I didn't step through, right, and you're not going to be thinking, I'm so glad I didn't because I allowed myself to stay on the one path that I knew was going to be good for me.

**Matthew Dicks** (01:28:46):
I just think that there is no one good path that's good for you. I think there's a multitude of paths, and they're all great, and a few of them are terrible, but you find out which ones are terrible by stepping through the door, deciding this is not for me and coming back. So I think most of the time people say no because they're afraid. And when someone asks me to do something that scares me, that is when I run to that thing as quickly as possible with all of my might as terrified as I am, because I know that it's the things that frighten me are often the things that are the best for me.

**Matthew Dicks** (01:29:19):
So we say yes with the acknowledgement that we can say no eventually, but a yes can lead to extraordinary things. And if you watch my TED Talk on saying yes, you'll see that yeses just lead to these extraordinary chains where you said yes to something you didn't want to say yes to, and suddenly it forced you to meet someone who you never would've met, who opened a different door for you. And I mean, the causal chain that you can sort of create by saying an odd yes is extraordinary.

**Lenny** (01:29:47):
There was a quote I often come back to around this, which is, "The cave you fear contains the treasure you seek."

**Matthew Dicks** (01:29:51):
Yeah, that's really good. I mean someone, I do standup now quite frequently. I was just in the New York City Comedy Festival, and I do standup because six years ago, one of my buddies sent me an email saying, "Hey, we should do standup." And I replied to him and said, "No, I'm not interested in that." Hit reply. And then I said to myself, "Whoa, why did you just do that?" And I said to myself, "I'm terrified of it." I can tell funny stories and if it's not funny, still telling a story, but if I'm doing standup and I'm not funny, I'm failing. And that's a terrifying thing.

**Matthew Dicks** (01:30:24):
So I immediately sent a second email that said, "Okay, I'm in. When are we doing it?" I have now done standup many, many, many times. That guy who initially asked me to do standup with him has never done it. Not once in his life. He wanted to do it, but he's afraid to step through the door. He's too afraid to do the thing that he challenged me to do that I now do on a regular basis because he challenged me and it's still the thing that probably scares me the most. And therefore, it's the thing that I'm relentlessly trying to do at all times because I know the things that scare me are the things that are the best for me.

**Lenny** (01:30:56):
Amazing. Matt, is there anything else you want to share or leave listeners with before we get to your very exciting lightning round?

**Matthew Dicks** (01:31:04):
No, I've said enough. They've heard enough from me. Let's go to the lightning round.

**Lenny** (01:31:08):
We've covered a lot. Let's do it. Well, welcome to our very exciting lightning round. Are you ready?

**Matthew Dicks** (01:31:12):
Yes.

**Lenny** (01:31:14):
What are two or three books that you've recommended most to other people?

**Matthew Dicks** (01:31:18):
Oh, so Nathaniel Philbrick's, Heart of the Sea, which is a non-fiction account of the whale ship Essex, which is the origin of the idea for Moby Dick. The sinking of the Essex is what gave Melville the idea for Moby Dick. It's an extraordinary non-fiction account of the whale ship Essex. So that book for sure. If you have children, but even if you don't, because this is one of those children's books that reads well for adults as Kate DiCamillo's, The Tale of Despereaux. It's a young adult novel. It'll take you two hours to read. I've read it 20 times. It is beautiful and extraordinary and fantastic. And then anything by Jessie Klein, she has two books. The only thing I don't like about her is she only has two books. Actually, Sedaris too, Jessie Klein and David Sedaris. Go read those two people too. I'm actually right now reading Bamford's book, the comedian, what's her first name? Bamford. I have Amy stuck in my head for Amy Sedaris. Maria Bamford's memoir right now I'm reading. Also, extraordinary. So there's four that I am now recommending.

**Lenny** (01:32:26):
Amazing. What's a favorite recent movie or TV show that you've really enjoyed?

**Matthew Dicks** (01:32:32):
Well, for TV shows I enjoyed The Last of Us, which is based on a video game I've never played in my life. Pretty extraordinary as a TV show, both because filled with stakes. Yeah, it's one of those shows they'll kill anyone at any time. And so you're on the edge of your seat. No one is safe, which is fantastic. And then it has this beautiful bottle episode in the middle of the season, which is one of those things where you're in a zombie TV show, which oddly is unlike any zombie TV show I've ever seen. And then there's a beautiful, fantastic episode. There's another one later on that's sort of very similar. It's just great storytelling in a multitude of ways. It's great. And for a movie, the Barbie movie is better than I ever expected it to be, quite frankly, and is proof positive that you can make stories about just about anything, and if they mean something, it's going to do extraordinarily well.

**Lenny** (01:33:35):
My next question, I don't know if it makes sense to ask you, it's usually for product people and founders, but the question is, is do you have a favorite interview question you'd like to ask people when you're hiring? Is there anything that comes up when I ask that?

**Matthew Dicks** (01:33:44):
I guess I'll say it's the question I like to ask people most often maybe when I'm playing golf and things. I don't like to ask people what they do. I like to ask, how did you get into the job you currently have? It's a dangerous question because occasionally I ask people it and they realize they're in their job for weird happenstances that don't relate to what they dreamed of doing. So I've had two people in my life cry while they answered the question because they suddenly understand, I'm doing this because my sister got me into the company 16 years ago. And I go, "Oh, well that's great. Is that what you always wanted to do?" And they say, "No, it's actually still not what I want to do." But I do think that most of the time, how you get a job is more interesting than the actual job you're doing. The answer to that question is more interesting.

**Lenny** (01:34:33):
You have a favorite product you've recently discovered that you really like, whether it's an app or something you bought?

**Matthew Dicks** (01:34:38):
Well, if you celebrate Christmas for years, I have had an idea on how to design the best Christmas tree stand, and I finally said, someone must've done it. And they did. So I wrote it down for you. It's the Krinner tree stand. The Krinner Tree Genie is extraordinary. It's exactly what I would've designed if I had any ability to design it. It holds up the tree like none other. It takes two seconds. It is everything that the research told me it would do. It's fantastic. If you don't celebrate Christmas, I will tell you that a Power POD, which is a small, it attaches to your keychain and it will charge your phone twice and it just lives on your keychain. So I am never a person who's going, oh no, I don't have any charge left. I have two charges on a Power POD, which lives on my keychain.

**Matthew Dicks** (01:35:29):
You forget it's even there. And then one day you need it and it's fantastic. It's the best one. There's lots of versions of it. The Power POD is the one you want. And then I just bought a hot dog toaster that toasts the hot dogs and the buns at the same time. It's called the Nostalgia Hot Dog Toaster. It looks like it's from the 1950s. It's really beautiful actually. It's the kind of thing you want to put on your counter because it looks fantastic. My son and I love it because we like hot dogs and it'll put two buns and two hot dogs into the toaster. You pull it down, three minutes later you have a hot dog ready to go. You didn't dirty anything. It's not the best hot dog in the world, but hot dogs are pretty great no matter how they're cooked. So I fully support the Nostalgia Hot Dog Toaster.

**Lenny** (01:36:10):
These are amazing selections. There's also call back to our nostalgia trick for getting to be funny.

**Matthew Dicks** (01:36:15):
Right. That's true. Yes. Unintended, but I'll take credit for it.

**Lenny** (01:36:19):
Do you have a favorite life motto that you often repeat to yourself, share with friends, either in work or in life?

**Matthew Dicks** (01:36:25):
Yeah, it changed my life really. When I was in fourth grade, a teacher who, and I don't remember which teacher it was, which kills me. I was having a bad day and I was being the way that most people are, frankly. And the teacher said to me, "Listen, a positive mental attitude will be your key to success." And I don't know why it's stuck in my head, but it did. I have said that to myself 100,000 times.

**Matthew Dicks** (01:36:48):
And today there's one human being in the world who I think is more positive than me, one human being who I've met, who has more positivity than me. I am a relentlessly positive almost, my wife says offensively positive person. She's like, "You know what? Some days you can have a bad day." And I said, "I just don't. Because a positive mental attitude is my key to success." And it's really the way I frame so much of my life, is looking to the positive, looking to the good. And I do it for people whenever I can. And sometimes it frustrates people. But I really believe that most of life is the mindset that you bring to it. And for me in fourth grade, "A positive mental attitude will be your key to success," for some reason, hit me at the right moment in the right way and has stayed with me ever since.

**Lenny** (01:37:30):
What's interesting about that is it's not even like that well, cleverly put. It sounds like a fortune cookie,

**Matthew Dicks** (01:37:36):
Yeah.

**Lenny** (01:37:36):
You get and you're like, yeah, sure. But I love that that really had so much impact on you, it stuck with you.

**Matthew Dicks** (01:37:41):
Yeah, I think it was probably timing really. I think I was really having a hard time, and I know at the time two of my friends were not being my friend anymore, and they were my only two friends sort of at the time. And I think I was just open and ready to hear something that I could do to make my life better. And that was the one, and I'm probably predisposed to being an optimist anyway, so it probably landed just right for me.

**Lenny** (01:38:05):
A positive mental attitude will be your key to success. Amazing. Final question, maybe just to leave listeners with one tactical thing they can do to become better storytellers. What would that be?

**Matthew Dicks** (01:38:17):
So two things should start every story you ever tell for the rest of your life. So you start with location, where are you? Location activates imagination, right? If I say I'm standing in the kitchen, you've already automatically applied 1000 adjectives to my story. You see the kitchen with great clarity. You probably put me in your own kitchen or your parents' kitchen or a kitchen you see on TV. But if the particularities of the kitchen are relevant to the story, that's what I want you to do. I'm not interested in reproducing locations with some kind of visual accuracy in your brain. I want you to see a fully realized location. So I love location because it's one word that comes imbued with 1000 adjectives.

**Matthew Dicks** (01:38:59):
So you start with location and you start with action, meaning something needs to be happening right away. Literally, I am in a place and I'm doing a thing. It indicates to the audience that you're actually going to tell something that's moving forward. It's why there's a big spaceship shooting of little spaceship in the opening of Star Wars. It's why there's a police officer chasing a guy across a roof. Something is already happening.

**Matthew Dicks** (01:39:27):
We didn't start with nonsense. We started with something happening that grabbed us right away. That's what people want from story. Also, if you're a person unlike me, which is to say anyone who isn't sort of a white straight American man with no physical or mental disabilities, who thinks, I've always thought every room I walk into, I have the right to speak. But if you are unlike me in those regards, you often find, and I know this is true, that it's harder to make space, to get people to hear you if you're from any marginalized or discriminated against group in any way. But what I've been told by women and people of color and members of the LGBTQ community, they've discovered that when I start a story by going, I'm in a place doing a thing, it's a signal to people that I am now telling a story.

**Matthew Dicks** (01:40:12):
And when you can signal to people, I'm now telling a story, they will get quiet for you and they will afford you the opportunity to speak. I didn't know this was going to be the case, but I have had many, many people who I teach this skill to come back to me and say, "My God, people listen to me." And they've said they think they listen because I tell a good story, but they've told me because I start with that location and action, it just tells people, the movie's on. Nobody talks during the movie. You can eat popcorn, but you're not allowed to talk. It silences the room for you and affords you some space to then start doing the work that a good storyteller does to hold those people's attention. So start every story you ever tell for the rest of your life with those two things, and you're already going to be like 50% better than you were before you heard this.

**Lenny** (01:40:57):
Wow. Well, the hits just keep on coming. Matt, you're much more of a philosopher than I imagined you were when we started this conversation. I learned a ton. I'm really excited for people to learn from you. Where can folks find you online if they want to learn more or continue learning from you and work with you potentially, especially companies? And then finally, how can listeners be useful to you?

**Matthew Dicks** (01:41:17):
Sure. So you can find me at matthewdicks.com or if you're a business oriented person or someone who wants to learn, I also have storyworthymd.com, my initials, MD, and that's where I sort of have courses and online training and things like that. So either place you'll be able to find me and contact me. In a non-self-serving sort of version of your second part of the question, I think if you just tell stories, but more importantly, if you ask people to tell you stories, again, creating that space, listen for people who say things like, oh, something like that happened to me once. What they're really saying is, I wish someone would want to hear what happened to me once.

**Matthew Dicks** (01:41:59):
And so I am always someone who's willing to say, oh, tell me that story. Offer someone five minutes of your time so they can finally speak the thing that they've been waiting to speak to someone. So if you just do that, there's going to be more opportunities for storytelling in the world, and ultimately, perhaps that will funnel down to me where they will want to buy my book or visit my website or take some training with me, but just create space for storytelling. I think that'd be a beautiful thing.

**Lenny** (01:42:25):
I love it. What a beautiful way to end it. Matt, thank you so much for being here.

**Matthew Dicks** (01:42:29):
Thanks so much, Lenny. I really appreciate it.

**Lenny** (01:42:31):
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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## [21/24] Jason Fried challenges your thinking on fundraising, goals, growth, and more

**Jason Fried** (00:00:00):
The reason I think it's great for entrepreneurs to start bootstrapping is because they just have more practice making money, and they get better, and better, and better at the fundamental skill you need to have ultimately to run a successful business, which is to make money. Hopefully, I don't come off as encouraging everyone to be like me. I'm not saying that at all. What I'm saying is, this is a way to be. It's an alternative to what you're often hearing in our industry, which is, "Go big or go home. Raise a bunch of money and get huge, and unicorn status," and the whole thing. That's a way. Just know though that basically almost nobody makes it that way. Really, almost nobody really makes it that way, and there's a lot more room to make it, and to build a successful business, if you throw out that outlier and look at all the other places you can land as a business.

**Lenny** (00:00:49):
Today, my guest is Jason Fried. Jason is the Co-Founder and CEO of 37signals, which makes Basecamp and HEY, and soon a few more products including a competitor to Slack. 37signals is a very different type of company. They have no investors, no board. They have no plans to go public. They never want to sell their business. They've made a profit for 24 years in a row. They have over 100,000 customers and make tens of millions of dollars in profit each year, which most VC-backed companies never make a dollar of. All of this profit filters down to the founders and employees because they have no investors. Most founders, by default, will go down the venture route raising money from VCs and Angels. For many types of companies, that is necessary. But it's also important to know that there is a different option available, and it can be much more fulfilling and fun, and even much more lucrative, by bootstrapping your idea.

**Jason Fried** (00:05:03):
Thanks, Lenny. It's good to be here.

**Lenny** (00:05:04):
It's really good to have you on. I have this new segment on the podcast that I call Contrarian Corner, and I have this feeling like this entire episode is going to be Contrarian Corner. I'm excited to dig into all kinds of stuff. I have so many questions I want to ask you. I thought it'd be good to just start with giving people who aren't that familiar with your story and 37signals, a sense of just how successful the business has been. I think people don't quite get the business you've built, and the scale you've built. So whatever you can share in terms of customers, profits, anything you are comfortable sharing, I'd love to give people... Especially things that might surprise people, just a sense of like, "Wow, this business is not what I imagined."

**Jason Fried** (00:05:44):
We don't talk about things that don't really matter so much, like revenues don't really matter 'cause you can go broke generating a lot of money. But, we talk about profits. Historically, let's say over the past 10 years or so, we've been profitable every year for 24 years. But let's say over the last 10 years, we've been doing double-digit million dollar profits on an annual basis, which is really nice. We have about a 100,000 plus paying customers, so that's a rough number, and we've about currently 75 or so employees.

**Jason Fried** (00:06:12):
So, a relatively small business in terms of the number of people who work here, big customer base, big profits, and that's how we like to keep it, and that's something that we've always focused on, versus a lot of these other metrics that I hear a lot, and usually there's acronyms attached to them, and of don't even know what they are, and I don't really care about them so much. We just want to make more money than we spend, have good healthy margins which allow us to experiment, and play, and not be afraid to do things that may not work, and just enjoy ourselves. So that's what we've been doing for almost 25 years. Next year will be our 25th year in business.

**Lenny** (00:06:47):
Just following the same thread, the bet that companies are making, obviously going down the venture route, they're going to lose money for a long time so that they can make much, much more money in the future. So the idea there is, grow as fast as possible, as big as possible, and then we'll make money. You're a big advocate of not raising venture and bootstrapping. So what's your advice to founders for when raising money makes sense? I actually wrote this article, one's called, Your Startup Is Probably Not Venture-Scale, just trying to convince people, you may have a really good idea, but it doesn't mean it's a venture-scale business. I feel like we're aligned on this. What's your advice to founders there?

**Jason Fried** (00:07:25):
Obviously, if you're building cars, or you need a factory, or you're opening a restaurant and there's actual things you need to buy like ovens, and you need to hire people right off the bat, and you need to pay rent, you need capital. It could come from you. It could come from friends and family. It could come from an investor. It can come from a bank loan. There's lots of places to get it, but you'd need it. Software businesses though, and businesses like ours, we just make software, and a lot of people in our industry are like us in that respect. They need a couple laptops and a couple people, and it's pretty cheap. It's really pretty cheap to get going, and the margins are incredibly healthy in software, or they should be.

**Jason Fried** (00:08:06):
What's interesting is that Silicon Valley has found a way to make the most profitable style of business the least profitable. Software, there's no physical costs. The margin should be close to 80 or 90%. It turns out that they're barely even, most of them positive in the end, or they're just sliding by basically. I don't understand how that... Well, I do. They have too many people and they spend too much money on customer acquisition, and all that. But, it blows me away. Most businesses in the world would love to have Silicon Valley style economics, make something that doesn't cost much to make and then sell it for high prices.

**Jason Fried** (00:08:50):
But everyone, the corner store, the pizza shop, they wish they could do this, and they can't because they have physical products that they have to sell, and they have to buy goods, and they have to get raw materials and convert that into a pizza, and there's just costs involved with that. They can't sell it for too much because the other place down the street sells it for less. So again, I'm getting off track, but if you're going to start a business that really truly requires cash, typically capital expenditures, expensive things, hardware, whatever, of course you need that. But, I don't think you do otherwise.

**Jason Fried** (00:09:20):
I think it actually hurts you if you go out and think that you do, because there really is only one outcome for venture-backed companies, which is go huge. If you think about all of the space between a small business and a massive, huge unicorn-y business, there's so much room there that you could normally find your own way, and slide into a slot or a place that makes sense for you. But if you're venture-backed, you just don't even have the opportunity. You blow right past those, or they want you to blow right past those. If you don't, you wither on the vine and die essentially, and it's just too bad.

**Lenny** (00:09:58):
Coming back to something we touched on a bit, is this idea of smaller teams. You tweeted a similar stats, so I'm just going to read these numbers, in terms of your competitors. Asana has 1600 employees. ClickUp has a thousand employees. Slack has 2,500 employees. Smartsheet has 3000 employees. Monday has 1500 employees. You have, I think you said, 70 something employees?

**Jason Fried** (00:10:20):
Yep.

**Lenny** (00:10:22):
You have similar numbers of customers, about 100,000 to 150,000, and you make a lot of profit and they generally don't. How is this possible?

**Jason Fried** (00:10:31):
We run a very different kind of business. We are focused on efficiency, we're not focused on growth. They're focused on growth. So typically, when you have a lot of people, you think you can do more things at once, and you probably can. You do more things at once, and have different offerings to different people, and different tiers, and salespeople, and all the things that build up an organization. We don't have any salespeople. We don't have 15 different versions of Basecamp. We're not after enterprise, so we don't have the enormous support costs and enormous support infrastructure required to service customers like that, and customize this and customize that to keep a whale happy who's paying you $300,000 a year.

**Jason Fried** (00:11:13):
We don't have any of those things. We have one price, basically. Well, we have two prices on Basecamp, one price on HEY. Actually, two prices on HEY. Two, basically. But one code base, one product we offer everybody. Let's take Basecamp for example. Nobody can pay us more than 300 bucks. I don't care how big your company is, the most you can pay us is $299, you get unlimited users. What that allows us to do is to just build one product, do a really nice job, keep it tight, and simple, and clear, and not have the complexity that comes with trying to service and satisfy so many different kinds of companies at different price levels with different price points and different expectations. That's why these companies tend to get bigger and bigger and bigger.

**Jason Fried** (00:11:58):
They also, frankly, build products just differently. We build products with two people at a time. So every feature we work on in Basecamp, or HEY, or whatever we're building is two people, one programmer, one designer, and they have a maximum of six weeks to deliver the feature that they're working on. Most of them are usually a couple of weeks, but they have a maximum of six weeks. So we don't get stuck in these big huge projects, with meetings with 18 people, and slow decision-making, and indecision, and complexity, and all the things that come with trying to do too many things for too many people. Now, all that said, we could still make the mistake of hiring hundreds of people because we could afford to do so. But to spend money because you have it on things you don't need is something that Silicon Valley's gotten quite good at, but we're quite bad at intentionally. I don't want to spend money on things we don't need.

**Jason Fried** (00:12:49):
So we think that constraints, simplicity, small teams actually are where it's at, and keep us honest, and allow us to do great work for our customer base that we know, small businesses, very tight companies like ours, and satisfy them versus trying to go after the big companies, and have to have salespeople, and have long sales cycles, and whatnot. Honestly, if you gave me 1,000 people, I wouldn't know what to do with them. We would fall apart. If you gave me 500 people, I wouldn't know what to do with them. We would fall apart. We would be a worse off company with 500 people. I'd be completely lost. So, that's the other thing. I don't even understand how they run, and the amount of layers they must need, and the amount of complexity organizationally that they must have to... The latticework they have to build up to support all that weight, is just remarkable and it's foreign to us.

**Lenny** (00:13:39):
Okay. I definitely want to talk about how you operate in your way of working, 'cause it's really interesting and there's a lot companies can take away. But, I want to follow on this thread of small teams. I have a few quotes that you've shared that I love.

**Jason Fried** (00:13:50):
Oh, no.

**Lenny** (00:13:50):
Oh, no.

**Jason Fried** (00:13:52):
No, good. No, it's good. Hey, if I said it, I said it. Let's go.

**Lenny** (00:13:55):
No, they're awesome. They're great. Around this idea of staying small, one is, "Small is not just a stepping stone, small is a great destination itself. Also, if you think you're too small to be effective, you've never been in bed with a mosquito."

**Jason Fried** (00:14:08):
Now that's not my quote. That's someone else's, to be clear.

**Lenny** (00:14:10):
Okay. Okay, you popularized it.

**Jason Fried** (00:14:11):
It's a great quote though.

**Lenny** (00:14:12):
Okay. Then there's one more. "You don't need to outdo the competition, it's expensive and defensive. Underdo your competition. We need more simplicity and clarity." I think a lot of these things point to, there's a few paths to success and goals for people. One is build a massively scaled, everyone's using a product like Figma and Notion, and build a venture scale, $100 billion company. Then there's this path which is, we're just going to make a bunch of profit we're going to make individually. We're going to take home a bunch of cash. We're not trying to have everyone in the world use it. I know your focus is, you call it, the Fortune 5 million versus the Fortune 500. So maybe just whatever you want to share about what success means to you, how you think about what success is for you, for the company your building.

**Jason Fried** (00:14:53):
For me, it's really about, would I want to do this again? If the answer is, "Yeah, that was enjoyable. I enjoyed that. That was worthwhile. I'm glad I did that. I'd like to do that again," then it was successful. Now you could carve out some extremes there. I'm sure someone who's addicted to drugs might go, "That felt great, I should do that again." So you got to be careful with that, in a sense. Obviously, I'm not talking about that. Addiction's a whole different story. But in general, with this stuff, "That was fun. Let's do that again. That worked. Let's do that again." Or, "That didn't work. I didn't like that. That was a pain in the ass. That was too complicated. That took too long. Let's not do that again." So it really is about, do you want to do that again? That's what success is to us at a root level.

**Jason Fried** (00:15:37):
Now, on the business side of things, we have to be profitable. That doesn't mean that everything we do needs to be profitable. I am not driven by data, or I don't have different P&Ls for each product in a way where we're looking at them very carefully. It's in total, collectively, are we making more money than we spend? That's the only thing we ultimately look at, whether or not this product is more profitable than that product, and this is behind that, it's all the things we do. It's all the things we do. I don't even think you can actually draw lines back to everything and go, "That was worth it. That wasn't worth it." What is the value of saying thank you to somebody? Would you want to A/B test that and, if it turned out that it was worse to say thank you to somebody, would you not do that? No, you would do it because it's still the right thing to do.

**Jason Fried** (00:16:28):
So a lot of our things are, what feels right? What seems like the decent thing to do? What things do we enjoy making? As long as we can, at the end of the year, look back and go, "Well, collectively, more worked then didn't work," then we're okay. That's how we look at it. We don't have financial goals. We don't have OKRs or KPIs. I don't have revenue targets. I don't have growth targets, in terms of the number of customers we need to pick up this year versus last year. I don't look at any of those things. It's just, at the end, "Did we make more than we spend? We did. Then the things we did this year were worth it." That's how it goes.

**Lenny** (00:17:08):
You also have no investors. You have no board. You have no plans to go public. You have no plans to sell the business.

**Jason Fried** (00:17:13):
Right.

**Lenny** (00:17:14):
There's this book, I don't know if you've read this book called, Finite and Infinite Games.

**Jason Fried** (00:17:18):
No, I've not.

**Lenny** (00:17:20):
Okay. I think you would love it. The whole premise of this book, it's like a terse, tricky, philosophical book, but it's very short. It espouses, you want to be playing infinite games to be happy in life, games that never end versus games like, I'm going to build a business and sell it. Or, I'm going to go public, that's my goal. Or, I want to achieve this promotion. You get most joy out of things that never end, like building great relationships, building a company you want to keep working at forever.

**Jason Fried** (00:17:45):
I like that. What's interesting is, I've always thought of my career this way. When I got my first job, I was 13. I worked in a grocery store for a bit, and then I worked in a shoe store. After that, maybe when I was 15, I got a resellers license, which was this thing... This is way back in the day. I think they still exists. A company called Ingram Micro D, which had this huge thick catalog of electronics equipment. If you had a resellers license, you could buy these things at wholesale prices, then I could sell them to my friends for retail, which is almost 2x wholesale. Even though I'm not selling electronics equipment today, I'm selling software instead, I feel like I have the exact same job as I did when I was 15, that this is a long continuum of finding stuff that I like.

**Jason Fried** (00:18:31):
In this case today, it's building things that I like, and selling them to like-minded people who also would find them useful or those things too. So whether or not it's software, or electronics, or stereo equipment, or whatever the heck it is, or music organizing databases, it's all the same to me, and I just want to keep doing it. This is my day job. The other thing that's interesting about entrepreneurship is, sometimes there's a sense of, you can get a job or you can be an entrepreneur. Well, an entrepreneur is a job. This is my job, so I want to create the company that I want to work at, and I want to keep doing this job for as long as I can. As long as I'm useful, I'm good at it, I enjoy it, I want to keep doing that.

**Jason Fried** (00:19:14):
So to get in bed with an investment that would say, "In five years you have to stop doing what you're doing, you're going to get a big paycheck maybe, but you got to stop doing what you're doing because we're going to sell this business, and you're going to have to go work for this other company for two years and do their thing. Then eventually, after that's over, you'll leave and you'll go start another thing," that just has no appeal to me at all. I'd rather just keep doing the thing that I'm enjoying doing, as long as I can continue to make it work.

**Jason Fried** (00:19:37):
What's cool about having a company like ours, which is an independent business, we don't have to ask anyone for permission. No one can tell us no. So we can turn this into anything we want. It's this vehicle, more so than it is a software business. It happens to be, of course, what it is, but it could be something else as well. There's no limits to what it could be, and that's a fun way to go through life too, in this all-terrain vehicle which can anywhere, on-road, off-road, whatever, and you can get anywhere you need to go. That's what's really quite fun about the kind of business we have.

**Lenny** (00:20:12):
You have this term you hold, instead of a startup it's a stay up.

**Jason Fried** (00:20:15):
Yes. I'm so sick of the startups. It's cool to start a business, obviously, but I'm sick of that term dominating. Because, frankly, starting a business is actually way easier than staying in business. Now, none of it's easy, so I want to be supportive of people who are starting businesses. But they should know that that's actually not the hard part. Literally tomorrow, I can start a new business. You can come up with a name, and you can make a thing, and you can put in the app store, and you can sell it for two bucks, and you've got a business going. But, are you going to be there in two years? Are you going to be there in five years when competition rushes in? When you have employees, are you going to be there? Staying is harder than starting. So I'm here to celebrate stay ups. Plenty of other people are here to celebrate startups.

**Lenny** (00:21:01):
I feel the same way. I always say this about newsletters, and it's also true for podcasts. Easy to start a newsletter, hard to keep it going.

**Jason Fried** (00:21:07):
Totally. I've seen your newsletter fly. We have a newsletter and it's been pretty flat. I'm like, "How does he do it?" It's hard. It's really hard. It's hard to build a podcast audience. It's hard to build a newsletter audience. So yeah, starting something is really easy, but then most people end up in this plateau area, 'cause they get some initial growth, the word gets out, and they end up with 6,000 somethings, and then you're stuck there. Then it's like, "Well, do you want to keep doing this? Or, are you just high on the growth? Or, do you actually like the thing?"

**Jason Fried** (00:21:42):
If you want to do the thing for a long period of time, you've got to like the thing because you're going to have to endure these moments of plateaus, which is what staying up is all about. Sometimes those go down. We've had wavy years, always been profitable, but our profit's different every year. Sometimes it's more, and sometimes it's less. Sometimes our margin is more, sometimes it's less. If you compare yourself to the previous year, you can get demoralized to some degree. But I just, "What do we want to keep doing?," and then we're in it to stay in it.

**Lenny** (00:22:13):
Speaking of enduring, you've been at this for almost 25 years now, I believe?

**Jason Fried** (00:22:18):
Yeah.

**Lenny** (00:22:19):
Have there been periods where... I like that sigh that you just had there.

**Jason Fried** (00:22:24):
It's a long time.

**Lenny** (00:22:25):
So maybe along that path, one, is there a point at which maybe you started going off track and you realized, "This is not what I want to be doing. Why did I do this to myself?" Then two is just, what have you learned being at this for this long?

**Jason Fried** (00:22:36):
I would say, over the past few years, I've had more thoughts of, "How long should I do this for?" I go back and forth. I can tell you, what's interesting is, right now, I'm probably more excited than I've been in many years. But, a year ago I was not so excited. I think that after you've been doing this for a while, you do tend to just compare, what was it like in the early days? What's it like now? All the new things that are harder weren't harder before, and now they're hard today. Do I like doing this kind of hard work, or would I rather do...? You just amass this history, and so you tend to just call back to it, and look back to it. So you opine for the early days, or you reminisce, I should say.

**Jason Fried** (00:23:16):
"Yeah, it was so much easier when we were 20 people." "Yeah, but we weren't doing this, and times were different, and you can't go back anyway." But, it's interesting. Next year I'll be 50. We'll be doing this 25 years. I'll have been running this company for 25 years. Part of me thinks, "Is that enough? Maybe that's enough." But right now, I'm really excited about what we're doing. We're doing some really great product work, probably the best we've done in many, many years. Launching this new thing called ONCE, which hopefully we're going to build three or so products next year under that category. I would like to write another book. We finally have another idea for another book.

**Jason Fried** (00:23:53):
So there's just, right now, this outpouring of energy. I'm trying to be very conscious of my energy interest. Right now, I'm getting energy from the business. There are times in the past where the business sapped energy for me. If it SAPs too much, at some point, you start to think, "Is it worth it? Do I want to keep doing this?" Right now, I'm fueled again by it. But, I don't know what it'll be like in a year from now. I really don't know. I think I'm more conscious of that than I've ever been given how long I've been doing this.

**Jason Fried** (00:24:21):
Also, I always have this strange fantasy, I'm always curious, "What would someone else do with this place? What if someone else could just step in tomorrow? How would they run it? No one's ever had a chance to run it but me. What would they do differently?" I'd have to be completely detached from it to let them really run with it. But, what would they do? I always have this curious about that, I would say. Not curious enough to find out, but still curious. It's always in the back of my head.

**Lenny** (00:24:49):
What do you think they'd do?

**Jason Fried** (00:24:50):
I think they'd probably be focused on growth. I think there's opportunities that we miss all the time. I think that we are stuck in a certain... Stuck sounds like a negative term, but I don't mean it that way. But, we're stuck in a certain groove. We do things the way we do things. We change the way we do things here and there, but we're not really jumping into a new groove. I think someone would jump into a new groove and run the company differently, maybe make a lot more products than we're making today. Maybe resurrect a couple of things that we did in the past. Probably spend a lot on advertising, a lot of marketing, probably take our margin way down and try to focus on growth. What if we spent 70% of our margin on growth? What would that look like? I just feel like that's what most people would probably come in with a business like ours and do. They go, "Oh my god, there's so many missed opportunities here. Look at this, and look at this, and look at this. You've got this brand, and people know about you, and you've got 100,000 paying customers. Think about all the things you could do." I'm not really thinking about all the things we could do. I'm thinking about what we're doing. So I think someone else would come in and think about the things we could do.

**Jason Fried** (00:25:49):
I'm thinking about the things we are doing, with a little bit of a look ahead to things we could also do, but they're still pretty close to what we're doing today. So, that's what I think would happen. It'd be interesting. It'd be neat to live in a reality where there could be a second reality running right alongside you, truly. Not an A/B test, which is hard to do. You can't really A/B test an entire company. I'd seek to A/B test small things. But, it'd be cool if that was something that could happen. Maybe there's some simulation down the road.

**Lenny** (00:26:16):
I was just thinking-

**Jason Fried** (00:26:16):
It's a possibility.

**Lenny** (00:26:17):
Maybe we're in the simulation variant where you're still running it.

**Jason Fried** (00:26:20):
It could be.

**Lenny** (00:26:21):
And there's another... This a cool exercise, actually, just to think about it. If I were to bring in any leader, what would they do? Just as a thought exercise.

**Jason Fried** (00:26:28):
This is a weird way to think about it, but I almost would be embarrassed by what someone would come in and look at, and go, "Oh my God, you guys are missing so many opportunities here." I'd be like, "Yeah, I know. I know we are, but I'm totally fine with it." But, there'd be this moment of judgment and reckoning with, "Do you realize how much you're leaving on the table?" You could have five different pricing tiers, and make a lot more money, and you can maximize this and maximize that, and squeeze this and squeeze that, and address this market, and you could have special versions of Basecamp. Wow, churches are using Basecamp? We could do a special version for churches, and for synagogues, and religious institutions, or education or nonprofits. Think of all the slight different things you could do with these different..."

**Jason Fried** (00:27:06):
I'm certain that all those opportunities exist on the table. They don't interest me, personally, in terms of making multiple products. But I could see someone else going, "There's a huge opportunity here. We got to pursue this." I'd be really proud if someone did that, and made the business bigger and better. I could never have done that. I'm glad someone else did that. But right now, we're running it our way.

**Lenny** (00:27:29):
Coming back to this as a path people can take with their business versus a traditional venture scale business, this path is essentially build something, sell it, make money, live like a chill life. Not super stressed, growth-focused obsessed, need to build a billion-dollar company. Do you think this path is something everyone should do? Is it a specific type of personality, a specific type of product? Do you recommend people that sometimes do go this big shot venture scale route?

**Jason Fried** (00:27:59):
I'm glad there are some people who do that. I'm glad that there's some businesses that-

**Jason Fried** (00:28:00):
People who do that. I'm glad that there's some businesses that wouldn't have worked out had they not taken a bunch of funding and went big, clearly. And there's many impressive businesses that do that. But let's face it, those are extreme outliers. The majority of companies on this planet run like ours. They're bootstrapped, they don't have any money. No one's willing to give them a penny and they open up a shop somewhere, they do something, they put their shingle out and they launch a website or whatever and they try to make it work. So most people are doing it our way, even though in our industry it seems like we're the outliers, but we're not. We're actually incredibly boring and mainstream, really. If you were to pick any random business owner on the street, they'd run their business like us. I got to make more money than I spend otherwise I'm out. I don't have this big cushion of millions sitting in the bank that I can just spend on things.

**Jason Fried** (00:28:48):
So they're pretty, they keep an eye on costs. They think about this carefully. But yeah, I'm glad there's people who are going for the moonshot and doing it their way and doing it a different way. And the world moves forward sometimes because of those businesses and it's great. It's great and I admire them. It's just that it's not the path I would take and I think because that's not who I am, and I think this is the important point that I want to get across, is I'm not really, hopefully I don't come off as encouraging everyone to be like me. I'm not saying that at all. What I'm saying is this is a way to be. It's an alternative to what you're often hearing in our industry, which is like go big or go home, raise a bunch of money and get huge and unicorn status and the whole thing.

**Jason Fried** (00:29:29):
That's a way. Just know though that basically almost nobody makes it that way. Really, almost nobody really makes it that way. And there's a lot more room to make it and to build a successful business, if you throw out that outlier and look at all the other places you can land as a business. So my interest is optionality. If I could land in 135 different positions and have a sustainable business, that's great. Versus saying there's only one way I'm going to be successful or happy. Those odds aren't really in anyone's favor. Even though of course some people win the lottery. And I'm not saying it's luck. There is luck, a lot of luck, including we're lucky that we've made it. So there is a degree of that when I say lottery. But really the point is that there's only a few slots for a few companies like that at any one time. Meanwhile, there are hundreds or thousands of slots for other kinds of companies to make it if they don't go for the moon.

**Lenny** (00:30:31):
Just to close this thought around whether, if you have an idea going the venture route makes sense. What do venture scale companies need to achieve? What investors look for that to even work out? To your point, it almost never works out. What is it you have to do for it to feel like, okay, this is a venture scale idea versus this is an awesome idea. We could just make money every year, every month from it and not raise money and life will be great.

**Jason Fried** (00:30:54):
I'm probably the wrong person to ask, but I would say there are versions of our... Let's just take Monday for example. Basecamp and Monday are quite a bit different, but they live in the same world. We could have flipped, someone could have had the Monday approach and sold Basecamp that way, and Basecamp could have gone big in that way and Monday could have stayed small in our way. Again, I'd rather be my business than their business. I would not trade Basecamp for Monday's business any day of the week because I love what we're doing. We're profitable, we're happy. We don't have to deal with the things they have to deal with. So I wouldn't trade businesses or places with anybody. But you could imagine it could have been swapped. So it's not that Basecamp couldn't be this big venture scale, whatever you want to call it, although look, hey, we have the same number of customers roughly than they do.

**Jason Fried** (00:31:46):
Are we? I guess we are venture scale in that respect. But again, point is is that depending on how you approach it, you can take anything in any different direction. So it's more of a mindset, what are you after? We're not after that and they are. So that's what they do. And we do it a different way. So I don't necessarily think... There's things like Airbnb is a great example that that has to have a certain degree of scale to really be something that no matter where you go in the world, you're like, I can get an Airbnb there. And that's probably going to take money to get there. Same thing with Uber. Uber's another example, and these are easy to pick, but they're great examples really. When Uber was getting started and they had to proliferate all over the country to begin with and all over the world.

**Jason Fried** (00:32:33):
So it was this reliable thing you could think of just you would think of a cab. If I went to New York or Chicago, I knew there'd be a cab. Was there going to be an Uber? I don't know. Well, you have to know that there's going to be one to begin to trust us. So in order to do that, you have to expand rapidly. So there's that kid of, those kind of businesses exist and those are great examples of venture-backed companies that kind of need that massive initial push to be available in all the different places because they're actual physical products. Airbnb's a physical product, Uber's a physical product, Basecamp, Monday, Asana, they're available everywhere instantly anyway. I don't know what you need the money for other than marketing. And it's interesting because marketing's losing them a lot of money. So it's an interesting thing. But anyway, you can talk to them about that.

**Lenny** (00:33:20):
I want to start chatting about your ways of working, how you operate at 37signals. There's a lot of really unique approaches. One is you mentioned that every project is, I didn't know this. It's two people, a designer and engineer, and then two to six weeks of work. Can you just expand on how you actually do that, how broad development works there?

**Jason Fried** (00:33:36):
Yeah, so we have framework development framework we invented called Shape Up, and if you go to basecamp.com/shapeup, you can read the book, it's free. You can also get a print version if you want. Shape Up is our methodology for actually building products. And part of this is this idea at the root of it is this idea of the six-week cycle. That whatever we choose to do can take no longer than six weeks. So this is not an estimate of time, it's an appetite, which is a radically different approach. It doesn't sound like that much of a different word, but it really is. An estimate is like how long do we think it's going to take? And however long it takes is however long it takes. And most human beings are terrible estimators. We all are pretty much terrible estimators. So that's why things keep going and going and going and going.

**Jason Fried** (00:34:21):
We instead have appetites. And our appetite for any individual feature is no more than six weeks. Essentially that's our budget we're willing to spend. I'm only willing to spend six weeks in any feature. So we have to figure out the simplest, most effective version of that to get that done within six weeks and get it done by two people. Now, not everything gets the full six weeks. Some things were like, we have a one week appetite for this. This is not that big of a deal. If we have it, great. If we don't have it, that's fine. We're willing to spend a week on it. Not that it could take a week, because it could also take 12 weeks if we give it 12 and it could take 24, if we give it 24. Work expands to fill the time available. So for us it's about appetite.

**Jason Fried** (00:35:00):
So the idea of appetites, maxing things out at six weeks, two people max, and then there's a lot of other details, and I could go on for an hour about Shape Up, people can read about it. But it's those fundamental principles, appetites, six week max, small teams and this idea of shaping the work ahead of time, then giving the team a lot of latitude to figure out how to get that thing done. We don't have a spec, we don't create to-dos or tasks or tickets for people. They create the work that needs to get done to fulfill the idea that we've written up and designed essentially, and they figure out how to do it. Then we trade. So they might get into something that we've said, we have about six weeks. Well, we're only give it six weeks and two weeks in they go, we actually stumbled into something we didn't realize.

**Jason Fried** (00:35:50):
This is probably not going to be able to be done the way we thought. So can we do it this way? And then we have a discussion and there's a conversation. There's a lot of molding and changing that happens along that period of time. We call it trading concessions. There's all the trade-offs we're always thinking about. So all these things that come to bear. And then people often ask, well, what if you don't get it done in the six weeks you gave it? Well, so it depends. So in most cases it should die, meaning it just doesn't happen. Because if we say we're going to give it six weeks and we give it seven or eight or nine or 10, then we're not really giving it six weeks, we're giving it 10, then we don't really have a system.

**Jason Fried** (00:36:27):
There are times though, when there's a couple days left when we're on what we're calling the downslope. So we have these things in Basecamp called hill charts. And things that are on, that's actually work... A project's more like a hill. It's not like a linear line. If you're on the left side of the hill, it means you're still pushing this thing up the hill. You're still trying to figure out how to do this. But once work gets to the top, it's downhill from there. It's just pure execution and we know how to nail it. So if we're almost at the bottom of the hill on something and it needs two more days, fine. If there's any work that's left over that's still on the left side of the hill, meaning we're still pushing it up, we don't know how we're going to do it and we're at our time limit, it almost certainly dies. So there are some contextual decisions to make at that point, but fundamentally that's how we approach work. And this prevents long running projects that never end, which by the way are the most demoralizing kinds of projects.

**Jason Fried** (00:37:17):
Things that you're stuck on that you don't want to do that never end, sucks. And if people get stuck on a couple of those, they want to leave their job. So the implications here are significant. And so we want to keep people out of that zone of like, I hate this work and it goes on forever. Because sometimes you're going to hate the work. Not all projects are that exciting. Sometimes it's maintenance stuff, sometimes it's updating an internal billing system that's boring and no customers are going to see but needs to be done. But you'll know that, hey, at maximum we've got four weeks on this. I can already see the end from the beginning, no big deal. But if it's like this is going to take nine months and you're on week four and you're like, I hate this, bad. So we want to stay away from that sort of thing.

**Lenny** (00:38:00):
You have these quotes along these lines about planning, long-term business planning is a fantasy. I don't plan long-term because I want to do what I think, not what I thought.

**Jason Fried** (00:38:09):
Yes.

**Lenny** (00:38:09):
I love these. This whole idea of appetites, it's very appealing. It makes so much sense. It's like the ultimate impact to effort calculation. The effort we'll put into this is fixed and we'll not go beyond this because the impact we expect from this is pretty clear. And if the effort goes up and up and up, well why did we even do this? But obviously the downside is you can't promise things really to sales marketing, which I think makes sense in your type of business. Do you see this work in businesses that aren't your business this approach?

**Jason Fried** (00:38:43):
Well, let me talk about promises for a second. Promises are the downfall of every business. Every time we've made a promise to get something out in a certain period of time and we kind of inevitably seem to miss it, it's funny how it's almost like it would've been out in time, but the fact that we'd promised it made it not deliver in time. There's some strange thing that happens when you promise things. So we've learned to not promise anything. We can share what we're working on if we want to. We can tell people we're doing something. And by the way, the worst promise, and by the way, we've made a couple of these recently, we always regret them. It's like by the end of the year. That's the one promise you got to be very careful of, because it's so easy to make. There's nothing easier than promising work later.

**Jason Fried** (00:39:29):
And the further away it is, the easier it is to promise. And so this whole, by the end of the year, oh, red flag. Just remind yourself whenever you say that to yourself, go, oh, wait a second. Wait, wait, what am I doing right now? Because you're probably setting yourself up for disappointment. So as far as other companies running this way, there are a number of other companies that are running this way and more and more are adopting Shape Up all the time. But it's a struggle. It's hard. It's hard to change the way you work. I think companies form roots and roots go in the ground and once your root structure is formed, the plant that grows from that is the plant that grows from that, basically. You kind of have to uproot. And this is not really a totally clear metaphor because that plant is that plant, but you almost have to plant a new seed somewhere else, let's just say, and then grow something new because it's very hard to change in flight and change what you have and change what you're used to.

**Jason Fried** (00:40:24):
So what we often encourage people to do is keep working the way you're working, but some future project, some low criticality project, try this new method on that. So if it doesn't work, because it's probably not going to work very well the first time, just like if I gave you a guitar and you never played before, it'd be unreasonable for me to expect you to play well. You're going to suck for a while. So go pick some things that don't matter if you suck at them for a while and try this method over there and go, oh, you know what? I'm actually getting quite good. Now let's try to bring this into some more critical stuff. I think that's the important way to approach these sorts of projects, which is to take the criticality out. Because what ends up happening is that when people try to try something new on something really critical and it doesn't work, they'll never try it again.

**Jason Fried** (00:41:08):
They've destroyed all future opportunities to try this again, because everyone knows how bad it went last time on something that really mattered. And they would've gone, we could have done it our old way. Our old way worked. It kind of sucked, but it worked. And so now you're comparing two things that aren't really comparable, but you're always going to go with the momentum that you had versus the new thing. And so you got to be careful with that. So I know I'm rambling a bit on it, but that's my general sense and feel on how to adopt a different way of working.

**Lenny** (00:41:36):
There's also this cool down period after one of these, what do you call these? A sprint or what's the term for it?

**Jason Fried** (00:41:42):
No, I hate that term. I don't like the word sprint because how do you feel after a sprint? Exhausted.

**Lenny** (00:41:48):
But also pretty good.

**Jason Fried** (00:41:50):
You can. Yeah, yeah. It's funny because I was a sprinter in high school, so I love sprinting. But if you go all out, you might feel high for a minute, but you can't go all out again. You've got to really catch your breath and you certainly like to sprint. I remember my track coach actually ran in college for a year until I realized that I wasn't good enough. But he made us run 20 200s in a row with just two minutes break in between, and the 200 is an incredibly hard race. You're all out for 200 meters or yards. And after the fifth one I just threw up. I just threw up. It's like that's kind of what work is for a lot of people. It's like 20 200s, they have these sprints and they never seem to end. And there's one sprint after the other, after the other, after the other, after the other.

**Jason Fried** (00:42:36):
And that's why I don't like the word because you can't layer that back to back to back to back. You cannot sprint back to back, to back, to back in life. And you can't do it at work. People do it at work, but I don't think it actually works. So what we do is after our six week cycles, we typically take what we call a two-week cool down. So we call these cycles, not sprints. A two-week cool down, and we call them cycles because cycles happen again and again and again. Sprints start and end. Cycles happen. There's cycles in life and seasons, and I like that idea that you're prepared for this thing to happen again.

**Jason Fried** (00:43:12):
Take two weeks, cool down. That's when people can sort of internally freelance. They're still working, but they're kind of tightening up a couple of things. Maybe we just shipped or working on a couple extra days on something that didn't ship that's going to ship in two days, or kind of fixing some bugs and messing around with some stuff that they wanted to get to, but no one ever had time to and was never scheduled. So that's kind a good time to do that. In the meantime, a few of us are shaping up the next cycles projects and finalizing that and writing the pitches up for that. So that's what those cycles are for. It's not that you're stopping work, it's that you're doing other kinds of work. And that I think is replenishing and refreshing, and I think that's the important part versus back to back to back sprints of the same kind of work all the time.

**Lenny** (00:43:54):
You mentioned also that you have no growth goals, that you make decisions a lot on instinct and gut and opinion, which sounds amazing, it's great if you could pull it off. Feels also very hard to operationalize and maybe make the best decisions in times. Can you just talk about how you actually operationalize that and what you find happens when you approach things that way?

**Jason Fried** (00:44:15):
I'll just admit that that's the only way I've ever known how to work. I don't know how to make decisions by numbers or I don't find any joy in it, frankly. I've always been intuition driven and gut driven. And frankly, to be honest, I think everyone actually is. And this is part of the thing I want to write up. I've been thinking about writing about this. I think everything's a judgment call. And so yeah, data can play a part. All sorts of things can play a part, but unless you're letting a machine make the decision, that's purely rational. If you're asking a human to make it's a judgment call. They're bringing to bear thousands of things they know and don't know about that influence them about this particular decision. And it's why when companies hire executives, what are they looking for in executive? They typically go judgment and experience.

**Jason Fried** (00:45:06):
They're not like they can read an Excel spreadsheet. That's not the thing that matters. Anyone can read that or anyone can read a chart or you can learn to do that. They're looking for judgment and experience, which is a very amorphous thing. It's like, what is it really? Well, they've been around, they've seen a lot of things, they've absorbed a lot of experiences and they're going to bring those undescribable things to bear to make decisions for the business. So out of all the things, data might be one thing, but there's thousands of things that go into a decision that many of which you don't even know. And I just feel like I'm comfortable admitting that that I don't really know why I'm making these calls, but I'm making these calls regardless. And I'm not looking at a number and going, if this is fifty-one percent versus forty-nine, I'm going this way for sure.

**Jason Fried** (00:46:01):
That could be an input perhaps, but it's not the only input. And I think people should recognize that even if you're a data-driven person, there's so much more at play here. So I just feel like just being honest about that and that's sort of how I've always looked at it. And I also will admit, as I just mentioned, I don't know the things that go into my decision-making process, but I'm absolutely fascinated by decision-making. I think it's one of the most interesting human endeavors. And I would just say that give your intuition credit. Give your gut credit. It's absorbed everything. And plus the things that you don't know it absorbed that are valuable.

**Lenny** (00:46:42):
It's easier to do that if you're the founder running the company, obviously. Is there something you find that you can do to help your teammates approach things that way too? Do you just trust their instincts also in a similar way?

**Jason Fried** (00:46:54):
Yeah, you're right by the way, it is easy for me to sit up here and say this, I own the place. No one can fire me. I get it, right. I can be wrong all the time, go, my gut just told me to do this. And I understand, I do. I'm self-aware enough to understand that. But I think that by demonstrating that's how we make decisions, it creates space for other people to make decisions that way. And when we have conversations, I'm talking with my team about something, I'll often go, I don't really know. It feels like this. It feels this way. And they'll say, I feel this way. And I'll ask them, how do you feel? How do you feel? What we ask people in general is we say, what do you think? We don't say, what do you know? We often say, what do you think? We might say, what do you know?

**Jason Fried** (00:47:43):
But we also say, what do you think more time. And what does that mean? What do you think is, I don't know where these thoughts come from and I don't know what forms them. So I think it's interesting to look at the things we say and go, we actually do want people to think. And so I'll often say, what do you think or what do you feel or how does this feel? Is something we talk more about at work than pretty much anything else, which is like, how does this screen feel? How does this flow feel? How does this feature feel? How does this word feel? How does this sentence feel? How does this paragraph feel? How does this website feel? How does these colors feel? Because human beings feel.

**Jason Fried** (00:48:20):
And while we have a logical side to us and a rational side to us, we're primarily feeling creatures. Even if we don't admit it, we are. And so I'm always curious about that. So I bring that up a lot and I ask other people how they feel, and I think hopefully that encourages people to share that side of their opinion. And we almost never, sometimes we look at numbers to sort of be an input, but it's never prove that. I'll never say justify that. That's just not terminology or lingo that we ever bring up. It's not a way.

**Jason Fried** (00:49:05):
It's, how do you feel? It's not like, how certain are you? I try to tend to shy away from anything that's about certainty. We're not after certainty. I want to know how you think it feels. So anyway, I'm rambling again, but this is, I'm rambling because this is actually how things go. When we talk, there is a lot of this, it's not precise in a sense. It eventually becomes precise when it's out in the world, but the thought process is very rambling and very amorphous, and you kind of find your way as you go. And eventually go yeah, yeah, that's it. That's it. That feels right.

**Lenny** (00:49:45):
This kind of advice comes up a lot actually on this podcast, especially for product managers, that there's a lot of power in just trusting your instincts and not just being this kind of unbiased participant in a product team, having actual, here's what I think works from your own experience using the product from your own life experience. But this came up with Brian [inaudible 00:50:05] episode. He's running the company, he's telling everyone basically, here's what we're building. A lot of people said, okay, that'd be great if our CEO is also a designer, very product-minded person. Many people aren't that, many people don't have actual enough experience to have built amazing instincts. So, do you solve that by just hiring people that have a lot of experience? Is it like a hiring thing? Is it trust people that have a lot more experience more because not everyone's going to have the right instinct?

**Jason Fried** (00:50:34):
It's true. Look, Brian's probably one of the greatest CEOs around today, but I like small businesses. So he knows how to run a bigger organization. I wouldn't. So I can't really step into that answer from that perspective. One of the reasons we stay small, I think, is so we can all rub off on each other. And when we hire, we can be very, very selective because we only hire a few people a year. And so I only hire designers and product people, David hires programmers, and different people in the company hire different people. But when I hire designers, I'm curious about their tastes. I'm curious about what they like. I'm curious about what other products they think are good. I'm curious about what they've seen that they admire or who they... I'm always asking about that because that helps me get a sense of who they are and what lens they see the world through and what kind of influences they're going to bring to bear. So that's the kind of stuff I'm looking for.

**Jason Fried** (00:51:34):
And one of the things that we do during the interview process for designers specifically and product people, which is the same thing in my mind, is they do a project for us at the end. So the last five finalists will do a project for us. We'll pay them to do the project, they'll have a week to do it, they'll do it, and then I'll critique it with them. Even if I love it, I will push back in certain areas. And one of the things I'll often ask is, if you had another couple days, what would you do with this? And I want to see where people go with that. To me, that is where you can see they don't have any time to think. So where does their gut go? What are their instincts? Where do they arrive after having to riff on the spot with something?

**Jason Fried** (00:52:18):
So what's behind what they built? Because what they built should just be some of what they had in mind. It shouldn't be everything. Now they're exhausted of every future idea. And I've seen some people who we thought were really good, and in that moment, they don't know where to go with it. Now, that's not to say some people don't need time to think and think it through, but I'm still looking for people who just, their gut is filled with ideas. And so it doesn't always translate but that's how I try to suss out whether or not someone has a good gut instinct on where to go. And it almost doesn't necessarily even matter where they go with it because this is raw, just raw gut. But I want to see that they have one and they're willing to lean into it and not be afraid of saying things that may not make any sense.

**Jason Fried** (00:53:08):
But yeah, I've got some other ideas and we could try this, and we try this, and I kind of play with this idea. And I don't know. Actually, now that I'm thinking about it, maybe we try, what if we did that? What about this? And then I would say something and we'd riff and we start riffing. And when we start riffing, there's a synchronicity that I'm looking for. And when I feel that synchronicity and that resonance, the two wavelengths are just perfectly vibrating together, then I know we have something. So that's the kind of stuff I'm looking for when I hire people. And I do think that that translates to people with a better gut feel than someone who's more of a, let's call it an academic product person, which can be very fine at other places, but it wouldn't really work here.

**Lenny** (00:53:46):
That's really great advice for someone looking for someone that has a good instinct and gut. And I think it's interesting because that's often the opposite, what you described is what many people don't want. Someone with just a ton of ideas. Because a lot of companies, a lot of leaders are like, we got plenty of ideas. We just need you to help us ship stuff.

**Jason Fried** (00:54:02):
I don't want that either. So I don't want just ideas. So they have to make something that's clear. First of all, it has to be good and clear. And then they also have to be able to riff on the spot and think about how else they could take this. We've had some people who were just so scatterbrained and they've got a million ideas, but when we asked them to execute something for this project, it was a total mess. You could see their time management skills were off and they focused on the wrong things. That is not a go for me, that's a no go.

**Jason Fried** (00:54:31):
What's a go is that's a clever design, well executed, thoughtful, clear, and here's where they could take it from here on out if they had a few more days, or even if we had 15 minutes, what would you do you do with that? So that's the kind of stuff that I think ultimately is the meat of it. And so I always think of it in terms of play. This is play. I want to play with this product. I want to play with this design. I want to play with this idea. It's play and play is a thing. It's a very clear thing versus a rigid, boring approach to product development, which again, can be successful, but it wouldn't work at our company.

**Lenny** (00:55:12):
Great clarification. I completely agree.

**Jason Fried** (00:56:29):
Oh my God.

**Lenny** (00:56:31):
I think you may have seen this question, but the question is, what is a spectacular failure of someone trying to follow your advice and failing when it doesn't stick? What is the reason?

**Jason Fried** (00:56:41):
People trying to make a rapid, fundamentally, 180 degree changes quickly is a great way to fall flat on your face, basically. I have seen people who try to adopt, let's say, Shape Up, and they come back six weeks later and they're like, "This sucks. This doesn't work." I'm like, "I'm not surprised to hear that. Tell me how you did it." And then, they explain like, "Oh, the next project we did, we did this." I'm like, "Yeah, I'm really not surprised to hear that now." Because you can't really do that. You can't turn on a dime. There's this thing called momentum. I always try to think of things in terms of the physical world. The more massive an object, the more energy it takes to change its direction. This is why big companies move slowly.

**Jason Fried** (00:57:26):
This is also why momentum, which is the way you've been working for four years, is going to power you forward in a certain way. It's very hard to turn the corner immediately or turn around. You just cannot do it physically. If you can't do it physically, you can't do it this way. I think that's what I've seen, is these rapid like, "All right, starting tomorrow, we're starting Shape Up." It's like, well, no, it's not going to work. Unless you say we're going to do it on this other thing that doesn't matter so much. That's one thing I would say.

**Jason Fried** (00:57:52):
The other thing is that pretty much every business is a spectacular failure. It just is. It's like, business is really hard and the ones that make it are all outliers. This is why most businesses fail. There's a million reasons why, and it's always hard to pin it down. And we can all look back. By the way, I don't like to look back on things. I'm not much of a fan of looking back on failures and trying to figure out what went wrong so we don't do it again, because I don't think we know what went wrong. I think we can spend a long time trying to analyze it and we're going to find something that we can agree on, and it tends to be what you can agree on so you can move on. But that doesn't mean that's what it was.

**Jason Fried** (00:58:37):
Just like we don't really know why you make decisions, you don't really know why things didn't work. Sometimes there are some examples, and I think it's true if you're talking about a mechanistic system. You're stamping metal and it's supposed to have perfect circles and it's an oval. You can go back to that machine and see how the thing worked, and the line. You can adjust that and fix that. A lot of work though is not that way, especially software work, where there's a million different inputs and a million different people. It's not simple stamping machines. It's a different thing. I don't know, but I do think that trying to make big changes too quickly is a primary reason.

**Lenny** (00:59:13):
You've seen this approach work at traditional companies, I imagine? It's not just companies that work in your way where there's no investors, they're not obsessed with growth? You've seen Shape Up implemented at traditional public type companies?

**Jason Fried** (00:59:27):
Yeah, it's usually smaller teams. It's not like Airbnb, Brian's not going to go, "Okay, tomorrow, we're following this thing that these guys over 37signals came up with." But it's typically small teams inside larger companies that experiment with this. Sometimes it spreads and sometimes it doesn't, and it doesn't always need to. It could be this one division, this one group that works a different way.

**Jason Fried** (00:59:45):
Also, it doesn't have to be fully Shape Up. It could be 30% of it. Maybe it's just simply the six-week cycle thing is the thing and the rest of it doesn't matter so much. Or it could be this idea of appetites versus estimates, and they can work that into the way they work. Take whatever works. You don't have to go wholesale on any of these things.

**Lenny** (01:00:07):
Awesome. A second question comes from Leo Polovets, one of my favorite VCs. He works at Susa Ventures. He asked the question a lot of people actually asked. It's just, what does he think he got right and where has he changed his mind, if anywhere? You share a lot of strong opinions, very contrarian opinions. So, maybe just mostly on that second part is what I'm most curious about. What have you changed your mind about?

**Jason Fried** (01:00:29):
A few years, well, a handful of years ago, we used to make multiple products, and we went to just doing Basecamp. I thought I would be personally satisfied for the rest of my career, working on one thing and just making that thing the best it could possibly be. Essentially, working on one sculpture, and constantly tweaking it and chiseling it and just polishing it, and just making it better and better, and better, and better, and better. I still thoroughly enjoy working on Basecamp. But a few years ago, we built this new thing called HEY, HEY.com email service, because we just felt like we had to make more things again.

**Jason Fried** (01:01:04):
This idea that I thought, that we could be happy as a company just doing one thing really well, which was a major shift. We had multiple products. We basically wound those down. We didn't ever close them down. People can still use them, who were using them before, we just stopped selling them. We even changed the name of the business from 37signals to Basecamp. We're saying, we're signaling all through. We're doing one thing that's just this thing called Basecamp. It's a huge, massive decision to make, and so we were all in on it. And then, a few years ago, we go, "You know what? We're makers. Let's be honest about ourselves."

**Jason Fried** (01:01:39):
I'm talking about me, and I was talking about David. But we were just like, "We want to make more things again. We have some more ideas. Why are we suppressing ourselves? Let's not do that." We made HEY and now we're doing ONCE, and we're going to make more products and more products and more products. We're going to probably do another book, as I mentioned earlier. It was that. I think that's the biggest major fundamental 180 degree change that I've changed my mind on, but I changed my mind all the time.

**Jason Fried** (01:02:08):
I disagree with myself constantly on small things. Product design decisions or the naming of something, or how we roll something out, or how I'm going to write something or present something or say something. There's probably an answer, I'm sure there's an answer in this podcast that if I listen back, I'd go, "I would probably answered it differently," or, "I don't even agree with the way I answered that." There's a million things like that happening all the time. But in terms of big things, I think that's the best example I can come up with.

**Lenny** (01:02:33):
It's clear that you've designed your life and designed your business in this very intentional way. Because the default path, and I'll reference this back to this other podcast episode, the default path is, build a company, raise a bunch of money, build massive business, generate a lot of revenue, exit, try something else. And you've done something very different. You've built a company-

**Jason Fried** (01:02:53):
Can I speak up to that, though?

**Lenny** (01:02:53):
Please.

**Jason Fried** (01:02:56):
Because this is the pathless path stuff?

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

**Jason Fried** (01:02:57):
Is this what that was? Yeah. I'm moderately familiar with that idea. I didn't listen to that podcast, but I saw some clips. I find it interesting because you've designed your life intentionally. It's funny because there are some principles I hold, perhaps, or some direction I'm headed, but I don't think about any of this ahead of time, including the company. We don't have a multi-year plan. I don't even have a one-year plan. I don't even have a six-month plan or a quarter. We think about everything we're going to do every six weeks. Every six weeks, we rethink what we're going to do next.

**Jason Fried** (01:03:33):
We're very much an in-the-now company, making it up as we go. And this is true for me, personally, my career, the whole thing. I didn't have any of this planned out. I didn't decide I wanted to be like this or like that. I just figure out what works and keep doing that until it doesn't. And then, maybe we do something else. But it's very much, I'm not on a path. I can't see the path. I'm on a path. We're going somewhere. I don't want to stand still. But I don't know where I'm going, and I'm perfectly comfortable with that.

**Jason Fried** (01:04:05):
For me, it is really much about making it up as you go, based on, again, being in touch with how things feel to you, what your intuition is, what your gut tells you, what makes you happy. What do you want to do? What can you do? Sometimes, it's things that make you happy and you can't do, just because life is what it is. So, understanding that and figuring out what the trade-offs are. But really, it's figuring out as we go, and I think, frankly, it's the best way to run a business. I think it's the healthiest, most honest way to run a business, which is, to figure it out as you go.

**Jason Fried** (01:04:37):
I think the further out you plan, the less you know about the decisions you're making. And by the time you get there, you're probably going to be wrong, or you're going to want to do something else. And then, if you're like, "Don't do those things," then what's the point of planning? People end up doing things they don't want to do because they said they were going to do them. Obligations in the future, I think, are quite dangerous, and I think they send people down a path of unhappiness, actually. I think just staying closer to now is probably the best way to do that.

**Lenny** (01:05:04):
A lot of this trickles down from the biggest decision you made, which is, don't raise money, keep control of this business. You're the boss. There's no boss above you.

**Jason Fried** (01:05:13):
Yeah, the independence. If you go to 37signals.com, there's 37 ideas. And the first one, there's a 00, which is start here, which is like a read me. But 01 is independence. Independence is the root of all the things we're able to do, and we did make that intentional decision. We didn't know all the tentacles that come up from that and what it's going to impact and touch, but we knew principally, we want to be able to do what we want to do.

**Jason Fried** (01:05:40):
We want to be entrepreneurs and to me, that means working for yourself. The moment you go out and take money or have these big obligations, you end up working for someone else. I do understand why some companies do it, but I don't understand why a lot of people do it, who probably shouldn't do it. I think staying independent is a wonderfully fulfilling experience, and it's very hard to do when you're beholden to someone else's timeframe and expectations.

**Jason Fried** (01:06:12):
Another thing we rarely have here are expectations. This is the point. We launch a new product, I don't know what's going to happen. We launched Basecamp, I didn't know what was going to happen. We launched HEY, I didn't know what was going to happen. We're going to launch some new stuff soon, I don't know what's going to happen. We don't say, "If this gets 20,000 users, then it's a success." I don't know. We don't care. It doesn't even matter.

**Jason Fried** (01:06:33):
We're making it anyway, and we're going to see what's going to happen. The market will tell us what happens. I'll just wait to find out. There's no sense in spending the time thinking about what could be.

**Lenny** (01:06:43):
Just to push back, I imagine there are expectations of like, "I hope this works out. I hope people adopt it. I hope it becomes the best email client in town." There's a sense of like, "We want this to succeed"?

**Jason Fried** (01:06:53):
That's pride, though. That's a matter of like, we want to be proud of the work that we did. We really hope people like it, and we want to keep doing it. To me, that's a sense of caring about the work itself. It's not so much about the outcome, which you don't control as much as you might think. Clearly, we want people to accept the work that we do and we want to find enough people who like it to make it sustainable, but I don't have them in mind. This is going to sound selfish, but I have me in mind first. Because if I'm not for me first, it's hard to be for someone else.

**Jason Fried** (01:07:29):
I'm for us. We want to make things that we're proud of, that we think are really good, that are unique, that brings something new to the world that doesn't exist, otherwise there's no point in doing it. That bring a different perspective that only we can provide because everyone has their own. We want to make sure ours is very visible in the products that we make, which is why we approach things very differently than most, and our products are very different than most. That's why they should be there. We should provide alternatives.

**Jason Fried** (01:07:56):
As I said earlier, I don't like the word competition, because it almost sounds like you could be making the same thing. I want to provide an alternative, which is a different approach, a different way forward. It could be in pricing. It could be in the way something works. It could be in the flows in the thing. It could be the entire conception of the thing, but it should be an alternative. If it's not an alternative, it doesn't need to exist. Anyway, that's how I think about it.

**Jason Fried** (01:08:24):
But yeah, there are expectations. Or I should say, maybe it's more like there are desires and hopes of acceptance to some degree, because it needs to. Otherwise, we can't stay in business. But really, it's like, are we proud of it first? We're wrapping up the HEY calendar right now, which is the calendar we're building for our HEY email service. I'm really proud of it. I have no idea what's going to happen. It's very unusual. But I'm really proud of the work that we did, and that's enough for me.

**Jason Fried** (01:08:47):
I think it's going to do well. I don't know, though, and it doesn't really make any sense to wonder if it will or not. It just, it will or it won't. All I can do is, be proud of the work that we're doing and be proud of the people who are doing it, and feel like we're putting something out in the world that we think should be here. Whether or not people agree is up to them.

**Lenny** (01:09:05):
You mentioned the principles of the company and I was going to touch on one of these actually. What's the URL to check these out? By the way, we'll link to it in the show notes.

**Jason Fried** (01:09:11):
Yeah. 37signals.com.

**Lenny** (01:09:12):
Okay. Right, just the homepage?

**Jason Fried** (01:09:15):
Yeah.

**Lenny** (01:09:16):
Okay. Amazing.

**Jason Fried** (01:09:16):
Yeah. Yeah. The homepage, yeah.

**Lenny** (01:09:16):
Okay. One of them is, work isn't war. You wrote a book about this roughly, about Work Doesn't Have to Suck, but I guess, can you just talk about why war work feels like war, and then what maybe people could do to make it feel less like war?

**Jason Fried** (01:09:29):
This is about words in a lot of ways. I'm not looking at the page right now. I could pull it up and read it, but essentially, a lot of work uses war metaphors. You're targeting customers. You are conquering a market. Gosh, now I really want to make sure I get all these right. Hang on, I'm just going to look this up. Because these things are how people talk about work. It says, "They conquer the market. They capture mindshare. They target customers. They employ a sales force. They hire head hunters. They destroy the competition. They pick battles and they make a killing."

**Jason Fried** (01:10:10):
That's how people talk about business. I find that to be depressing. It just feels depressing to me. We use words to establish a perspective in a way of thinking about the world. And if those are the words that are in your head, then you feel like it's this war. This is the other thing. People are always like, "What do the Navy SEALs do?" And they're like, "Heck, yeah." That's the Navy SEALs, man. It's not your software business. Why are we always looking to Navy SEALs to tell us how to run our business? "The military, they've got a group of eight and they do these."

**Jason Fried** (01:10:42):
It's like, "Yeah, okay, that's that context." Can we not look at that for a second about ... That's amazing. What they do is amazing, obviously, but what you're doing is you're making B2B accounting software. Let's just chill for a second here, okay? I like to think of words that are more additive and alternative. " We can exist. Let's exist. Let's make something great." Not, "Let's beat them, let's conquer them, let's make a killing." Let's just make something great. I think that matters, and it changes the way you think about the work that you do.

**Jason Fried** (01:11:16):
It's more about pride and excitement and a spirit of creation than it is destruction. I think if you go into it with destruction in mind, you're going to end up in a pretty dark place. That's our point of view.

**Lenny** (01:11:31):
Awesome, I love that. Coming back to this bootstrap path, there's a lot to love about it. Independence, with that trickles down all these things that you're able to do with your company that other companies aren't able to.

**Lenny** (01:11:43):
For someone that's thinking about going down this path and wants to bootstrap their company, that doesn't have a lot of money because it takes cash to start a business, do you have any advice for just how to get started down this path?

**Jason Fried** (01:11:53):
Yeah. First of all, it's hard. This is hard. When you have nothing, especially, it depends where you are in your life, too. You may have a couple of kids and you don't have a lot of time, and you got to pay mortgage. It's tough, so this is hard, but it's the reality for almost every business in the world that starts. The best advice I could give you is, and this sounds so trite, but really it's true, is, stay as small as you can for as long as you can. The only thing you can really control are your costs. You can't control the alternatives in the market. The competition, you can't control them. You can't determine the market itself. You can't control the economy. You can't control how much advertising costs, but you control your own costs.

**Jason Fried** (01:12:39):
The other thing I would encourage people to do is, figure out how to do as much as they can on their own before they bring on a second person. Really work and struggle through something on your own. The moment you bring on someone else, you've got another mouth to feed. It becomes expensive. You got another personality to deal with the more you rely on them. And if they turn out to be the wrong person, you have to lose them. You don't have anyone to do the work that now you have them doing, and now you've got to do it. You're not going to be any good at it. You got to start as small as you possibly can and do as much of the work yourself as you possibly can.

**Jason Fried** (01:13:11):
Keep your costs in check. Don't spend any money on branding. Don't go get an office. Don't spend anything on anything, basically, except the tool you use. Let's say, it's your laptop or whatever you're going to use. Get a good one. They don't cost much anymore. 1,500 bucks or something like that, you can get a really nice MacBook Air or whatever. You need an internet connection and maybe you need a host somewhere or whatever, but use Squarespace to set up your site for 15 bucks a month or whatever. Don't go hire a web designer. Find all the efficiencies and keep your costs incredibly low, and don't make things hard on yourself.

**Jason Fried** (01:13:47):
This is the other thing that all businesses at every stage need to keep in mind. While it's hard, things are relatively simple until you make them complicated. Simple can also be hard, but complicated is a lot harder. I think Brian Chesky had a really good bit on this, I think, on your podcast about how companies get complicated. And I loved that. When I was hearing it, I kept hearing this unfolding, this complex shape that you almost can't fold back. It's so complicated now that you don't even see where it came from. Now, it is what it is and you can't put it back in the bottle. It's just a mess, right? This happens really quickly and it can happen at a small scale, too. These are a bunch of things, and none of this is to say it's going to work. You could follow all those things and it could just completely fall apart. And it probably will. It's just the reality. I think something we use at 37signals, David taught me this, it's really a stoic thing, which is just the idea of negative visualization. What's the worst that can happen? You got to be at peace with the worst that can happen. Just role-play that and go, "What's the worst?" For example, we're doing these new ONCE products. What's the worst that can happen? Well, the ONCE model is totally different. It's not SaaS. It's you pay once, you download the software. You install on your own server.

**Jason Fried** (01:15:09):
We're putting a lot of effort into this. This could be the wrong time to do it. It could be a total flop. This could not find any traction on the market. What's the worst that can happen? Well, we spent six months exploring something and having a really good time doing it. Our margins are there, so we can do it. I wouldn't suggest someone does this if they can't afford to do it. But we know this might not work, and we're already at peace with the fact that this might not work. That's, I think, how you ultimately are able to move forward, is to be at peace with knowing what's going to happen if it doesn't work out.

**Lenny** (01:15:42):
I want to touch on Linear. One, it's interesting that you guys have a lot of similar philosophies. What is it about project management, task management software that creates this sort of approach to business? That's maybe one question, if there's something there.

**Lenny** (01:15:59):
And then, the other is, it feels like they have a lot of similar philosophies. Growth isn't a focus. It's gut and instinct. They have paid work trials. They're profitable. They don't spend a lot of time around VC money.

**Lenny** (01:16:11):
Do you have a feeling like this approach could work in the venture route? And do you see them as maybe an example of like, "Hey, maybe we could adopt a lot of these things and also raise money?" Maybe there's another direction here?

**Jason Fried** (01:16:22):
Yeah. I can tell you I don't know enough about them to comment on their ... I've heard some about them and it sounds like they have some similar points of view. Where those came from, I don't know. Maybe they materialized out of nowhere. Maybe they picked them up from someone else. Maybe they came up with them themselves. Lots of different ways to work. It's nice to hear that other people are trying some of these things and it's working for them, so that's great.

**Jason Fried** (01:16:45):
The thing with the VC route, so the idea of having too much money, it doesn't mean you can't work efficiently and thoughtfully. But it does create a degree of sloppiness, because you don't have to. When you don't have to, and when I'm saying have to, you could say have to what? Have to do a whole bunch of things. When you don't have to, we don't have to make money, when you don't have to be efficient, when you don't have to be profitable, you just get sloppy.

**Jason Fried** (01:17:15):
"Let's hire some more people. Whatever, we can afford to. In fact, they need us to spend the money, by the way. They didn't give us the money to save it and earn 6% interest." Which would be great now. Three years ago, 0% interest. "They didn't give us the money to sit in the bank. They gave us the money to spend the money." What are you going to spend it on? Two things, people and marketing. Basically, that's what you spend it on.

**Jason Fried** (01:17:36):
We can buy more ads. We can do more of this. We're going to do that. We can hire some more people, build up more teams, do more things simultaneously. There's a certain sloppiness in that. I think it just becomes harder when the environment encourages slop, which is why I think the value in bootstrapping is that it teaches entrepreneurs, it not even teaches, it forces them to have to figure out how to make money. The more time under the curve they have making money and practicing making money, the better at it they're going to get.

**Jason Fried** (01:18:07):
I used the guitar metaphor a bit earlier, I'll use it again. If you're playing guitar, if I give you a guitar and ask you to go up on stage and play guitar, you're going to suck. It's going to be horribly embarrassing and you're going to be terrible at it. You might be terrible at it a month later, but you'll be slightly better at it. You do it for six months or a year, you're going to be better and better. And then, five years and you're really getting good. Why do we think that a business that is sloppy, that doesn't have to make their own money, that is just getting pumped full of money by somebody else, can all of a sudden turn on the profit spigot and all of a sudden be profitable?

**Jason Fried** (01:18:36):
What you see is that they oftentimes cannot because they're just not set up to be that way. They've never played guitar before, and now they're being asked to play guitar. The reason I think it's great for entrepreneurs to start bootstrapping is because they just have more practice making money. They get better and better and better at the fundamental skill you need to have ultimately to run a successful business, which is to make money. If you don't have to do that from the start, you're just not practicing that. You're practicing spending money.

**Jason Fried** (01:19:02):
Getting good at spending money is not a valuable skill as getting good at making money. That's why I think it's just harder. But, of course, it's possible. It's just harder.

**Lenny** (01:19:10):
What I'm hearing is, essentially, to do this well. You need discipline. Understand, here's the incentives they're driving me to; spend more money, grow faster, and being really good at not ... And then, also, it sounds like you just need investors that are on board with ... "We understand. We're not going to focus on growth obsession. We're not going to focus on getting new teams. We're going to give you space to build it the way you want."

**Jason Fried** (01:19:33):
That exists. It's just also an outlier in that industry. I think what you need are constraints, is what I'm actually trying to get at. You need constraints. When you have just loads of money, you basically have very few constraints. That's what tends to lead to slop. Versus like, "Hey, if we don't figure this out, we can't make payroll next week or next month." You just start to figure things out. One of the best stories I heard about this was Peter Rahal, who started RXBAR. Are you familiar with RXBAR?

**Lenny** (01:20:00):
Mm-hmm.

**Jason Fried** (01:20:01):
Yeah, little protein bars or whatever. There's a great article about this years ago, where he was talking to his dad about, I think, raising money or something. His dad's like, "Hey, go sell 1,000 fucking bars and come back and talk to me." He's like, "Just sell some fucking bar. Get out on the street and sell some bars, man. You've got products? Sell products. Go, sell." Versus all the things you could possibly do. "Go sell some bars." It's just such great advice and it just cuts through all the crap. I like that scrappiness, and you don't get scrappiness from having large S. You just don't. It's just too easy not to have to do anything.

**Jason Fried** (01:20:46):
Not to say that VC companies aren't doing things. They're doing a lot of things, obviously, but are they honing the scrappy skills? Are they learning how to make money and have margin and be profitable? If they don't have to, they probably are not. I think at some point, and we're starting to see this now, this is not like an I-told-you-so thing, this is just, this is what happens. This is not me. This is just economic cycles. Money's harder to find, it's harder to get. Even companies who've raised money, investors are not necessarily putting in additional rounds. There's deep cuts happening, layoffs, pain and suffering.

**Jason Fried** (01:21:23):
It's hard to switch from having a lot to not having enough, and then having to work as if you know what to do. I think there's a lot of confusion in the market now, at companies now, I should say, because they don't know what to do. They haven't had to do it before. I feel for them in a sense because, how could they be expected to know what to do? Just frankly, as I said earlier, if someone dropped 10 million bucks on me and 1,000 people, I would have no idea what to do with that. Truly, I would not. I would waste it is what I would do. If you don't have the experience, how are you going to know?

**Lenny** (01:22:00):
I'm the same way with the newsletter and the podcast. There's no way I can grow this thing with money, really. I've tried a bunch of little experiments and nothing really does anything. It actually comes back to, let me find this quote that you have of just your business strategy in a nutshell. "Just keep making great shit. Keep your cost in check. Charge appropriate prices for your work. Share as much as you can and let the chips fall where they may."

**Jason Fried** (01:22:22):
That's basically it. One of the things I don't think I said in there was, enjoy it. Have fun. Enjoy the ride. Love who you're working with and create a great environment to do great work, and so other people can do great work and thrive as well. That's all baked into that. It's not like, set targets. It's not, try to be a billion-dollar business. It's not, aim for an exit. It's not, be on the cover of whatever. It's not many of those things.

**Jason Fried** (01:22:52):
Maybe it's the Midwesterness in me, growing up in Chicago. I don't know. It's just that. The best business advice I ever got, I got from my dad. It's just a simple line. It's like, "No one ever went broke making a profit." And maybe that's just my guiding light, ultimately. It's like, because you can go broke generating a lot of revenue. A lot of companies do. But you can't go broke generating a profit, and I think it's just really tight.

**Lenny** (01:23:18):
What a great quote. Final question before we get to our very exciting lightning round. Let's talk about ONCE. This is a new product/umbrella of products you're developing. Can you just talk about the thinking here? And then, I think you guys are announcing the actual first product within this umbrella?

**Jason Fried** (01:23:32):
Yeah. The idea behind ONCE is, David and I feel like, we're probably a bit early here, but we feel like there's going to be a bit of a turn back towards the way things were. Pendulums always swing. And for the last decade or so, SaaS has been pretty much the only way to run business software. Basically, you rent it. There's really not a lot of alternatives. You rent software. We think that there's subscription fatigue and also some benefits to that, for sure, but there's also a lot of downsides just to ...

**Jason Fried** (01:24:00):
... that, for sure, but there's also a lot of downsides to subscription software. You keep paying the same amount every month for the thing that you had last month. It's not like a magazine where every month you get literally a new issue. So that's new. I'm paying for new weekly or monthly, okay, that makes sense. I mean, I know there's new stuff that comes out in software products but let's face it, the core of the thing that you're using, 90% of the time is the thing you've been paying for four years now, every month. It just seems like, nah. So we are going to launch this thing called Once, which is essentially a brand and umbrella, a line, a product line of non-SaaS products, of products, not services, things people will download, software business offer products, people will download, pay for once and then install on their own server or a shared server or in the cloud, their own cloud or whatever.

**Jason Fried** (01:24:53):
But they'll run it, they'll manage it, they'll pay for it once and there's no subscription fees, no recurring fees. They get updates, they get support and some of that stuff, but that's it. And so we're going to launch the first one shortly here and then we plan on doing, hopefully, maybe three more next year. And the beauty of these things is that what we're basically doing is we're going out in the market and looking at it, although we already know it because we've been in this world. But we're saying, what are the commodities out there? There are a lot of commodities in business software and there's like 50 alternatives and they're kind of all sort of the same yet they're all still charging luxury prices. In my opinion, if you're paying tens or hundreds of dollars a month or in some cases, thousands of dollars a month, month after month after month after month after month for when there's hundreds of alternatives and there's no price differentiation really between them, that's an opportunity. In every other industry, there's generic peanut butter, there's generic pencils, there's generic everything in a sense.

**Jason Fried** (01:25:50):
So we're out there looking for commodities that are still charging luxury prices that we can create really beautifully tight, simple, essential generics of very high quality that don't do everything that the other products do, but get the core of it right, the 80-20, we get that right at a high degree of quality. And we can build these in typically three months each with two people. And the maintenance cost is zero to us, essentially. There's no marginal cost here because we make the software and we sell it and we don't have to maintain it in terms of hosting and the whole thing, which is what the expensive part of SaaS is. So anyway, that's the idea behind Once. And we, again, don't know what the market's going to think. I have no idea but we're really excited about trying this and seeing what happens.

**Lenny** (01:26:33):
And then could you talk about the first thing you're launching or is that not out?

**Jason Fried** (01:26:37):
Yeah, sure. The first product we're going to be launching is basically an old product that we made way, way, way back when. So years and years and years ago, 2006, we launched a product called Campfire, which was-

**Lenny** (01:26:38):
Oh, of course.

**Jason Fried** (01:26:50):
... a group chat tool.

**Lenny** (01:26:51):
How could you not remember Campfire?

**Jason Fried** (01:26:53):
Well, some people are-

**Lenny** (01:26:55):
Are younger.

**Jason Fried** (01:26:55):
... 22 and they don't know, understandably so. But if you've been around, maybe you remember Campfire, which was a group chat tool, which is I think eight years before Slack came out or something like that. So it was really early and it was really hard to get people to even understand what this thing was, and a lot of people didn't get it. And then Slack came out, of course, and steamrolled it and really, really executed beautifully and did a great job. But chat has become a commodity. There are a million ways to chat with people now, and in the business realm, they're all still quite expensive and they're all month to month to month. You got Slack, you got Teams, and you've got a few others and it's like, you know what... And there are some open-source alternatives, by the way, that are free or cheap. But we want to put something back out there.

**Jason Fried** (01:27:41):
So we're going to relaunch Campfire under the Once brand. You'll pay for it once, you'll install on your own servers, and you'll run it. And it'll do 90% of the things that you want to do every day and these other chat tools and do them very, very well and very, very simply and very, very easily. And we think it's going to be really interesting. And by the way, the other thing we're thinking about with these Once products, which is interesting, just get to this alternative point of view, is that these don't necessarily need to replace things. They can be in addition to. You might still run Slack at your company but you want to back up for when Slack goes down, or you want a special air-gapped chat for your executive team that cannot be leaked by another company where you're hosting data or having other people involved that might have access to it by accident.

**Jason Fried** (01:28:34):
You can run things, you can have different tools doing similar things but for different groups in different contexts. Now, you probably wouldn't want to pay month to month to month to month to month for a backup system when something almost never goes down, but if you only have to pay for it once, it might be really... that's a good thing to have. That's an insurance policy to pay for it once and we just have it in our back pocket. The other thing we're doing with Once product is that you get the code. And so if you're a product team and you're curious to see how this product was built, and we've gone to great lengths to make it exceptionally well-built for this purpose, this is a book, essentially, of how to build this kind of thing really, really, really well on the CSS on the HTML and the Ruby on Rails side, for example.

**Jason Fried** (01:29:18):
So you'll get all the code and you can look at it and you can modify it, you can play with it and you can tweak it. You can't resell it. There's a certain licensing but it's yours. And so if you want to change the layout, go ahead. If you want to add some features, go ahead. If you want to mess around, go ahead, it's yours. And that's another thing that's really novel. You don't get that in subscription software. So there's a lot of things going on that we're trying. There's some other really cool stuff. I'll tell you, one more quick thing about it is that we're trying to make this first prompt especially have as few words as possible, maybe 30 words. So we're picking tools that are... or picking categories that people already know how to use, and so we're trying to keep as many words out of this as possible so it's instantly essentially available for the entire world.

**Jason Fried** (01:30:05):
It doesn't have to be localized. It's just like, it's universal software. We're trying to think about it this way. And when we do have a word, we're going to have a panel that shows that translation in a bunch of different languages. So it's not like you install this pack or that pack, it's like, you can hit this because different people in the world work in different countries. So we have people in different countries that work for us. I don't want to just have the Indian version because people in India might also have people that work in Brazil and they need the Portuguese version. So you can see all the different languages for certain words when we use them, which is a really novel thing.

**Jason Fried** (01:30:34):
We're kind of playing, this is the whole thing like, these tools give us a chance to play and explore new realms and new ideas that we couldn't do with SaaS. This is one of the things I'm getting back to the first question you asked me, I think, or maybe it wasn't the first, but this is why I'm excited again. There's some novelty again, there's some new explorations again. We're able to do things that we couldn't do in other places. So there's an excitement that's building around this creative exploration again, and that's really firing us up.

**Lenny** (01:31:03):
It's clear how you're excited about this. You're saying how you thought you'd be happy just building Basecamp for the rest of your life, and clearly, there's a pull here, I'm going to try something totally new and different. Also, the domain is awesome, Once.com, right?

**Jason Fried** (01:31:14):
Yeah, that was fun. And we're still going to do Basecamp in here. So we're still doing SaaS. I still believe in SaaS. This is not going to replace SaaS but there should be an alternative. People should be able to buy what they need versus rent what they need.

**Lenny** (01:31:27):
I think this is going to be an interesting experiment because this is how we started with software and then SaaS came and everyone loved this idea of, I don't have to worry about anything. I'm just going to pay you monthly and you take care of maintenance and hosting all that stuff and keep updating me with better features. So I think it'll be interesting to see if we've missed something leaving that world. One clarifying question, for updates, do you buy yearly, like a new Campfire every year, or how does that work if there's updates?

**Jason Fried** (01:31:54):
So the plan is, is that let's say you buy Campfire 1.0, this is the way software used to work. It's the same approach, which is like, you'll get all the 1.X updates for free. And you'll be able to decide if you want to update yours or not. So we'll say, hey, 1.1 is out and here are the new things and you get to decide if you want to download that and update yours or not. So you can stick with 1.0 if you want or you can skip a version, whatever you want to do.

**Jason Fried** (01:32:19):
If when we get to version 2.0, there'd probably be... you'd probably have to buy it again, but we'd probably have a discounted upgrade rate. But that's like, you also totally optional. I don't know if we'll ever even get there. We might not need to. Have no clue. But we're leaving that door open that if there's a radically new version that we had to sink another six or eight months into or something, it feels right to say you'll need to upgrade. Maybe you get half off because you're a previous customer or something like that. So we don't know but that's the plan.

**Lenny** (01:32:49):
I think it's also important for people to remember your target is not to replace Slack at big tech companies, like your market is the Fortune 5 million as you described.

**Jason Fried** (01:33:00):
First of all, we don't have a sales team, so it's self-service, it'll always be. If some big huge company says... they look at their bill, their Slack bill and they're going, we're paying 1.2 million a year for this? Wait, wait a second, I can pay less than 1,000 bucks once for this. Maybe that's worth having, or maybe even if we don't use it, it's absolutely worth buying because maybe we will use it, or maybe we can experiment with it in this place. One of the things we're trying to do here is find a price point and it's going to be under 1,000 bucks. I won't tell you exactly where, but we're trying to find a price point where it's kind of becomes a no-brainer, like, you know what? We should buy this, we should have, this should be in our toolkit, and we should use this in certain parts of our business even if we don't replace this other thing, although we still might because we might find that as this group or these two groups or three groups that are using this are making exactly the same progress, why are we spending all this money elsewhere?

**Jason Fried** (01:33:53):
So it's a bit of a Trojan horse, potentially. I don't know what's going to happen. No idea, but it's going to be pretty interesting. The other thing that's really cool about it, this is the tiniest market in the world, but because it doesn't go out to the internet, you can run it in truly air-gapped research facilities. There was a time way back in the day where the White House got in touch with us. This is when Obama was running and wanted to use Basecamp. But they're like, we need to install it because we can't obviously host this stuff on your servers. I know, I totally get it. We can't do that, unfortunately. Sorry. But they have security needs that are just far beyond what most things allow, but this is the kind of thing where they can actually be completely detached from the public internet and run this kind of software, which is really interesting. Again, tiny market, not what we're building it for, but it's a cool byproduct or side effect, I should say, of running things this way.

**Lenny** (01:34:49):
And then did you share when this might come out? I know you don't promise dates but is there something you want to share there or is it-

**Jason Fried** (01:34:54):
Well, unfortunately, we promised. We said by the end of this year, that's why I was getting to that. But we said by the end of 2023, and we're almost there, here we are in December, so mid-December, we're going to start to roll this out to the first batch of customers. It's probably not going to be available publicly to everyone in the world yet, but that'll come soon after. But the first batch of customers are going to get it and we'll slow-roll it out, figure out what we missed, what we need to tighten up and tweak. It's not really a beta as much as it's just a limited release, which is the smart way to do this, and then we'll open the doors very, very soon after that.

**Lenny** (01:35:30):
Jason, you're breaking your own rule of not saying by end of the year. Apparently, I learned earlier that that's never works.

**Jason Fried** (01:35:37):
Yeah, it's funny, we definitely said that and we said that six months ago and here we are, end of the year.

**Lenny** (01:35:45):
It's happening. So maybe sometimes it works out.

**Jason Fried** (01:35:47):
Yep.

**Lenny** (01:35:48):
Before we get to our very exciting lighting round, is there anything else that you wanted to share, touch on, or leave listeners with?

**Jason Fried** (01:35:55):
I think one of the most important things though to remember, and I got to it in another answer, is just like, humans tend to complicate things, and a lot of things are hard but they're still simple until you make them complicated. And just keep that in mind that you can make a lot of progress with two people, and you can do a lot of great work four weeks at a time max, and you can figure things out as you go, and you don't need to know exactly where you're going, and you can be profitable business, and you can find customers who are willing to pay for things. These are all possible things to do. And you don't need to be a big huge company to be successful. And you don't need to be a big huge company to make significant amounts of money. You don't need to do that.

**Jason Fried** (01:36:42):
You don't need to raise money. So it's like, all those things make things more complicated, actually. Some people think they might make them simpler, if I have a bunch of money, it's simpler. It's actually not simpler, it's harder. In a sense, the more... because those things come with expectations and again, they erase your scrappiness, and there are side effects here. Those things come with very, very thick and strong strings attached. And you got to think about what are those strings attach to and what do they prevent you from doing? You don't have a full range of motion anymore. So I'll leave people with that, even if I touched on some of those ideas earlier on.

**Lenny** (01:37:21):
And that's a really great way to summarize it. With that, we've reached our very exciting lightning round. Are you ready?

**Jason Fried** (01:37:27):
Let's do it.

**Lenny** (01:37:29):
What are two or three books that you've recommended most to other people?

**Jason Fried** (01:37:33):
The first one is this book here, so Several Short Sentences About Writing. Do you know this book?

**Lenny** (01:37:38):
I love that book. I have it on my coffee table.

**Jason Fried** (01:37:42):
When anyone ever asks me, what book do you recommend on writing? It's this one, Several Short Sentences About Writing. I can never pronounce his last name, but Verlyn Klinkenborg, I believe is his name, although I might be bastardizing that. But it's an extraordinarily good book about writing and it's all about the sentence, beautifully written, fun to read, really great. The other one is pretty much anything by Derek Sivers, but specifically, Hell Yeah Or No. I recommend this book to everybody. It's really had a big effect on me and David, specifically. We use this term, hell or no, all the time internally. Is this a hell yeah or no? It really clarifies a lot of things. And the last one is this design book, which is interesting. There's a few different versions of it. The one I have handy, it's called Home-made: Contemporary RussianFolk Artifacts.

**Jason Fried** (01:38:35):
And what this book is, it's a collection of... it's a beautiful book. It's very simple. Basically, every spread is a person, a story, and a thing that they had to make because they didn't have anything. They couldn't buy what they needed. They didn't have what they needed. So this example here is a guy put a hole in a spoon to make bubbles for his kid, to blow bubbles, large bubbles. This is a TV antenna made out of forks, and it's just like, getting back to the scrappiness, I admire this kind of ingenuity among or over pretty much anything. And I think that this book is full. There's a couple hundred pages. They have a couple different editions of this, but I love this one a lot. Look at this one. This guy had to make a door handle. I mean, in America, we're like, go get a door handle at Home Depot.

**Jason Fried** (01:39:28):
This guy didn't have a door handle, so he made it out of a plastic, looks like a gallon oil can or some water thing, and nailed it to a book, which nailed it to a door. Amazing. And this is also why I've always loved... I know this isn't very lightning, sorry but I've always loved looking at jailhouse creations and tools and how people make weapons out of combs and pens. It's just, I find this like, I have nothing, I need something, I can use my human brain to figure out how to make it. I think that scrappiness is beautiful.

**Lenny** (01:40:03):
Yeah, I was just going to say it speaks clearly to your scrappy mentality. And what is that book called again?

**Jason Fried** (01:40:10):
This one's called Home-made: Contemporary RussianFolk Artifacts. And there's also an Eastern European one and there's another one too, but Home-made.

**Lenny** (01:40:18):
What an awesome, unusual selection. Okay, next question. What is a favorite recent movie or TV show?

**Jason Fried** (01:40:24):
I don't watch TV. I rarely get a chance to see movies these days. I really thoroughly enjoyed Oppenheimer though. I mean, I went to the theater to see it, and seeing that in the theater was really special, but I just love the movie, is fantastic.

**Lenny** (01:40:41):
Do you have a favorite interview question that you like to ask candidates that you are interviewing to hire?

**Jason Fried** (01:40:46):
I think we actually went over this one a little bit, which was, I'm always curious about what else... if you had more time, what would you do with this idea? Another one is, whose work do you admire? So it's not so much about what you can do, but what are other people doing that you think is great? I find that, that really illuminates what kind of pulse they have on the world and what they're looking at and what inspires them and what they think is good. So I like that question.

**Lenny** (01:41:12):
In that second question, what do you look for? Is it someone that you also admire?

**Jason Fried** (01:41:16):
Ultimately, in the moment, I don't care who it is. It's more about, tell me why. So someone will say, I like so-and-so, I'm like, why do you like them? What are they doing that you think is interesting? This is kind of the thing I tend to always ask, which is, why do you think that that's interesting? I'm always trying to get behind the words and understand where this is coming from because people can prepare answers and they can sound great. But it's like, well, what's behind that? Where are you going with that? Why? What's the genesis of this? That's what I'm always after. And so whether or not I agree with the work or whatever, in the end, it plays a part to some degree but I'm more interested in, how did you get there?

**Lenny** (01:42:01):
Is there a favorite product that you've recently discovered that you really love?

**Jason Fried** (01:42:06):
Yes, although it's more of a category. I bought an old car, and I've fallen back in love with stick shifts. I learned how to stick, and then I basically have had automatic cars for many years and I got back into sticks. And now it's even deeper than that. I got back into the old analog driving experience and how wonderful it is to feel attached to the machine that you're using, that you turn the wheel and it turns it rod and it turns the wheels, and that your leg muscle actually is what's breaking the car, to some degree. There's something about that direct feel that really surprised me. It surprised me how much is missing in modern cars and it actually... I like to draw these parallels because this is how I see the world. It reminded me of our business, actually. I think we have a very stick shift business.

**Jason Fried** (01:43:06):
We have a very direct business. Everything's very, very tight, very straightforward. There are not a lot of layers of abstractions. There are not a lot of things in the middle between the work we do and the way it feels, and I think of large businesses as automatic transmissions and modern cars where you just... everything's simulated. You don't really know what the road feels like. You can't really feel it in the steering wheel, or maybe there's some fake feel in there now. The brakes are just sending a command to a computer to squeeze the pads. The transmission is like, you don't control it, it just does its own thing. And there's a beauty in that too, but there's also a disconnect that I forgot about until I got back into driving the old car, which is harder to drive and noisier and bumpier and creakier, but there's a real directness to it that's really special, and I think it's actually a good way to look at business and to remind yourself that staying as connected to the thing that you're doing as possible has a lot of value.

**Lenny** (01:44:11):
That's an awesome metaphor. Next question, do you have a favorite life motto that you often repeat yourself, share with folks, find useful in work or in life?

**Jason Fried** (01:44:21):
And I don't always live up to it, but basically, it's worry less. There's a great Tom Petty lyric. I can't remember which song it's in, but I think it's on Wildflowers on the album. Most of the things you worry about never happened anyway. And it's just so true. I find myself worrying about all sorts of things that don't matter and never happen, and then you're like, God, I spent three days worrying about that, or I went to this appointment and it was fine. The amount of worry, and it's just all in your head, and it's all about anticipating the future that hasn't happened yet, and I try to tell myself that, and I try to tell others that in business. I try to tell myself that in life and in business, but also, I tell others that in business, what if people don't like... I don't know. You'll find out. Worry less about it. It probably isn't going to be a big deal anyway. So that's what I would say.

**Lenny** (01:45:12):
Worry less.

**Jason Fried** (01:45:13):
Worry less.

**Lenny** (01:45:14):
Final question, I was going to ask you this before you mentioned this, but you said you're writing a new book, potentially, are you able to share what this new book might be about?

**Jason Fried** (01:45:22):
We haven't started writing it. I can tell you, or I'm thinking about it, and it's going to revolve around the idea of gut and intuition in business and decision-making. I don't really know exactly how they all play in here in a book, but I think we need to celebrate gut and intuition more in business. And most business books are not about that. They're about the opposite in many ways. Whatever, you can't improve what you can't measure, or whatever these things are. And I think that's true in a lot of realms, like medicine, you can look at your biomarkers and you can do things.

**Jason Fried** (01:45:59):
I don't think things are quite as direct in business, and I think that intuition and gut is something to be celebrated. So I think what we're probably going to end up doing is looking at all the ways we use intuition and gut to make decisions at work, whether it's hiring or product decisions or policy decisions or whatever it is. Maybe break down some of those decisions in the past, perhaps, or talk about things on a day-to-day basis about how we employ those tools to move forward. So that's roughly the idea. It's very loose right now but hopefully, we can tighten it up and that's what I'd love to focus on that next.

**Lenny** (01:46:30):
That's an awesome topic for a book. I was thinking Worry Less could also be an awesome title for a book, if that's another topic-

**Jason Fried** (01:46:35):
That'd be a great title for a book-

**Lenny** (01:46:36):
... to go down.

**Jason Fried** (01:46:37):
Yeah, that would be.

**Lenny** (01:46:39):
I'm reading Charlie Munger's Poor Charlie Almanack right now.

**Jason Fried** (01:46:42):
Oh, beautiful.

**Lenny** (01:46:43):
There's a whole thing around the way we misjudge and make mistakes with our psychology, just like a heuristic [inaudible 01:46:50].

**Jason Fried** (01:46:49):
Human misjudgment.

**Lenny** (01:46:51):
Exactly. And I feel like that would be a part of this story of gut instinct are often right, but here's ways that we are often wrong, so maybe that's something to think about.

**Jason Fried** (01:47:00):
Yeah, it's funny. I had one opportunity to meet with Charlie Munger.

**Lenny** (01:47:03):
Oh, wow.

**Jason Fried** (01:47:04):
It was on a Zoom call, and it was four of us, and we got an hour with him.

**Lenny** (01:47:04):
Wow.

**Jason Fried** (01:47:09):
This was a few years ago. And I only asked him one question. I was mostly just a student listening to other people's questions. I said, what's your take on doing something well that you know nothing about? Essentially, is there power in being completely ignorant about something? I didn't add this but I've often found myself more creative when I don't know how to do something versus like, well, this is how you're supposed to do it, so you fall into this pattern. And I really loved his answer, which was, "I would just... trust your instinct on that," which is like, a lot of great things happen because you don't know how to do them.

**Jason Fried** (01:47:47):
In fact, a lot of innovations happen because you don't know how other people do them, and all you have is your gut. All you have is your intuition. All you have is how you feel about the thing. You don't have evidence, you don't have other examples to follow. You don't have a list of what to do. You just do. And I'm paraphrasing here. But it gave me a lot of confidence and hope to continue to follow our gut. And maybe this is, ultimately, in a way, what was the seed for this book perhaps, although I hadn't really thought about that until now. But it's a beautiful thing to read and to listen to him speak. I love it.

**Lenny** (01:48:29):
Jason, we covered everything I was hoping we'd cover. Thank you so much for making the time for this. Two final questions. Folks want to follow up and maybe ask more questions. How can they reach you if they can? And then how can listeners be useful to you?

**Jason Fried** (01:48:42):
So you can hit me up on X, Jason Fried, F-R-I-E-D. I'm on LinkedIn as well, and you can also email me directly, just Jason@hey, H-E-Y.com. So hit me up there. How can people help me? I mean, if you like what we're doing, spread the word. We don't really spend any money on advertising and marketing. We've explored a little bit here and there but most of our growth has been organic, and it's just word of mouth. So if you like what we're doing, tell people about it because it really helps us out.

**Lenny** (01:49:09):
Amazing. Jason, thank you so much for being here.

**Jason Fried** (01:49:11):
Thanks, Lenny. It was great.

**Lenny** (01:49:12):
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 lenny'spodcast.com. See you in the next episode.

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## [22/24] The essence of product management | Christian Idiodi (SVPG)

**Christian Idiodi** (00:00:00):
I try to explain to people that the real essence of this job is that you wake up on behalf of someone else to solve a problem for them, and you have to do it well enough that they give you something back in return. That's kind of the real essence of it, and that's, I always call it a certificate of appreciation. And it could be in the form of revenue, engagement, loyalty, reference, all of those things. And that's the real essence of this job. If it's not fun, you're probably not doing it right. If it's not had, you're probably also not doing it right.

**Lenny** (00:00:35):
Today, my guest is Christian Idiodi. Christian is a partner at Silicon Valley Product Group, alongside Marty Cagan, who when he introduced us, called Christian the most interesting man in the world. After meeting him, I tend to agree. After a long career in product, Christian now spends his time working closely with companies, big and small, implementing and improving their discipline of product management. In our conversation, we discuss why the product management field is so often disliked and what you can do to avoid becoming a product manager people don't want on their team. We spend a lot of time on coaching, how to get better at coaching your reports, how to get better coaching from your manager, and some really clever tactics for building trust with leaders within your company. Also, Christian shares his one favorite go-to method, out of all of the discovery methods out there, for figuring out what to build.

**Christian Idiodi** (00:04:03):
Thank you for having me, Lenny. It's a joy to be here.

**Lenny** (00:04:06):
It's a joy to have you here. So Marty Cagan introduced us, a colleague of yours at Silicon Valley Product Group. And the way he described you is he considers you the most interesting man in the world. Did you know that that's how he thinks about you?

**Christian Idiodi** (00:04:18):
I didn't. I consider him one of the most interesting people in the world too.

**Lenny** (00:04:22):
You guys are so kind to each other. I wanted to start with this trend I've been noticing in product management and the perception of product management. It feels like, I don't know if this is new or if it's always been around, but it feels like there's this trend of people just not liking product managers. There's trend of founders feeling like they should wait a long time to hire their first product manager. There's a lot of teams that wish they didn't have a product manager in their team. We don't have this person telling us what to do. I'm curious just why you think there's often this dislike of product managers. And then for PMs listening, do you have any advice for just how to not become a product manager people don't like and don't want on their team?

**Christian Idiodi** (00:04:59):
I think most people don't like product managers often because they haven't experienced good product managers. The core of product management is competency-based, meaning there is someone in an organization that represents the customer the best, that has a deep knowledge of the customers and your users, that has a deep knowledge of your data, your industry, your business and the product itself. And because of this competence, you kind of trust them to make decisions because if you have a problem that says, say we want more customers, it makes a lot of sense to go to the person that is an expert in customers to say, "Help me solve this problem." What you see happening in many organizations is that there is kind of this misperception displaced influence and mistrust because of the poor competency, meaning I feel I know more about the business or I know more about the customer or the data. And so why should I not tell you what to do?

**Christian Idiodi** (00:06:03):
And I think people fail to understand that this role is, it's a team spot. They are part of a team of people working together to discover a solution we're building and in a way that works for our company. And so I think when I think through the companies I've worked with, where I see this discipline really eroded is where there is just not a competent level of product management. The way I describe it to a CEO, I'll ask him, "Tell me who you trust in your company to make a decision on what markets we go to, what things we do." And they always have some senior leader, some VP, some person. And I say, "Why? Oh, Bob has been here a long time. He knows everybody. Everybody loves him and trusts him. He understands our business." And I often say to him, I say, "Well, Bob said put up manager." And it's often interesting to executives when I try to explain that way. I say that's the competent level that we're talking about here.

**Christian Idiodi** (00:07:01):
Imagine if you had Bob's on every team. Imagine how much you can accomplish. So one, I don't really think it's... I often say it's not the hate for product management, it's a hate for the understanding of what they have experienced in product management, which are people that are not able to deliver results that help them meet the outcomes they want.

**Christian Idiodi** (00:07:23):
So if I were advising product managers, I often say, look, when we see sales or executive driven product management where we see these alternatives to product management, it's not a cultural knock or a leadership knock, it's really on the individual and the discipline has to elevate itself to a place that it earns the right to make a decision on what we do.

**Lenny** (00:07:45):
I have exactly the same perspective. When people say they don't like product managers, exactly what I tell them is, you just haven't worked with a great product manager. A great PM makes everything easier for you. If you want to be a PM, people would hate to lose on their team. I would never want to lose Christian on my team as a PM. Is there something they could do maybe or change to become that person?

**Christian Idiodi** (00:08:06):
Well, I was just joking with someone earlier. I said, "I've only seen great product managers come out of two places. One, either a series of massive failure in their career or experiences that have been bad or from learning from great product leaders." The reality of this kind of role, it's kind of like if you have all kinds of... maybe you're like on a sport, like a quarterback on a team, you need to practice product management to be good at product management. You're not going to get mastery by avoiding some of these elements.

**Christian Idiodi** (00:08:39):
And we've kind of clearly defined what you need to represent to a company for them to trust you. So there is this period of humility that I challenge all product managers to have, this period of learning, recognizing what you do not know. And what you do not have is the trust of an organization or even in yourself that you know the customer, the business or the data better than anybody else. What you need to do is quickly try to accelerate that. You're going to find the loudest, most influential person in your organization, the person that everybody knows, knows everything, is in every meeting and stuff, and you're going to ask them to teach you. You're going to challenge them. And if they don't have the time to teach you, you're going to volunteer to help them. I'm going to intern for you. You're going to get permission from your manager and say, "Look, I want to spend time with Lenny. He's the head of sales, he's the head of operations and stuff. I just want to learn from him."

**Christian Idiodi** (00:09:35):
Now, what you're doing is you're extending that person's trust to yourself. You're also building a relationship with that person. But more importantly, you're learning what is driving that person's influence, which is their competence in the business or the customer.

**Christian Idiodi** (00:09:51):
After you've done that, you have to keep doing discovery because what's going to be different now is that person knows they've taught you everything that they know, but everybody now sees you learning every single day. So at some point, people will recognize that you might have more insights and more data than anybody else, and they will only know this because they've seen you learn from the best and they've seen you continuing to learn. So I always practically advise product managers in this kind of scenario, build relationships with people. You earn their trust by asking them to do two things. One, you're either going to teach me or I'm going to help you. And you're going to build relationships there, gain experience with them. You've got to immerse yourself in the deeper understanding of the business and the data.

**Lenny** (00:10:38):
Wow, there's a lot there. Because this is awesome. This is exactly, I think what people want to hear is how do you become better and how do you become more trusted and respected? So things you're recommending to PMs that want to become better, less disliked, more successful. I just took some notes as you were talking. One is there's a sense of becoming more full stack in the company, like understand the business, not just there's your one product and here's your one goal. And then this idea of just be always learning, which is both you are learning things and also people see that you're learning and see that you really care about a lot of the parts of the business that maybe you wouldn't naturally be inclined to understand. And that also helps you build relationships. And also just this really important point of if you know more than anyone else, people will innately trust you and respect you and want you on the team because you happen to have a lot of answers.

**Christian Idiodi** (00:11:25):
Yes.

**Lenny** (00:11:26):
Awesome. Kind of on a similar thread, something that Silicon Valley product group has is a really good definition of what a product manager's job is. And I thought it'd be cool just to spend a little time here. There's these four attributes you guys like to share. Can you just talk about that, as a little foundational?

**Christian Idiodi** (00:11:40):
I kind of mentioned before, a product manager is in a team spor., so they work as part of a team to uncover a solution, what to build. And every time you solve a problem, there's inherent risk involved. There's the risk of will people buy this or will they choose it or will they choose to use it, which is all a value type of risk. There's the risk of can they use it, which is a usability type of risk. The risk that we can build it to have the skills to build it or the time to build this, that's a feasibility risk.

**Christian Idiodi** (00:12:14):
And the risk of it working for our business, which is a viability risk. I cannot call out the product manager's competency. It's really to try to drive the first and the last one, which is value and viability. A solution worth building, something people will buy, choose or use, and one that works for our business, which is at the core of what product teams do, solve a problem in a way customers will love and a way that works for our business. It's why the product manager gets all the rap of, if everything goes great, a great team effort, if everything goes wrong, they blame the product manager.

**Christian Idiodi** (00:12:49):
It's because people hold them accountable to results. Nobody wants to work on something nobody wanted in the first place and your job is to ensure that we are working on something people want in the first place. And it is such an amazing role. I try to explain to people that the real essence of this job is that you wake up on behalf of someone else to solve a problem for them. And what an amazing job. There's just no greater... I cannot think of a better discipline with such inherent permission to solve problems on behalf of someone. And you have to do it well enough that they give you something back in return. That's the real essence of it, and that's the, I always call it a certificate of appreciation. And it could be in the form of revenue, engagement, loyalty, reference, all of those things. And that's the real essence of this job. If it's not fun, you're probably not doing it right. If it's not hard, you're probably also not doing it right.

**Lenny** (00:13:51):
Wow, I love that frame of reference of you're giving something to customers and your success is measured by do they give something back in return, which is basically do they pay for your product? Such a beautiful way to think about that. Oh, man.

**Lenny** (00:14:05):
Okay. So just to summarize these four elements, there's value, usability, viability, feasibility to understand if the product they're building hits all these attributes.

**Christian Idiodi** (00:14:15):
That's right. You're trying to uncover a solution and you know you've solved the problem when you get those two things, something customers love, they give you something back, and our business can support it in some ways. And I'm calling out, these are the different risks in our kind of taxonomy, how we call the things you have to tackle. And it's a team sport, and so there are these four risks of should we build it, will people use it, will people buy it, will our customers support it or our business support it? And you're trying to answer those questions with a designer and a product engineer.

**Lenny** (00:14:52):
Of these four, so value, usability, viability, feasibility, where do you think most new PMs fail most or should spend more time?

**Christian Idiodi** (00:15:00):
Oh my goodness, value. Value is probably, it is the most important and the most overlooked. And the big driver for that is often because of the operating model of teams. Teams are often given roadmaps of projects and features to go build and deliver. If that's the case, you actually really don't need a product manager because they're going to assume value. If the boss told me to build this, I cannot say, "Should we build this? Is this the right thing to build? Is there a better option? Is this what people will buy?" You just assume it's valuable.

**Christian Idiodi** (00:15:38):
And so often, when people ask me why does the product manager seem to play like a core leadership role on a team, almost like the quarterback. And it's not that they're more special in solving the problem that the designer or the engineer, but they're answering a question that determines if we should be working on this in the first place.

**Christian Idiodi** (00:15:57):
So value is often the hardest thing to solve and must be overlooked. We often see bad patterns where companies will say, "Yes, we ran a test, with 300 users and they all scored it 84% or 90%. They love it." In that way. I said, "Well, just because somebody can use your product doesn't mean that they will buy it. Just because they can use it doesn't mean they will choose it. Just because they can use it doesn't mean that they will actually use it." And what people say is often different from what they do. And our job is to actually solve the problem, which is what core value is, in a meaningful way. And often overlooked because we check the box on our own item. So the most important, because that's to the point of the certificate of appreciation, what you get in return, that's the ultimate outcome. Really, value.

**Lenny** (00:16:55):
You once gave a talk along these lines around discovery, and it was this talk of here's all of the things you can do to help understand what to build to make something valuable. There's a billion frameworks for every step of the discovery process, press releases, story mapping, opportunity solution, trees, fake door tests, all these things. And you're like, if we had to pick one thing, if there's one process or approach that you recommend most, your answer was essentially finding some number of reference customers to work with and helping them and working with them to design the product. Do you still see that as the one, if you had to pick one approach to figure out what to build? And if so, you just talk about how you recommend going about that.

**Christian Idiodi** (00:17:35):
The holy grail of product walk is really a reference customer. This is somebody that has used your solution or your product, loves it enough to tell people about it. I kind of described the work of the product team is to solve problems in a way that customers love and a way that works for our business. The ultimate definition for me today of the love that somebody has for our product is they're willing to put their reputation on the line by telling people about it. And for me, if we think about you do a lot of interviews with founders and entrepreneurs and you're going to have people that they find a market with an idea and they jump in. But if you think at the core of some of these founder-inspired businesses where the founder will say, "Well, I had a problem and it was their problem and they focused on solving the problem and then they got their friends on it."

**Christian Idiodi** (00:18:39):
And so it's almost like this idea that if they were their own first reference customer. They were so close to the problem, immersed in the environment of the problem, solved it in a compelling way enough where it was like, there are more people like me. And it is like if I said to you, "Lenny, let's go to a steakhouse. Find me a new steakhouse around you." You might go online and Google and you see a steakhouse with one review. How do you feel about that? I don't know. Maybe other people don't want to try this. You see two reviews, you're like, maybe it's the chef and their spouse or something. The question is how many positive reviews would you have to see to jump and say, "Let's go try this one." There are some things inherent in, if you look at Geoffrey Moore's adoption curve and those kinds of models in here, most people don't want to be the first to try things. But you are likely to try things if other people that look like you have accepted it or defined it as good.

**Christian Idiodi** (00:19:39):
And so the whole essence for me of this technique is to create those first people, those reference customers. If you think about how companies make the shift to becoming sales-led or operations-led, almost all companies start product-led. The product is first. You kind of build something and it's like, yeah, it's going, let's hire salespeople and marketing people and operational people to do it. What's really happening is that the product team created the first customers. And now a group of people have to capture the value that was created. So what's happening here is that it is constantly the job of product teams. The reason they lose influence is because salespeople are having to sell a product. You see? So they're like forcing back, "I need this and I need this." But if you came to me and said, "I want to buy steak," and I say, "Let me show you 20 people that look like you that recommend this steakhouse," my job as a salesperson is very easy. I'm just like, "Hey, you should eat here. Everybody that loves steak, they all eat here."

**Christian Idiodi** (00:20:44):
So product teams feel, at this contract to an organization when they don't create powerful reference customers. So it's by far my favorite technique. And the way this technique works is you want to discover and deliver and develop who has the problem, the customer. I want to discover who has the problem. At the same time, discover and deliver a solution to this problem. The idea here is that if you really want to solve a problem, you need to get out of your building. Go spend time with someone that has the problem and don't leave until you solve the problem. People talk about why we had such a record time to the Covid vaccine. Sure, technology has improved, our research has improved. But if you think about it, we had the highest number of volunteers for vaccination in the history of any vaccine in the history of time.

**Christian Idiodi** (00:21:36):
Why? Did we have to look for someone with Covid? No, they were literally all around us. The research was immersed in the environment of the problem. They could study... and so this is often what I call, it's almost like a pressure-cooked discovery in some ways. If you truly, truly want to solve a problem, get out of your building, get out of the assumptions, get out of your opinions. Immerse yourself, find someone who has the problem, stick with them until you discover a solution for this problem. And you're going to do that. The part of why I love this technique, the two biggest reasons I think, the first is if I cannot find a certain number of people that have this problem, my goodness, it might not be a problem, but solve it. I have never had a product failure using this technique. If I were to credit... goodness, I think last count, I'm up to like 205 products I have worked on or participated in creating in my career. And I tried to build a new product every year from scratch. It's kind of a crazy thing about me. My friends know what I want for my bad day is a problem worth solving. And I like to go from idea to revenue, and the setup, and I test all of these techniques in this way. And everybody knows my favorite technique is if we find a problem worth solving, we need to uncover a solution for B2B, I want six to eight references, for B2C, I want maybe 15 to 25 references as an indication that we've achieved product market fit.

**Lenny** (00:23:15):
Just to be clear, you said you still work, you build products yourself and you practice this and you've built... okay, what's like every recent product that you've built? I didn't know this.

**Christian Idiodi** (00:23:25):
So I do a lot of work in Africa now. WorkNigeria is like a job board that helps people. We do kind of a job board HR replacement and advisory too as well. I'm actually working on another app around the NDA and protecting high-asset individuals in some ways. So kind of every year, I find a problem like that worth solving and I practice doing the work of discovery with a team of people.

**Lenny** (00:23:54):
That's amazing. I see this unraveling of the most interesting man in the world is happening a little, bit by bit. We learn more and more about you. Okay, amazing. So just to kind of summarize some of these-

**Lenny** (00:24:03):
Okay, amazing. So just to summarize some of these points, which are really great and I've never heard it described this way before. So basically, a really effective way to understand how to build something people actually want and solve real problems is this idea of pick reference customers. And I really like this word reference, which is not just they're going to help you build a thing, but they're also become a reference to future customers because they end up loving it because you built it for them and they love it.

**Lenny** (00:24:27):
Your advice is find six to eight in B2B space, 15 to 25 in B2C. And the reason there's a number here is if you find just one or two, you never know, they might be just the one or two that have this really weird problem that no one else has. And I think that's usually the flaw in this approach is you end up building it for a small number of people and nobody else really wants it. And it sounds like in your experience, this is a good kind of number where probably a lot of more people will have this problem.

**Christian Idiodi** (00:24:53):
Yeah. There've been studies to validate some of these numbers. I think early, IBM, kind of struggled selling those supercomputers. And if you're buying a million dollar computer, someone says, "Hey, do you want to buy?" And you're like, "I don't know. Is there anybody else that has bought it? Shall I be the first?" And there was this common question of what would it take for you to buy it? And someone says, "Hey, if I see five or six people that look like me already have this, then I feel confident making the argument to my company, we should jump on it." And it's like, so how do I create the first five to six? And you can see a lot of the validation on B2C in some of the things you might see in the App Store on Yelp or those places. My idea here is if you found a steakhouse with 25 5-star reviews, you are likely to adopt this.

**Christian Idiodi** (00:25:41):
So in every app I have ever put on the App Store, on the day I launch the app in the app store, they are 25 5-star reviews. I will never launch an app and be like, "Let's hope Lenny loves it. Let's see who the first person." On the very first day of launching the app, there are 25... so I will know I am not ready until I have achieved 25 people that have told me, worked with me and said, "I am now ready to put my reputation the line." Sometimes I might need to work with 30 people or 50 people because the output is 25 reference customers. Because if Lenny is like, "I don't love it enough" or "I don't feel comfortable," I'm not going to customize for Lenny. I'm going to find my single target market, talk to more people. If I get 25, I have achieved product market fit.

**Lenny** (00:26:29):
So interesting. It basically kicks in this word of mouth flywheel that everyone's always looking for is how do I get people to talk about it. Build it for them, solve their problems, tell them that it exists. You mentioned a bit about how you understand if it's actually, let's call a product market fit, if you have product market fit with these people that you ask them if they're going to leave you a 5-star review for example. I guess what do you consider this is good, I got one more person that's really happy with this? What tells you it's got product market fit with a person?

**Christian Idiodi** (00:26:55):
If I were thinking about how I will do this, pick a problem to solve, first of all, I have to know who I'm solving the problem for. And in some indication and I want to validate that this is actually a problem you do have. And I'm looking for a certain type of person. These early adopters in our world are broken up to technologists and evangelists. Technologists could be, "I love the new iPhone 16 is coming out and it's going to have five cameras and I write an article in some tech review board. Super fast, super sleek, all good design." You just love new technology. You always jump on new technology. And evangelist could be someone that says, "Oh my, I look great with the iPhone 15, it has three cameras. I will look phenomenal with the iPhone 16, so I'm going to go stand in line at the Apple Store for three hours or overnight because I just can't wait to get my hands on the Apple 16."

**Christian Idiodi** (00:27:53):
They may feel a little irrational, but those are the kind of people you're looking for, people that believe they have a problem. So it's like you will try any steakhouse, in my example. You're just like, "I love steak. I don't care if there are reviews or not. I'll try it." And what I'm trying to do here is I'm saying, okay, Lenny loves steak, he wants to try a steakhouse. And I'm good to say, "Lenny, I'm trying to build the best steakhouse here. If I create a menu that you absolutely love, are you willing to tell people about it?" That could be a video testimonial, write a review, stuff like that. And it's okay Lenny, if you don't love the first iteration of it and stuff like that, I want to hear your feedback. I want you to work with me in ensuring that I build the best steakhouse here. And that's kind of the idea.

**Christian Idiodi** (00:28:37):
So I'm going to work with 25 people that look like you and I'm going to keep tweaking, in this sense iterating on the product and the menu until Lenny's like, "My goodness, this is the best steakhouse in the world." It is like I'm just going to write about it and when I get 25 people that have all, it's not the steakhouse, they love it enough. Because this is where you really get the shift in value. Because if I say, "Lenny, go write me a review, a five-star review." You're like, "I don't know if I feel comfortable about." You say, "Why not?" You see, I'm really going to get deeper feedback because people will say or do anything just to avoid hurting our feelings or for us to get out of their face. So they'll be like, "Yeah, yeah, yeah, I'll give you a five-star review." But when I say do it, you're like, "Well, I have this hesitation." Why? That's really where great discovery comes. But it's hard to in a silo. You have to be immersed with the person that has the problem. So product market fit is when you iterate it in this discovery, you've discovered and delivered something so meaningful that these customers that are your target customers, are willing to put their reputation on the line and be a reference. That's my indication.

**Lenny** (00:29:49):
I imagine though, Christian, so charismatic, comes to me and says, "Hey Lenny, would you leave me a five star review for this product. I'm working on this, I'm trying to figure out if people want it." I would be like, "Yeah, of course. I'll leave you a five-star review." What do you do to kind of avoid that, just like I just want to be nice, like I don't care, I'll leave a five-star review.

**Christian Idiodi** (00:30:06):
You. It's part of why I need 25 in B2C. And don't get me wrong, if I can convince 25 people in there, I may have a marketing product and a charismatic marketing products. If that's all I needed to do was a good message and charisma to get people on it. The good benefits of this is that you can tackle risk very early because you can involve many other parts of your organization, marketing, sales, legal, finance. People often ask me how do I come up with the marketing spiel or the description? I'm like, "I don't make that up." If I ask Lenny, "What do you feel about this product?" And he says, "Well, it's cool and it's very sleek and very nice." The marketing department will say, "We don't like those terms. We want to call it comprehensive." And when you go out to sell your product, people are going to be disappointed because the expectations are created by what's on the box.

I only market exactly what customers tell me. I have never been surprised about what customers will say when I release a product because in this technique I already get their feedback. And so I'm going to put exactly what Lenny said on the box. "Hey, this product's cool and sleek and easy to use." I've only launched a product that says super fast but difficult to read because the technology team said there was no way to change the font on something and it was just going to be difficult to read. And you know what everybody did when they got the product? "Oh my goodness, it is super [inaudible 00:31:39]. All right, it is also difficult to read." It matched their expectations in some ways. So what I do here is I learn how to sell the product with this technique, I learn how to market the product because I have real people, that we're not making assumptions.

**Christian Idiodi** (00:31:54):
What's the best way to market this? How much Lenny? How would you find this? Does this language resonate with you? Does this properly describe the menu? See? So that's kind of what you're doing when you use a technique like this. It feels heavy to people, but that's kind of part of the practice of it. If you do this a whole lot, you get really comfortable at involving, you're working with your customers to solve it. But for me, the fact that you will not have a product failure because you have a natural pivot out, meaning if I can't find 25 people that love steak, why in the world am I building a steakhouse? So if you don't find enough people that love this problem and are willing to help you, just be like, this is not a problem worth solving. But more importantly, you really start to get... is the fastest part to product market fit, the clearest definition for me because I know when my product is ready, when I've dotted those I's and crossed those T's, in that way.

**Lenny** (00:32:49):
I think your point there, recruiting is itself a huge signal, is really important. Can you find people that have this problem and care enough about this problem that they're going to talk to you and spend time exploring this thing that doesn't exist yet. I think that's super interesting. And then I think another key part of this is it's one solution that solves many people's problems. And it can't be a bunch of different things for a bunch of different people.

**Christian Idiodi** (00:33:10):
That's right, that's right. If one person says, "I don't want this," wants this, another person wants this, you don't do it. That's how you know you do the minimum. All 25 have to want the same thing. If one person's out, you just don't do it at all. And the reason that's powerful is because if I come to you and I say, "Hey, it's missing this feature." I say, "Well yeah, 25 people that look like you that are very happy without it." You see? That's how if you think about what you do in a review, you see the five stars and you instantly like, "Oh, that's good enough." But if you have a question, what do you do, you cannot double click on the review to read. And that's how people get convinced. There's this social influence of like, "Well, Lenny's cool, he likes the steakhouse. I should like it. He's fine with this not being there so I should be fine with it." So your references are super powerful in more than any company, in influencing consumers on what they should choose or not choose.

**Lenny** (00:34:06):
Basically, Strive builds new products exactly this way. They find new customers that have a problem and they work with very small number of customers to build a product for them, and that's how a lot of their new product... I think Rippling works like this too. So I think this is a really good lesson for everyone listening, if they're trying to build something new. Is there an example that comes to mind that would be, I don't know, interesting to talk through, of something you built that you worked through this process?

**Christian Idiodi** (00:34:30):
Oh, boy. I tell the example of solving a problem when I was at a staffing company, a snag job. They do hourly jobs and help people find their best job or an hourly job and I actually get a call here from the head of Global staffing at Starbucks. Now, he called me, you can see the benefit of this technique, because I'm the person he calls when he has problems. I've used this technique with him at a previous company. He didn't even know I was at a new company. And he calls me up and he says, "Christian, I have a problem." I said, "Well, don't we all have problems?" He said, well, "We just bought a bakery in the San Francisco Bay Area. And as we're doing the paperwork to kind of take over this company or this acquisition, we realized that close to 800 of the employees may be undocumented workers."

**Christian Idiodi** (00:35:22):
And I said, "Wow, that does sound like a problem." He's like, "Yeah, imagine if this breaks out in the news and all of that. But more importantly, we still need to get all their paperwork. So all these people are going to quit and we'll have a new bakery without employees." And my first question to him as a product guy is like, "Wow, would you give me a million dollars to solve this problem?" And it's like, "No, seriously?" I was like, "300,000." I'm throwing out numbers. He's like, "Maybe." I said, "Wow, you have my attention." I go to my CEO, I tell him to call. I grab a designer and an engineer. I just say, "Hey look, I would love to work on a little project with you all if you have some time." I kind of debrief them on the call. Now the first thing I have to do is to try to define the problem, identify problems. What really is the problem going on?

**Christian Idiodi** (00:36:08):
Yeah, we're breaking it down, we're talking through this. We say, well, at the end of the day, Starbucks needs to hire like 800 people quickly because we can't fix getting everybody's paperwork. But they're going to lose these people and they need to hire those quickly. And I say, well, who else has this problem? We're trying to throw out guesses. I'm like, "What are we talking about? Let's go out." Everybody jumps in my car and we start driving around and this is where we're doing our product work from. We're talking in the car, just out of the building. We see a new construction site for a new McDonald's coming soon and we're curious. We're like, well, "Let's go find out." We start talking to people on sites. Fortunately, the operations director is on site and we ask him, we say, tell us about opening up a new McDonald's.

**Christian Idiodi** (00:36:54):
He says, "Well, do you know we need like 120 people on opening day?" We're like, "Whoa, for McDonald's? Really, 120 people?" He's like, "Yeah, do you know that most of the people in this industry don't show up to work on the very first day, and every day we're in construction, we're losing money. So the second the bathrooms, the restrooms, are done, we want to open up." We're like, "Wow, we didn't think about this, new construction, a new store opening." They need to hire lots of people quickly. So I said, "Thank you very much." I gave him my business card, he gave me his. We jumped back in the car. We just kept driving. We went to the mall. We started talking to people there. We talked to a manager at Macy's and she said, "Oh look, we hire 20,000 people in the holiday season."

**Christian Idiodi** (00:37:36):
We're like, "Macy's." Yeah, it's like nights, weekend, shipping, stuff like this. We started hiring in the summer because of how painful it is. Now, all we're doing here is just validating that this is a real problem, like other people will have the problem. So we go back to the office, we're brainstorming, like, "How will someone even go about solving this problem?" We're thinking this was like, we're not really sure, but McDonald's guy was very desperate. I said, " I have his business card." We start throwing some ideas. So I called the McDonald's person and I said, "Look, you just met with us." He's like, "Yeah. We would love to help you solve the problem." He said, "Well, what do you have in mind?" I said, "We've been talking. What if we just sent you some people to interview. And if you like them, you'll hire them."

**Christian Idiodi** (00:38:18):
He said, "That seems fairly easy." He's like, "How do I pay for this?" And we took a swag like, "Maybe you pay us for everybody that you hire." He was like, "Oh, I don't see much risk to that. This is great." I'm like, "Oh, okay." We have no sense of what to do. We are literally Googling, how do people find a job at McDonald's? We go to colleges, we are sticking up flyers. We are putting ads in the newspaper back then, we are looking at different techniques to try to get people into a funnel and interest by posting on Craigslist or things like that. At the end of the week, we get about 40 people that are interested to come to the interview. We're like, that feels good for our first try. We call the manager up and we say, "Look, on Monday we will send you 40 people to interview. This is great."

**Christian Idiodi** (00:39:05):
Monday I take my designer, my engineer, we are on site with the manager. At nine o'clock, we expect three people to show up for interviews. Nobody shows up. 10 o'clock, another three, one person shows up. We got to the end of the day, less than 20 people show up. This man only has four or five people. We are like, "We suck this. This is terrible." We go to the manager, " Let's go and apologize for wasting your day and stuff." He starts to laugh. We're like, "What's going on?" He said, "Look, I forgot to tell you. Folks in this industry don't even show up to interviews. We are McDonald's, we pay minimum wage. People will leave us for 25 more cents an hour. They will leave us for a job that is one block closer to their house or less than a mile closer to their home."

**Christian Idiodi** (00:39:54):
Now, the engineer is with us and he's thinking about it. It's like, this is really interesting. About half of the people showed up. He hired one in five. If you really want to solve this problem, playing the laws of averages, we probably need to send this man close to 200 people. We need to go bigger. So we are storming the office, we called the McDonald's guy again. I was like, "Can we try again next Monday?" And he's like, "Do I only pay for the people I hire?" We're like, "Sure." It's like, "Oh, go ahead and kill yourself on this." It's a pain. We've been trying all kinds of things for years.

Now, we start doubling down our efforts. We start calling back all the people that didn't show up for interviews like, "What's going on? Did you get lost? Don't you want a job? What's wrong with you?" We start figuring out what portals worked well for us the last time, what wasted our money, what was the cost to acquire a person. And we spend a week doubling our efforts on those channels. We probably have about 120, 130 people on the list. The Sunday beforehand, we start calling them up like, "Please show up. Don't embarrass us. Don't you want the job? Do you need that address? Should I call you a reminder, set your alarm." We're trying all the techniques to try to get more people. There we go the next day and at the end of the day he has about forty-five to 50 people. He comes to us, he shakes our hand. He's like, "Whoa, the quality was excellent. All my recruiters were engaged. The day was smooth," [inaudible 00:41:17] how successful we are.

**Christian Idiodi** (00:41:18):
He's like, "I want to use you for every new McDonald's I open in the area." Now, I don't know I have a product. I just know I was able to help one person at McDonald's. But I feel like I have enough learning. So I called up my friend at Starbucks and I said, "Hey, man, remember the problem we talked the about?" He's like, "Yeah. I would love to help you solve it." He said, "Oh, okay. What do you have in mind?" I said, "Well, I think we need to send you about 3000 people to interview." He said, "3000 people? I told you I only need 800." I said, in this industry, most people don't show up for interviews, right? He said, "Oh my goodness. You know our industry well. I like this. I'm going to take this up, I think we'll give you this contract." I take my designer, my engineer, we go to San Francisco. We're out there recruiting because this is where it was based. We have to get a whole hotel, hire people. We are working all the channels we knew, working in the area. Remember, we don't have any software, no technology. The designer, we're doing this manually, Excel spreadsheets, phones, emails, in that way. In one week, Starbucks hired 784 people. I get an email the next Monday morning from the contact at Starbucks. He copied Howard Schultz, then CEO of Starbucks. The email read, "These guys just saved our butts." I sent it to my CEO, but then I said, "You know what?" I only know now I can help on McDonald's and a Starbucks, but that doesn't mean I have a product. But I now have enough of problem definition. I reached out to the head of marketing, the head of sales. I said, "Tell us who has this problem you've come across," because we need to work with more people to try to uncover a solution that is scalable, maintainable, reliable, and works for our business. Weirdly enough, the next opportunity we had was the Los Angeles International Airport. They were opening up a new terminal and they said, "We need 200 people to manage all the stores in the new terminal." And we were like, "200 people? We just hired close to 800. We got this." We go to LA for the briefing with the staffing group and they tell us the people that work at an international airport have to match the demographics of the travelers. We say, "Say what? Yeah, we have 13% Chinese-speaking travelers, we need 13% Chinese-speaking employees." We say, "Sorry? We've got 5% Korean speaking." I mean my team is in LA, we're in Chinatown. We are speaking, trying to recruit people to come and work in an airport. If we expect 10 people to show up, only one person shows up.

**Christian Idiodi** (00:43:49):
We start calling job seekers up like, "What's going on?" They say, "Do you know what it means to work at an airport?" First, I wake up at five o'clock, I drive to the employee parking lot. I get into a bus. Then I go through security. There was not like TSA pre-check back then. Then if I want to break, I go to security again and then you pay me minimum wage. It took us close to three months to staff this. We had to negotiate with the union to raise the price to like $15 an hour to attract people. When we come back from that, you know what we're saying, that is not our customer. Never again. We are never doing airports. That's a pain.

**Christian Idiodi** (00:44:24):
Around this time, it was the holiday season, so we reached out to the person at Macy's. We told them about our work with McDonald's. They say, "Oh, we'll try this." We started working with them. You can imagine through this, the engineer is thinking, how can I use technology to improve this? I always tell this to people, I never wrote a requirements document, I never wrote a story. So the designer is thinking, how can we improve the end-to-end experience? Okay, we need a recruiter experience, a job seeker experience. We had a funnel. We need to build a scheduling tool so that they can scale the interview. Oh, what about notification? Maybe text message. We can send them a map so that they can know how to get to the... I mean, all of these things, because they were involved from the very beginning in defining the problem, they were immersed in the solution to the problem. It takes us about eight and a half, almost nine months to build this. When we launched this product in its first 90 days, it booked $32 million in sales.

**Christian Idiodi** (00:45:22):
Why? Because you got McDonald's probably until today using this product to open up every new store. Well, Starbucks went to the global contract. We say, " Well, we've only done discovery in the US so I only know where it works in this market." And we started finding, if you look at NASCAR, some of these big sporting events, they have to bring a lot of people together very quickly for a short amount of time. And this is the same kind of product they use to do that high volume hiring in a short amount of time. If you think about it, I was discovering who had the problem and developing the customers that have the problem. At the same time, I was discovering and delivering a solution to that problem.

**Lenny** (00:46:01):
That's insane. You said you made thirty-something million dollars the first year of launching this thing.

**Christian Idiodi** (00:46:06):
Yeah.

**Lenny** (00:46:06):
That's unreal. I love how this is the epitome of doing things that don't scale. You going hiring McDonald's employees and then Starbucks employees.

**Christian Idiodi** (00:46:15):
That's right.

**Lenny** (00:46:16):
Then airport employees. Wow.

**Christian Idiodi** (00:46:18):
You do things that don't scale and then you do things that do scale. And it's so powerful when you discover how to do things that don't scale, when you actually know. Because it's the power of technology is just the beauty of what it can do at scale.

**Lenny** (00:46:34):
And to that point, it's easier said... a lot of people talk about doing things that don't scale. Many people don't actually do anything like that. They're like, "Nah, let someone else figure that out, or let's just actually think about the future of this versus just doing it and solving and finding problems." I love that also, you didn't do any of these other, the things we talked about. There's no fake door test, there's no opportunity solution trees. There's no user interview. You're talking to people. It wasn't like a user research interview, come sit down, ask questions.

**Christian Idiodi** (00:47:00):
I said, there's nothing better in learning how to solve a problem than trying to solve the problem. You will get all the answers, the research, the failure, the mistakes, all the evidence. You know the difference between what people say, this is what they do. You'll validate and test. Because at the end of the day, what is statistically relevant? Solving the problem is the clearest indication that we've solved the problem and that we know how to solve the problem then. And so yeah, very powerful technique.

**Lenny** (00:47:30):
And I love that you didn't really know exactly where this was going to lead. It was just kind of this exploratory, let's see if there's something here. And you just kept following this like, huh, there's a problem. It looks like we found a way to solve it. Let's just see where else this can take us. Amazing.

**Lenny** (00:47:44):
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**Lenny** (00:48:03):
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**Lenny** (00:48:34):
I want to shift to a different topic. You spend a lot of time helping product leaders get better at coaching, get better at building relationships, get better at building trust with their teammates. Marty Cagan actually shared this quote with me when he joined, he said that you can build trust with executives and product leaders faster than anyone else he knows, and the people you coach adore him like some kind of rock star.

**Lenny** (00:48:57):
He's literally on speed dial for several of the CEOs of the largest companies in the world. Okay, so let me just ask you, what's your secret to being a great coach, and how can people listening become better coaches to their reports, maybe colleagues?

**Christian Idiodi** (00:49:12):
This topic is probably near and dear to my heart because, I mean, there are many ways that I think our corporate structures have failed in creating high performance and stability in people, and I think one of them is actually encro of leadership. And by leadership, the key component I often point to is coaching. This idea of what truly is the job of a leader. And I tell people, yeah, it's context and culture at the highest level like, why are we here? Where are we going? How do we organize ourselves to get there? What's important?

**Christian Idiodi** (00:49:51):
Just kinds of things and the environment in which we do it, but there's a people element because you recognize that you want an outcome and you need people working together to that outcome. So I now have to staff those people and I have to hire and train them and equip them and then appoint them to what those things are. But many of those things are one-off, meaning I create a vision, I create a strategy. I hire a person. There's something that is every day and that's coaching, that's like the day job of managers. And if I think about high performing teams in the world, and you can pick sports is one of those, artists, they have coaches and managers like it's an everyday thing. And the idea is that when I explain this to people, I say doing product management is a product manager's job, but getting better at product management is the manager's job, is the coach's job. And people tend to misunderstand how that dynamic works.

**Christian Idiodi** (00:50:57):
You see, if you are playing a game, you're in the game. The coaches are on the sideline watching you play the game and getting you better at playing the game. Your job may be to kick or pass the ball and you need a competence level, but somebody's job is every day looking for ways for you to be better at your job.

**Christian Idiodi** (00:51:16):
The number one reason most people don't give good coaching is because they've never experienced good coaching themselves. And most people can only give to other people what has been given to them, what experiences they've seen. I was in an executive meeting with a CEO and he gets up in a meeting and he just starts screaming and cursing at everybody, just throwing up And I said, "Whoa, whoa." I said, "Can we talk outside?" They pick him outside. I was like, "First of all, I don't even think I can work with you anymore given this environment you're creating, but I need to understand why you are talking to your team like that." And he says to me, he says, "Christian, well my boss used to scream at me like this. And look at me, I'm now a CEO, I got it, I understand it. They are grownups, they can understand it too."

**Christian Idiodi** (00:52:05):
And I said, "Well, tell me what you're trying to communicate." And he explains it to me and stuff and I said, "Is it okay if I show you an alternative way of communicating that?" He says, "What do you mean?" I said, "Well is it first of all safe for me to do this with the team?" So I go back to the team and I say, "Look, I'm going to try to say what the CEO was trying to say again. He's giving me permission for you to speak freely and candidly, I want your honest opinion as to what was more effective and why." And I took a stab at kind of representing what he was trying to say and I asked the team and it's like, yeah, it's the same thing kind of message, but when he tells us this stuff we just go do it. We get it, we go do it. But the way you described it right now to us, I can think of four other things I need to do. I even understand some other things that may be missing that we need to now go tackle.

**Christian Idiodi** (00:52:57):
And the CEO is kind of really taken aback and it's kind of in some ways he has never seen an alternative. And he's never seen if an alternative be effective. Most people need to see something then they need to do it before they can even teach it, in some ways. Now I'm saying this all because I need to make a very strong argument for people understanding coaching. And in some ways I probably did not know that I was probably good at coaching. I coached my kids in soccer for eight years and we always won the championship, my boys team and I had long waiting list of people and I thought I had a fundamental flaw in understanding it because when my kids were all four years old, when you have the kids run around the soccer field just kicking the ball any way, my team always had plays, they all have strategy.

So winning games like 10 to zero, other kids, I thought I'm like, maybe I was born in another country. I didn't know you were just meant to let them play. And I was really coaching kids and I was treating four-year-olds like adults. We're watching video, watching tape, having real... [inaudible 00:54:05] But it was so funny when you see them execute on the field. But I've kind of always had this mentality about the truest forms like companies cannot care for people, people care for people. And the representation of what is acceptable in an environment or what we do is by the leaders. Now there's some different dynamic to why that's not happening with how we promote people and the whole poor structure around that. But fundamentally, trust is a key part of doing this. And I think when I tell these people, I say, "Look, most people don't know that you know something until they test you."

**Christian Idiodi** (00:54:50):
We do it a whole lot in our environment. I ask you a question, I see how you answer and it's like I might ask you what's one plus one? It's two and now I know that one plus one is two. I don't care when you learned it. I need you to know that it's two to do my work. So it happens in everyday environment and what people fail to do is to do the learning so they get the question wrong and they lose trust. And trust is based on competence and character, there are other values like communication and concern and care, but most corporate environments, it's a competency thing. That's why you see so many companies accept people with bad communication, bad care, because they're very good at their job. So if you can demonstrate competence, you will earn some trust, at least the trust of competence from people.

**Christian Idiodi** (00:55:44):
So I kind of explained to people a whole lot that the real core of their job at first is to learn, to seek to understand before they are understood, to know what you don't know. That humility and ego only last a small minute. The most powerful way I have found to get trust with many people is to have them accountable for an outcome of mine, which is to know. So if I wanted to accelerate trust with Lenny, I will ask Lenny to teach me. And I see this like an emotional intelligence, black belt technique here, but many environments, if you get into environment, it's very quickly for you to identify the power in that environment. Who is influential? Who has loudest voice and all? And there's something behind why they're powerful. Yes it is title, but if you think about why someone is called a CEO, it's because there's some competence that made someone give them the title, they are great at growing businesses, they have a good stride, whatever it is.

**Christian Idiodi** (00:56:51):
So what you do to build trust is you want that person to trust you. Okay. But the only way that person will know that they trust you is if they test you. And unfortunately many environments they do that publicly. I'm in a meeting, I ask Lenny a question. He bumps a presentation like, oh, product managers are useless. That person doesn't know anything. So here's what I do when I want to build trust, if Lenny's a new hire in my company, I take Lenny to the loudest, most influential person in the company. And I say, "Look, I just hired Lenny. Super rockstar, did all of this. But he knows nothing about that business, nothing about how we work and stuff. I will love for you to teach him some things." Now he may be like, "I'm super busy, I'm involved."

**Christian Idiodi** (00:57:36):
I say, "Look, Lenny should just hang with you. I've played his calendar for the whole week. He's just got to sit in meetings you are, quiet, observe, just by observing you, he will be a rockstar. No stress, nothing to give." Now it's impossible for this leader to sit with you for a whole week without saying things like, "So Lenny, where are you from? What do you do? Tell me about yourself." What have I now done? I forced a relationship between a very powerful, trustworthy, influential person and somebody else that doesn't have it. If you are walking around the company with this person, what is everybody going to say? Oh my goodness, you're friends with that person. I want to know Lenny because we can never get him to agree on it. So if I know Lenny, I'll be close with it. Lenny is more accessible, he's new, but how did Lenny break in? I'm extending somebody else's trust to you. Now by also making that person share in the accountability of training you or teaching you, in some ways, I am now making them accountable for your growth. It's impossible two months from now for that person to say, "Oh, Lenny doesn't do anything." Why? Because it makes them a bad teacher. So they're always going to be friendly, be like, "Oh yeah, Lenny, let's have a conversation. Don't do it like this in this way." They will prep you because it makes them look bad if you're not competent. Now, this technique accelerates relationships and trust. It's the help me teach me type of technique. It also allows them to observe the dynamics within the company, but it accelerates relationships because it's impossible for you to be in a meeting with a leader all the time without the person saying something like, "Oh yeah, hey folks, let me introduce you to Lenny."

**Christian Idiodi** (00:59:20):
Now that person is now the one introducing you to more connections within the company. Fastest way to build is, now feels like it's a expense but this is the job of a coach. You are designing a very specific playbook to help people achieve the outcomes reward and that's by getting them competent at their job and then their potential where they need to go next.

**Lenny** (00:59:45):
That are some Jedi ninja tricks right there. I love that. I've never heard this advice before. Makes so much sense and it's so easy to implement.

**Christian Idiodi** (00:59:54):
Yeah.

**Lenny** (00:59:54):
Amazing. For someone that maybe doesn't have a Christian around as a coach or a manager that isn't at this level, what advice do you give people that are looking for a coach or someone that could help them along these lines to learn to build trust and learn to just generally improve?

**Christian Idiodi** (01:00:09):
Boy, like I say with everything, you don't get mastery by avoidance. And one of the things that good coaches do that when I say corporations fail companies is they don't create space for practice. I see people complain to me about people all the time, oh this person is not good. They presented this, it was terrible. And I ask them, "What did they do at practice?" They say, "What do you mean?" I say, "When they were practicing this, what did they do?" Say, "Well, they didn't practice. I told them to prepare this." I say, "Think about what happens at practice. Any practice of any sport, any game. You can stop. You can make corrections, you can give feedback. What you do at practice, you do in the game. Product management is a one time, game time kind of role. So when do people practice?"

**Christian Idiodi** (01:00:57):
And so what I tell people in the absence of getting good coaching, you need to find practice arenas. It's kind of like if you are learning a new sport or basketball, you kind go to the gym. It's a practice arena. You can play and shoot around and let maybe some people have pickup games that you join and stuff like this in some ways. And so I always advise product managers like, you need to join a lot of pickup games, which they are low barriers to entry, low evaluation reward, loan risk type of thing. Go volunteer at a non-profit working with the team, go volunteer in your community event or church or whatever you go to, go party. But now what am I trying to do with these things? Find places where people do collaborative problem solving. That is what you're doing as a product team.

**Christian Idiodi** (01:01:50):
It's more likely in a high performance environment you'll find a good coach. You'll find somebody out there but what you're also doing is you're observing other people play. Most people learn a lot of skills by, you watch TV like, oh I like that move. And then you go to the gym and you practice that move, you see what you do? So it's like you're seeing then you're doing it in some ways. So you need to see good product work so that you can do good product work so that you can teach good product work. So if you don't have the benefit of having a good coach directly, you've got to find environments where you see good coaching happening and a good indication of good coaching is actually good outcomes over and over again. Winning teams, winning performances, great products, great products come from great product teams. They probably have good leaders or a good leader within a bad culture.

**Lenny** (01:02:45):
So essentially it's get a bunch of reps in is a big part of this advice. Just get reps in and I think what you just said is such an important part of it is collaborative problem solving is the key thing to look for. I was going to ask you how you recommend people get into product management. I imagine this is a very similar answer, it's just find opportunities to collaboratively problem solve.

**Christian Idiodi** (01:03:04):
That's right. And I differentiate that because there are all those guys that are the, I know I like to change a light bulb or they can walk individually or thinker and stuff and I kind of differentiate that problem solving from the people that are very good at working with other people to solve a problem. And there are so many of those pockets, you're getting reps. You've heard those who that just tell you stories of them working problem and I can see how they will help me. They know how to use data, they know how to use insights. They're not afraid of talking to people. How are you going to get those reps? Because you come into my company I ask you a question like, oh, I really don't know where do I find? But if you've done the problem solve with a team, sometimes you may not even know how to get the answer, but you know who to go to get the answer. That's a gift too.

**Lenny** (01:03:52):
I love that so much of your advice comes back to being the person that knows the most or has learned the most or even looking like they're spending the time to learn the most, which makes so much sense. The people you want to entrust are the people that happen to have the answers.

**Christian Idiodi** (01:04:05):
I try.

**Lenny** (01:04:06):
And each person will know. Yeah, it just makes sense. Something else you talk about is people getting promoted too early. Leaders getting promoted too early, not doing well, they end up blaming others when really they were not actually ready for this new position. Can you talk about why you think that happens and then just how maybe as that person that might be in that position right now feeling like, oh, shit, maybe it's not my fault.

**Christian Idiodi** (01:04:31):
I don't know how to make an appeal to corporations on this one. It's a similar appeal in the light of coaching too as well. Most people are promoted to a point of incompetency or so, but I kind describe the dynamic this way. It's kind of like Lenny is a fantastic engineer. If you think about it, he wins engineer of the year awards. If you go to the office, his picture is on the wall, everybody knows him. He's feeling good. But it's like one year, two years, maybe eight years in Lenny's feeling like, am I really growing in my career? Am I really challenged in my career? He looks at the engineering career ladder. The next role from his senior engineer role is engineering manager. The leadership team, HR, they look at the same thing. That's true. We love Lenny. We don't want to lose Lenny, we need to promote him.

**Christian Idiodi** (01:05:20):
And the next step is engineering manager or product manager, manager, however, I want to use the rule here. And so, we do what? We promote Lenny. It feels good at the moment. Yeah! Congratulations on your promotion. He posts a nice post. We are like, "Yeah, we're going to keep Lenny there for long time now because he's promoted." Now, Lenny has never been a manager in his whole life. He's never interviewed people, fired people, didn't even coach people or had done any of those things directly. After a couple of months, Lenny starts to recognize an interesting pattern. Nobody's clapping for him at company meetings anymore. And sure they've taken down his picture from the world because he's no longer an engineer, he's a manager. So somebody else is now the engineer of the year, they are clapping for him in meetings. He's like, he doesn't feel recognized or seen anymore. He's just a guy now behind the scenes and that kind of thing.

**Christian Idiodi** (01:06:10):
Then in a couple of weeks go by, then they have a big engineering problem. And you know what Lenny does? He jumps in and he solves the problem. Lenny did not recognize that his job has changed. His job is no longer to solve the problem directly, but to get a team of other people good at solving problems. This is because you're a great engineer but not a good manager. This story or this dynamic I've told is probably the most common origin story of what people see or deem as micromanagement. In many cases here, this individual knows how to do engineering. They don't know how to do engineering management. They don't see the shift in their dynamic being changed. We see back patterns where it's like the second you become a manager or a leader, you cannot say things like, I don't know. I'm not sure, I need help. Who told us those things? But it's like such an expectation that our leaders must have the answers, must know the right things, must do the right things.

**Christian Idiodi** (01:07:17):
And so what do we see people do? Rather than Lenny asks for help, he goes to Google and searches how to do an interview, how to write a review. Are you seeing? He reads different articles like this one looks cool and then he does it and nobody dies. Nothing breaks so he thinks there's a good framework and a good pattern. And we have this dysfunctional culture of everybody doing different things, whatever works for anybody and that is the cycle that repeats itself. Now, a person that works for Lenny sees that he used this framework and thinks it must be a good framework, my boss did it, and you see how that cycle repeats itself? Because Lenny didn't actually get coached to be a manager. If you ask anybody that works with me, if come to me and say, "Oh, I need to get promoted to be a director." You know what I say? I say, "Go be a director. You don't need a title. Let me tell you what a director does. And you're going to work with me over the next couple of months to do those things because I am promoting you to do the job, not to learn the job." You see where it falls apart in promotions? We promote people and it's like you're now a VP, do VP things. And you're like, I have never done VP things before, but I cannot tell people I've never done VP things because it makes me look incompetent, but I see the job description. I should do some VP things. What did my last VP do? Those things and those. How you say? But the best place to learn how to be a VP is when you're not a VP because that's where you practice being a VP.

**Christian Idiodi** (01:08:52):
That's where you get feedback on because then when you become a VP, you have done those things before. It's like why is the first time you've done an interview when you're now a VP? Come in and do an interview with me, observe me do an interview, ask questions, see what works, get feedback. That's why I love those group product manager roles because those are actually meant to be designed as ways for people to make a decision if they want to be a manager or they want to just stay in the discipline, but people use them as why would you give somebody four direct reports if no evidence, they can manage one? So what I do is I give you one, you might tell me, I hate people. That's okay, we can talk about that. But it's like, let me give you four and you're just going to practice the bad behavior on four.

**Christian Idiodi** (01:09:37):
So this is what often happens in company. We promote them into incompetence. It's not their fault because we are not coaching them. What we need to do is create a safe environment for people to practice leadership before they become leaders, before we promote them. We have to have good coaching programs for leaders to say, if there's a succession plan, I want Lenny to be a new manager. I don't wait till it's time to promote him then I teach him management because then apparently he cannot say things like, I don't know. I have to teach him leadership and management before he becomes a leader or a manager.

**Lenny** (01:10:10):
I love this idea of just doing VP things. I just picture someone walking around and, I'm doing VP things.

**Christian Idiodi** (01:10:14):
I'm doing VP things. All the time, I see them live, but what's a VP thing?

**Lenny** (01:10:19):
I'm doing VP things. I think another added benefit of doing these things before you say you're VP is that is the best way to get promoted to a VP is you are already doing the job.

**Christian Idiodi** (01:10:28):
That's right. And nobody bites you on it. You see that? And you're not even surprised by it and it's very safe because when you're not in the job, you can make mistakes and nobody blames you. He's not a VP, look at him trying to do VP things. You see? But the second you're a VP, there's so much leverage in the role that your mistake is serious because it impacts everybody. But when you're not, it's like you get coverage, you get protection, nobody's as mad at you. It's like, yeah, he was just trying to take a stab at it. Let's coach him on that. But what is the best time to know those things? It's before you're in it. Before you're in it

**Lenny** (01:11:06):
To give companies and leaders something to do with this advice, you talk about helping them train and practice before they do this. How did you do that? I don't know, is it work with Silicon Valley Product Group to help train and coach?

**Christian Idiodi** (01:11:18):
There are many great product coaches out there. There are many leadership coaches out there. I think there's some recognition. People have to have the humility and the self-awareness to recognize that there are opportunities for them to get better as a leader and product management, you need to see or experience, good leadership, you need the reps of good leadership and we do it in everyway. You probably talk to people about strategy and what did they do? They outsource it all the time. Tell somebody else to do it, and that cycle feeds itself because you never do it. You only know how to outsource it. You never learn how to do it. You see? And so many people outsource, oh, go get a mentor, go take a training class, and they'll think that they're outsourcing coaching in that way. It's like go take a communication.

**Christian Idiodi** (01:12:02):
Sourcing coaching in that way. It's like, " [inaudible 01:12:03]. Go take a communication class." I'm like, "Okay." They come back from the class, and they punch you in the face. I'm like, "Why did you punch me?" "The class taught me to punch you in the face. You paid money for me to learn how to punch you in the face." I say, go to the communication class with the employee because they're going to need to practice the communication.

**Christian Idiodi** (01:12:20):
You learn what they're learning. Both of you now will practice it together, so that they can get better at communication. A communication class doesn't get you better at communication. Communicating better is an indication that you're better at communication. You need to practice it. And I need to create a safe place for you to practice, I need to give you feedback that you're communicating better. These are all patterns in coaching that many leaders just don't have these tools and techniques to do it.

**Christian Idiodi** (01:12:48):
I do teach a lot of leaders how to coach. I do a lot of people work with leaders. There's not a singular product problem. People here me say, "All problems are people problems." There's not a singular problem that I have not seen coaching address.

**Lenny** (01:13:04):
What I hear is essentially the biggest burden is on the manager to be a great coach to their reports, and for a manager to get good at this, essentially a coach is a really good method. Bring someone in that could work with you one-on-one on a lot of these things. Awesome. That's very actionable, very solvable.

**Lenny** (01:13:21):
Everyone's always going to ask, "How do I find an awesome coach?" Difficult, I guess. I don't know. What do you tell people to go find a coach? Is there anything you could recommend, just how to go find a coach?

**Christian Idiodi** (01:13:30):
You've got to find people that have generated good outcomes. People are always like, "How do you find a good consultant?" I get people teaching people a lot that haven't done the job. Don't get me wrong. If you look at American football teams, there are some coaches that have played the game before, and you feel good that they can coach you. And there are also some coaches that have not played the game, but if you look at the pedigree, they've learned from good coaches, they've worked under good coaches.

Same thing with product. I say there are only two parts. A good coach is someone that has played the game before and has generated good outcomes, and the second is that they've learned from good product coaches. You want to find people with a strong pedigree. You see [inaudible 01:14:12], and you, "Oh, you worked at Amazon this year," or "You worked at this company," or "You worked at Stripe. [inaudible 01:14:18] good results. How did you do that?"

**Christian Idiodi** (01:14:19):
"Oh, my environment was great. The culture was great." "Who taught you? Who coached you?" Do pick-up games with the people that they coached. They will tell you what patterns their coach told them. How do you do that? My coach told me to do this, and you're going to learn from them. I say, "Oh." Important things.

**Lenny** (01:14:37):
Amazing. Okay. Final area I want to spend a little time on is the work you do in Africa. Marty said that you're the foremost expert in introducing product and technology into world's developing countries. I know you spend a lot of time in Africa specifically. Can you just talk about the work you do there and also just maybe the opportunities and challenges you run into when you're working with folks there?

**Christian Idiodi** (01:14:56):
Yeah. I have an African background, and my family is there, and I used to have this false notion that the things we've done in North America or Europe or Asia, the problems we've solved, have been solved in these markets. I remember talking to someone in Africa years ago, and he said to me, "Oh." I said, "You just got a new job. Where did you find a job?" He's like, "Oh, I found it in a newspaper." I said, "A newspaper? What do you mean found a job?" I remember participating in solving that exact problem in 1998. I was working with the team to solve that, and I had this false assumption that because I solved it here, of course it's solved everywhere.

**Christian Idiodi** (01:15:40):
I started to see patterns like this in Africa where just two things were trending. One, so many, the poor use of technology and enabling technologies to solve problems. And two, the difficulty in actually solving problems in these markets, in these emerging markets. And one of the things we take for granted, I always tell people the government is probably the biggest public private product platform in the world. In all countries, they all have this public... Because they provide the infrastructure and the architecture that is enabling for people.

**Christian Idiodi** (01:16:18):
Imagine if you were trying to code and you didn't have power. Now you're thinking there are markets where you have to solve the problem of getting power before you then getting access to a computer and then getting access to the right type of software to be able to code something. Look at all the different things. You have to solve many problems just before you can start to solve the problem in a meaningful way. This is a very big reflection of the dynamic in Africa.

**Christian Idiodi** (01:16:44):
The second pattern of what we see is because of this challenge, I see two things. One, people make a lot of money on a problem than from solving the problem. There's this whole society that people are very good at walking around problems. "We've got an electricity problem, we'll just buy generators." "We've got a road problem, we're going to buy bigger cars." I was talk at a conference, and I was driving up to it, and I saw a Tesla with a portable generator at the back of it. They'll stop and charge the Tesla, and they keep going on the road. In some ways, that's a whole society, but it's never been a society that didn't have creative people.

**Christian Idiodi** (01:17:26):
Just an amazing, tremendous amount of talent. It's a very young population. I talk to people all the time. I say, "Look." Someone told me, "Well, Africa, seven of the eight most underdeveloped places in the world are in Africa."

**Christian Idiodi** (01:17:41):
And I said, "Well." They were talking about the discovery of the internet. Less than 30% of Africa has discovered the internet. And I tell them, "Wow. And we created seven Unicoms from that. Imagine if 50%, 75% discovered the internet. We need to understand the opportunities, the youngest population, the fastest growing, some of the fastest growing economies in these markets. Some of the problems are so basic, and the opportunities are so huge. So I had to kill all these assumptions. One, that I needed permission to come to solve problems there, and two, that we didn't have the means to equip and educate people.

**Christian Idiodi** (01:18:24):
We don't have a talent problem or a resource problem. The biggest opportunity I've found is to really empower a continent with enabling technology and the mindset and the skills to be able to leverage technology in solving problems.

**Christian Idiodi** (01:18:40):
This led to me starting a nonprofit in Africa, the Innovate Africa Foundation, and we are committed to this education of people on the continent, this enablement with technology. We did our first conference last year, the Inspire Africa Conference. It just blew my mind. I'm so humbled when I could see a thousand people from 31 different countries in Africa come with a hunger and an eagerness to learn how to do product work. And it's not cheap by any means for them to do that.

**Christian Idiodi** (01:19:14):
What moved me the most is looking at the future generation. We had a 13-year-old and an 11-year-old in the workshop. The 11-year-old was a robotics engineer. The 13-year-old was a CEO of a small startup that keeps healthcare records, a leader. And I'm like, "If I can help these people learn how to do product well, this is the whole generation for Africa. This is the future of people that want to leverage technology in a meaningful way." So I spend a lot of my time in Africa, coaching, advising and teaching teams how to use technology, how to do product, how to organize themselves as product teams, how to solve problems, and really to create a boldness within the continent for them to go after problems and solve them, than walk around the problems or make money on them.

**Lenny** (01:20:03):
If people want to learn more about this, maybe support the work you're doing, what's the best way to find out more?

**Christian Idiodi** (01:20:09):
You can visit the nonprofit website. It's innovateafricafoundation.org. You can follow our work on SVPG or the inspireafricaconference.com. I know I will be doing a lot more next year. In January, I am going to be launching a fund, the Paid Africa Fund, and I want it to be a fund funded by the product community for Africa. It's an angel investment fund. One of the problems I recognize is that so many of the startups, they are not ready for institutional investment, and they are forced into it in some ways. They say people are giving up a lot of equity when they just need cashflow. And so I really want to focus on a fund for the community to enable people to get product market fit in those markets.

**Christian Idiodi** (01:20:55):
That'll be launching in January. I'll probably do an announcement about it. I'm excited about that work and to really try to promote more of product-centric thinking on the continent.

**Lenny** (01:21:06):
Amazing. You should call this fun reference customers or something along those lines, if the goal is to help them find product market [inaudible 01:21:12]-

**Christian Idiodi** (01:21:12):
That's right. They'll be learning a lot of that.

**Lenny** (01:21:15):
Christian, is there anything else you wanted to share or leave listeners with before we get to our very exciting lightning round?

**Christian Idiodi** (01:21:21):
I've always made an appeal to the product community to really have a sense of what they do beyond the job of a products team or product manager. And I always try to encourage people to see that: at the very core of what you do is really solving a problem. And that's creating... When you do that, create value in the world, you're making a dent in the world. People that participate in trying to make things better or trying to solve problems, and we should not shy from that definition of our job.

**Christian Idiodi** (01:21:58):
It might feel like a fluffy one. It might feel too lightweight and not meaningful, but I think when people take to heart that that's really what the essence of products is or product work is, they bring to work a different passion, they bring to work a different sense of empathy, they bring to work a different sense of customer centricity. And all of those things lead to good outcomes.

**Christian Idiodi** (01:22:21):
I always make that appeal to product people as like, "Yeah, all the frameworks, techniques, all the stuff, just think truly about what you're trying to do. You're trying to care enough about a problem to solve it on someone's behalf and do it so well that it give us something every time."

**Lenny** (01:22:37):
I really love that last point of just that's how you know if you've built something people care about. They give you something in return, and one of those things could be actually telling other people about it.

**Christian Idiodi** (01:22:44):
That's right.

**Lenny** (01:22:46):
To your point about reference customers.

**Christian Idiodi** (01:22:46):
Yes.

**Lenny** (01:22:47):
Amazing. Well, with that, we've reached our very exciting lightning round. Are you ready?

**Christian Idiodi** (01:22:52):
I don't have a choice.

**Lenny** (01:22:54):
Nope. What are two or three books that you've recommended most to other people?

**Christian Idiodi** (01:22:59):
Oh boy. In this discipline, probably all of our books: Inspired, Empowered, and we are coming up with one in March, Transformed.

**Lenny** (01:23:08):
I see that tee shirt there. I see the promo happening.

**Christian Idiodi** (01:23:10):
Yes, it's happening. It's happening. But it's really a reflection of so many decades of love and passion for product work. And I have not found, I always told Maddie that you write the books after have gone through the failure. It's like, "I've failed at leadership, now there's a book on it. I've failed at product, now there's a book on it." And it reflects really the heart of good product work. I love Ben said the hard thing about hard things I love. There's some books that really describe the mindset and culture that good product work is done in. I always recommend those to people.

**Lenny** (01:23:43):
Just on this topic of Transformed while we're on it, when is it coming out, and can you give just an elevator pitch for the book just so people know what it'll be about?

**Christian Idiodi** (01:23:49):
Transformed is coming out March next year. Oh God, just three months. Some people should have gotten shipping dates on their books if you pre-ordered it now. But it really talks about how to move to the product model or the product operating model, which is really this set of beliefs and principles that the best companies work in. We share stories of companies that have transformed into this that are not your traditional bond digital or bond tech companies that have made this transition. We tell stories of what companies can do. If it's anything, it's an appeal that there is a better way of working and solving problems and that companies can work in this way regardless of where you are in the journey.

**Lenny** (01:24:32):
All right. We'll have to have you back once the book comes out to get more people aware of what is happening. Amazing. Okay, I'll keep going. Favorite recent movie or TV show that you've really enjoyed?

**Christian Idiodi** (01:24:41):
I jumped on the Succession bandwagon, and I enjoyed, and I used to love Billions too as well. I love good writing, really just intellectual media writing business. And so probably Succession and Billions would be two.

**Lenny** (01:24:57):
Do you have a favorite interview question that you like to ask when you're interviewing candidates?

**Christian Idiodi** (01:25:02):
Well, I always give them a problem to solve. That is probably my favorite question, and it's not a traditional problem. I probably will see something like, "Hey Lenny, I have a friend. He's been legally deaf or hearing impaired his whole life, and he just got a new job that requires him to wake up significantly earlier than he normally does. And as you can imagine, traditional alarm clocks will not do it, will not solve the problem. And I would love to give that problem to you. Walk me through how you go about tackling this or solving this." For me, I like that question because it gives me a sense of how you think. It gives me a sense of how you solve problems. It gives me a sense of how you know what you do not know and how you go about knowing the things you need to know, what you need to solve a problem.

**Christian Idiodi** (01:25:52):
There's no magical right or wrong answer. I do a lot of people that say, "I have no clue what to do. I'm more curious and because I want to now know what you do, but you don't have a clue." Or people that jump straight to solutions, are more engineering-centric. People that jump straight to... I can get a sense of who you are when I give you a problem that requires you to do some thinking.

**Lenny** (01:26:15):
And you're doing this live in an interview? It's not like, "Go home and think about this, and then-

**Christian Idiodi** (01:26:20):
Oh, I'm doing this live in an interview.

**Lenny** (01:26:20):
Live, okay. And then what's a sign that they're on the right track? What do you look for that's like, "Yes, this is what I want to see"?

**Christian Idiodi** (01:26:26):
Remember, when I think about what makes a good product manager, I look about collaborative problem solving. There are people that feel like, I'm just going to solve the whole thing myself. This is what we should do. We should do it like no evidence, no data, no kind of stuff in there. It's very interesting. But people that are saying, "You know what? I would need probably work an engineer and designer. We might need to put [inaudible 01:26:46]." I look for intellectual curiosity in some ways, people that have proven questions in your head. People that are very quick to see things [inaudible 01:26:54] people. I will talk to 20 of them. I say, "How you going to do that? Do you know sign language?" And they're like, "Oh, how am I going to talk to them?" There are people that are like, "I'm going to need a lot of help to try to figure this out. I don't know a lot about your friend, but I know..." Some people have frameworks they run to. It exposes that, if they're married to one way of working.

**Christian Idiodi** (01:27:14):
It's more about knowing what you can't know. I'm looking for empathy, humility in some sense. It is a competence thing because most of I can teach, I can coach a lot of things, but that arrogance, that ego, those kinds of things, those "I walk alone," those things are very, very challenging and disruptive to a team culture.

**Lenny** (01:27:35):
Do you have a favorite product that you've recently discovered that you really like? Either an app or something physical? Anything that's like, "Oh, this is really cool"?

**Christian Idiodi** (01:27:43):
My eldest son is into sports. He loves all kinds of sports stuff, sports apps, all of those kinds of things, and he got me on this app called Real, like real sports. It's really cool. It shows scores of different games, but it's really driven by social influence. So all of your Twitter posts will get there like, "Oh my God, [inaudible 01:28:07]." It's almost like real time more than real time. You're getting real time with reactions of people around you and your communities.

**Christian Idiodi** (01:28:15):
It's a very different way of checking on a score than I've ever seen, and I thought it was just really, really thoughtful in how... I want to share reaction to touchdown with 50 people around the world that will care about my favorite team just got a touchdown, and you'll all share reactions at the same time. And the first person that saw it, you can see it. It's very simple. This is like scores for games, but these days I don't check my scores anywhere else but on it.

**Lenny** (01:28:45):
Do you have a favorite life motto that you often repeat to yourself, share with friends, either in work or in life, that you find useful?

**Christian Idiodi** (01:28:52):
Wow, boy. I've said a lot in this talk about companies don't care about about you, people care about you. It's never too late to be what you want to be. But early on, my father would always tell me, "Show up. Show up, and you're ahead of 80% of the people in the free world. Show up on time, and you're ahead of 85% of the people in the free world. Show up on time with a plan, and you're ahead of 90% of the people in the free world. And if somehow you have the guts to put that plan to action with a smile, then you probably will have a great chance of success. And if you do that over and over again, every aspect of your life, it can at least lead to successful outcomes." And I think that's a lot of some mental definition for me every day.

**Lenny** (01:29:37):
Amazing. I love that. Final question: as maybe the most interesting man in the world, is there anything people may not know about you or would be surprised to hear about?

**Christian Idiodi** (01:29:48):
Wow. I hope there are no surprises about me in that kind of case in that way, but I went to a gifted and talented school. I was out of my house at 12, and I went to kind of boarding school, and I've never been back home since then, so I've kind of been on my own. But we are kind of in the middle of nowhere, probably eight miles from any form of civilization and stuff in the middle of the jungle. No potable water, no electricity. So you kind of had to get water yourself, generate your own power. Probably the most interesting time in my life to shape my worldview, surviving at 12 to 16 on my own in the middle of the jungle. Very intriguing part of my life.

**Lenny** (01:30:40):
Very different from your life these days. Actually, one more question. I think you're the fourth... You're from Nigeria, right? Your family's from Nigeria?

**Christian Idiodi** (01:30:47):
Yes.

**Lenny** (01:30:47):
You're the fourth Nigerian guest on this podcast, I realized. And I always like to ask, what's your favorite Nigerian food slash which food should people seek out if they were to try to find some good Nigerian food?

**Christian Idiodi** (01:30:59):
My favorite Nigerian is super-duper cultural and native. It's like starch and [inaudible 01:31:06] soup. You can't really find that anywhere, it got to come from mom's cooking. Marty Cagan has tried it. He came to my hometown, my parents' house and had it. But if you are discovering Nigerian food, [inaudible 01:31:18] is a variation of rice, which everybody has, jollof rice, and yes people, I'm going to say this: jollof rice, Nigerian jollof is better than Ghanaian jollof. It's a war, but it's okay. We already claim victory, and we'll move on. But start with jollof rice is elementary, but then you have to try [inaudible 01:31:34] like a pounded yam with a soup. There are many different variations of that. And you get a pounded yam, like pounded cassava, and you eat that with a soup, and you will love it.

**Lenny** (01:31:45):
Some controversy over here, competition-

**Christian Idiodi** (01:31:47):
That's right.

**Lenny** (01:31:47):
... for who's got the best rice. Amazing. Christian, I am now a huge fan of yours. I'm so happy we did this. Thank you so much for making time for this. Two final questions: where can folks find you online if they want to reach out, and how can listeners be useful to you?

**Christian Idiodi** (01:32:00):
You can find me on LinkedIn as well. You can reach out to us on our websites svpg.com. I tell people the best fit to be useful to us is to do good work using these principles and all the things we teach people over and over again. We care about outcomes, we care about good product work in the world. I would love your support with the work I'm doing in Africa. I've always reached out to the product community around the world to help developing countries and communities. So please follow our work, please support our work in Africa in building a product community.

**Lenny** (01:32:35):
And what is the website for that again? Specifically the nonprofit you started?

**Christian Idiodi** (01:32:38):
Innovateafricafoundation.org.

**Lenny** (01:32:41):
Amazing. Christian, thank you so much for being here.

**Christian Idiodi** (01:32:44):
Thank you for having me, Lenny. Such a pleasure.

**Lenny** (01:32:46):
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.

---

## [23/24] The hierarchy of engagement | Sarah Tavel (Benchmark, Greylock, Pinterest)

**Sarah Tavel** (00:00:00):
I think a lot of people think about markets almost like these bodies of water, it's like it's this big body of water that we're going after. I actually think that the most interesting markets, you have to think of them like currents where you're there's something happening in the market that's creating this current where you can have a plank of wood that you've put on the river and it's going to pull you forward. Versus a market that doesn't really have that momentum to it, you're going to have to build something really big and fancy to make any progress. That's why we care less about market size because really, what you're looking for when you're looking at a market, are what are the dynamics of change, what's the current and momentum that's going to pull the company and make the job easier for the founders to actually build something that endures. 

**Lenny** (00:00:56):
Today, my guest is Sarah Tavel. Sarah is a partner at Benchmark, one of the most preeminent venture capital funds in the world, where she focuses on investing in consumer and marketplace startups. Prior to Benchmark, Sarah was the first product manager at Pinterest. And though I normally have a policy against VCs on the podcast, as you'll see, Sarah thinks very much like a product and growth leader. And I always learn a ton talking to Sarah about startups and marketplaces. We also learn in our conversation, she used to play rugby and was apparently one of the best tacklers in her league. 

**Sarah Tavel** (00:03:12):
Super excited to be here. 

**Lenny** (00:03:13):
So you may or may not know this, but actually, normally have a policy of no VCs on the podcast. But you're a very special VC because you're a former product manager. Many people don't know you were the first product manager at Pinterest. To me, you still think like a product manager so I'm very excited to break my rule and have you on the podcast. 

**Sarah Tavel** (00:03:31):
Thank you for the exception. 

**Lenny** (00:03:33):
What I want to do with our time together is dig into two frameworks that you've developed and use with founders that you work with to help them build successful companies. One is focused around customer businesses, and one marketplace businesses.

**Lenny** (00:03:49):
Let's just start with the first framework. I think you call it the Hierarchy of Engagement. Just to start, could you maybe just share a broad overview of this framework? And also, just where it emerged from, where you came up with this concept? 

**Sarah Tavel** (00:04:02):
Sure. I think one thing you'll notice about me is that I have an allergic reaction to vanity metrics, what people talk about as vanity metrics. When I made the transition from Pinterest, where I was leading product for the discovery team, so I was responsible for all the discovery surfaces on Pinterest. The home feed, the search, the recommendations, a couple other teams. Ultimately, what those teams were about was about engagement, increasing engagement of Pinterest. It was helping people, when they were on Pinterest, find something that they loved enough that they wanted to pin it to one of their boards.

**Sarah Tavel** (00:04:48):
When I started to meet with all these really talented consumer founders building consumer social products, this was during a time when everybody was getting excited about growth hacking. What you would see is that you would see all these founders coming in, and they all had these up and to the right graphs, whether it was sign-ups, or downloads, or MAUs. It felt to me like it wasn't obvious that those metrics that they were all getting very attached, and focused on, and showing in these presentations was the wrong thing to focus on. It didn't get to the heart of whether they were on the path to building enduring consumer social product. They were missing, at the core, the criticality of engagement. 

**Sarah Tavel** (00:05:45):
I just started to feel this and it became like a pebble in my shoe. I started just to go through that process that you've gone through many times before of writing and distilling it, and that's where I came up with this hierarchy. What you realize when you look at social products is that they're almost is this action which I call the core action of that product that forms the foundation of the product. When a user completes this action, it's clear that they both understand the utility of the product, they understand what that product is all about, and it's an action that, if they perform the action, they're very likely to come back. So for Facebook, the obvious action is friending, in the beginning days. For Pinterest, it's pinning. I don't know if you're an Evernote user. For Evernote, it's writing a note. When you perform that action, that means you're an engaged user. Of course, there's a lot of other actions that you have to do. You can follow people on Pinterest, you comment on Facebook. But the end of the day, if you're not doing that action, you're not really a user to the product. That's why the MAU thing doesn't really mean anything. It's really looking at, I think, of users completing the core action. You can look at this as a cohort, weekly, daily, whatever the right cadence is. But that's the foundation, that's level one. 

**Lenny** (00:07:16):
Basically, there's some definition of an active user that a consumer business basically needs to define, and essential figure out what is that action they're taking that makes them an active user versus just opening up the app, or whatever it is. For Snapchat, it might be sending a snap.

**Sarah Tavel** (00:07:34):
That's right.

**Lenny** (00:07:35):
For What's App, it might be sending a message. Okay, cool.

**Sarah Tavel** (00:07:36):
Yes. Yes. By the way, this action, it's very important to pick the right action. You want to make sure it's an action that scales to enough users. You want to think about, "If I think about my product roadmap and optimize for it, what do we end up doing?" 

**Sarah Tavel** (00:07:56):
Just to give you a more concrete example, actually in the early days of Pinterest, we weren't sure what it was. We had all these things we were measuring. We were measuring follows, we were measuring clicking through, liking something, pinning obviously, time on site. We would do these experiments and you would get all this different data where some things would go up, some things would go down. What were we optimizing for? 

**Sarah Tavel** (00:08:24):
There's something that's really, really important about having that clarity of this is the action that is most important for our product. All things, our NUX has to lead to this. If a user isn't doing this, then there's something missing from their experience of the product. It's super important to get real clarity and know exactly the one that you're going to be picking to go forward. 

**Lenny** (00:08:49):
One more question along these lines. How do you think about this milestone versus the activation milestone for a new user? Do you find they're often the same? Getting your user to that aha moment-

**Sarah Tavel** (00:09:00):
Yes. 

**Lenny** (00:09:00):
Versus ongoing? 

**Sarah Tavel** (00:09:01):
Right. Part of it is how do you measure the success of your NUX, of the activation? To me, it is are you taking those new users and helping them understand the mental model of your product well enough that they start completing the core action.

**Lenny** (00:09:18):
Awesome. 

**Sarah Tavel** (00:09:19):
There was a NUCs once that we played with at Pinterest where we didn't even teach people what pinning was. It was their feed magically appeared and it was a real ... That was an example of okay, we have to help people understand that they are here to discover something and save it to their board. 

**Lenny** (00:09:35):
Just in case people don't know what NUX is, new user experience. It's just an acronym for new user experience.

**Sarah Tavel** (00:09:40):
Thank you. Yes.

**Lenny** (00:09:42):
Okay. Maybe one more just foundational thing that I think we maybe skipped is what's the best way to think about using this framework? Is this essentially where you should focus your energy, on which elements of your product you should be driving, which metrics to focus on? Is that a simple way to think about ... Basically, we've talked about layer one and there's three layers. What's the best way to think about, as you're talking through this framework, of how to apply it and use it? 

**Sarah Tavel** (00:10:02):
In a way, you have to think holistically when you're building these consumer products, when you're designing it. But I think it's very important, once you get the product out and you're starting to optimize, to start thinking through each of the levels. That's just very focusing, to help a founder understand, "What are the levers that I really have to be focusing on to improve?"

**Lenny** (00:10:26):
Awesome. I want to come back to how to apply it, in maybe some examples, after we go through the three levels so I'll turn it back to you. 

**Sarah Tavel** (00:10:32):
Perfect. Let's say you're building your product and you're starting to see that you have users completing the core action. Then, the next challenge you have, and I've seen this many times before, is that then you have to figure out how to get those users to stick around. You want to retain those users. Obviously, if they do the core action once or twice, and then they run out of steam, you're going to be in a really challenged position to build something that endures. 

**Sarah Tavel** (00:11:03):
The test for me, of whether you're building a product that has the ingredients to create a retentive product on a micro level, just at the user level, is that the product should get better the more you use it, and you'll have more to lose by leaving it. I'll give you a couple examples there, a couple of my favorite products. 

**Sarah Tavel** (00:11:26):
Obviously, Pinterest. One of the features that I worked on when I was at Pinterest and we shipped was this idea of a picked for you feed. The idea was every time you pinned something to a board, we would take that information that the user gave us and use it to create recommendations in their home feed. It may have been the first algorithmic feed that was in a social product because, suddenly your home feed wasn't just things and people that you followed. The truth is, people weren't really following other people on Pinterest so we needed a way to make the experience get better the more you used it, so we started to do these recommendations in your home feed. 

**Sarah Tavel** (00:12:10):
It was this experience that, the more you pinned, the more personalized your home feed got for you. Then, the more you pinned, you also had more to lose by leaving Pinterest because, all of a sudden, you had all your favorite books, articles you wanted to remember, the recipes that you were planning on cooking one day, the holiday planning that you were doing. So you wouldn't abandon Pinterest because Pinterest was this repository for these different expressions of your identity, or these different bookmarks that you wanted to back to. That was this idea. It's very important that the core action is the thing that you use as the product to make the experience better over time. 

**Sarah Tavel** (00:12:52):
Evernote, another example. I don't know if you're an Evernote user.

**Lenny** (00:12:57):
No. I tried it once and it was way too complicated, and I gave up quickly.

**Sarah Tavel** (00:13:01):
People still laugh at me for being an Evernote user.

**Lenny** (00:13:05):
Oh, wow. 

**Sarah Tavel** (00:13:06):
I'm a lifetime user. 

**Lenny** (00:13:09):
Wow. 

**Sarah Tavel** (00:13:09):
It's one of those things that I take all my notes in Evernote. I dump documents in Evernote. What I means is that, the more I use it ... Now I know that I can do a search in my Evernote and I'm going to find the document I'm looking for. Now, I can never leave Evernote. It has everything. I have thousands and thousands of documents in Evernote. That's a product that's incredibly retentive. 

**Lenny** (00:13:37):
Unless someone builds a great exporter, and then there goes that piece of friction. 

**Sarah Tavel** (00:13:41):
People keep telling me I need to move on to Notion or something else, but not yet. I will remain a dinosaur here. 

**Lenny** (00:13:48):
Wow. I love that that's an example of someone can break that barrier and make it less retentive, by making it easier to get off.

**Sarah Tavel** (00:13:55):
Yes.

**Lenny** (00:13:56):
It's interesting growth strategy, basically. 

**Sarah Tavel** (00:13:57):
Yes. Yeah, it's very true. Let's say, now, you have a product, it's growing, more people are completing the core action. When they complete that core action, the product gets more retentive for them. It gets better the more they use it, they have more to lose by leaving it. Then, your tall task, and this is the hardest thing to overcome, is how do you make the product self-perpetuating? This is where I love to think of every time a user users your product, let's say they're clicking on the mouse or they're tapping on their phone, I love to think of it as this kinetic energy that they're putting into your product. You're taking that energy, and your job with a great product, is to take that energy and, as much as possible, convert it back to the experience that they're having with your product. 

**Sarah Tavel** (00:14:55):
Now, the biggest thing that you can do is a network effect. The more I pin something on Pinterest, the better the experience for every user on Pinterest. Every time I add a pin to a board, I'm creating a new edge in Pinterest Graph, that Pinterest then uses to create recommendations and enrich their understanding of all those objects on Pinterest. The network effect is the strongest thing that you can do. And obviously, if you have that, which all social products have to in some way, you have to spend time, as much as possible, just maximizing where that shows up, fine-tuning it, removing friction so that it's a flywheel that spins faster and faster. 

**Sarah Tavel** (00:15:42):
But, there's other loops too, that you have to identify and then maximize. These are the growth and re-engagement loops. These are classic loops, you talk about these a lot, they exist in marketplaces and social products. How do you get it so that, as your users use the product, they want to share it with other people? They create metadata that you can then use for SEO. You have collaborative experiences that pull other people in. There's all different things you can do here. And then, there's also things that you can do to re-engage a user.

**Sarah Tavel** (00:16:18):
As an example, in the early days of Pinterest, if you pinned something, you're pinning something that you found on Pinterest that somebody else pinned. So we would send a push notification, "Hey, Lenny, Sarah just pinned your pin to her art board." Now, if you were a dormant user at that point, it's been a couple weeks since you'd used Pinterest, that notification might pull you back into Pinterest and be like, "Hey, I wonder what other pins Sarah has on her art board." It's a great re-engagement loop where Pinterest doesn't have to do anything there intentional. The user is creating the action that drives the outcome that Pinterest wants in that example. 

**Sarah Tavel** (00:17:03):
Now, as much as I love Evernote, this is a place where Evernote obviously falls down. There's no loops that they can take advantage of, that when I use the product, I make it better for you. There's no loop where, when I use the product, I want to pull you into the product. They tried at some point, to do collaborative journals, it doesn't work. That's a place where, because of that, Evernote had to spend money to acquire users, they tapped out. They missed that level three. 

**Sarah Tavel** (00:17:38):
There's other examples I could speak to, of companies that weren't able to transcend to level three, that you wouldn't otherwise think. I think of companies like Houseparty and Clubhouse. What was interesting about both of those products is that you would think that the more users that came into Clubhouse or Houseparty, the faster the flywheel should spin. But the challenge was that they relied on push notifications. I don't know if you had this experience, but let's take Houseparty as an example. You started to follow a lot of people on Houseparty, and then all of a sudden, your push notifications just got overwhelming. Because it was a realtime product, that you had to use push noti cations to know the moment to join the product, but when you had so many push notifications because the more people you followed, the more notifications you had, you just get to this point where you start ignoring them. It becomes this thing where, even though the flywheel should be spinning faster, it starts breaking down. That's the real tricky nuance in this level three.

**Lenny** (00:18:52):
I think people hearing this are going to be like, "Okay, getting people to use your product more often, increase retention, make it viral basically," it's stuff they already know. But I think what's powerful about this is this is just a lens, a clarifying lens on what is most important. There's so many things you can be focusing on to increase your product's success and help it grow. What I love here is just, "Here's the three most important things, and then here's the levels." They build on each other. If you want to increase retention, get people to do the core action more often. If you want to help it grow, focus on helping it spread, self-perpetuate. 

**Sarah Tavel** (00:19:30):
Yeah, I know. That's absolutely right. The importance of it is I can't emphasize enough how important focus is when you're building these companies. It's so hard. There really isn't a playbook. Every company, the ones that succeed have to be fundamentally different from anything that was before it. But there are these first principles of the ingredients that they all share, and you can use those ingredients to really focus you when you're going through the inevitable growth curve and wanting to know, "Well, how do we maximize this moment? How do we really focus on the things that will set us most up for success?" That's where I think a framework like this can be really clarifying. 

**Lenny** (00:20:17):
There's a lot of depth behind each of these things that you're being modest about. One is, with the top of this pyramid of making it self-perpetuating, the reason that's really important is for a consumer app to work well most of the time, it has to be able to spread really cheaply. The cost of acquisition needs to be very low, unless you somehow figure out some paid ad strategy where you can make money with paid ads, which is very rare. So maybe speak to why that's so important to a consumer product.

**Sarah Tavel** (00:20:45):
Yeah. What are you trying to build with a consumer product? You're not trying to build something niche. You want to build something that can be a mass-market, hundreds of millions of users, billions of users. It would take considerable capital to do that with marketing. There's one example that we have so far, which is TikTok, of spending more than $1 billion, once they figured out actually the first two levels in order to grow. They didn't actually put user acquisition spend behind TikTok until they had a product that was retentive, and then they know that they really wanted to maximize that. But every other social product has grown organically. They've been able to do so because they've figured out how to maximize these loops. Even TikTok got to millions over users before they spent all the capital to acquire those remaining users. 

**Lenny** (00:21:52):
I didn't know that number. TikTok spent $1 billion on paid ads-

**Sarah Tavel** (00:21:56):
Yes.

**Lenny** (00:21:56):
To get to where they are today? 

**Sarah Tavel** (00:21:57):
Yes.

**Lenny** (00:21:57):
Holy moly. 

**Sarah Tavel** (00:21:58):
Yes.

**Lenny** (00:21:59):
I knew it was many millions, but I didn't realize it was $1 billion.

**Sarah Tavel** (00:22:04):
Yes. 

**Lenny** (00:22:04):
That just shows you how hard it is to break in and become a new social network, essentially, or a new social app. 

**Sarah Tavel** (00:22:10):
It is hard. And then, at the same time though, we do see exceptions to it where I still feel like consumers are hungry for new experiences. We've seen a couple over the last few years that have gone into tens of millions of users. Nothing that has really created the experience that's sticky enough to pull minutes away from, really TikTok and Instagram, which just are these dominant forces right now. 

**Lenny** (00:22:42):
Your message also reminded me of a recent guest post on my newsletter about this app Saturn, I don't know if you read it. 

**Sarah Tavel** (00:22:49):
Oh, I didn't. But I know of the app, and it's just an awesome founder.

**Lenny** (00:22:53):
Yeah. It was really interesting. They had a really interesting insight about, first of all, very few apps ever make it to the top of the app store that break through what's already there. The ones that do almost always spend a few days there and then, are gone because it's a one shot thing. What they basically talked about is many apps have this viral K-factor, where they spread like crazy, everyone starts using them, everyone's in there. But then the opposite happens very quickly, too, where if a few people miss using it a few days, you go in there and it's, "Oh, nothing's happening here anymore," and it quickly crumbles. Clubhouse essentially went through this, BeReal started go through this, where people stopped posting and then, "All right, forget this. Everyone's gone." Most apps have this destructive K-factor that kicks in, the same way it kicked in to get it to spread. 

**Sarah Tavel** (00:23:36):
Yes. As people say, when something grows really quickly, it also can collapse really quickly. 

**Lenny** (00:23:43):
Yeah. Tough. I guess along those lines, is there anything you've seen or learned ... The idea of this framework is to avoid that, essentially. But I guess, is there anything comes to mind to avoid that? 

**Sarah Tavel** (00:23:55):
One other thing that I've seen that runs into a challenge, and I find it runs into a challenge particularly with level two, is anonymity. Anonymity is something where ... Pseudo-anonymity and anonymity are very different concepts. With pseudo-anonymity, we have it on Twitter, you have it on Reddit. You have a persistent identity that you're creating, and that identity then can have accruing benefits, mounting loss. My pseudo-anonymous account on Twitter that just flames other VCs ... I'm just kidding.

**Lenny** (00:23:55):
This is breaking news.

**Sarah Tavel** (00:24:35):
I'm not funny enough to make something like that. But for the people who do have it, they get accruing benefits because they get people to follow them. And that's the mounting loss too, where they've grown their identity on a platform even though it's a pseudo-anonymous identity. The challenge when you have pure anonymity is that you don't have that accruing benefit or mounting loss that happens. 

**Sarah Tavel** (00:25:05):
I don't know if you ever played with Secret, but it's similar to TikTok or something like that. These are the types of experiences where, over time ... The network effect doesn't work because the anonymity creates the conditions for bad behavior, so that starts to pull down the community. And then, it is also the experience where you'd use a product and you can delete, and then come back three months later, and because of the anonymity aspect of it, your experience isn't any different. I find anonymity, people keep trying it, and super talented founders keep hitting their head against that wall because it has the very early fun growth, but it just continues to be a product that isn't able to persist without some persistent identity. 

**Lenny** (00:26:05):
I'm going to pull on this thread of just ways to increase retention. Basically, this is one of the things, maybe the main thing you're telling people to help increase retention, make it so that it's really hard to leave. Before we get there, just to make it clear, is this framework mostly for social consumer products, or do you generalize it to consumer products? 

**Sarah Tavel** (00:26:25):
I think it's consumer products in general.

**Lenny** (00:26:29):
Okay.

**Sarah Tavel** (00:26:29):
But it makes the most sense for consumer social. 

**Lenny** (00:26:34):
Okay, got it. 

**Sarah Tavel** (00:26:34):
It works for Evernote. Evernote isn't a consumer social product. 

**Lenny** (00:26:39):
Awesome. Okay, so it's most helpful for if you're the social, your friends are in it sort of product?

**Sarah Tavel** (00:26:45):
Right. You have the chance of level three with social.

**Lenny** (00:26:48):
Right, awesome. Okay. On this thread of retention, it's a thing that I speak about often, everyone always talks about. The most important thing you got to get right is get retention to a good place because if you can't retain people, nothing's going to work anyway. 

**Lenny** (00:27:02):
So just to spend a little more time here, is there anything else you recommend to founders to help them with increasing retention and getting to a healthy place with retention? 

**Sarah Tavel** (00:27:13):
Number one is actually measuring it. I can't tell you how many times I suggest to a founder to track cohorts and that's a new thing. Just being really, really clear and intellectually honest on looking at cohorts I think is number one. 

**Lenny** (00:27:34):
Okay, maybe just describe that briefly, and then we'll link to an article that I have about how to do that. 

**Sarah Tavel** (00:27:38):
Perfect. These are the moments when I should probably turn the mic over to you, to talk about-

**Lenny** (00:27:44):
Nope, you're in the hot seat. 

**Sarah Tavel** (00:27:46):
[inaudible 00:27:46]. A cohort, what I always like to look at is weekly cohorts for these products. You look at them in two ways. Which is one, for each vintage of cohorts, you're looking at a group of people who signed up in a given week, and that's one. 

**Sarah Tavel** (00:28:00):
... like a group of people who signed up in a given week and that's one cohort. You look at it both on an active user basis, like are those people continuing to come back to the product? And I particularly love to look at that on a weekly active user completing the core action pieces of like, are users completing the core action? How is that changing overtime for each of the cohorts? And then also, looking at activity level within those cohorts. And so, what you love to see is the kind of classic smile graph where, as the network grows and users start to use the product more and more, you start to see that, overtime, they actually become more retained in the product as opposed to kind of the classic leaky bucket where the cohort just keeps on dwindling down. And until you reach a point with your cohorts where there is a plateau, you have more work to do on figuring out the retention of your users.

**Sarah Tavel** (00:29:04):
The second thing is just focus. So I can't tell you how how many times also you'll meet a founder and they will... There was one example I saw, it was a kind of a dating app, friend making app, and he was growing it via TikTok, which is not geographically constrained at all. And so, he's growing the user numbers, but without focusing on a specific geography, it's gonna be really difficult to make that type of product a high retention product.

**Lenny** (00:29:39):
Coming back to the framework, which layer do you find most often is the one founders maybe are under-investing in/maybe the most important to focus on if you had to pick one of these, or is it super dependent on your situation?

**Sarah Tavel** (00:29:54):
What I often feel is that, a lot of times, product founders, consumer founders, see where they want to get to, they compare themselves to the full expression of a product that you see with other products, ROBLOX, Instagram, TikTok, whatever it may be, and they want to get there.

**Sarah Tavel** (00:30:19):
But what that ends up meaning when the when a new user signs up is that there's too much in the beginning to to take in and understand, and you don't then have a very focused product that gets the user to the thing that you most want them to do. And that's actually part of the importance of understanding level one, what your core action is, is that you want to make sure that when a user comes to your product, signs up for the first time, doesn't have necessarily a lot of contacts on what the product is itself, that they see the thing that they're supposed to do and you get them to do it. And a lot of times, in the beginning, there are just so many other things that a product might have that you're defusing that attention that they would otherwise have had on the on the thing that's most important. 

**Sarah Tavel** (00:31:19):
And so, I feel that that's the first mistake, and it's kind of natural that it would be the first mistake, but maybe the largest mistake that I see people make. 

**Lenny** (00:31:32):
Essentially, not getting the activation moment right, not focusing enough on getting people to that aha moment as people describe, and then again, that repeating again and again as a core action. 

**Sarah Tavel** (00:31:42):
Yes.

**Lenny** (00:31:43):
To close the loop on this sort of discussion, could you just share again a few examples of core actions/activation moments, just to make this fresh again in people's minds? And then also, just whatever you could share about helping people decide what that is. I know it's a difficult thing to do well, but any advice for how to find that activation?

**Sarah Tavel** (00:32:03):
I mean, I'll tell you the exercise that we did at Pinterest because as I mentioned before, it wasn't obvious to us in the beginning of Pinterest like were we a social network? Like should we optimize for the follow graph? But you have to remember, Pinterest, this was 2011, you had Twitter growing like crazy, Instagram was growing. Those were both asymmetrical follow graphs that they were creating, right? And so, it wasn't clear at the time whether Pinterest was actually just creating a new follow graph, but that was about things instead of what Twitter was or what Instagram was. And so, it wasn't obvious.

**Sarah Tavel** (00:32:45):
And what happened actually is that there was two efforts that I think of as like kind of bottoms-up and top-down that helped really clarify that, actually, pinning something was the core action, it was going to be our North Star. We called it weekly active pinners.

**Sarah Tavel** (00:33:03):
And the two things were, there's always this like bottoms-up analysis that you do, which is, we looked at every action that you could do on Pinterest, so we had liking, following, clicking through, time on site, pinning, repinning. And we looked at, first of all, what percentage of users complete those actions? And if you do that action in a week, what's your propensity to come back the following week? And we basically ranked that.

**Sarah Tavel** (00:33:38):
And what we saw was that if you pinned something, repinned something, which is finding something on Pinterest, I'm using those synonymously, or click through, you had an incredibly high probability that you would come back. So if someone's pinning something, they're coming back to Pinterest the next week with a super high, more than 90% probability at the time.

**Sarah Tavel** (00:34:02):
And then there's like the top-down way of thinking about it, which is, well, what is Pinterest for? And if a user does come to Pinterest and they never add something to a board, do they really understand what Pinterest is? And yes, clicking through makes you want to save it. The click through is valuable, you want save it, so clicking through is obviously really important. But at the end of the day, if they don't like that pin enough that they want to save it themselves to their board, then we haven't done our job. 

**Sarah Tavel** (00:34:36):
And so, we did this kind of top down, bottoms up analysis to make it very clear that when we launch an experiment or launch a new feature, if the probability, if the percentage of people that pin something doesn't go up, or the number of pins for that cohort doesn't go up, that experiment is not a a successful experiment.

**Lenny** (00:34:58):
Awesome. There's a post I'll link to in the show notes where there's actually a guide to doing this regression analysis on how to figure out your activation milestone.

**Sarah Tavel** (00:34:59):
Amazing.

**Lenny** (00:35:08):
Basically, what is most causal of retention as you're describing. And I love this example from Pinterest. Any other just examples? Again, you shared a few at the beginning of just examples of great activation milestones/core user actions.

**Sarah Tavel** (00:35:20):
I'll tell you one other one that I thought was super interesting, which is that when I initially published this post, I had assumed wrongly that YouTube's core action was watching a video. And then Shishir Mehrotra, who was the kind of CPO of YouTube, he reached out to me and he said, "That's what it was in the early days, but we started to realize that it wasn't actually our core action. And we did a lot of analysis on YouTube and what we realized was that subscribing was the core action on YouTube."

**Sarah Tavel** (00:35:59):
And it makes so much sense when he said it, right? You're a creator, you're uploading content onto YouTube, there are a lot of other places at that time that you could have uploaded that content to, but you care about YouTube because that's where you're growing your audience, right? And so, the more people that subscribe to your content on YouTube, the more you have the accruing benefits and mounting loss of using YouTube.

**Sarah Tavel** (00:36:26):
And so, that was super important on the creator side, which, one of the funny things that will bridge to our next conversation is that all social products are really marketplaces, right? YouTube is a marketplace. You have the creators uploading content and the viewers who are watching it, supply and demand.

**Sarah Tavel** (00:36:46):
And so then, the subscribe button is also very interesting because then from the demand side, the viewer, why would I come back to YouTube consistently versus, again, all the other places I could spend time on if it weren't for me having found creators for whom their content really resonates with me so much so that I subscribe to their content? 

**Sarah Tavel** (00:37:10):
And so, I loved that example because it showed a little bit the evolution that can happen with these companies, but then also, just the beauty of like you know you've got something really right with the core action when it's helping both sides of your network.

**Lenny** (00:37:26):
Awesome example. And I think it's also a good reminder people change these things. "You come up with your best bet. Okay, we tried this for six months, maybe let's try something else. We've learned something new."

**Sarah Tavel** (00:37:36):
Exactly.

**Lenny** (00:37:37):
I'm also going to link to this post I wrote around finding your North Star metric, which was like such a multimedia conversation with just links for all these topics to go deeper. Essentially, I figured out the North Star metric for, I don't know, 30 companies. And I feel like the North Star metric of a company ends up often being this core user action. So like Pinterest, it sounds like those WAPs, weekly active pinners.

**Sarah Tavel** (00:38:00):
Yeah. Pinners, yeah.

**Lenny** (00:38:01):
And YouTube is subscribers.

**Sarah Tavel** (00:38:04):
In the beginning we called it weekly active repinners and war because we felt like we were at war, so it was good.

**Lenny** (00:38:09):
And then, it became peacetime maybe.

**Sarah Tavel** (00:38:10):
Yes, exactly. 

**Lenny** (00:38:11):
Awesome.  So maybe just to close the thread on this framework, can you just briefly summarize who this is most helpful for and just how they could apply it if they're maybe not growing as fast as they want or they're just getting started as a founder building a consumer product?

**Sarah Tavel** (00:38:29):
Yeah, I think about consumer founders, product founders, product leaders in these companies that are thinking through the road map. What is the most important things that they need to prioritize, the big rocks, for the immediate short-term? And the framework then provides a lens on what to prioritize.

**Lenny** (00:38:51):
And we'll link to the whole framework for people that want to go deeper.

**Sarah Tavel** (00:38:54):
Awesome.

**Lenny** (00:38:54):
Okay, so let's move on to your second framework that you called the hierarchy of marketplaces. And first of all, I want to give a shout-out to Mike Williams, who's the founder of Everything Marketplaces, who gave me a bunch of good question suggestions to ask as we do this.

**Sarah Tavel** (00:39:07):
Wonderful, now I'm nervous. 

**Lenny** (00:39:10):
He's Mr. Marketplace.

**Sarah Tavel** (00:39:11):
Yes.

**Lenny** (00:39:12):
Okay, so let's start with the same question, just what's kind of the broad way to think about what this framework is and who it's for? And then, where did it come from?

**Sarah Tavel** (00:39:18):
It's a framework or hierarchy that is for marketplace founders. It could actually be B2BC or B2C, or marketplace product leaders that are like either getting started or scaling their marketplace and helping kind of prioritize and focus on the things that most matter.

**Sarah Tavel** (00:39:42):
And it came out of a similar reaction, a very similar parallel to what I was experiencing, meaning, all these consumer social founders. Like they would talk about MAUs and I just felt like it didn't get to the heart of whether they were building enduring value. And I actually started to realize that GMV was very similar. GMV, it's a metric that it seems like... Of course, you can't build a marketplace without growing GMV in the same way that you can't build a social product without growing MAUs. But if you focus, if the race that you think you're running is to grow MAUs or to grow GMV, you're not actually going to run the right race. It can take you... 

**Sarah Tavel** (00:40:32):
And actually, with marketplace, very interestingly, it can take you in the wrong direction. So what would happen is I would meet all these founders and everybody got fixated on this milestone of $1,000,000 of GMV. Right. And I think a lot of people started to feel like if you could hit $1,000,000 of annualized GMV, it means you're ready for your Series A. But it's kind of self-evident that not all GMV is created equal, right?

**Sarah Tavel** (00:41:02):
So imagine a food delivery company 10 years ago. You could have $1,000,000 of GMV by focusing on LA, or $1,000,000 of GMV by focusing on Boston, or you could have $1,000,000 of GMV by having $500,000 here, $200,000 here, like spreading it out. And I would meet so many founders who would say, " Oh, well, I thought we had to prove out that the value proposition resonated in these other cities and so, that's why we're diffusing our focus." But what they what I would always feel is like they were just making their job so much harder by doing that.

**Sarah Tavel** (00:41:46):
The other way you could think of it is like if you're trying to get to $1,000,000 of GMV as quickly as possible, you're actually motivated to go after a really big market, right? It's a lot easier to get to $1,000,000 of GMV when you're skimming the cream on this big ocean of a market, then to be very, very focused on a smaller market. And getting to $1,000,000 of GMV in a constrained market is a lot harder, takes longer, but it's actually the path to building something that endures.

**Sarah Tavel** (00:42:16):
And so, I was having the same conversation again and again and I just felt like I needed to crystallize it or synthesize it in a way that would be easier to communicate, and that's what led to this hierarchy.

**Lenny** (00:42:30):
Awesome. Okay, cool. So you've touched on a number of the important elements of this hierarchy, so let's dive in.

**Sarah Tavel** (00:42:35):
Okay. There's probably a couple core insights, but the first one that I think about with this hierarchy is that when you're building a marketplace, you actually have to start from the goal and work backwards from there.

**Sarah Tavel** (00:42:51):
Now, what's the goal? Marketplaces, I mean, you have so much incredible content on this, they're just incredibly difficult to build. You're basically building two companies at the same time, right? You have the product and go-to-market org for the demand side, the product and go-to-market org for the supply side. And somehow, you have to make these two line up so that they serve each other's needs. It's an incredibly difficult dance. And yeah, it's one of the hardest types of companies in the software world that I think you can build.

**Sarah Tavel** (00:43:29):
And you do it because you think about the the full expression of these models and you think about companies like Airbnb or Amazon or eBay or Google, where once you have scale and have very dominant market share, you have a product that just is the best place without question of fulfilling this need. And they end up being very profitable cash-flowing businesses. And you see that, and that's the business that you want to build, that's why you're going through all the hardship of building a marketplace, getting the marketplace off the ground to get to that place.

**Sarah Tavel** (00:44:10):
And there's kind of very clear analysis. I published it in the hierarchy. I have this incredible graph that I remember seeing when I board observer for this online classified company called OLX led by Fabrice Grinda. And it kind of shows that the more dominant a marketplace is relative to the number two in its space, the more profitable that business is. And so, it's just like a very clear like you don't want to be... Obviously, when you're building a marketplace, you don't want to be in the middle of the pack, but even being number one but just barely number one doesn't give you any of the benefits of a marketplace model, you're fighting for each incremental point of market share. It's not clear to the supply side or the demand side that you're like the main place to be. And so, it only becomes really clear once you have that dominant market position where you're just so much bigger than the number two

**Sarah Tavel** (00:45:09):
And the only way to get to that place, to get to that moment of real dominance where you have this winner take most dynamic is that you have to tip your market, and that's the only scalable way to do that, and that's what level two is.

**Sarah Tavel** (00:45:26):
And so, how do you maximize your chance of tipping a market? You have to focus on a really constrained opportunity, and that is level one. So that's kind of like the broad framing, which is like a really important thing of how, when you're building a marketplace, you actually are building towards that point of dominance. And so, it's part of the reason why being really, really, really focused in level one is so important.

**Lenny** (00:45:57):
Awesome. So you walked through this backwards. Just to summarize in case people didn't totally catch it, basically, layer one is focus, layer two, tip the market, layer three, dominate the market.

**Sarah Tavel** (00:46:08):
Exactly.

**Lenny** (00:46:09):
Awesome.  So let's maybe start with layer one of just focus-

**Sarah Tavel** (00:46:09):
Let's do it.

**Lenny** (00:46:13):
... which I think is the most counterintuitive step for people building a marketplace where, as you said, normally, it's go big as fast as possible, get as much GMV as possible, just make everyone happy as quickly as you can. And your advice is, essentially, do the opposite. Make it very...

**Lenny** (00:46:29):
You have this like great acronym of thimble that, I imagine, you'll talk about that I love, I always think about. So yeah.

**Sarah Tavel** (00:46:34):
Yeah. And part of what's so hard about this idea focus is I'm lucky to meet with just incredibly ambitious founders. And the hardest thing I think about building these marketplaces is that the ambition can often feel like this sun, like the heat of the sun that's trying to warm everything up, and you're going after this big market, warming the ocean.

**Sarah Tavel** (00:47:05):
And I think that, really, what the the best, ambitious founders do is they focus that ambition like a laser beam on a small market, the thimble. And what you do is like you're getting that thimble, you're getting the product market fit really, really right with this like small, constrained market. And if you heat that up really, really hot, then it expands from there. 

**Sarah Tavel** (00:47:29):
And part of this is that we have to accept a couple of points of scarcity. One is that, you can't raise hundreds of millions of dollars from the start, where we, especially today, live in a world where there is a constraint around capital. And so, you have to be able to take that capital in the beginning and make the most out of it. And the only way to do that is to be very, very focused.

**Sarah Tavel** (00:47:57):
And the second thing is that the constraint is the founder's attention. And again, these things are really, really difficult to to get off the ground, and the only way that you can do it is by having myopic focus on a segment.

**Sarah Tavel** (00:48:13):
And the example that I always think about was a very cool thing that we all got to see, which is when the food delivery wars happened, where you had companies like DoorDash and Postmates and Uber Eats, and then, the incumbents of Grubhub, take very different strategies. I make comparisons to Postmates and and DoorDash, both successful companies, but Postmates, from the very beginning, had very big ambition and went after all the big cities. They went after, not just restaurants, but restaurants and Apple and retail, bicycle. I remember, there were so many things that they went after all at the same time.

**Sarah Tavel** (00:49:06):
And when you're playing that game, you're always being compared to whatever other substitutes there are in the market, right. And you're it and that just when you have constraint of capital and attention you're you're spreading yourself thin across a lot of different vectors of kind of preference for the customer and the seller.

**Sarah Tavel** (00:49:28):
DoorDash on the other hand, famously and very controversially went after the suburbs in the beginning. And the beautiful thing about the suburbs is that there is very little competition because no one thought that you could do it economically. And they probably weren't wrong in the beginning, like DoorDash lost a lot of money in the beginning fulfilling delivery in the suburbs, just because the delivery times, the driving was so long, but by going after a market that other people weren't focused on, it let them get to a place where they were able to really make the customers on both sides of their marketplace happy enough that they retained.

**Sarah Tavel** (00:50:11):
And this word happy I use, I should expand on it a little bit because the realization I had as I reflected on this kind of feeling that GMV is really actually a vanity metric, it doesn't get at the core of whether you're building enduring value. It's like very clear and there's plenty of examples I could give where there are companies that had incredible scale and still were disrupted by a startup. And it's because actually, customers don't care how big you are, they don't care how many transactions you've accumulated. What they care about is when they have a transaction with you, how happy do you make them? How much better is the experience that you provide than any other substitute that they could use? And if you do a good job, then they're gonna keep coming back to you. And so I call it happy GMV.

**Sarah Tavel** (00:51:11):
And that's actually the thing that I think you as a founder or product leader have to focus on, which is, what do I think is going to be the experience of a buyer or seller that leads them to retaining and tracking that as like the happy path and therefore, the happy GMV.

**Lenny** (00:51:29):
Amazing. I love that concept, happy GMV. You also kind of extend this idea and I think you call it the minimum viable happiness is what you want to create when you're building this marketplace, this symbol of water that you're trying to boil into something incredible. What's the minimum version of that that creates really happy customers?

**Sarah Tavel** (00:51:52):
That's right.  Yes. And kind of the way to think of it is like, obviously, when you're a marketplace founder you know that in order to build something endures, you're going to have to grow. But you in the beginning, you're you're doing all these things that don't scale, you're working on your product experience, you're taking friction out of the transaction, and you want to get to a point where there's a certain percentage of people that retain after having done a transaction. And so, you're kind of doing the work, doing the work, doing the work to get to that minimum threshold. And that's when you know you get to kind of go to the next step of starting to figure out the levers to really scale what you're doing.

**Lenny** (00:52:36):
Awesome.  And again, it's easy to say, it's difficult to do as a founder to tell them like, "You just need to get a small version of this marketplace working, versus you go big really quickly." And so, most of the time, I think it's actually like location, basically start in a city if it's location-oriented. Or if it's all online, pick like one niche to focus on, like Etsy was like, craft fair goods, right?

**Sarah Tavel** (00:53:02):
Exactly. And sometimes, as we saw with Postmates, sometimes it's both, which is, geography and category. Again, you have to assume scarcity of your capital, of your attention, of your customers attention and so getting complete clarity of what is the experience that you want to really nail, what's that happy path you're optimizing for, constraining that in the beginning gives you the option, the optionality to grow beyond that, but if you don't constrain, you just won't be able to get there fast enough.

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**Lenny** (00:54:47):
I want to talk about what it looks like when you you've got it working and it makes sense to start expanding, but before I do, there's one kind of example I found in my research which is really interesting, which is Thumbtack where they, from the beginning, went national and across many categories. And the founders admit maybe that wasn't the right idea. It took them a long time to get to something that was really working. But on the other hand, their thinking was to create enough of a flywheel for people to keep coming back. How often do you need a plumber? How often do you need a DJ? So there's-

**Sarah Tavel** (00:55:22):
I was just going to say that is the trickiness with Thumbtacks model and it persists as the trickiness with their model, which is that you don't have a high repeat use case there and so you have to... One of the really important things with building a marketplace is cornering the buy side, like having a relationship with the buy side where they don't even think about where they're gonna go, they come to you. And if it's a plumber, you use that so infrequently that every time you are going to look for a plumber, you're gonna start at Google, right? You're not gonna assume, "I'm gonna go to Thumbtack to find that because-

**Sarah Tavel** (00:56:00):
I'm not going to assume I'm going to go to Thumbtack to find that because you've already forgotten by that point. And so you need to have enough touch points with the consumer so that they'll have a relationship with you and start to think of you as a place to go to. And that's probably, that was the trickiness with Thumbtack. And by the way, when we talk through level two, that also level two will articulate some more of that trickiness.

**Lenny** (00:56:27):
Awesome. By the way, I do use Thumbtack. It's implanted in my head of that's where to go to find plumbers and stuff.

**Sarah Tavel** (00:56:32):
That's great. I mean those founders, I adore Marco. He is an incredible, incredible founder.

**Lenny** (00:56:38):
As a segue to layer two, what are signs that you've done a good job at focusing and things are working? You have this term that I love of creating a white hot center, so maybe speak to that, or just what tells you, it's like, "Cool, I think we've got this very focused thimble. How do we know it's time to go?"

**Sarah Tavel** (00:56:57):
Yeah, I think it's very much that you see people retaining. You just feel that where people are texting you or emailing or whatever it is, that they've had a great experience and you see them coming back. And you're not going to make everybody happy. Let's all accept that. But there's a core of users, a persona that you are able to make really happy. That's when you know that you're on the right track.

**Lenny** (00:57:29):
Awesome. It's essentially the very fuzzy product market fit question.

**Sarah Tavel** (00:57:33):
Yes, yeah.

**Lenny** (00:57:33):
And I'll link to a few posts I've written that help people get there. I guess is there anything you want to add there like this?

**Sarah Tavel** (00:57:39):
The only thing I'll add, those two things related I'll add. I don't like NPS for this, and I have a whole blog post on this. I like Sean Ellis's question of how disappointed would you be if this product disappeared? And I think it's if you have at least 40% of people respond that they'd be very disappointed, then you're on the right track. That's kind of the feeling that should tell you you're on the right track.

**Lenny** (00:58:06):
Awesome. Okay, let's talk about layer two around tipping the marketplace.

**Sarah Tavel** (00:58:10):
So layer two, I think, will actually illuminate again the importance of that constrained focus for layer one. You're doing all these things that don't scale, that you've written so much about, Lenny, about kick-starting, the marketplace, all those things that you can't just keep on doing forever.

**Sarah Tavel** (00:58:29):
Now, layer two, level two is about figuring out how to do things that do scale. And really, you're doing it in service of this kind of mythical moment of a tipping point. And the tipping point is this idea that you often reach some kind of saturation point in a market. You've reached an experience, you've kept on working on the product experience, you've taken a lot of friction out, and you keep on growing, growing, growing. And you're doing that in service of increasing happiness.

**Sarah Tavel** (00:59:06):
And this is a really important thing. The growth that you're doing, you should have a lot of clarity on your flywheel at this point, and know that you're growing in service of accelerating your flywheel. And people talk about the flywheel as liquidity. You could think of it as happiness, which is that the more the flywheel spins, the more you're able to make both sides of your marketplace happy.

**Sarah Tavel** (00:59:33):
And what you're doing is you're growing into a greater percentage of your market. And as you're doing all these things again that don't scale, then you reach this moment where things start to get a lot easier. You've kind of pushed the boulder up the hill and it starts to slide down. And what you notice first, I think, is you start to see it on a micro level where you might have suppliers that start to tip to you or buyers that tip. You might see your cohorts get a little bit better. You start to see some organic growth.

**Sarah Tavel** (01:00:06):
And let me give a story or an example of a company that I got to see where the marketplace started to tip. So we're investors in a company called REKKI. And REKKI is a marketplace for restaurants and their suppliers. And it's, imagine in the beginning, this kind of app that you could use. It almost looked like WhatsApp, that a chef could use instead of doing a voicemail at midnight when they're leaving the restaurant or typing something into WhatsApp and texting it to their supplier, an email, whatever it is. They could use this REKKI app and it would make it a lot easier for them to do that. And then of course the marketplace elements is that then they'll be able to discover other suppliers on REKKI if they need them.

**Sarah Tavel** (01:00:57):
Now in the beginning, REKKI had to have their own sales force and they were going to London, knocking on the doors of these restaurants, finding and cornering probably the chef in the kitchen to show them the app, to get them to change to this new app called REKKI. And it's a very high cost of sales effort to have, as you might imagine. But then what started to happen is that every time they got a new chef onto REKKI, that order would then go to the supplier that that restaurant normally ordered from. And so instead of getting the voicemail, the supplier would start to see a nice order form that was from the restaurant and provided by REKKI, powered by REKKI.

**Sarah Tavel** (01:01:43):
And what would happen is that as REKKI grew more and more in London, these suppliers started to get more and more of their restaurants ordering via REKKI. And then some of the early suppliers started to be like, "Well, this is so much easier for me. I would much rather get this order form from REKKI than have to listen to an hour of voicemails from chefs with different accents and different ways of ordering their food in the morning when I come in.

**Sarah Tavel** (01:02:12):
And so then the suppliers would reach out to REKKI and be like, "Hey, here's a CSV of all of our customers. Can you reach out to them and onboard them to REKKI because I'd much rather have my orders come via REKKI than the way I'm getting them." And so you go from this moment of the hard high cost of sales, pounding the pavement, to getting a list on a silver platter of restaurants to onboard. And that's that feeling of tipping, where all of a sudden something goes from being really freaking hard to so much easier.

**Lenny** (01:02:52):
It feels a lot like how people describe finding product market fit. Things start to feel like you're not pushing anymore and it's just coming to you.

**Sarah Tavel** (01:03:00):
Yes.

**Lenny** (01:03:01):
In your experience, is this tipping often just happens as you become more successful in this thimble of a marketplace? Or is it things you have to do actively to tip to get to this place? It sounds like in REKKI it was like this feature they built of just recommending, "Hey, you should check out REKKI, and maybe other suppliers would help you have an easier time if they're joining." So is it usually like it just happens with scale, or is there usually something you have to change to create this tipping point?

**Sarah Tavel** (01:03:32):
I don't think Ronan predicted that that was what was going to happen. And you're constant, that kind of customer obsession, having the relationships with the suppliers, having the relationship with the buyers, so that you have your ear to the ground. And when they start to lean in a little bit, you're there to receive them. And so I think this is very much part of what great marketplace founders are able to do, is they're able to start to feel that there's something tipping in their direction and then create momentum behind it.

**Sarah Tavel** (01:04:10):
And that's a lot of what this level two is all about, which is that, I think, every marketplace has to figure out what I call tipping loops. And there's two types of tipping loops that work together symbiotically to help a marketplace scale.

**Sarah Tavel** (01:04:28):
The first are the growth loops. And so we just talked about an example with REKKI. There are many examples of this Hipcamp, another marketplace I'm lucky to work with. If you and I went camping on Hipcamp and I booked a tree house on Hipcamp, and you are going to join me on it, I could then as part of my checkout flow, essentially invite you to my reservation so that you could see the maps, the more information about the tree house and any of the sites around it. And so I'm the person that Hipcamp acquired, but then I pull you into my experience and that's a great buyer to buyer growth loop.

**Sarah Tavel** (01:05:12):
There's classic seller to seller loops or buyer to seller, all these directions. And then the great marketplaces see those loops and they figure out ways to accelerate them. So classic seller to seller referrals. Uber drivers would tell their friend, "Oh, you should start driving for Uber, it's great." But then Uber incentivize it with a referral bonus, and you started to see Uber drivers literally writing blog posts about how much they loved driving for Uber because some of them were making more money getting the referral bonus then actually driving. And so you're trying to find these growth loops and you maximize them.

**Lenny** (01:05:56):
Awesome. I'll link to a post that has a lot of these insights from this work that I've done on marketplaces, but a few others that are just interesting. Basically you're trying to figure out how do you create a engine that continues to drive supply and also drives demand. So a fun example is when Etsy was getting started, as you know, they went to craft fairs and pitched sellers, "Hey, sign up for Etsy. You could sell your stuff online." And then all their sellers started telling all their buyers, "Hey, buy my stuff on Etsy."

**Sarah Tavel** (01:06:24):
Etsy literally gave them business cards. So Etsy gave their sellers business cards that made them feel like, "Oh, I'm a real..." Made them feel professional. And the link on it was to their Etsy store.

**Lenny** (01:06:39):
I love that. One of the most magical growth engines of marketplaces is when your supply brings on the demand. So that's a really good example. Another one is DoorDash, where basically a restaurant signed up for DoorDash and then they tell all the customers, "You want to order our food? Go to DoorDash and order it." And so all the restaurants are telling everyone about DoorDash and then they become DoorDash users and they order from other restaurants.

**Sarah Tavel** (01:07:01):
Yes, and it shows how creative DoorDash was to both sides of the market in that example.

**Lenny** (01:07:08):
And then Faire is an awesome example too. It sounds similar to REKKI as you described, where Faire is basically a B2B artisanal items marketplace where boutique shops buy nice candles and blankets for their store to sell. And essentially they did what you described, where they signed on a store and they basically told them, "All your vendors can join for free and not have to pay any fees if they sign up for Faire, and it makes it easy for you to buy their stuff." And then on the other side, a candlemaker tells all the places they sell to, "Hey, you should use Faire. It's so easy to buy our stuff, and we can communicate through there." And they can sign up without any fees. So basically everyone just invites all their existing partners on Faire, and then everyone's on Faire. So yeah, there's a lot of ways to do it.

**Sarah Tavel** (01:07:53):
I love it. And so the second type of loop, and again this loop works symbiotically with the growth loop, is what I call happiness loops. And I think of them almost as the kidneys for your marketplace as you grow. The happiness loop, the idea is you have a lot of new sellers coming in, and of course you have new buyers, but you want to make sure that you are matching your buyers with the sellers that are going to give them the best experience.

**Sarah Tavel** (01:08:23):
And so, normally in a consumer social product, churn is heartbreaking. Once a user churns, they're almost never going to come back. And with a consumer social product, you're trying to get to massive scale. But when you're building a marketplace, actually, there's a healthy amount of churn that you want on the supplier side because there are just going to be suppliers who aren't going to create a great experience for the buyer, and you can't do anything about that.

**Sarah Tavel** (01:08:53):
And so we've all had the Uber driver who you give one star to. That person you don't want on your marketplace getting matched with buyers. And so you're trying to then make sure that, as you grow, you have a natural mechanism in your marketplace to reward the suppliers that you want to reward and to churn out the ones that you don't. Of course your job is to do your best to set all the sellers up for success, but it's an inevitability.

**Sarah Tavel** (01:09:24):
And so there's two great examples I think of in these happiness loops, which is around search ranking, and then reputation. Search ranking is just a very obvious one, which is, you're trying to understand what creates a happy experience for the buy side, and then reward the sellers that provide that experience.

**Sarah Tavel** (01:09:47):
So I think an interesting example that ended up actually changing but still is illustrative, is that UberEats in the very beginning of their journey, thought that their advantage in the market was going to be about having really fast delivery, right? Because they already had this network of drivers and so they thought that that's where they were going to really lean in and have an edge over any competition. And so in the search ranking, they rewarded restaurants that prepared the food quickly, and so answered the Uber Eats request, and then actually got the food out as fast as possible so that Uber Eats became synonymous with the quickness by which you got the delivery. And so that restaurant that takes 40 minutes to prepare the food, they would get ranked low in the experience for Uber Eats, even if the food was really, really great.

**Lenny** (01:10:45):
Okay, so we've been talking about tipping of the marketplace. Is there anything else there that you want to share before we move on to the third layer?

**Sarah Tavel** (01:10:53):
Yeah, there's two other things that come to mind. One, just as a reminder, and then one as a caution. So the reminder is in order to tip a market, you have to reach a saturation point in that market. You can't tip a market before you've penetrated it to some saturation level. And it goes back to level one of why you want to focus on a constrained market.

**Sarah Tavel** (01:11:23):
Let's take growing a food delivery product in Des Moines, Iowa versus LA or New York. When you're growing in a small city and you're focused on restaurants, you're going to be able to get to this tipping point a lot faster and more efficiently than if you're going after a very big market. And so there's a real advantage to being able to prove out the playbook as quickly as possible and as efficiently as possible before you move on to bigger challenges. And so I think it underscores, again, why it's so valuable in the beginning to focus on something that is constrained.

**Sarah Tavel** (01:12:09):
And again, Postmates focusing on San Francisco, the city. DoorDash focusing initially on the suburbs, much smaller opportunity, but one that they could really knock the cover off the ball on. They had no competition. They had a customer that was desperate for attention, and so they could make them happy. And that just sets you up for real success to go from strength to the adjacent market.

**Sarah Tavel** (01:12:38):
The second thing that I'd say is, and this is so important is that not all markets are susceptible to tipping, right? We've all experienced this, I'm sure Lenny, with the companies that you work with, the companies I work with, where there are conditions of a market that make it vulnerable to tipping. I have six in my post just to name a couple classic ones.

**Sarah Tavel** (01:13:11):
The first obvious one is just concentration on the supply side. In order to be able to tip a market, you need suppliers to want to lean in on your marketplace. My partner, Bill Gurley talks about how great marketplaces create the new incumbents. So you basically have suppliers who aren't the incumbents. The incumbents aren't going to lean in on your marketplace, they're already fat and happy, but you want to have these hungry suppliers who lean in. But if there's already concentration in your marketplace, in the ecosystem, the market that you're playing in, then you're not going to have sellers lean in, and you're not going to be able to create a flywheel that spins where the more sellers you bring on, the better the pricing or experiences on the demand side because the sellers are happy and there's nobody that's hungry or fighting. And so that's just a critical, critical point.

**Lenny** (01:14:14):
Bill Gurley and I actually had a little Twitter debate once about supply versus demand and which one's more important. And basically his pitch was like, "All that really matters in the end, to build a successful marketplace, is can you find the demand? Can you bring the demand to your marketplace?" It makes all the sense in the world. Everything in the end is, "Can you find customers?"

**Lenny** (01:14:34):
In the work I've done looking into marketplaces, what I find is the hardest thing to do, to bring people to your marketplace, is to find the supply and bring it to people, basically aggregate it. And your point here is exactly right, is that basically the value of your marketplace is to find this non-concentrated demand that's all over the place and bring it together and make it easy to transact with. So I think that is really important, just to double down on this point, that what makes the marketplace valuable is supply that is hard to find that you make easy to find and transact with. And I feel like that's almost the core of what makes marketplace work.

**Sarah Tavel** (01:15:13):
I think you're both right.

**Lenny** (01:15:14):
Yeah, I think we're both right. Right, right.

**Sarah Tavel** (01:15:15):
Because in the beginning, the only way you get started with the marketplace, obviously, is you're bringing the supply online, and that's what opens up the opportunity. And the only way then for you to have a chance at tipping the market is if there's enough fragmentation on the supply side to create a differentiated experience for the demand side to care about your marketplace. But the only way to build long-term enduring value with a marketplace is to corner the demand side. And so it's kind of a little bit that evolution of a marketplace that ends up changing who you focus on.

**Sarah Tavel** (01:15:55):
And I don't know if you've experienced this in my experience with the marketplaces that I work with, it's a constant like, "I have to focus more on the demand side right now. Okay, now we got to focus more on the supply side." And it's just back to how difficult these businesses are to build, especially when you have limited resources, that it's like the forever battle of building a marketplace.

**Lenny** (01:16:15):
Yeah, especially if it's a geographically oriented marketplace like a DoorDash. Sometimes you have more customers than restaurants.

**Sarah Tavel** (01:16:15):
Right.

**Lenny** (01:16:22):
Sometimes you have too many restaurants, not enough customers.

**Sarah Tavel** (01:16:23):
Yes.

**Lenny** (01:16:24):
So, it's very city dependent. At Airbnb we had basically many attempts at a dashboard of which market is supply constrained, which is demand constrained. Along the same lines, I think it's also something I think about with B2B marketplaces, the reason they're challenging, in my experience, to work, there's so few of them, is the supply is rarely fragmented. Usually there are very few suppliers, so it's pretty easy. "I'm just going to pick one of these 10 and I don't need you." Is that true? Is that how you think about the challenges of B2B marketplaces?

**Sarah Tavel** (01:16:53):
There's definitely that, but I think actually the bigger challenge with B2B marketplaces is on the homogeneity of the supply. When you think about a lot of labor marketplaces, and let's take a classic example of Mechanical Turk, right? What you need in a marketplace for that flywheel... I have a graph in my slides where you show that the more you penetrate the market, the happier you're able to make your customer. You should have an exponential experience where the flywheel doesn't slow down. Now you take Airbnb as an example, there isn't a limit to how valuable it is to have more supply on Airbnb because everybody has their own special preferences. And there probably is a theoretical limit, but you just feel like there is always going to be the, there's such heterogeneity in the supply for Airbnb, that that's what has let Airbnb really close and escape competition.

**Sarah Tavel** (01:18:04):
With B2B marketplaces what sometimes happens, like a labor marketplace, is that you have this homogeneity in the supply, where it's not clear that adding the next incremental unit of supply actually changes the experience for the demand side. And so at Mechanical Turk, whether Mechanical Turk has a hundred thousand Turkers or 5 million Turkers, it probably doesn't really change the experience for somebody who is using Mechanical Turk. And that's why in the early days, a Mechanical Turk, you saw a lot of other copycats or clones of Mechanical Turk doing something similar because it didn't take that much supply for them to be able to create an experience for a segment of the market that was as good as the already scaled Mechanical Turk.

**Lenny** (01:18:55):
Awesome. I'm glad we got into that. We're getting real dirty about marketplaces. Exactly what I was hoping for. You said that you had something else you wanted to share along these lines.

**Sarah Tavel** (01:19:04):
And there's so many other examples of reasons why a marketplace won't tip competition. Again, you're a food delivery company and you go after the suburbs where there's no competition. That makes your job really easy to tip the market. You go to New York City where you have an entrenched competitor of Grubhub plus Seamless Web, a different culture around delivery where the restaurants mostly have their own delivery fleets, and it's just going to be so much harder for you to tip that market. And so, I think you have to be really context aware when you're building a marketplace of what your competition's going to be so that you see if there is a path for you to actually tip the market.

**Lenny** (01:19:52):
And even if you've tipped the market, it may get untipped, like Uber comes in and starts to eat your lunch, no pun intended. It doesn't last forever. You have to keep fighting for it.

**Sarah Tavel** (01:20:01):
Well, and it's such an important point, which is that you can never rest on your laurels when you're building a marketplace. The history of places is one in which you have a marketplace that feels dominant and then gets disrupted by a competitor. HomeAway, VRBO being disrupted by the likes of you at Airbnb.

**Lenny** (01:20:23):
I wish I could take credit for all that. Yeah, so one way I think about it is you're talking about this idea of tipping is, a simple way to think about if tipping is happening, if you're tipping it successfully, is percentage of your growth that's starting to come from organic word of mouth, people just becoming like, "This is the default way I'm going to order food, travel, book a ride."

**Sarah Tavel** (01:20:43):
I think you see two things. You see one, the cohorts getting better. So people start using you more. As the supply side gets more diverse, you have more and more use cases that you start to be able to serve. And so you get the demand side leaning in more, the cohorts get better. And then to your point, you have the organic growth that happens where you don't have to fight to get each new participant on both sides of your market. There's something that starts to happen where the value proposition is just so strong relative to any other substitute that the market starts coming to you.

**Lenny** (01:21:27):
Awesome. So essentially, cohort retention starts going up because more and more valuable, and more people are coming to you, just word of mouth or through some loops that you built.

**Sarah Tavel** (01:21:36):
Exactly.

**Lenny** (01:21:37):
Awesome. Anything else on this layer/level of the [inaudible 01:21:41] before?

**Sarah Tavel** (01:21:41):
No.

**Lenny** (01:21:42):
Okay, cool. Let's talk about dominating the marketplace and what that looks like, and how you do that. How do you dominate a marketplace and win, Sarah Tavel?

**Sarah Tavel** (01:21:51):
So yes, level three, and this is the one I feel like every founder who starts a marketplace, they're chomping at the bit to be able to really focus now on growth. Because all along, I feel like we've been holding you back of just, "Focus, focus, focus." And what you're doing through level one and level two as you're honing what you're building, is that you're basically building a playbook. You don't yet know whether this playbook is repeatable. It's not always the case that the dynamics of one market is the same elsewhere. I'll take REKKI as an example. In the London food scene, there's significant fragmentation of suppliers. In the Berlin food scene, that's not the case. And so it's not always the case that whatever you did in one market works in another market, but usually there's something that rhymes. There's a hint of what is going to work.

**Sarah Tavel** (01:22:56):
So what happens now is you have a market that's tipping, and the question then is, are you ready to take your eye off the ball and start to diffuse your focus into other markets? So there's kind of three vectors then that any marketplace can grow at this point.

**Sarah Tavel** (01:23:17):
The first vector is within the existing market where you already are tipping that market. You as a founder then have to make a very personal decision, that what you're looking at is the context of your competitive situation. So if you're tipping a market and you have no other competitor going after that market, you're the first one to see this opportunity, then I think you have two things that you want to do at the same time to grow.

**Sarah Tavel** (01:23:49):
The first thing is that you want to take the existing market that you're in and you just keep doing what you're doing, and you may even find ways to stretch beyond that initial market that you're going after-

**Sarah Tavel** (01:24:00):
... Beyond that initial market that you're going after, within the same market. And so, what I mean by that is Uber went from black cars to UberX to UberPool. They kept on finding ways in the geographies where they were already dominant to keep on getting stronger by expanding the use cases that they serve. So you have continuing to grow and penetrate the market, find ways to answer more use cases in that market that you can do, especially if you don't have a lot of competition. And then, the third vector of growth is you want to then try to get as many plates spinning in as many markets that you can handle as quickly as possible. And this is like the blitz scale, right? This is the land grab. And again, your equity value that you're going to create is going to come from dominating the market.

**Sarah Tavel** (01:24:59):
And so you don't want to plant a thousand flags in a thousand markets at the same time, spread yourself too thin, and not decidedly win any one market. You always want to put more wood behind fewer arrows. The more scale that you have, the more cities or categories where you have the flywheel starting to spin and you're starting to see the tipping point happen, the stronger your company will be. Each market that you get, you have scale in, where you'll have contribution profit. You take that contribution profit, you invest it in new markets. The more markets and contribution profit you have, the more venture capital you'll be able to raise, which you then reinvest in growing. And so, this is really the place where you are, as aggressively as possible, while, at the same time, not losing sight of the fact that your goal is, in each market individually, to dominate that market, you're trying to grow into as much possible market opportunity as you possibly can.

**Lenny** (01:26:10):
And again, the reason this is so important is most founders that are ambitious start with this. They're just like, "Go big immediately, blitz scale. We need to win fast before anyone catches up." And so, again, it's a reminder that's the final step, once you've done these other two steps.

**Sarah Tavel** (01:26:27):
Yes, and it's such an important point, because don't forget, you're always going to be vulnerable to competition. And so, let's say you have a million dollars, and you spread that million dollars of go-to-market costs across 10 cities, spreading yourself really thin. You have a competitor come in, and guess what? They put a million dollars into one city, they're going to win that city, and that's going to set them up for greater success down the road, to keep on being able to get more capital and more expense that they can put to work to grow those cities. And of course, we never have one competitor. Always have a lot of competitors. And so, focus on these steps is just, it really is such an important thing to have discipline around.

**Lenny** (01:27:17):
And this is the reason that Uber went big and raised so much money, invested so much to scale so fast, versus Lyft. Same with DoorDash versus Uber. Basically, they're both trying to dominate. Neither one, I guess, Uber, I don't know if it's safe to say, seems to have won in the market. DoorDash versus Uber Eats still very one and two-ish. So I think a lot of people look at these companies, they're like, "They raise so much money, they're losing so much money, they're never going to work." But they do this, because to build a durable business and to get the benefits of the idea of what the marketplace they built, they need to dominate, they need to be number one by far. And it doesn't mean it always works. DoorDash, even though they're bigger than Uber Eats, from what I understand, they're not like... I don't know, would you consider they're dominant? Or is it still a big challenge?

**Sarah Tavel** (01:28:06):
I don't know. I don't know. What is clear is that they've built an incredible company. It's just an incredible... They've done an incredible job of doing what they do, and it is a crowded market still.

**Lenny** (01:28:21):
So you can still build a great business, even if you don't dominate, dominate. It's just you won't make as much money, nearly as much profit, basically, your cash flow.

**Sarah Tavel** (01:28:28):
That's right.

**Lenny** (01:28:29):
Something that you all at Benchmark are really big on, which I think would be interesting to talk about, is the TAM not being as big a deal as people think. So a lot of times, there's a lot of marketplaces that start very small, and there's a fear that the market is just not going to be big enough for them to build a massive business long-term. And you all don't worry about that as much as a lot of other investors, where the market itself isn't a huge killer of investing.

**Sarah Tavel** (01:28:57):
I would underline it even, which is that we get excited about the markets, the opportunities, that might seem small from the outside.

**Lenny** (01:29:05):
I love it. Can you speak to that and help people understand [inaudible 01:29:10]?

**Sarah Tavel** (01:29:09):
You remember the early days of Airbnb like, "How big could this get?"

**Lenny** (01:29:14):
Yeah, I wasn't there that early.

**Sarah Tavel** (01:29:16):
Yeah, but you knew of it, and Etsy also underestimated for years and years and years. Hipcamp, that was part of what excited us is that it was this market that was actually much bigger than people would have thought from the outside. And the wonderful thing about going after these underestimated markets is that they don't have competition in the beginning. And so, you have more of the elements of being able to operate into a market and tip the market towards you, when you don't have competition. And so, we love these types of markets, and we always say, to the founders out there, if other people are telling you the market's too small, we would love to get to know you.

**Lenny** (01:30:00):
I think a lot of founders will love hearing this. I think it's also important to add something you've shared with me is it's important for there to be adjacent markets that are big, for you to have the potential to expand it to [inaudible 01:30:11].

**Sarah Tavel** (01:30:10):
Right. And yeah, it's such an important point. The market itself, it can't be a cul-de-sac. You need to start somewhere that has the potential to grow beyond that, but in the beginning, it's going to look small. Let me give you the example of Hipcamp. Hipcamp, when we invested, was literally land. It was land where people... I don't know, Lenny, if you're a camper. I unfortunately am...

**Lenny** (01:30:38):
Yeah, I love Hipcamp by the way.

**Sarah Tavel** (01:30:39):
Okay, well, amazing. Well, if you have a tent and a sleeping bag and you're not afraid to put your thermos in a running river and clean the water, then that was the early days of Hipcamp. It was for the hardcore camper, which itself, feels like a very small market. It's not actually that small, but it is a smaller market than other people might themselves get comfortable with. But then, what would happen is that hosts on Hipcamp, and I stayed at one of these Hipcamps, and it's just such an incredible experience, the host started to make a little bit of money from Hipcamp. And they took that money, and they started to invest in structures on their land. So in the beginning, maybe it was a fire pit or a bathroom or shower, and then, it became a tree house or a yurt.

**Sarah Tavel** (01:31:34):
And so, what happened with Hipcamp is that, in the beginning, it was going after this very different market segment, but as they became successful, made their landowners money, those landowners invested that money back into their land and started to open up the market opportunity for Hipcamp, into people more like me, that are glampers, that want that experience in nature, but maybe don't want to pitch a tent to have it. And so, that's kind of one of those examples of an underestimated market that ends up growing beyond that. There's warning stories here too. I always think of Etsy. So Etsy, I remember, actually, when I was at Pinterest, being driven crazy by Etsy, because Etsy was all about handmade goods. But as they were running up to going public, they started to chase GMV. And what that looked like is that they started to have a lot of mass produced goods on Etsy.

**Sarah Tavel** (01:32:38):
It drove me crazy at Pinterest, because there was this one seller of these scarves, that was clearly a mass produced scarves, and they were spamming Pinterest constantly with pins of those scarves. And it was just very clear that Etsy had kind of lost its way in that moment. They would start to chase GMV growth. They were going beyond what they actually stood for, and they ended up having a real reaction from the sellers that were making handmade goods and the buyers. It was this big erosion of trust, and they ended up, I don't know if it was related, but it ended up precipitating, I think, a CEO change, to the CEO that is there now and who has obviously done an incredible job building Etsy from there.

**Lenny** (01:33:26):
Yeah, we had the VP of product from Etsy on the podcast. And we talked about that actually, what that transition was like, because it was pretty dramatic. They went from very warm, fuzzy, cozy vibes to, "We need to build a business that lasts. Let's change the way we operate." While we're on this topic of what gets you excited about marketplaces, this is something Mike suggested I ask you, so I love that you get excited when it's a small market, very contrarian, what else, when founders are pitching you, let's say with a marketplace, what else do you look for? Whatever you can share off the top of your head that you look for that gets you excited about marketplace.

**Sarah Tavel** (01:33:59):
It's a couple things. One is, and I'm thinking actually of one founder I met recently, where there's that earned secret, where they see a market opportunity that other people are overlooking, that hasn't been addressed. Maybe there's a reason why it hasn't been addressed in the past, but now is the moment, there's something changing that's creating a current in the market. We could talk about currents later, if we want to, but that there's something that's creating momentum in the market, that's opening up an opportunity for this marketplace to exist. And for whatever reason, that founder is the person who sees it. And it's kind of one of those things that, once you see it, you're like, "How does it still work this way?" And it makes so much sense for somebody to come in and do something about it. And then, the second thing that always just deeply resonates, and it's obvious at this point why this would be true, is a founder then that really has focus.

**Sarah Tavel** (01:35:01):
And it's kind of back to focusing their ambition, like a laser beam, as opposed to this broad sun trying to do everything. And so, you really feel like they're focused on the right things, and that actually leads to the third thing, which is you really feel, when a founder is either trying to fool you or fool themselves with vanity metrics, versus the true intellectual honesty and the intellectual rigor of, "What's really working in my business? What's not working? Where are we focused to make that the best it can be?" And man, that is always, that's how you build long-term, enduring value, and it's something that I think it's consistent across all the founders I'm lucky enough to work with.

**Lenny** (01:35:52):
What I love about this answer is something I often say about marketplaces is that most of your problems are not marketplace problems or questions. It's just what every startup has to deal with. So what you shared is basically an earned secret, which will apply to any business, which maybe emerges a current in a wave that you can ride, having great focus and also focusing on the right metrics. I 100% agree. And it's also interesting, it could be a marketplace, it cannot be, and I think people often overweight how much... "I'm building a marketplace and I need to think of everything," from this marketplace perspective versus 95% of your challenges, questions, hurdles are going to be just whatever startup has to deal with. And then, there's a bit of specific to marketplace.

**Sarah Tavel** (01:36:36):
And I want to just double click on the current thing, because it's very related, which is a lot of people, and this is back to maybe our contrarian take on markets, I think a lot of people think about markets almost like these bodies of water. And it's like, "Oh, it's this big body of water that we're going after." And I actually think that the most interesting markets, you have to think of them like currents, where there's something happening in the market that's creating this current, where you can have a plank of wood that you've put on the river and it's going to pull you forward, versus a market that doesn't really have that momentum to it, you're going to have to build something really big and fancy to make any progress. And that's why we care less about market size, because really, what you're looking for when you're looking at a market are what are the dynamics of change, what's the current and momentum that's going to pull the company and make the job easier for the founders to actually build something that endures?

**Lenny** (01:37:40):
Essentially, "Why now?" is how a lot of people think about this, right?

**Sarah Tavel** (01:37:44):
Yes, yes.

**Lenny** (01:37:45):
I love just the visual of a current. There's a startup I invested in, as an example of the opposite, that's a crypto marketplace sort of thing. And they started it when crypto was really great, and they continued building it as crypto winter emerged. And they just realized, "Our timing, this is not the time to build a crypto company, that's new, that's trying to compete with who's out there." And so, it's an example of the... You got to recognize when the wave is going the opposite direction and everything is pulling you away from success. The opposite of what you're describing.

**Sarah Tavel** (01:38:16):
Yes. I might have a nuance there, because I think crypto is too broad of a way to describe it. If you said it was a DeFi crypto company, then yes, definitely, with treasuries where they are, the opportunity in DeFi isn't as material as it once was, which stablecoins, I'm a huge believer in stablecoins, and I think that's a market where we have a real current. With inflation and so many local currencies, there's real demand for stablecoins, the US dollar stablecoin, that comes in many different shapes and forms, that is something that I believe has a very strong current right now, that I'm actually quite excited about.

**Lenny** (01:39:01):
Oh, interesting. Yeah, I should have been clear. It's like a very specific part of crypto that's just not happening too much, versus what it was. Okay, we've gone totally off track. So let me come back to our track and see what else you wanted to share around the hierarchy of marketplaces either on the top...

**Sarah Tavel** (01:39:02):
That's it.

**Lenny** (01:39:18):
Okay. We did it. Amazing.

**Sarah Tavel** (01:39:20):
Yes.

**Lenny** (01:39:20):
I have a couple more questions sort of related, but I guess, is there anything else that you wanted to say about the hierarchy of marketplaces?

**Sarah Tavel** (01:39:27):
Maybe just this kind of the coda, which is like you can never rest on your laurels, and we talked about this already, but the history of marketplaces is one of disruption. And the idea with happiness is that, and Amazon and Bezos talk about this, which is expectations, consumer expectations, are constantly going up. And so, if you ever stagnate in the experience that you give to the consumer, guess what? You're going to get disrupted. And the examples of we talked about with Airbnb and HomeAway, DoorDash, and Grubhub, Grubhub wasn't able to, for different reasons, they were a public company, and so, they couldn't access capital in the same way that the private markets could. But they were too slow to change the atomic unit of their supply to have delivery that they fulfilled. And so, they got disrupted by the DoorDash, Uber Eats of the world. And so, you just can't rest on your laurels. Expectations constantly go up. And it's part of what's so exciting about this market that we play in.

**Lenny** (01:40:40):
I think Grubhub is a great example of that, where they were the first really successful food delivery company, and then, even with network effects, by far, the best way to order. And then, DoorDash comes around and wins, because they go bigger and spend a lot of money that Grubhub wasn't willing to spend. Awesome. So I guess the advice there is just don't take for granted your success, even if you have amazing network effects.

**Sarah Tavel** (01:41:02):
That's right.

**Lenny** (01:41:03):
Okay. So as we were chatting about this conversation, something you mentioned is that, even if you're not building a marketplace, these lessons are actually still useful. So say you're building an open source product or a social network or even a SaaS startup, a lot of these sort of lessons can still apply. What advice would you have for people that have heard what you just shared, but aren't necessarily building a marketplace? What are some of the takeaways as well?

**Sarah Tavel** (01:41:26):
At Benchmark, I'm lucky that I have partners who look at very different types of companies that I look at, and we meet such a incredible breadth of founders. And what you just realize, again and again, is that these same lessons hold. With open source, it's about solving a specific developer's need in the beginning and solving it really freaking well, and then, expanding from there. With SaaS, I think maybe the fascinating exception, kind of similar to your Thumbtack exception, I think what Parker Conrad's doing with Rippling and this idea of a compound startup is very different. And actually, he has a level of ambition that is both the sun and a laser at the same time. And so, that's kind of, in a rare founder, you can have that level of execution, but again and again, what you see, and I think a lot of this, for new companies leveraging large language models to build products, is that focus on a constrained market to start is the way to win.

**Lenny** (01:42:34):
I like that. Basically, it's happy developer in the case of DevTools or happy enterprise user, just get happy people using your product and coming back to it. So I love that as a reminder. One other question is you wrote this post on finding white space in building marketplace, basically someone that wants to build a marketplace, trying to figure out, where is there an opportunity for new marketplace? Do you have any advice for people, say, founders, potential founders, that are looking for ideas and opportunities to build a marketplace for how to find one? Where do you think there's opportunity?

**Sarah Tavel** (01:43:05):
It's kind of fun to ask the question whether LLMs change the game or open up new surface area. So in my post, I write about three ways that you can look for a new opportunity. I think it was like, number one, you always find a horizontal marketplace and you find the kind of low NPS part of that segment and you create a marketplace around that. eBay, being a horizontal marketplace, the sneakers being a low NPS part of that, and you get GOAT. The second is finding a niche that no one else is paying attention to. And the Etsy examples we gave, the Hipcamp stories, and bringing that online, taking friction away, and showing that it's actually a bigger market than you think. And then, the third is changing the atomic unit of the supply. So that kind of like Grubhub, the atomic unit there was a restaurant that has its own delivery fleet, and then, Postmates, DoorDash, Uber Eats came in and said, "Actually, it's any restaurant, we'll provide the delivery fleet."

**Sarah Tavel** (01:44:15):
And so, they opened up the available supply. Now, when I think about LLMs, I think there's a real opportunity for the third one. LLMs may make it possible to bring on a supply type that maybe the long tail, that was just, it was too much effort to reach out to them, onboard them, but maybe if you automate that work, you actually create an opportunity to expand the supply in a way that none of us can anticipate right now. And then, who knows whether there's an opportunity with LLMs to create a better experience in one of these kind of low NPS segments of a market or a niche market itself, that makes it possible to bring it online. So I haven't seen anything yet, but I am definitely on the hunt.

**Lenny** (01:45:05):
Very cool. Turned into AI corner, which I love. Okay, well, with that, we reached our very exciting lightning round. Are you ready?

**Sarah Tavel** (01:45:14):
Okay, I'm ready.

**Lenny** (01:45:16):
What are two or three books that you've recommended most to other people?

**Sarah Tavel** (01:45:22):
Pachinko is one of the best fictional books I've read in a while. I just loved it, and so, I highly recommend that. And then, to founders, I am a sucker for The Five Temptations of a CEO and The Five Dysfunctions of a Team. It's kind of like you imagine those books in the grocery store aisle, but they're fast reads that are incredibly insightful and I highly recommend.

**Lenny** (01:45:47):
Is there a favorite recent movie or TV show that you really enjoy?

**Sarah Tavel** (01:45:51):
I don't watch stuff, so I'm not a good candidate there.

**Lenny** (01:45:55):
I highly respect that. Is there a favorite interview question that you like to ask candidates, which usually, we can transform into when you're talking to founders and trying to decide if you want to invest?

**Sarah Tavel** (01:46:06):
I always love hearing the journey people take and specifically how they've made decisions along the way, what drives them from each step. I think that's always very illuminating.

**Lenny** (01:46:20):
Do you have a favorite product you've recently discovered that you really love, whether it's an app or physical product that you've used often? Anything real cool or fun?

**Sarah Tavel** (01:46:31):
I'll say we are late joiners to Tesla, my family. And man, it is one of those products that you use it for the first time, and you're just like, "I could see why I'd want to own equity in this company," not financial advice obviously, but it's just an awesome experience.

**Lenny** (01:46:53):
I completely agree. I've gotten so used to, we have a regular car and a Tesla, and the fact that you don't need a key anymore, you just walk up and open it, because it has your phone... My wife, she left the key in our Subaru, just because she's like, "Oh, shit, I need to take the key out." It's just sitting there running. Yeah, you're so used to just the casual just walk up, open, you're good to go. Awesome. Do you have a favorite life motto that you often repeat to yourself, share with people, either in work or life, that you find useful?

**Sarah Tavel** (01:47:25):
My partner at Greylock, Reid Hoffman, has this line of every strength has a corresponding weakness, and vice versa, and there's so much wisdom there. We see our own strengths and we see our weaknesses, but not realize that they actually go together. You can't have one without the other. Similarly, strengths in organizations, like a decentralized organization can move really quickly, and the corresponding weakness of that is that it can feel chaotic and disorganized. On the other side, a centralized organization can feel really slow, but it is very intentional in the decision-making and the control of the experience. And so, everything has trade-offs, and realizing that, more often than not, they come together, it's just so useful to be aware of that.

**Lenny** (01:48:20):
Awesome. Final question. I believe you played rugby at some point, is that right?

**Sarah Tavel** (01:48:24):
Yes.

**Lenny** (01:48:25):
Okay. Is there a rugby story that would be fun to share from your time playing rugby? And if not, what should people know? What would surprise people about rugby, that they may not be aware of?

**Sarah Tavel** (01:48:36):
Well, what people might be surprised of, especially if they meet me, is that I was actually a really good tackler, and I think I broke my nose a couple times and have more injuries than I would care to remember, but I definitely inflicted more injuries on other people than I received. And I think rugby is, there's a camaraderie that comes with rugby, and the one thing I'll confess is that we always joke that the rugby team is, it's not a rugby team, it's a drinking team, that has a rugby problem.

**Lenny** (01:49:18):
Amazing.

**Sarah Tavel** (01:49:19):
Those times are behind me.

**Lenny** (01:49:20):
Oh, man. It sounds like an awesome person to have in your court when you're a founder, the best tackler in town.

**Sarah Tavel** (01:49:27):
Heck yes.

**Lenny** (01:49:28):
Amazing. Sarah, I'm not surprised this went as long as it did. 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 follow-up questions? And how can listeners be useful to you?

**Sarah Tavel** (01:49:41):
I appreciate that. I'm Sarah at Benchmark. I'm on Twitter, Sarah Tavel, and I have a Substack, SarahTavel.com. If you're a founder, you're working on something, don't be shy. We're in the business of meeting with people like you, and so, I always love to get stimulated by new ideas and people.

**Lenny** (01:50:03):
Just to focus people even more there, is there stage you like, is there markets, anything people should know of what's right for you?

**Sarah Tavel** (01:50:09):
We, at Benchmark, we're early stage. We're an early stage firm. We aspire to be first board member. Usually, it looks like the series A, and that's really where our sweet spot is.

**Lenny** (01:50:23):
Awesome. Sarah, thank you so much for being here.

**Sarah Tavel** (01:50:26):
Thank you for having me.

**Lenny** (01:50:27):
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.

---

## [24/24] Strategies for becoming less distracted and improving focus | Nir Eyal (author of Indistractable and Hooked)

**Nir Eyal** (00:00:00):
I went to Alibaba and I bought myself one of these flip phones from China like we used to have in the 1990s with no apps, no internet connection. And then I got myself a word processor off of eBay so that I could just sit down and write and do the important stuff. And even when I stopped using all the technology, even when I got rid of all the apps, I would sit down on my desk and I'd say, "Oh, you know what? There's that book that I've been meaning what to do some research in," or, "Let me just clean off my desk real quick," or, "You know what? I should take out the trash." And I kept getting distracted because the problem is not our technology. The problem is our inability to deal with discomfort. So, what I have adopted for myself and what I'd advise anyone who finds themselves in this situation is to always identify what is that internal trigger, what is that itch that you are looking to escape when you get distracted, because that is the source of 90% of our distractions.

**Nir Eyal** (00:00:51):
It's not the pings, dings, and rings. It's the feelings. But to me, that's incredibly empowering because once you realize, "Wait a minute, it's just a feeling." It's all it is, it's just an emotion. Then you can have tools ready to go. You can have arrows in your quiver ready to take out as soon as you feel that discomfort.

**Lenny** (00:01:10):
**Nir Eyal** (00:04:27):
Thanks so much, Lenny. Great to be here.

**Lenny** (00:04:29):
I feel like we have a chance to record the most valuable hour in podcast history because it could give people more time to do the things they want to do. And this is based on a book that you wrote. It's called Indistractable, which is all about helping people become less distracted, become better at focus, and it might be the most essential skill in the workplace today. And so, what I'm hoping to do today in our chat is just basically give people as many tactical skills and pieces of advice and tools to become less distractable and to get better at focus. How does that sound?

**Nir Eyal** (00:04:59):
That sounds great. I love that you're setting the expectations high. I'll try and meet them.

**Lenny** (00:05:03):
Well now, we got to hit them. Okay, so here's the question. I'll just start really broad and let's just see where this goes. My question is just how does one become less distractable, slash how do I become less distractable?

**Nir Eyal** (00:05:15):
Okay, so there's a deeper motivation here. It's like, "I need help," which is great. That's my favorite thing to do, is to actually get concrete with people about what their specific challenges are. But let me back up here. So, this is what I spent five years writing a book about, because why did it take me five years to write a book? Because I was so distracted. So, I wrote this book for me more than anyone else. That's the only reason I write books. It's not because of what I know, but because of what I want to know. And I discovered that there were so many myths and tropes and just flat out harmful things that I was doing to hurt my own productivity. And when I really went down to first principles and looked at the research, I found that there were so many things that I was doing wrong.

**Nir Eyal** (00:05:56):
But since I've changed my ways and adopted what the research literature says about distraction, it's improved my life in inconceivable ways. I'm in the best shape of my life at 45 years old. I have a better relationship with my family than ever. I'm more productive at work than ever before, not because I didn't know what to do. That's what I find is really emblematic of people today is not that we don't know what to do. It used to be maybe, okay, our grandparents, they didn't know what to do because the information was scarce. They had to go to the library and look things up. Well, today, with the internet, we all basically know what to do. And if you don't know what to do, Google it. You can find the answer out there. But we all basically know common-sense stuff like if you want to get in shape, you have to exercise and eat right, okay?

**Nir Eyal** (00:06:38):
You don't need a diet book to tell you that. If you want to have better relationships with your family, you have to be fully present with people. If you want to do better at work, you have to do the hard work that other people don't want to do. We already know these things. What we don't know is how to get out of our own way, how to stop getting distracted. And so, that was certainly my problem. And so, what I wanted to do was really dive into the problem because the conventional solutions didn't work for me. When I have a problem in my life, I'll think about it, I'll write about it, I'll talk to friends, I'll talk to my wife about it. If I still can't figure it out, I'll read books about it. And what the conventional wisdom out there written by a lot of college professors that are all tenured is stop using technology, stop checking email, get off social media. It's melting your brain, but that's not very helpful, right?

**Nir Eyal** (00:07:23):
Maybe if you have tenure, that's okay, but I can't stop using technology. My career will plummet. I have to use these tools. So, I wanted much more practical advice, and what I discovered was that the root cause of distraction is much more interesting and the solution is far more empowering than stop using technology, technology's evil, it's melting your brain. So, where do we begin? Maybe the best place to start is by first, before we dive into the tactics around how do we become indistractable, the first place to start is what is distraction? Understanding the term really, really matters. And the best way to understand what distraction is, is to understand what distraction is not. What's the opposite of distraction? So, if you ask most people, what's the opposite of distraction?

**Nir Eyal** (00:08:06):
They'll tell you focus, right? I don't want to be distracted, I want to be focused. That's not exactly right. Then in fact, the opposite of distraction is not focus. The opposite of distraction is traction. Becomes pretty easy when you look at both words, traction, distraction. They're opposites because both words come from the same Latin root, trahare, which means to pull, and they both end in the same six letters, A-C-T-I-O-N that spells action, reminding us that distraction is not something that happens to us. It is an action that we ourselves take. So, traction, by definition, is any action that pulls you towards what you say you were going to do, things you do with intent, things that move you closer to your values, and help you become the kind of person you want to become. Those are acts of traction. Now, the opposite of traction, distraction, is any action that pulls you away from what you plan to do, further away from your goals, further away from becoming the kind of person you want to become.

**Nir Eyal** (00:09:01):
And what separates traction from distraction is one word, and that one word is intent. I love this Dorothy Parker. She said, "The time you plan to waste is not wasted time." So, I think we need to stop medicalizing and moralizing what people do with their time. Why is it that someone going on Reddit or on social media or watching a YouTube video that's somehow morally inferior to watching a football game on TV? It's not. Anything you want to do with your time and attention is fine as long as it's done with intent, as long as you're doing it on your schedule, and not someone else's, certainly not the tech company's schedule. So, anything you do with intent is traction, anything else is distraction. So, what I discovered, for me, was that I was getting tricked by distraction in that the most pernicious form of distraction I discovered was the kind I didn't even realize was distracting me.

**Nir Eyal** (00:09:53):
So, let me know if this sounds familiar to you, Lenny. I would sit down at my desk. I would look at my to-do list. By the way, we can talk about why to-do lists are one of the worst things you can do for your personal productivity. We can get back to that later. But I would sit down at my desk and I'd say, "Okay, I've got that big important project. That's what I'm going to do this morning. I'm not going to get distracted, nothing's going to get in my way. Here I go, I'm going to get started, but first let me check some email."

**Lenny** (00:10:17):
Are you watching me because this happens to me every morning. You got to stop.

**Nir Eyal** (00:10:21):
This is totally autobiographical. This is what I used to do all the... "Oh, let me just scroll that Slack channel. What's everybody at the office doing? Oh, let me just catch up on industry news." That's important. That's part of my job. I'm being productive, right? And what I didn't realize is that distraction was tricking me into prioritizing the urgent and the easy stuff at the expense of the hard and important work I had to do to move my life and career forward. So, just because it's a work-related task, doesn't mean it's not a distraction. In fact, that's the worst kind of distraction. Far worse than playing Candy Crush or whatever because then you're putzing around, then at least it's obvious that you're distracted. But if you're just checking work email, you feel productive even though that's a distraction because it's not what you said you want to do with your time and attention. So now, we have this framework. We have traction, we have distraction.

**Nir Eyal** (00:11:08):
Now, there's one more thing that's super important, then we'll have the entire picture so that we can stop thinking about the model and actually get to a brass tacks of what do we actually do. Now that we have traction distraction the other thing we have to consider are triggers. We have two kinds of triggers. We have external triggers. These are things in our outside environment, the usual suspects, the pings, the dings, the rings, all this stuff in our outside environment, which we tend to blame for distraction, but studies find, that's only 10% of the reason we get distracted, 10% of the time it's because of something outside of us. What's the other 90%? Turns out 90% of the time that we get distracted, it's not because of what's happening outside of us, but that most distraction begins from within boredom, loneliness, fatigue, uncertainty, anxiety. That is the cause of 90% of our distractions. So, whether it's too much news, too much booze, too much football, too much Facebook, you are always going to get distracted from one thing or another unless you understand the root cause of the problem.

**Nir Eyal** (00:12:09):
So, step number one to becoming indistractable is to master those internal triggers or they will become your master. Now, we're working around those four points. Step number two, make time for traction. We can talk about that. Hack back the external triggers and step number four, prevent distraction with pacts. So, you asked a big question, I gave you a big answer. That's the overall framework. That's a strategy. Tactics are what you do. Strategy is why you do it. So, I wanted to explain the strategy before we got into the tactics.

**Lenny** (00:12:36):
Amazing. I love this word traction because it relates to kind of the other side of this podcast of growth, product market fit, building products people want, getting traction with users. So, I really like that there's this additional way of thinking about traction, which is basically not being distracted. Can you just repeat the four steps again for people to have this in mind?

**Nir Eyal** (00:12:55):
Step number one, master internal triggers. Step number two, make time for traction. So, this is where we're turning our values into time. We can talk about how to do that. Step number three is hack back the external triggers. This is where we get into the pings, dings, and rings, not just the obvious stuff like your phone, your computer. I take about a page and a half to talk about that. That's kind of kindergarten stuff. But what about all the non-obvious external triggers? What about stupid meetings that didn't need to be called? What about emails that didn't need to be sent and received? What about our kids? Our kids are wonderful. I know you're a new dad, they're fantastic to have kids, but they can also be a source of distraction. So, how do we deal with all those external triggers, and then finally prevent distraction with pacts and pacts are this firewall, this last resort against distraction that we can use to keep distraction at bay and it's really about these four steps in concert in this order that anyone can use to become indistractable.

**Lenny** (00:13:47):
Awesome. Does this spell something clever, by the way?

**Nir Eyal** (00:13:49):
No, I didn't have an acronym, but I do have a pretty picture.

**Lenny** (00:13:53):
Awesome. So, let's go through this and I'd love specifically example you shared, I think many people run into this. There's a hard thing I need to do and I'm just going to go check my email and Twitter instead. I feel like that's a very common distraction, and so sharing, getting into that at some point would be awesome, but otherwise let's get into these four steps.

**Nir Eyal** (00:14:09):
Yeah, well, we can absolutely do that. So, is that something you encounter? It sounds like a...

**Lenny** (00:14:13):
100%. Every time. I have my to-do list, work on next week's post, and then I'm like, "Oh, let me just go check Twitter or maybe tweet something and that'll be fun," and then totally check my email. "Oh, inbox zero. Let's get all the way to zero. Oh, that's cool. Okay, now the days are over."

**Nir Eyal** (00:14:28):
Exactly. And by the way, we are cut from the same cloth. This is exactly the pattern I used to get into and I knew I wasn't doing my best because I wasn't putting in the time to the things that were most important. I was doing just what was easy and what was urgent and that's not good enough. So, if we use this model, step number one is master the internal triggers. So, for you, Lenny, so when you say, "Okay, I know I've got to do this big important thing, but now I'm going to go check email," I would guess that there's some kind of underlying emotion that you're trying to escape. Let's put yourself in the shoes that you were in when you said, "I was going to do that big important thing, but now I'm going to check email instead." Do you remember the last time that happened, by the way?

**Lenny** (00:15:11):
Every morning.

**Nir Eyal** (00:15:13):
Every morning. This morning?

**Lenny** (00:15:15):
Yeah, this morning.

**Nir Eyal** (00:15:16):
Okay, perfect. Do you recall what you were feeling right before you went to Twitter or checked email or did the thing that you didn't want to do as opposed to the thing you said you were going to do?

**Lenny** (00:15:27):
I don't know if this is an emotion or feeling, but there's just this, I need to get serious and start using my brain and there's going to be this deep work moment where I just get real deep and it takes a lot of effort to push me into that. Sometimes easier, sometimes harder. So, maybe it's avoiding this, "Oh, okay, I'm going to really have to think." It's like, I guess, it's the fear of the brain starting to really have to work.

**Nir Eyal** (00:15:51):
Yeah, that's hard work. So maybe, it's a bit of laziness. Maybe, it's a bit of momentum. There's this uncomfortable feeling of this cold start problem. "Oh, I don't really want to do it right now." So, this is incredibly important and I appreciate your candor here around what you feel because all of us experience it and we don't want to talk about it. We want to think that it's, "Oh, I'll just grayscale my phone," or, "I'll just turn off notifications and that's going to solve the problem," and it never does. And let me tell you, I tried all of it. I went to Alibaba and I bought myself one of these flip phones from China like we used to have in the 1990s with no apps, no internet connection, and then I got myself a word processor off of eBay, so that I could just sit down and write and do the important stuff.

**Nir Eyal** (00:16:33):
And even when I stopped using all the technology, even when I got rid of all the apps, I would sit down on my desk and I'd say, "Oh, you know what? There's that book that I've been meaning what to do some research in," or, "Let me just clean off my desk real quick," or, "You know what? I should take out the trash." And I kept getting distracted because the problem is not our technology. The problem is our inability to deal with discomfort. So, what I have adopted for myself and what I'd advise anyone who finds themselves in this situation is to always identify what is that internal trigger, what is that itch that you are looking to escape when you get distracted, because that is the source of 90% of our distractions. It's not the pings, dings, and rings. It's the feelings. But to me, that's incredibly empowering because once you realize, "Wait a minute, it's just a feeling." It's all it is, it's just an emotion. Then you can have tools ready to go. You can have arrows in your quiver ready to take out as soon as you feel that discomfort.

**Nir Eyal** (00:17:27):
So, let me give you one tool that I use every single day. Feel free to use it next time you feel this same problem. It's called the 10-minute rule, and this is just one of a dozen different techniques that you can use that I put in the book, but this is one that I use almost every single day. So, for me, I've been a professional writer now for over a decade, and writing is never easy. I hear people say like, "Oh, just form a writing habit." I think that's ridiculous. I don't know what they're talking about. A habit is defined as a behavior done with little or no conscious thought. I don't know how to write out of habit. Writing is always hard. Fricking work. I've written two bestsellers, thousands of articles and let me tell you, it's always difficult. It's hard, and all I want to do when I write is just Google this one thing or let me just check the news real quick or let me just do anything but the actual writing. So, here's what I do.

**Lenny** (00:18:15):
By the way, there's a great quote that I'll share real quick about this that I think I share often on this podcast that I think it's falsely attributed to Hemingway, but it's that, "Writing is easy. Just sit down at the keyboard and bleed."

**Nir Eyal** (00:18:27):
Oh my God, that's so true. It's so true, and I've not figured out how to make it suddenly easy. Every single word is hard to type out, but I got to do it right and I love doing it. I love having done it. In the process, it's very difficult. But after I make the discovery, after I create something that I think is useful, then it's a lot of fun. But doing the work is really difficult. So, here's what I do. Every time that I am tempted to go do something else, which is all the time, what I will do is I will take out a timer, I'll take out my phone and I'll say, "Set a timer for 10 minutes." I'll put the phone down and my job is for those 10 minutes, whenever I'm ready, get back to the task at hand or do what's called surf the urge.

**Nir Eyal** (00:19:12):
Surfing the urge acknowledges that these emotions are like waves. They crest and then they subside. But that's not how we think about emotions. Most of us think about emotions as always being there. If I feel bored, I feel like I'm always going to be bored. If I'm frustrated, it feels like I'm always going to be frustrated, but that's never the case. Emotions are like waves. So, your job is to set that timer for 10 minutes and realize you can do just about anything for just 10 minutes. So, the idea is not to say don't do it. We know that this technique that a lot of people use of abstinence, telling yourself, "Don't do that, that's bad," actually can backfire. And we can talk about the psychology if that's interesting of why abstinence backfires. But a much healthier technique is not to tell yourself no. It's to tell yourself not yet.

**Nir Eyal** (00:19:57):
You're not saying no, you're saying not yet. And so, you can do just about anything for 10 minutes. So, what I tell myself is, "Okay, I'm just going to wait 10 minutes before I check email, before I scroll social media, before I Google something that is just trying to procrastinate doing the work." I can do that. I'm a grown man. I can do whatever I want. I can do that in 10 minutes. And so, for those 10 minutes, all I have to do is either get back to the task at hand, get back to writing, or surf the urge, which is simply experiencing that sensation, acknowledging, "You know what? This is hard work. That's okay. That's why I'm feeling frustrated. That's why I'm feeling bored. That's why I'm feeling anxious. That's why I have this cold start around I don't really want to do this work because it's difficult."

**Nir Eyal** (00:20:34):
So, what I do is I take a deep breath and I repeat a mantra that I made up for myself. You can make up your own mantra. My personal mantra whenever I feel this internal trigger is I remind myself this. I say, "This is what it feels like to get better. This is what it feels like to get better." And just saying that for as long as I need to until that emotion crests and subsides and then get back to work. What you'll find nine times out of 10 is that by the time those 10 minutes are up, you will have forgotten about that sensation. You'll be right back at the task at hand. And so, that's what's called the 10-minute rule. And of course what you're doing over time is that the 10-minute rule can become the 12-minute rule, can become the 20-minute rule, and most importantly, you are proving to yourself that you have agency that you said you were going to focus on a task and you did. That's the most important part.

**Nir Eyal** (00:21:22):
The flip that we need to change in people's minds is this ridiculous belief that technology is hijacking our brains. There's nothing we can do about distraction that our focus is being stolen. It's not being stolen, we're giving it away. And so, what we need to do is to empower ourselves by showing ourselves in practice as well as in theory that we can postpone that distraction when we say we will.

**Lenny** (00:21:46):
What I like about this is one, it's kind of like the Pomodoro technique, but it's shorter. The 10 minutes I think is a really clever tweak versus 20 minutes, which a lot of people recommend. And then I guess a couple of follow-up questions. Do you do this one time in the morning and then not come back to it? Is this like a jump start for the day and then you start... If I start a thing like this, it won't be 10 minutes, it'll be like an hour because I'm like, "Okay, I did the hard thing, I'm into it. I'm just going to keep working." So, is this like a jump start for the morning or do you come back to this throughout the day?

**Nir Eyal** (00:22:13):
So, you can do it whenever you find yourself slipping off track. And so, the Pomodoro is a version of this. I don't think it's complete enough because Pomodoro just said, "Set the timer, do it." Okay, fine. And that's great if it works for you. By the way, anything I'm saying right now, if the thing is working for you, if your life is awesome and you're doing what you said you're going to do, maybe this isn't the podcast. Maybe my book isn't the book for you, right? I'm talking to the people who, for whatever reason, you know you're capable of more, you know you're drifting off track. Maybe if like me, you said you were going to exercise but you didn't or you said you're going to eat right, but you don't. You said you were going to work on that big task, but you procrastinate. That's really who I was and that's who I wrote this book for.

**Nir Eyal** (00:22:49):
And so, you can use that technique whenever you get distracted. It's not the whole picture. So, it's super important. Remember we talked about those four steps. This is just step number one. There's about a dozen different things you can do. Maybe this particular 10-minute rule doesn't work for you, doesn't work for everyone. There might be other techniques you use. So, there's dozens of different techniques just about this step around mastering internal triggers. But the next step to answer your question of well, how long do I go for? Do I do it for an hour? If now, I'm in the zone? And my answer is emphatically no. You don't go as long as you think you can. What you want to do, and this is step number two, is you're making time for traction by turning your values into time, which means you are going to make a time box schedule because you cannot call something a distraction unless you know what it distracted you from.

**Nir Eyal** (00:23:39):
I'll say that again. You can't call something a distraction unless you know what it distracted you from. So, for me, at least, when I would succumb to, "Oh, let me just check email for a quick minute, let me just see what's happening on Twitter for a quick minute," part of that was because I would justify to myself, "Well, this is a work-related task. I got to do it sometime," and there wasn't a specific time to do it on my calendar, so I would keep thinking, "Well, I got to do it sometime. Might as well just do it now." And that's a huge mistake because if you can't look at your calendar and say, "Oh, that's traction." Okay, check email, write the blog post, post the podcast, go on social media. If that's not what's written in your calendar, if it's not there, it's a distraction. And so, it's not just work-related stuff. I literally have time in my calendar, spend time with my daughter, go on social media, watch Netflix. It's in my calendar. So now, I took what was previously distraction and I turned it into traction by putting it on my schedule.

**Lenny** (00:24:37):
So, you actually do this through the day you have, "I'm going to check Twitter during this time of the day, I'm going to hang out with my daughter during this time of the day."

**Nir Eyal** (00:24:44):
Exactly. And you're adjusting it never in the day. So, you never want to do that. You always want to make sure you're doing it the day before. And so, what I do once a week, Sunday evenings, it takes me maybe 10 minutes a week. 8:00 P.M., I sit down, I look at my schedule for the week ahead and I ask myself, "Does this schedule reflect my values?" What are values? Values are attributes of the person you want to become. I'll say it again. Values are attributes of the person you want to become. So, there's three life domains, you, your relationships, and finally your work. So, what you got to do is you look at your calendar for the week ahead and you ask yourself, "How would the person I want to become spend time taking care of themselves?" That's the you domain. If you can't take care of yourself, you can't take care of others, you can't make the world a better place.

**Nir Eyal** (00:25:26):
So then, you put in your calendar how you want to take care of yourself. What might that include? Well, time for rest. We all know how important sleep is, but I used to yell at my daughter and say, "Oh, it's your bedtime. You got to get to bed." And then one day she said to me, "Daddy, do you have a bedtime?" She was absolutely right. I was a hypocrite because I know how important sleep is and I didn't have a bedtime. Now, I have a bedtime. It's in my schedule. Then put in time for whatever else is important to you. Is reading important to you? Is prayer important to you? Is meditation, is exercise, is video games, is that important to you? Great. Whatever's important to you according to your values, put it in your schedule. Then you're going to put your relationships in. So, don't let the relationships in your life get whatever scraps of time are left over.

**Nir Eyal** (00:26:08):
Put time in your schedule for your significant other, for your kids, for your buddies. How many of us are trapped in this loneliness epidemic because we don't make time for our closest relationships, including adult friendships? Don't let those wither away. Put time in your schedule for those, as well. We know that most friendships, they don't die in some big blowout. Relationships starve to death because we don't invest in them. Put time in your schedule for those relationships. We can talk about how to do that, as well. Then finally, the work domain involves two kinds of work. We have what's called reactive work and reflective work. Reactive work, reacting to notifications, reacting to emails, reacting to taps on the shoulder from your colleagues. That's going to be part of everybody's day. I get that, but don't let that be your entire day because what most people do, they habituate into not wanting to think.

**Nir Eyal** (00:26:56):
They don't want to think what's important. "So, just let me look at my email inbox. My email inbox will tell me what to do. What's really important for my business? That's really hard. I don't really want to think about that. I'll look at my to-do list and I'll start ticking off easy tasks to do that make me feel productive." That's terrible. What you want to do instead is to book time in your schedule for this reflective work time, which is where you do the kind of work that requires you to work without distraction. Planning, strategizing, thinking, for god's sakes, can only be done without distraction. So, that fills up your calendar, as well. And what you're going to find, that there's never enough time for everything, which is good because what this forces you to do, and this is one of the main reasons why to-do lists suck, is because to-do lists have no constraints.

**Nir Eyal** (00:27:38):
You can always add more to a to-do list. You can always add more, but here's what happens. This is what happened to me. I would get home from work. I have a very busy day and I'd look at my to-do list and it's a hundred items long and I think, "Wow, I've been working real hard all day and look at all this stuff I still didn't do. Loser." And so, day after day, week after week, month after month, I was reinforcing this self-image as someone who doesn't know how to manage their time. And then I started saying stupid stuff like, "Oh, maybe I'm no good at time management. Maybe I have undiagnosed ADHD. Maybe there's something wrong with me." There's nothing wrong with me. There's something wrong with this very stupid to-do list method, which doesn't force you to understand that there are trade-offs that you have to prioritize properly and that can only be done with constraints and that constraints come from your calendar.

**Nir Eyal** (00:28:23):
So, you're turning your values into time by making time for traction and having this calendar and then, only then you can look at your calendar and say, "Ah, whatever it is I plan to do, that's traction. Everything else is distraction."

**Lenny** (00:28:36):
I want to share a couple things that worked for me that are very much along these lines. One is booking. I call it deep work time within the day. This was the only thing I had in the calendar, so I didn't do the other things, which I think would've been really helpful, but I had a, I called it deep work time. I will slap you if you book anything over this meeting.

**Nir Eyal** (00:28:36):
I love it.

**Lenny** (00:28:55):
And I did that every Monday morning, Wednesday morning, and Friday sometime, and on that...

**Nir Eyal** (00:28:59):
Who was slapping you?

**Lenny** (00:29:01):
I would be slapping the person that booked time over that slot and nobody can...

**Nir Eyal** (00:29:05):
Okay, got it.

**Lenny** (00:29:06):
And I don't know if that's allowed these days. I don't know how this...

**Nir Eyal** (00:29:10):
Depends who you're booking with, I guess.

**Lenny** (00:29:11):
Yeah, make it a little less aggressive maybe. But that worked a ton. It was like a two- or three-hour block of deep work time and that made a big dent in my ability to have time to focus because people weren't booking me as a PM.

**Nir Eyal** (00:29:23):
Yeah, I love it. And by the way, I want to hear more of these, but that illustrates a really good point that when the stakes are high enough, I hear people a lot of times saying, "I just can't find the time to focus and I can't get this done and it's impossible these days." And then I say, "Well, let's make a little wager here." Let's say, I get this around physical fitness a lot or somebody says, "Oh, I want to be an author. How do I do that? How do I write the book? I can't seem to find the time." And they constantly say why They can't, they can't, they can't. "There's this constraint. My boss wants this. My kids want that." They have every kind of excuse. And then I say, "Okay, let's say that if you don't work out, 8:00 A.M. Monday morning, if you don't work out, you're going to have to pay me $10,000. Are you going to do it? Are you going to work out?"

**Nir Eyal** (00:30:03):
"Well, of course, I'm going to work out. Easily. Yes, of course." Okay, so we've established you can. Now, we're just negotiating the price. So, this has to do with step four around making pacts, making what's called a pre-commitment, and one of them is a price pact. This is how I got in shape. I used to be clinically obese. Today, I'm in the best shape of my life, partially because I use these pacts. Now, the important thing is you have to do this last. If you don't figure out the internal triggers, most importantly, if you don't make time for traction in your schedule, if you don't hack back the external triggers, this fourth step won't work. But as the last line of defense, it's incredibly impactful and we can talk about how to do that, as well.

**Lenny** (00:30:39):
I heard the all-in guys did this to lose weight. I think Sax and Jason did a pact, too. I think it was a lot of money, a hundred thousand dollars or something wild for...

**Nir Eyal** (00:30:49):
Oh, that's awesome. Actually, that's what I used to finish this book, as well. Maybe they read my book, I wonder, because I talked about this exact situation.

**Lenny** (00:30:55):
You hit it. It sounds like. You made it.

**Nir Eyal** (00:30:57):
I did? Yeah.

**Lenny** (00:31:00):
Another trick I'll share that I found useful around the to-do list. So, I used to-do lists, but I've learned that I can't just let them grow is when I had a regular job. I wrote it down in a notebook and every morning, I rewrote the to-do list so that it reminded me like, "Okay, I've copied this thing 10 times now. I'm not going to do it. I'm just going to push it out." So, that act of just rethinking about it every day was really impactful. But that works for people that are okay with an analog to-do list. If it's digital, that doesn't go away.

**Nir Eyal** (00:31:29):
So, I just want to clarify, there's nothing wrong with taking things out of your brain and putting them on a piece of paper. That's wonderful, but that's step one. And so, the big mistake that people make is they put stuff on their to-do list and then they wake up in the morning and what are they supposed to do? "Well, I'll do whatever's on my to-do list." And so, what they tend to do is the easy stuff. I've known people, I hate to tell you, I used to do this myself, too. I would do a task and then forget to put it on my to-do list. So, I would go back in and write it on my to-do list just so I could check off the box. How messed up is that? It's ridiculous. And I think this is something that I think really does need to change is that we have this culture where checking stuff off your list is our little emotional reward, right?

**Nir Eyal** (00:32:12):
But that's ridiculous. We need to stop measuring ourselves by how many cute little boxes we check off. And rather, a much more important metric is not, "Did I finish the task?" I don't want you to track, "Did I finish?" That's not the important part, but people are probably scratching their heads. What do you mean? Isn't it all about finishing what I have to do? No, the important part is figuring out your productivity. It's figuring out how efficient you are at using your time. So, a much more beneficial metric to track is not, "Did I check off the box? Did I finish?" Rather, it's, "Did I do what I said I was going to do for as long as I said I would without distraction?" I'll say it again. "Did I do what I said I was going to do for as long as I said I would without distraction?"

**Nir Eyal** (00:32:53):
Because that is the only way to understand how long things take you. The problem with to-do lists is that there is no feedback loop, there's no feedback mechanism. How long do things take you? So, this is why you have what's called the planning fallacy with people who use to-do lists, which says that on average, studies have found that tasks take people three times longer to finish than they estimate. Why does that happen? Because when you say, "Okay, here's that thing on the to-do list. I'm going to work on that and see how long it takes me to get it done." So, you work on it for five minutes and then you get an email and then you get a notification and then you start talking to one of your colleagues and you never actually track how long that thing took you to finish, as opposed to when you say, "Look, I'm going to work on that task for as long as I said I would, but without distraction. That's it. That's all I'm going to do."

**Nir Eyal** (00:33:39):
What you now have is a metric of how far you got. So, I worked on that presentation, it needs to be 30 slides long, and I worked on it for 30 minutes and I finished two slides. Okay, great. Well now, I know that I need 10 more of those time boxes to finish the entire task. And this is why it turns out that people who measure themselves the way I espouse of people who say, "I'm just going to measure myself based on, did I do what I said I was going to do for as long as I said I would without distraction regardless of whether I finished," the kicker here is they actually finish more. They get more done than the to-do list people because now, they understand how long things take them to finish and they can appropriately time that as opposed to what most of us did.

**Nir Eyal** (00:34:20):
What I used to do before I wrote Indistractable was procrastinate, procrastinate, procrastinate. "Oh crap, I got to get this done. The deadline's here, so I'm going to work all night to finish it," and of course, that's not when you do your best work and it's very stressful.

**Lenny** (00:34:31):
Since you mentioned deadlines, do you have any advice lessons on that as a tool to get things done?

**Nir Eyal** (00:34:36):
What we find is that people who are very deadline motivated, they do finish what they say they're going to do, but of course, the quality is crap. They're typically getting by by the skin of their teeth, and I did this all the time. This is my entire college career and my MBA at Stanford career was waiting, waiting, waiting, and then finishing at the last moment. And I could do well enough, but of course, I could do so much better if I worked without distraction. And so, it wasn't until, and we all know this basically, right? We know that putting in a little bit of diligent effort, a little bit at a time with plenty of lead time is going to give us a much better result than cramming at the last minute. But the reason people don't do this is because they don't understand how important it is, one, to manage those internal triggers.

**Nir Eyal** (00:35:22):
If you're constantly thinking, "Ugh, that project is going to suck. I don't really want to work on it. I don't want to make those sales calls. I don't want to make that presentation. I don't want to do that thing that feels uncomfortable," and you don't have the tools to deal with that discomfort, you're always going to procrastinate because fundamentally, procrastination is an emotion regulation problem. It's not a character flaw. There's nothing wrong with you, you're not broken. It's just that you don't have the tools to deal with emotional discomfort and that's the part that everybody skips over. So, we don't want to talk about these uncomfortable feelings, but that's where it has to start. And then, the part that people don't do is actually planning out not the task itself, but the time to work on the task without distraction. That's the part that if you can implement that step two that I talked about of making time for traction, that becomes a game changer.

**Lenny** (00:36:08):
So, I've tried things like this where it's here throughout the day, I'm going to try this, I'm going to do this and this, and I just don't end up doing it. Things come up or I just get distracted. I'm like, whatever. I guess one question is how often do you find yourself doing the things you set out in your calendar? And then two, any other advice for actually staying on track and doing things you set out to?

**Nir Eyal** (00:36:28):
Okay, so number one, did you have tools in place to deal with the discomfort? What did you do when you didn't feel it?

**Lenny** (00:36:32):
I did not. I did not have that surfing the wave and the ten-minute trick, and I'm curious if there's other tricks in that bucket actually, but no, I did not.

**Nir Eyal** (00:36:39):
Absolutely. Yeah. So, that's the most important thing and that is the most important section. That's why I put it at the front of the book because again, procrastination is an emotion regulation problem, and I think this is fascinating. Personally, I really wanted to dive deep and not only understand why do we not do what we say we're going to do, but why do we do anything and everything? What is the seat of human motivation? And I think I didn't understand it properly. I think most people don't understand motivation properly. Doesn't that blow your mind? If you think about it, "I know what to do. I agree, this is what needs to get done. I just don't do it." Isn't that ridiculous? And by the way, this is not a new problem. Plato, 2500 years ago, the Greek philosopher talked about this very same problem. 2500 years before the internet, before social media, before all these things that we think are so distracting online, the Greek philosopher has had the same exact problem.

**Nir Eyal** (00:37:27):
This is part of the human condition. It is part of our DNA that we constantly get distracted. But to me, that's a fascinating mystery. Why is that? Well, if you look at the deeper question of why do we do anything and everything, the seat of human motivation most people think is about carrots and sticks. If you ask people, why do we do what we do? It's about the pursuit of pleasure and the avoidance of pain. Jeremy Bentham said something similar to this. Sigmund Freud called it the pleasure principle. Neurologically speaking, it's not true. It's not true. It's not about the pursuit of pleasure and the avoidance of pain. It's not about carrots and sticks, but in fact, the carrot is the stick, okay? This is where I want to give you that matrix-like... Remember that scene, the Matrix, where there's that kid with a spoon and the spoon starts bending and the kid says, "Imagine there is no spoon," right?

**Lenny** (00:38:14):
Absolutely.

**Nir Eyal** (00:38:14):
Well, the carrot is the stick. What do I mean by that? We know that the only reason we do everything in anything from a neurological perspective is not about the pursuit of pleasure. It is all about the desire to escape discomfort. Everything you do, even the pursuit of pleasurable sensations, the carrot is the stick, because even wanting to feel good, craving, lusting, desire, hunger, that desire for something that feels good is itself psychologically destabilizing. The carrot is the stick. So, what that means, I think that's incredibly empowering because what that means is that whenever we don't do something, whenever we procrastinate, it's just a feeling. It's all it is. It's just a feeling. And so, when we learn those tools, it doesn't mean where I think people start intellectualizing it and thinking, "There must be something broken with me. Maybe you need a pill, maybe you need a treatment."

**Nir Eyal** (00:39:07):
Chances are there's a ninety-nine percent chance, there's nothing wrong with you. It's simply that you don't have these tools. So, that's where we have to start, is absolutely understanding and applying these techniques so that when you feel that discomfort, you use that discomfort. What I found in my research writing this book is that high performers in every industry, business, the arts, sports, high performers, they feel the same internal triggers. They also feel lonely. They also feel bored. They also feel stressed. They also feel anxious, but they use that discomfort like a rocket fuel to propel them towards traction. Whereas what distractable people do, as soon as they feel uncomfortable, as soon as they feel bored, as soon as they feel lonesome, as soon as soon as they feel indecisive or stressed, boom, they're escaping it with a drink, with a click, with something to take their mind off of that discomfort. So, that has to be step number one.

**Lenny** (00:39:55):
That is fascinating. Basically, distraction is an emotional regulation problem. It's the way you put it. What else works in helping you manage that discomfort? We've talked about this ten-minute trick, the timer, the surfing of the urge. What else is in that bucket of things I could try when I'm just like, "Nah, I'm just going to go check Twitter. I need to work on this thing, right now."

**Nir Eyal** (00:40:13):
Yeah, so there's a bunch of different techniques you can use there in terms of the internal triggers. We can get into some of the more nitty-gritty techniques. There's lots and lots of them. The most important thing here though is that once you have some in your toolkit that you want to try, let's say it's a ten-minute rule, it's surfing the urge, there's re-imagining the task, the temperament, all kinds of things that you can do. The next thing is to put it on your calendar, which we talked about briefly. So, let's say you say, "Okay, I've got that time when I..." What did you say that you want to do, that you check email instead?

**Lenny** (00:40:40):
Start on my newsletter post for the next week, or just continue.

**Nir Eyal** (00:40:43):
To write it?

**Lenny** (00:40:44):
Yeah, write it.

**Nir Eyal** (00:40:46):
Okay. And did you have that in your calendar? That was part of the time punch-me-in-the-face-if-I-don't-do-it kind of thing?

**Lenny** (00:40:50):
That was back when I had a regular job. These days, it's just, what I used to do is my first half of the day until 3:00 is just deep work time. I called it it's-time-to-build time, and then 3:00 beyond is meetings. So, it was actually a huge block of time of focus time, but it was not subdivided by the things I wanted to do throughout the day.

**Nir Eyal** (00:41:10):
I see. Okay. So, step two would be putting on your calendar, "I'm going to work on writing this newsletter for 30 minutes, 45 minutes, whatever amount of time." Make it whatever is reasonable for you based on how long you think you can do it. Put that on your schedule. Okay? Step number three is hack back the external triggers. So, did you find that when you said I was going to work on writing this newsletter, was there anything in your external environment that was pinging, dinging, kids, pets, spouse, anything like that?

**Lenny** (00:41:38):
It's interesting that now that you say that, just that fact that only 10% of distractions are from that. So, it makes me, on the one hand, I recognize that most of the time, there's not a thing pulling me to Twitter, LinkedIn, or whatever. Most of the time, it's just like, that's probably something interesting going on. But there's definitely times when I see a little badge or my little phone gets a little push or yeah, my wife's with a kid in the distance. I'm like, "Oh, let's go check out what's happening there."

**Nir Eyal** (00:42:02):
Yeah. So, that's where we want to hack back. So, the reason I use the term hack. To hack something is to gain unauthorized access. Someone hacks into your bank account or hacks into your database. We know that these technologies are gaining unauthorized access to our attention span when they're constantly pinging and dinging us. So, there's some very simple things you can do. Setting a schedule in advance so that your device turns off as it goes to do-not-disturb during certain times of the day or before you begin this task, before you start writing, you make sure to turn on do-not-disturb, so that there's nothing in your way. On my desktop, I have a do-not-disturb set from midnight to 11:59 all the time. It's constantly on do-not-disturb because I don't want these constant notifications disturbing me when I'm doing focus work.

**Nir Eyal** (00:42:52):
So, making sure that that's on. When it comes to, many of us work from home today, so making sure that your family knows when the time is that you are indistractable. And I'll give you one tip. I know you have a baby at home, but soon, that baby is going to be a toddler. And so, one thing that we did in my household is that my wife went to Amazon and she got what we call the concentration crown. And the concentration crown is just this little wreath thing that she wears. It looks like a little princess thing. It has little LED lights. It lights up. There's a picture of it in the book. And when my daughter was only six years old, we told her, "Look, whenever mommy is wearing the concentration crown, that means that she can't be interrupted and she will be with you within 30 minutes."

**Nir Eyal** (00:43:37):
So, her time block was always no more than 30 minutes. So, we said, "We will be with you within 30 minutes. Please don't interrupt unless you're bleeding. Okay? If you're bleeding, you can interrupt us, but unless you're bleeding," this is when my daughter was only six years old. She could find something to do. It's okay for kids to be bored time to time, but as long as mommy was wearing the concentration crown that told her, and by the way, me, as her significant other, as her husband, worked really, really well because I would always interrupt her and say, "Hey Julie, can I ask you this one thing?" And she was working on her computer, but I didn't know whether she was listening to a podcast or a video or doing work that needed concentration. So, hacking back those external triggers, making sure that they don't gain unauthorized access by interrupting the interruption, whether it's with your kids, your colleagues.

**Nir Eyal** (00:44:24):
So, every copy of indistractable has this little pull-out piece of paper, this piece of card stock that you fold into thirds and you put on your computer monitor. Okay, it's this big red sign on your computer monitor that says, "I'm indistractable at the moment. Please come back later." Now you can say, "Well, why don't I just put on headphones and my colleagues will know I'm not to be interrupted?" Yeah, but then they think you're putzing around, playing video games or something on your machine, as opposed to if you say, "No, I'm doing focused work right now, please come back later," you're making it acceptable to not constantly be interrupted. You're making it okay culturally appropriate to work without distractions. So, those are just some ways that you can hack back those external triggers.

**Lenny** (00:45:03):
I love that crown idea. I think a lot of people are going to use that. This time of year is prime for career reflection and setting goals for professional growth. I always like to spend this time reflecting on what I accomplished the previous year, what I hope to accomplish the next year, and whether this is the year, I look for a new opportunity. That's where today's sponsor, Teal comes in. Teal provides you with the tools to run an amazing job search. With an AI-powered resume builder, job tracker, cover letter generator, and Chrome extension that integrates with over 40 job boards, Teal is the all-in-one platform you need to run a more streamlined and efficient job search and stand out in this competitive market. There's a reason nearly 1 million people have trusted Teal to run their job search. If you're thinking of making a change in the new year, leverage Teal to grow your career on your own terms. Get started for free at tealhq.com/lenny. That's teal hq.com/lenny.

**Lenny** (00:45:58):
For avoiding distractions, triggers, pushes, all that stuff, is there any tools you recommend? I imagine, this is a lot of people are thinking. Is there like a way to block Twitter?

**Nir Eyal** (00:46:07):
Yeah, absolutely. So, that's a perfect lead-in to step number four. So, we talked about step one, master internal triggers, make time for traction, hack back the external triggers. We just talked about step number three. Step number four is preventing distraction with pacts. So with pacts, there's three kinds of pacts. We have a price pact, where there's some kind of financial disincentive to go off track. So, this is where we talked about earlier. You're making some kind of bet. We could talk about how I got into shape for the first time in my life using something like this. How I finished the book using something like this. That's a price pact. There's an identity pact, which is very, very impactful, which is what you're doing is you're forming a personal identity. So, this comes out of the psychology of religion where we know that people who call themselves a certain moniker. For example, if you say you're a devout Muslim, you're not debating whether you should have a gin and tonic because devout Muslims don't drink.

**Nir Eyal** (00:46:58):
If you say I'm a vegan or vegetarian, a vegetarian doesn't wake up in the morning and say, "Hmm, I wonder if I should have a bacon sandwich for breakfast." No, they are vegetarian. That is who they are. So, that's why the book is called Indistractable. Indistractable Is meant to sound like indestructible. It is your identity, it is who you are. And so, is it any different for someone to say, "You know what? I'm sorry I don't check every ping and ding every 30 seconds. I'm Indistractable. Or, "You know what? If we're going to have a meal together, if we're going to sit down and have lunch together, I want to have that lunch free of distractions. So, can we put away our phones?" Is that any different from someone who says, "I have particular dietary preferences," or, "I have a particular religious garb?"

**Nir Eyal** (00:47:35):
No, maybe it's not the norm. Maybe it's a minority of people who do that. But that's what I think it's going to take for the world to become indistractable, is that more of us show how great of a life we can have when we have some of these principles and make it part of our identity. And then the third pact is what's called an effort pact. And this gets into your question around what kind of tools we can use. An effort pact is where there's some kind of friction, some kind of effort that you need to take in order to get distracted. So, as the last line of defense, that's why this is the fourth step, the last line of defense, the firewall against distraction is making sure that you keep yourself in just as much as we keep distractions out. So, I'll give you a personal story here. I don't don't know if this is a family show. Is it okay if I talk about my sex life a little bit?

**Lenny** (00:48:22):
Absolutely. Let's talk and get into it.

**Nir Eyal** (00:48:25):
It's not as exciting as it might sound. I've been married for twenty-two years now. My wife and I found that we weren't being as intimate as we used to be. And this was when I first started writing the book. And part of the problem was that every night, we would go to bed and she would be fondling her iPhone and I would be caressing my iPad. And we weren't being intimate because we were busy playing with our devices as opposed to each other. And so, I started doing this research around Indistractable and I learned about this technique around making an effort pact. And so, what we did, I went to the hardware store and I bought us this $10 outlet timer and this outlet timer, anything you plug into it will turn on or off at a particular time of day or night, whatever you set.

And so, in my household, until this very day, every night at 10:00 P.M., my internet router shuts off. So, what does that do? We know that every night, 10:00 P.M., the internet router's going to shut off. So, my daughter knows, my wife knows, I know. I got to get everything done that I need to do online because the internet's going to shut off. Now, could I turn the internet back on? Of course, I could. I could tether, I could go pull out the router and replug it in, but that takes effort. And so, what I've done is if all else fails, if the internal triggers, making time for traction, hacking back, if all else fails, I've inserted a bit of mindfulness in something that I used to be mindless about. Now, I have to ask myself, "Wait a minute. Do I really need to go all that trouble of replugging and unplugging my router or should I do what I said I was going to do, which is get to bed on time and maybe be intimate with my wife?"

It's made a world of difference and I'll tell you honestly, Lenny. Now after a few years of doing this, it's become part of our routine. We all know bedtime's at 10:00 P.M. That's when we need to start getting ready for bed. The internet router's going to shut off. We actually don't even need this anymore because it's become part of our routine. So, that's one very cheap tool anyone can use as part of this effort pact. Another thing that I use almost every day, my daughter uses it as well, is this wonderful app called Forest. Do you know Forest?

**Lenny** (00:50:32):
No.

**Nir Eyal** (00:50:33):
It's awesome. So, here's the way Forest works. So, it's this cute little app here. I can show it to you. I'll pull it up. And the way Forest works is when you say you're going to do focused work time, you plug in how much work time you want. So, let's say I'm going to do 40 minutes of focused work time. There's that cute little virtual tree that's planted on my screen as soon as I hit go and if I pick up my phone and I do anything with it, that cute little virtual tree gets cut down. It's just a small reminder to say, "Yep, that's not what you said you were going to do right now. You said you were going to work with that distraction. Here, you are picking up your phone." It reminds you, this is not what you said you were going to do. So, it inserts that bit of friction, that bit of effort. Another, you asked for more tools. Another product I love is called Focusmate. Have you tried Focusmate?

**Lenny** (00:51:22):
Is that the one where they match you with somebody and you're kind of working, watching each other work?

**Nir Eyal** (00:51:25):
Yes, exactly. It's like a chat roulette without the dirty bits. So, I love this company so much, I actually invested in it. So basically, what you do is you go online, you look at this calendar and you pick a time when you want to do focused work. So, one of my issues used to be getting started. Once I got started, I was good, but getting started 8:00 A.M., I kind of like what you were saying with this cold start problem. So, what it does is it gives you this pact, again, this pre-commitment you're making with another person, "Okay, 8:00 A.M., I'm going to be there. And if you don't show up, you're going to get a bad review." So, it binds you to another person to build this effort pact to say, "I will be here at that time." You say, "Okay, what are you working on? What am I working on? All right, go." And for that entire time box, you work without distraction. And just seeing that other person who's also working without distraction is a wonderful way to bind you into what you said you were going to do.

**Nir Eyal** (00:52:17):
So, those are just a few tools. There's many, many others.

**Lenny** (00:52:20):
Amazing. Okay, so let me actually try to just list out all the things you've shared so far and it's going to be across all the four steps and then I'm going to follow up on a couple things here. So, here's my notes. One is this idea of just set a ten-minute timer and just tell yourself, "I am going to work on something that I really want to work on right now for 10 minutes and that's all I'm going to do." And while you're doing that, surf the urge, you're going to feel like you don't, but just surf it and feel it and be aware that this is difficult. The calendaring of your day, that feels like a fundamental part of your approach is just figure out what you want to do during the day. Ahead of time, put it on the calendar. So, your to-do list is your calendar, essentially.

**Lenny** (00:53:02):
There's this whole idea of pacts. You shared a bunch of different pact ideas, there's like I'll pay you a lot of money if I don't do this. There's this Wi-Fi. Okay. And then I guess that translates into some of these other things. The Wi-Fi killer device, the Forest app, the Focusmate app and product. And then there's a few other things you shared. Just do not disturb, like set a timer so that during the day, you have do-not-disturb on during set times. For you, it's all the time, which I try to do, too. And then obviously, let your wife through important contacts and then make your family aware of when you're going to be working so that they know not to bother you. Maybe this concentration crown.

**Nir Eyal** (00:53:41):
Yeah.

**Lenny** (00:53:42):
Okay. Before we move on to a different topic, I'd love to spend a little more time in that first bucket because it feels like your point is so important that most of our distraction is this emotional regulation and we just don't like discomfort. And so, I'm curious what else you could teach me and teach people about getting better at managing that emotion. Are there any other tactics in that bucket that might be useful?

**Nir Eyal** (00:54:02):
Absolutely. So, there's three big buckets in terms of mastering these internal triggers. We can reimagine the task, reimagine the trigger, and reimagine our temperament. And so, maybe I can give you one big tip I think that I discovered when it came to reimagining our temperament. If we think about our temperament as these immutable qualities, as the attributes of our personality, we have to be very careful about what kind of identity and what kind of limitations we let in to our psyche. And I'll give you a good example of this. So, a few years ago, there was this line of research around what's called ego depletion. Ego depletion is this idea that willpower is a depletable resource. And you saw some researchers doing studies that seem to suggest that willpower was something that you run out of, that for me, I would come home after a long day of work and I'd say, "Oh, I'm out of willpower. I'm 'spent', there's nothing else I can do. Give me that pint of Ben and Jerry's. I'm going to sit in front of the TV because I'm spent. There's no more willpower left."

**Nir Eyal** (00:55:03):
And some of these studies seem to suggest there was this phenomenon except the problem became that in the social sciences when something sounds a little fishy, when it sounds too good to be true, the scientific process dictates that we should rerun those studies. And it turns out that these studies around ego depletion could not replicate. We couldn't find the effect. And so, there was one exception to this and that exception was in a study done by Carol Dweck, she's one of my research heroes. She wrote the book Mindset, you're probably familiar with, and she did a fascinating study where she found that ego depletion does actually exist, but only for one group of people.

**Nir Eyal** (00:55:42):
Who was that group of people? It turns out that the only people who really did run out of willpower the way you would run out of charge in a battery were people who believed that willpower was a limited resource. And so, this is super, super important to not let ourselves be influenced by these ridiculous notions, these beliefs that somehow we are impaired, that we are limited, that we're addicted. That's a really popular one, that we're all addicted, we're all unable to control these behaviors. That is not true. And in fact, it's only true if you believe it is true. So, it should be part of our practice to tell ourselves we are indistractable. Indistractable is meant to sound like indestructible. It's meant to sound like a superpower. So, repeating to yourself that you're not limited, it's just about your actions. It's not a moral failing. It's not something wrong with you. It's not that technologies are doing it to you. It's simply a series of behaviors that we have to practice.

**Lenny** (00:56:37):
I really like that. That's a theme that comes up a lot on this podcast is people that feel like they're responsible for their situation, they didn't cause it, but they're still responsible. It is their responsibility to deal with it, end up being more successful. And there's this idea of just being high agency.

**Nir Eyal** (00:56:52):
So, one of the things that I think is important to remember here is that there's a lot of things that the individual can do. I think there's a lot of things that we can do within a company or an organization, as well, that we can make our workplace indestructible. But then I think there's some things that we can do on a societal level, and these are called social antibodies. That social antibodies are when society spreads norms or manners that help us overcome otherwise antisocial or destructive behaviors. And so, the good news is that we have been here before with something far more harmful and far more addictive than social media or technology distractions. If you think back to the 1980s, I was a child of the '80s. I remember the '80s very well, and I remember when I was growing up, we had ashtrays in our living room.

**Nir Eyal** (00:57:41):
In fact, everyone I knew had ashtrays in their living room. And today, that sounds crazy. You couldn't imagine walking into someone's home and lighting up a cigarette. If someone did that to you, that would be crazy. No one would do that today. Well, why? Why did that happen? Why would it be so incredibly rude to just walk into someone's home and light up a cigarette? Well, because there wasn't a law that said that that was illegal, someone's private residence. What changed was that we have new norms, new manners around how to behave when it comes to these destructive behaviors. So, I remember when my mom took away those ashtrays in our living room and she threw them away, and one day, one of her friends came over and took out a pact of cigarettes and was about to light a cigarette. My mom said, "No, no, no, no, I'm sorry. We are nonsmokers."

**Nir Eyal** (00:58:26):
You see, she had this now and that she used to describe herself. She described herself as a nonsmoker. If you'd like to smoke, if you'd kindly go outside. And of course, that's the norm today. But it took great people like my mom to go against the trend for these antisocial behaviors. So, I think the same thing is going to happen when it comes to becoming indistractable. Frankly, with or without my book, my book was intended to accelerate this process, but we're going to do this naturally because what humans do throughout history when it comes to figuring out how to use a technology well is that we adapt and we adopt. We adapt to the technology by forming new behaviors, new norms. So, just like my mom said, "Hey, we are nonsmokers. That's my identity. I'm a nonsmoker. If you'd like to smoke, you're going to have to go outside."

**Nir Eyal** (00:59:09):
We need to be comfortable with saying, "Hey, we are indistractable." If someone sits down with you across the table and you're having a nice conversation, they take out their funny, say, "Hey, hey, if we're going to have a conversation, let's be here both in body and mind." That means putting these devices outside of meetings. If we're going to have a business meeting or a personal meeting, we're going to declare these no-phone zones because that's who we are. We want to be indistractable. So, we adopt these new behaviors and we see that happening already. And then we adapt to these behaviors, I should say, with these new norms. And then we adopt new technologies that help us fight the bad aspects of the last generation of technology, and that's what we have always done.

**Nir Eyal** (00:59:48):
In fact, right now, there's an explosion of tech companies that are making a lot of money. A lot of these apps and startups are making money with tools to help fix the last generation of technology. And so, there's all kinds of tools listed in my book from Forest and Focusmate, all kinds of tools that can help us put technology in its place, ironically enough, with new and better technology.

**Lenny** (01:00:09):
You've touched on this point that I want to come back to around how you're not as confident that we're as addicted to technology and apps as we think, and I think that's really important. I'm excited to chat about it. Before we get there, I wanted to chat and follow this thread essentially of becoming Indistractable at work and building a company essentially that helps your teammates become less distractable. What advice would you give to leaders at companies to help employees at the company have better focus, essentially?

**Nir Eyal** (01:00:37):
A lot of folks that I've worked with in the past have said, "Look, I can become indistractable. I follow these four steps, fantastic. I'm indistractable. But what if my company's not indistractable? How do I help other people become indistractable? Or what if my boss is not indistractable and they're constantly asking me and pinging and dinging me for stuff and I'm not able to do my best work? So, what do I do about that?" So, there's a whole section in the book on how to build an indistractable workplace. And what I discovered was in the research in writing this book is that indistractable companies have three traits. And so, the first trait is that Indistractable companies provide employees with what's called psychological safety. This comes out of the research from Amy Edmondson at the Harvard Business School. And what she discovered was truly that companies have to provide employees with psychological safety.

**Nir Eyal** (01:01:23):
Meaning, if you can't talk about a problem, if you can't raise your hand and say, "Hey, you know what? I'm just not able to do my best work when I'm constantly expected to reply to every email, to every notification, every 30 seconds. I can't do my best work." If you can't talk about this problem, that is the problem. As I like to say, distraction is a symptom of dysfunction. Distraction is a symptom of dysfunction. And when it comes to the workplace, if you don't give employees that psychological safety to say, "Hey, how do we deal with this problem just like any other problem?" That in fact is a problem. It's not the technology, it's the fact that you can't get together and talk about this problem without fear of somebody thinking, "Oh, you're lazy," or, "You don't want to be on call," or, "You're expecting other people to work for you."

**Nir Eyal** (01:02:04):
No, that's not the issue at all. It's simply that we need to formulate how to fix this problem just like any other business challenge. The second trait is employees need a forum to talk about this problem. So, in researching this book, I ask people, what's the most distracting technology? What technology in the workplace do you find to be most distracting? The number two was some kind of group messaging service, and Slack was mentioned the most number of times. By the way, number one was email. Number two was some kind of group messaging platform, and Slack was mentioned the most often. And so, I went to visit Slack headquarters. I went to go see my friend Amir, who used to work there at the time, and I knocked on the door and I expected to see a company that was incredibly distracted because if it was the technology that was the source of the problem, nobody uses Slack more than Slack.

**Nir Eyal** (01:02:52):
They should be the most distracted company on earth. But that's not what I found at all because Slack, in fact, embodied these three attributes. They gave people psychological safety. They gave people a forum to talk about these problems. How did they do that? They actually created Slack channels at Slack. They had one Slack channel called Beef Tweets, and Beef Tweets was a channel where people could talk about their beef with a company. And it wasn't that necessarily management had to fix every problem. That's not the point. It's that they had to acknowledge that employee's voices were being heard. And how did they do that? Surprisingly enough, they did it with emoji. So, when a problem that an employee mentioned was fixed, they sent the green check mark emoji, but if it was a problem that maybe couldn't be fixed, but what they wanted to acknowledge that management had seen it, they would send the eyes emoji.

**Nir Eyal** (01:03:38):
And so, the important thing here is to give employees some kind of forum. It could be a Slack channel, it could be another case study in the book is the Boston Consulting Group, which I used to work at. They've gone from one of the most distractable companies to today. They're ranked as one of the best places to work in America. They have these meetings where they talk about PTO, predictable time off. And so, they completely changed that organizational culture by following these steps, as well. The last, the third attribute, which is the most important of the three, is that management must exemplify what it means to be indistractable because culture is like water. It flows downhill. And so, people will look to management to see how they behave, and they will act in accordance with those expectations. So, at Slack Company headquarters, in the company canteen, it says in bright pink letters, it says, "Work hard and go home."

**Nir Eyal** (01:04:31):
Work hard and go home. That is not something you would expect to see at a hard charging Silicon Valley startup, but that's what you see there because everybody in the company, this was before the acquisition. I don't know what it's like now, but when I wrote the book, this was certainly the case that everybody from Stewart Butterfield on down, the CEO on down, believed that to do people's best work, they had to work without distraction. So, if you use Slack on nights and weekends, you were told, "That's not what we do here." You were reprimanded because that was not part of the company culture. So, it's really those three traits, psychological safety, a form to talk about these problems, and management has to exemplify what it means to be indistractable.

**Lenny** (01:05:04):
I want to move to a different topic, but before we do, is there one thing or maybe two things that a listener can do, say today or tomorrow or this week, that would make it significant dent on their ability to focus and avoid distraction?

**Nir Eyal** (01:05:18):
I would say understanding these four steps of master the internal triggers, make time for traction, hack back the external triggers, and preventing distraction with pacts. If you can do one small thing in each of those four strategies, one small thing, that's a wonderful, wonderful first step. You don't have to do everything in the book. I'm giving you many of different options, but one small thing in each of those categories is huge. Now, when it comes to the workplace, one of the benefits of making a time box calendar is that you have a physical artifact. You have something that you can print out and show to other people. And so, I hear this a lot when it comes to people who say, "Okay, I'm indistractable but my boss isn't, what do I do? I'm constantly ping and ding from my boss. How do I get control over my time?"

**Nir Eyal** (01:06:02):
Here's what you do. This is called schedule syncing or managing your manager. Here's what happens. You print out your calendar or you show it to them on your screen, and you say, "Hey boss, I need 10 minutes with you, Monday morning. Is that okay? Can I get 10 minutes with you?" And now, what you're going to do is you're going to show them your time box calendar for your working hours. You're going to say, "Okay, boss, you see here's my time for email. Here's my time for that meeting you asked me to go to. Here's time for that big project I'm working on. Now, you see this other piece of paper? Okay, you see this other list here? This is a list of things you've asked me to do that I'm having trouble fitting into my calendar." So, what I'm helping you do here is avoiding the worst piece of personal productivity advice.

**Nir Eyal** (01:06:40):
The worst piece of personal productivity advice is if you want to be better at time management, you need to learn how to say no. What kind of stupid advice is that? Only a tenured professor who can't get fired would give you that kind of stupid advice. If you tell your boss no, you're going to get fired, that's dumb. You don't tell your boss no, you ask your boss to help you prioritize. That is your boss' most important job is to prioritize. So, you're not saying no. You're saying, "Here's my calendar. Here's this list of stuff you've asked me to do. Help me prioritize." And here's what's going to happen. Your boss is going to look at your calendar and say, "You know what? That meeting, you really don't need to be at that meeting. But that thing on that piece of paper that you listed over here, that's way more important. Can you swap that out?"

**Nir Eyal** (01:07:23):
And let me tell you, I've started three companies. I've sold two so far, and bosses, your manager will worship the ground you walk on because we're all wondering, "What is it that you're doing?" And I know we have to trust our employees, et cetera, et cetera. Yes. But we're still wondering, "Hey, that thing that you said was going to be done isn't done. Why not? How are you spending your time?" So, if you can proactively sit down with your boss so that they understand how you are spending your time, and again, this takes maybe 10 minutes, you do this schedule sync process that not only works really well in the workplace, it also works really well at home. So, my wife and I used to have conflicts over who's going to pick up our daughter, and why didn't you take out the trash? And we would have these conflicts because we didn't synchronize our schedules.

**Nir Eyal** (01:08:07):
Well, now, we take maybe five minutes a week. Sunday evening, we sit down together. Let me look at your schedule. Let me look at my schedule. "Okay, now we're synchronized. It's amazing." We prevent so many conflicts just by doing this simple schedule sync process.

**Lenny** (01:08:20):
I love that advice. I recommend a very similar approach to people to align with their managers. Basically, I call it managing up. And the way I describe it, manager taught me this is, I call it prioritizing and communicating. You could prioritize and not communicate, and your manager would be like, "What the hell? Why didn't you do this thing?" It's, "I prioritized. I never told you. Here's where I put it on my list." Or you could just communicate like, "No," and that doesn't work as you said. The best combination is just like, "Here's what I'm doing, here's why I will prioritize this and let me know what you think. Would you agree? You want to move it up? You want to move it down?"

**Nir Eyal** (01:08:51):
Exactly. And how much input. We always talk about one of the reasons I hate to-do lists is because to-do lists are just a register of output. It's the stuff you want to have done, but you can't have output without input. If you go to a baker, let's say it's your kid's birthday party and say, "Hey, I want two dozen cupcakes." Well, the baker's going to say, "Okay, I need flour, I need sugar, I need butter. I need all these inputs in order to make the output." But somehow when it comes to knowledge work, we just add more and more outputs without considering the input. What is the input for knowledge work? It's only two things. It's your time and your attention. That's it. Your time and your attention. So, in order to get the output, we have to think about the input, which is why the schedule syncing and time boxing is so important. Again, that's something that a to-do list can never give you.

**Lenny** (01:09:36):
Awesome. Okay. For our last topic, I wanted to spend some time on Hooked, which I think could be its own podcast. That could be a whole other episode of your first book that did really well. And essentially, this book, Hooked, is about teaching people how to get people hooked on their product. I know that you have this very contrarian perspective on, are we actually addicted to technology? Is it hurting mental health? All these things. So, this is contrarian corner. I'd love to hear your perspective on just, why is it that we're not as hooked on social media and technology as people think?

**Nir Eyal** (01:10:08):
Yeah. Okay, so there's a lot there. So, let me explain what Hooked was for compared to Indistractable. So, Hooked is about how do we build habit-forming products for good. And so, the idea there was that I think we need to use more of these techniques when it comes to healthy behaviors. We want people to get hooked to a language learning app. Duolingo, one of my former clients. That's a great thing that they found ways to get people hooked to learning a new language compared to the way we used to learn languages. Getting people hooked to exercise. One of the case studies in Hooked is Fitbot, which is an app that helps people form these habits around exercise. Getting hooked to a personal finance app to help you save money, getting hooked to enterprise software. That's all great, right? If it helps you become more productive, helps you live a happier, healthier life, that's wonderful.

**Nir Eyal** (01:10:53):
So, nobody's worried about people getting addicted to enterprise SaaS. That's not an issue. So, the vast majority of products out there, they're not worried about addicting anyone. The real problem the vast majority of businesses out there have is that nobody cares. They have a wonderful product that could really improve people's lives, but people aren't using it. And so, it's really about how do you get people to keep coming back to your product or service, not because they have to, but because they want to. And so, what essentially I do at Hooked is steal the secrets of these Silicon Valley giants. I literally ripped out their psychology to understand what makes their products work so well, so that everybody in every conceivable industry that is devoted to improving people's lives can use those habits for good. So, that's what Hooked is for. So, if Hooked is about good habits, Indistractable is about how do we break bad habits, but for different products, we want to build a good habit with the exercise app, with these SaaS app, with the good habits, and we also want to break the bad habits.

**Nir Eyal** (01:11:49):
So, that's the two sides of the same coin. They're not negations, they're complements. And I think I am uniquely qualified to write both these books because I know these techniques work and I know where they don't work. And I can tell you, having written Hooked, these techniques are very good. They're very effective. They're not that good. This isn't mind control. We're not hijacking people's brains. And there's a lot of people out there, a lot of tech critics have made a lot of money and gotten a lot of speaking gigs over scaring the crap out of people because people love that stuff. I was a journalism co-major in college, and the first rule of journalism is if it bleeds, it leads. So, you can get a lot more attention and a lot more press, a lot more invites to Ted Talks if you tell people, "Technology is melting your brain, it's super evil. Let's shut it all down."

**Nir Eyal** (01:12:40):
This is the classic chicken little story. People love that stuff. The truth is much more nuanced, but nobody likes nuance. Nobody likes the answer to every complex question, which is always the same. "It depends. It depends." For some people, overusing technology is a real problem. So, for people who are pathologically addicted, that can be very harmful because, what is the definition of addiction? An addiction is a compulsive dependency on a behavior or substance that harms the user. Now, that's about 3% to 5% of the population is pathologically addicted, but we toss out this word addiction all the time. Everything's addictive. My wife ordered a shoes from DSW, and on the box it says, "Danger, addictive contents inside." It's shoes, people. Shoes. And so, what we have done by pathologizing, by medicalizing this behavior is that now, everything's an addiction. "Oh, you like playing Candy Crush? It's addictive. You like social media. It's addictive."

**Nir Eyal** (01:13:37):
No, it's not addictive to everyone. No more than saying, "Hey, a lot of people have a glass of wine with dinner, but not everyone's an alcoholic. So, why do we think everyone who uses social media is addicted?" They're not. But we love that terminology. We love it. Why? Because even the word addiction comes from the Latin addictio, which means slave. So, it's much easier to tell ourselves, "I'm enslaved. My brain is being hijacked. My focus is being stolen. It's all Silicon Valley's fault." As opposed to saying, "Wait a minute, this isn't really a distraction." I'm sorry. "It's not really an addiction, it's a distraction," because then now I have personal responsibility. Now, I have to do something about it. That's no fun. Can I just blame somebody? But for the vast majority of people, save the people who are actually pathologically addicted, which by the way, I do think we need special protections for. If you're not a child who I do think we need special protections for, and you're not pathologically addicted, this is a personal responsibility issue that thankfully, all of us can overcome if we have the right tools.

**Lenny** (01:14:33):
Wow, this is quite the contrarian juicy corner. I wish we had more time to dig into all this stuff. So, basically, I checked Twitter a lot. I checked my phone a lot. You're saying that essentially, don't call it addiction. I'm just finding more things to get distracted by to push away from all these uncomfortable emotions that I'm feeling doing hard work.

**Nir Eyal** (01:14:52):
That's exactly right. And again, it doesn't mean it's your fault, but it is your responsibility as we talked about earlier, because who else's responsibility is it? We love these simple narratives. We love these simple stories of something bad is happening, so this is the bad guy. Well, sometimes the bad guy is also us, or at least we have a role to play in taking responsibility for this stuff. And so, if it was something that is insurmountable, if something you can't do anything about, for example, children, I think children are a protected class. My fifteen-year-old can't walk into a bar and order a gin and tonic. She can't walk into a casino and start playing blackjack. She's not ready for that. So, I do think we need regulations to protect children. I think we also need protections around people who are actually pathologically addicted.

**Nir Eyal** (01:15:35):
If you know people are getting addicted to your product, you do have an ethical responsibility. And I've written about this for the past 10 years now about specific legislation that I think we need around what's called a use and abuse policy for people who are pathologically addicted. But for 95% of us, it's not an addiction. It's something we can absolutely take control over if we want to and if we have the right tools.

**Lenny** (01:15:58):
Very interesting food for thoughts. Before we get to our very exciting lightning round, is there anything else that you want to share or leave listeners with?

**Nir Eyal** (01:16:06):
There's a wonderful quote that I really love from Paulo Coelho who said that, "A mistake repeated more than once is a decision." A mistake repeated more than once is a decision, such a great quote. And I think it's time that we realize that if we are not doing something about this problem, we are deciding to be distractable. The difference between an indistractable person and a distractable person is that an indistractable person says, "Ah, okay, I see what you did to me there. I see I got distracted. I'm not going to let it happen again." How many times can we get distracted by social media, by whatever, before we say, "Okay, I'm going to take steps today to prevent getting distracted tomorrow"? That's what defines an indistractable person. So, if you really want to summarize my work in Indistractable into one Mantra, it's that the antidote for impulsiveness is forethought. The antidote for impulsiveness is forethought. Fundamentally, distraction is an impulse control issue. That's all it is, and it's a skill like any other.

**Nir Eyal** (01:17:04):
We learn skills. Why do we expect that we should just be born with this innate skill to fight distraction? It's a skill like any other. And so, the antidote for impulsiveness is forethought. If we plan ahead, if we know that we're going to take steps a day to prevent getting distracted tomorrow, there's no distraction we can't overcome.

**Lenny** (01:17:22):
I love it. I love the message of empowerment and agency. I feel like that's so applicable to product management and a lot of the people that listen to this podcast. And just another example of that even though the world is making life more difficult for us, potentially, you could still do something about it. And I really like just the general message that you can do something about it. With that, we've reached a very exciting lightning round. Are you ready?

**Nir Eyal** (01:17:44):
I am ready.

**Lenny** (01:17:45):
All right. What are two or three books you've recommended most to other people?

**Nir Eyal** (01:17:48):
There's this book called Alchemy by Rory Sutherland that I love. It's a fantastic book. It delves into the psychology of various experiences. So, highly recommend that. And I'm reading a book right now, actually. It's all myself right here called The Experience Machine by Andy Clark, which I'm really enjoying.

**Lenny** (01:18:04):
What is a favorite recent movie or TV show that you've really enjoyed?

**Nir Eyal** (01:18:08):
Okay, so it's not very recent, but it's one of my all time favorite movies that nobody's seen, which is Empire of the Sun. Have you ever seen Empire of the Sun?

**Lenny** (01:18:16):
Nope.

**Nir Eyal** (01:18:17):
Okay, you got to see it. So, one of my favorite movies, it has Christian Bale in it when he was only, I think, 12 or 13 years old. Steven Spielberg was the director, John Malkovich stars in it. Unbelievable movie that for some reason nobody saw. So, if you're a Christian Bale fan, which I am, I think he's a fantastic actor, Empire of the Sun, classic, awesome movie.

**Lenny** (01:18:38):
Do you have a favorite interview question that you like to ask people when you're hiring them for a job?

**Nir Eyal** (01:18:43):
I'm not a big fan of interviews in general. I'm a huge fan of small projects. So, what I'll oftentimes do is pay people to do a small project and then I can see their work output. I find that that works much, much better than any question I can come up with.

**Lenny** (01:18:59):
Awesome. A few other people have mentioned that exact idea, especially at a company. I think about Linea, where they pay people to do a little project within their company. They're kind of like contractors for the company for a little bit.

**Nir Eyal** (01:19:09):
Yeah.

**Lenny** (01:19:10):
Is there a favorite product you've recently discovered that you really love, whether it's an app or something physical?

**Nir Eyal** (01:19:15):
I went to Japan a few months ago and I just became obsessed with all things Japanese, and so I bought a hundred different little gadgets that helped me make Japanese food at home. So, I had this little sesame grinder thing. The Japanese are so good at making devices for everything, so I would just put this under the general bucket of everything Japanese.

**Lenny** (01:19:36):
I use Muji pens, which is an amazing Japanese brand. They're just like...

**Nir Eyal** (01:19:43):
Yes, we have Muji. Yes, exactly. I have some of those, as well. They're great.

**Lenny** (01:19:44):
Go Japan. Do you have a favorite life motto that you often come back to or share with friends, either at work or life, that you find really useful?

**Nir Eyal** (01:19:52):
So, I do have several mantras that I repeat to myself daily. One of those is my life purpose. My purpose in life is to explain the world so that it can be made better. Now, that might not apply to everyone. That's my personal life motto. It kind of just helps me recenter and refocus my purpose for living, which is to serve others, to make the world a better place. And the way I do that is to explain the world so that it can be made better. So, of course, that's not going to apply to everyone, but I do think there is something very useful about sitting down and saying, "Wait, what is the purpose of my life?" And so, for me, having that mantra, which I literally repeat every single day as like a little prayer, I'm very secular. I don't believe in anything supernatural, but I think there's a lot of wisdom to be adopted from the practices of organized religion, and one of those is this secular prayer reminding me of my purpose.

**Lenny** (01:20:36):
I love that. Final question. You wrote a book about building habits. What's your best and worst habit these days?

**Nir Eyal** (01:20:45):
This is tricky. So, I think the reason I'm struggling answering this is because there's a difference between habits and routines and a lot of things that people think are habits are not really habits. So, I was going to say exercise. I used to be clinically obese and now I exercise. But that's not technically a habit because it's not done with little or no conscious thought. It's a routine, but I think that's probably one of my best routines is that I've finally, for the first time in my life, really gotten into physical fitness. I have maybe not quite a six-pack, but maybe like a four-pack at forty-five years old. I'm pretty proud of that and I'm not saying that to brag. I'm saying it as a testimony to the fact that when you say you're going to do something and actually do it, how wonderful that feels.

**Nir Eyal** (01:21:29):
Just live your life with intent. I'm not athletic. I never was athletic. I still don't really like exercise, but I do it and I eat right because I say I will. So, I think that's probably my best routine and probably my worst habit is that I still feel these impulses. If the definition of a habit is an impulse to do or behavior with little or no conscious thought, you better well damn believe that I feel the impulse to check Instagram for a quick minute or to look at this. I still feel that. I think the difference is that now, I know I'm going to feel those. I know that's part of my daily experience, and I have those practices in place so that they don't get the best of me.

**Lenny** (01:22:04):
Just along those lines, something I was going to ask but I forgot is, how often do you not do the things you had in your calendar? What percentage of the things don't get done the way you planned?

**Nir Eyal** (01:22:12):
So, when things change dramatically, then I tend to fall off track. So, the first time, if I make a big change in my calendar, I'm much more likely to fall off track. The more I can go from week to week with small parts of my calendar changing, the more I'll get to a hundred percent doing what I say I'm going to do. But I would say on average, once I have, I pretty much have my more or less calendar set for the week. I would say maybe 10% of the tasks I'll go a little too late on or I'll start, but then of course the idea is to make sure that doesn't happen again next time.

**Nir Eyal** (01:22:41):
But there is, of course, some wiggle room. So, when that might happen, let's say it's 10% of the time I go off track, well then I'll say, "You know what? I put in too much time for writing. An hour of writing is too much. Maybe I should just start with 45 minutes. Let's see if I can do that block. I'll adjust it a little bit because I got other stuff that I want to take care of." So, it's those small adjustments within day-to-day, whereas before I wrote Indistractable, it was all kinds of stuff. It was half the day that I would go off track.

**Lenny** (01:23:07):
Amazing. I was going to ask what it was like beforehand. Nir, I think we delivered on our promise. There's at least a dozen very tactical things you can do to become more indistractable and to focus better. Thank you so much for being here. Two final questions. Where can folks learn more about the stuff you're doing? Where do they buy your book? Where they learn more about the things you can do for them? And then finally, how can listeners be sold to you?

**Nir Eyal** (01:23:28):
I appreciate it. Thanks. So, my website is nirandfar.com. That's spelled like my first name, nirandfar.com. And my two books, Hooked: How to Build Habit-Forming Products and Indistractable: How to Control Your Attention and Choose Your Life, and they're available wherever books are sold and what you can do for me, become indistractable. Honestly, I don't care if you buy the book. If you can adopt some of these practices and help change this mindset that we're all victims, that we're being hijacked because of the tech companies. If you can start putting the word out there that this is something that has improved your life in some small way and tell others about it, this is how we start spreading those social antibodies, just like my mom did around smoking. I think we should all do the same.

**Lenny** (01:24:09):
I am going to be working on that as soon as we get off. Nir, thank you so much for being here.

**Nir Eyal** (01:24:14):
Thank you.

**Lenny** (01:24:15):
Bye everyone.

**Lenny** (01:24:18):
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.

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